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Home My WebLink AboutF-2 Staff Report - OB 23-24 ROPS AzusaSUCCESSOR AGENCY CONSENT ITEM F-2 TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE SUCCESSOR AGENCY BOARD VIA: SERGIO GONZALEZ, CITY MANAGER FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES DATE: JANUARY 17, 2023 SUBJECT: APPROVAL OF RECOGNIZED OBLIGATION PAYMENT SCHEDULE AND ADMINISTRATIVE BUDGET FOR JULY 1, 2023 THROUGH JUNE 30, 2024 AND ADOPTION OF RESOLUTION BACKGROUND: Pursuant to Health and Safety Code Section 34177, the Successor Agency of the former Redevelopment Agency of the City of Azusa (“Agency”) is required to continue to make payments due for enforceable obligations of the former Redevelopment Agency. The Agency is to prepare a “Recognized Obligation Payment Schedule” (“ROPS”) for the period of July 1, 2023 through June 30, 2024 (“ROPS 23-24”) that identifies these obligations for the period. In addition, the Agency is required to prepare a proposed administrative budget and submit to the Oversight Board (“Board”) for approval. This action requests the approvals of Resolution No. 2023-OB02, approving and adopting ROPS 23-24 and Resolution No. 2023-OB03, approving and adopting the proposed administrative budget for the period of July 1, 2023 through June 30, 2024. RECOMMENDATIONS: Staff recommends the Oversight Board take the following actions: 1) Adopt the attached Resolution No. 2023-R02, approving and adopting the “Recognized Obligation Payment Schedule” for the period of July 1, 2023 through June 30, 2024 (ROPS 23-24) pursuant to AB x1 26 as amended by AB 1484. 2) Adopt the attached Resolution No. 2023-R03, approving and adopting the proposed Administrative Budget for July 1, 2023 through June 30, 2024. APPROVED CITY COUNCIL 1/17/2023 OB 23-24 ROPS AZUSA January 17, 2023 Page 2 ANALYSIS: The Agency is required to adopt a ROPS setting forth the nature and amount of all existing Agency recognized obligations (as defined in the law). Each ROPS previously reflected a six- month interval of obligations. However, the new procedure requires the Successor Agencies to prepare a ROPS for a 12-month interval, for the full fiscal year. The obligations of the Agency may include the following: bonds; loans legally required to be repaid pursuant to a payment schedule with mandatory repayment terms; payments required by the federal government, preexisting obligations to the state or obligations imposed by state law; judgments, settlements or binding arbitration decisions that bind the agency; legally binding and enforceable agreements or contracts; and contracts or agreements necessary for the continued administration or operation of the agency, including agreements to purchase or rent office space, equipment and supplies. The following is a summary of the enforceable obligations listed in ROPS 23-24: 1. Bond Debt Service • 2014 Series A Subordinate Tax Allocation Refunding Bond • 2015 Series A Subordinate Tax Allocation Refunding Bond • 2015 Series A Subordinate Tax Allocation Refunding Bond • 2017 Series B Subordinate Tax Allocation Refunding Bond 2. Administrative Cost Allowance These include costs for staff, audit services, maintenance of properties and legal counsel that are required in the dissolution of the Agency to comply with AB x1 26 as amended by AB1484. The amount of the annual administrative cost allowance is capped at three percent of the total amount allocated to the Redevelopment Obligation Retirement Fund or $250,000, whichever is greater. 3. Loan Repayment The loan from the City to the Successor Agency for the former Enterprise site was approved by the State Department of Finance as an enforceable obligation. The amount reflected is 20% of the beginning loan balance that is required to be paid to the LA County Low Moderate Housing Program. Upon the approval of ROPS 23-24 by the Board, it is submitted to the DOF, State Controller’s Office and the County of Los Angeles Auditor-Controller by February 1, 2023. It will also be posted on the City website. The DOF must complete its review of ROPS 23-24 by April 15, 2023 and issue a Determination Letter. If the Agency disagrees with DOF’s determination, the Agency can request a Meet and Confer session with DOF, within five days of receipt of the letter, to allow for a two-way dialogue between the Agency and the DOF. At the conclusion of the Meet and Confer meeting, the DOF will issue a final Determination Letter by May 15, 2023. This is a statutory deadline as the tax increment must be distributed to the Agency by June 1, 2023 to fund the ROPS 23-24 obligations. OB 23-24 ROPS AZUSA January 17, 2023 Page 3 The attached Resolution No. 2023-OB02, approves and adopts ROPS 23-24, setting forth the recognized obligations of the Agency and the amount of paym ents to be made for each obligation from July 1, 2023 through June 30, 2024. It also authorizes staff to amend the ROPS in order to remove line items which are subsequently disapproved by the Board and/or DOF. Resolution No. 2023-OB03 approves and adopts the proposed administrative budget reflecting the estimated costs to perform the administrative functions for the purpose of winding down the former Redevelopment Agency’s affairs. The Successor Agency is entitled to receive a maximum amount of $250,000 annually. FISCAL IMPACT: The resources to fund the obligations of ROPS 23-24 will come from the Redevelopment Property Tax Trust Fund (“RPTTF”). Approval of ROPS 23-24 will facilitate the ability of the Agency to continue payment of the enforceable obligations of the former Redevelopment Agency for the next fiscal year. Failure to approve and submit the ROPS 23-24 to the DOF by the February 1, 2023 deadline, as required by AB1484, may result in penalties of $10,000 per day to the Successor Agency. Prepared by: Reviewed and Approved by: Henry Quintero Talika M. Johnson Principal Accountant Director of Administrative Services Reviewed and Approved by: Sergio Gonzalez City Manager Attachments: 1)Resolution No. 2023-R02 – Successor Agency of the former Redevelopment Agency of the City of Azusa Adopting a Recognized Obligation Payment Schedule-July 1, 2023 to June 30, 2024 (ROPS 23-24) Exhibit A – ROPS 23-24, July 1, 2023 to June 30, 2024 2)Resolution No. 2023-R03 – Successor Agency of the former Redevelopment Agency of the City of Azusa Adopting an Administrative Budget -July 1, 2023 to June 30, 2024 Exhibit B – Proposed Administrative Budget, July 1, 2023 to June 30, 2024 RESOLUTION NO. 2023-R02 A RESOLUTION OF THE SUCCESSOR AGENCY OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF AZUSA APPROVING AND ADOPTING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD OF JULY 1, 2023 THROUGH JUNE 30, 2024 PURSUANT TO AB x1 26 AS AMENDED BY AB 1484 WHEREAS, Health and Safety Code Section 34169(h), enacted by AB x1 26, requires successor agencies to prepare a Recognized Obligation Payment Schedule (“ROPS”) annually. WHEREAS, because the Successor Agency of the former Redevelopment Agency of the City of Azusa (“Board”) previously adopted a ROPS, Resolution No. 2022-R01, dated January 18, 2022, is operative only through June 30, 2023, so that the Successor Agency of the former Redevelopment (“Agency”) may continue to meet the Agency’s recognized obligations, and NOW, THEREFORE, BE IT RESOLVED, determined and ordered by the Oversight Board as follows: Section 1. The Recitals set forth above are true and correct and incorporated herein by reference. Section 2. The Agency staff is hereby authorized to administratively amend the ROPS in order to remove line items which are subsequently disapproved by the Board, the California State Department of Finance (“DOF”) and the County of Los Angeles Auditor- Controller and to format the ROPS to conform with DOF requirements and to take all necessary and appropriate actions to prepare and submit the ROPS, provided, however, that neither such authorization nor such removal shall be deemed to be, nor are they intended as, an acknowledgement of the validity of AB x1 26 and AB 1484 or such action by the Board and/or the DOF. The Agency reserves all rights of the Agency to challenge the validity and/or application of any or all provisions of AB x1 26 and AB 1484 in any administrative or judicial proceeding, without prejudice to the Agency’s right to list any such removed item on this or a future ROPS. The Agency reserves the right to pursue any and all appeals and any available legal or equitable remedy provided or available by law to obtain the correction of any erroneous decision regarding the ROPS. Section 3. The Agency staff is authorized to include on the ROPS any items which were approved on previous ROPS but not fully expended. Attachment 1 Section 4. The Board hereby approves and adopts ROPS 23-24, in substantially the form attached to this Resolution as Exhibit A, so that the Agency may continue to meet its recognized obligations, all as required by Health and Safety Code section 34177, during the time period from July 1, 2023 through June 30, 2024. The Agency reserves the right to further amend the ROPS in the future in order to provide an accurate schedule. Section 5. The Board hereby directs that copies of this Resolution be submitted to the California State Department of Finance, the California State Controller’s Office and the Los Angeles County Auditor-Controller and to be posted on the Agency’s website. Section 6. Pursuant to Health and Safety Code Section 34179(h), all actions taken by the Oversight Board, may be reviewed by the California Department of Finance, and therefore, this Resolution shall not be effective for five (5) business days, pending a request for review by the California Department of Finance. APPROVED AND ADOPTED THIS 17th day of January, 2023. Robert Gonzales, Chairperson Successor Agency to the Former Redevelopment Agency of the City of Azusa ATTEST: Jeffrey Lawrence Cornejo, Jr., Secretary Successor Agency to the Former Redevelopment Agency of the City of Azusa I HEREBY CERTIFY that the foregoing Resolution No. 2023-R01 was duly adopted by the Board Members of the Oversight Board of the City of Azusa at a regular meeting thereof on the 17th day of January 2023, by the following vote of Board Members: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Jeffrey Lawrence Cornejo, Jr., Secretary Successor Agency to the Former Redevelopment Agency of the City of Azusa EXHIBIT A RECOGNIZED OBLIGATION PAYMENT SCHEDULE 23-24 July 1, 2023 through June 30, 2024 RESOLUTION NO. 2023-R02 A RESOLUTION OF THE SUCCESSOR AGENCY OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF AZUSA APPROVING AND ADOPTING THE ADMINISTRATIVE BUDGET FOR THE PERIOD OF JULY 1, 2023 THROUGH JUNE 30, 2024 PURSUANT TO AB x1 26 AS AMENDED BY AB 1484 WHEREAS, Health and Safety Code Section 34177(J), enacted by AB x1 26, requires a successor agency to a former redevelopment agency to prepare administrative budgets to the Oversight Board for approval. WHEREAS, the Successor Agency of the Former Redevelopment Agency of the City of Azusa (“Agency”) has submitted to the Oversight Board of the Agency (“Board”) an annual proposed administrative budget (“Budget”) that commences on July 1, 2023 through June 30, 2024. Attached hereto as Exhibit B, and NOW, THEREFORE, BE IT RESOLVED, determined and ordered by the Oversight Board as follows: Section 1. The Recitals set forth above are true and correct and incorporated herein by reference. Section 2. The Board hereby approves the Budget, in substantially the form attached to this Resolution as Exhibit B, so that the Agency may continue to meet its recognized obligations, all as required by Health and Safety Code section 34177, during the time period from July 1, 2023 through June 30, 2024. The Agency reserves the right to further amend the Budget in the future in order to provide an accurate schedule. Section 3. The Agency staff is authorized and directed to enter into any agreements and amendments to agreements necessary to memorialize and implement the agreements and obligations in the Budget herein approved by the Board. Section 4. The Board hereby directs that copies of this Resolution be submitted to the California State Department of Finance, the California State Controller’s Office and the Los Angeles County Auditor-Controller and to be posted on the Agency’s website. Section 5. Pursuant to Health and Safety Code Section 34179(h), all actions taken by the Board, may be reviewed by the California Department of Finance, and therefore, this Resolution shall not be effective for five (5) business days, pending a request for review by the California Department of Finance. Attachment 2 APPROVED AND ADOPTED THIS 17th day of January, 2023. Robert Gonzales, Chairperson Successor Agency to the Former Redevelopment Agency of the City of Azusa ATTEST: Jeffrey Lawrence Cornejo, Jr., Secretary Successor Agency to the Former Redevelopment Agency of the City of Azusa I HEREBY CERTIFY that the foregoing Resolution No. 2023-R02 was duly adopted by the Board Members of the Oversight Board of the City of Azusa at a regular meeting thereof on the 17th day of January 2023, by the following vote of Board Members: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Jeffrey Lawrence Cornejo, Jr., Secretary Successor Agency to the Former Redevelopment Agency of the City of Azusa EXHIBIT B PROPOSED ADMINISTRATIVE BUDGET July 1, 2023 through June 30, 2024