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HomeMy WebLinkAboutF-1 Staff Report - SA 25-26 ROPS AzusaSUCCESSOR AGENCY ITEM F-1 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 21, 2025 SUBJECT: APPROVAL OF RECOGNIZED OBLIGATION PAYMENT SCHEDULE AND ADMINISTRATIVE BUDGET FOR JULY 1, 2025 THROUGH JUNE 30, 2026 AND ADOPTION OF RESOLUTION SUMMARY: 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, 2025 through June 30, 2026 (“ROPS 25-26”) 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. Typically, the Agency reviews and approves the annual ROPS prior to submission to the Board. However, due to the timing of the Board meetings this year, the Board approved the City’s ROPS 25-26 on January 13, 2025 contingent upon approval of the same ROPS schedules by the Agency. This action requests the approvals of Resolution No. 2025-R01, approving and adopting ROPS 25-26 and Resolution No. 2025-R02, approving and adopting the proposed administrative budget for the period of July 1, 2025 through June 30, 2026. RECOMMENDATIONS: Staff recommends the Successor Agency to the Former Redevelopment Agency take the following actions: 1) Adopt the attached Resolution No. 2025-R01, approving and adopting the “Recognized Obligation Payment Schedule” for the period of July 1, 2025 through June 30, 2026 (ROPS 25-26) pursuant to AB x1 26 as amended by AB 1484; and Approved City Council January 21, 2025 City of Azusa ROPS 2025-26 January 21, 2025 Page 2 2) Adopt the attached Resolution No. 2025-R02, approving and adopting the proposed Administrative Budget for July 1, 2025 through June 30, 2026. DISCUSSION: 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, successor agencies are required 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 25-26: 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. Upon the approval of ROPS 25-26 by the Board, it is submitted to the DOF, State Controller’s Office and the County of Los Angeles Auditor-Controller by February 1, 2025. It will also be posted on the City website. The DOF must complete its review of ROPS 25-26 by April 15, 2025 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, 2025. This is a statutory deadline as the tax increment must be distributed to the Agency by June 1, 2025 to fund the ROPS 25-26 obligations. The attached Resolution No. 2025-R01, approves and adopts ROPS 25-26, setting forth the recognized obligations of the Agency and the amount of payments to be made for each obligation from July 1, 2025 through June 30, 2026. It also authorizes staff to amend the ROPS in order to remove line items which are subsequently disapproved by the Board and/or DOF. City of Azusa ROPS 2025-26 January 21, 2025 Page 3 Resolution No. 2025-R02 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. It also authorizes staff to amend the administrative budget in order to remove line items which are subsequently disapproved by the Board and/or DOF. The Successor Agency is entitled to receive a maximum amount of $250,000 annually. FISCAL IMPACT: The resources to fund the obligations of ROPS 25-26 will come from the Redevelopment Property Tax Trust Fund (“RPTTF”). Approval of ROPS 25-26 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 25-26 to the DOF by the February 1, 2025 deadline, as required by AB1484, may result in penalties of $10,000 per day to the Successor Agency. The expected ROPS payments total $3,785,362 which will be paid to the City by the DOF in two parts and includes $207,958 in administrative allocations which the City will retain for reimbursement of the costs incurred to manage the Agency. Prepared by: Reviewed and Approved by: Shawna Murray Talika M. Johnson Principal Accountant Director of Administrative Services Reviewed and Approved by: Sergio Gonzalez City Manager Attachments: 1) Resolution No. 2025-R01 – Successor Agency of the former Redevelopment Agency of the City of Azusa Adopting a Recognized Obligation Payment Schedule-July 1, 2025 to June 30, 2026 (ROPS 25-26), including Exhibit A – ROPS 25-26, July 1, 2025 to June 30, 2026 2) Resolution No. 2025-R02 – Successor Agency of the former Redevelopment Agency of the City of Azusa Adopting an Administrative Budget-July 1, 2025 to June 30, 2026, including Exhibit A – Proposed Administrative Budget, July 1, 2025 to June 30, 2026 RESOLUTION NO. 2025-R01 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, 2025 THROUGH JUNE 30, 2026 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; and WHEREAS, because the Successor Agency of the former Redevelopment Agency of the City of Azusa (“Board”) previously adopted a ROPS, Resolution No. 2024-R02, dated January 16, 2024, is operative only through June 30, 2025, so that the Successor Agency of the former Redevelopment (“Agency”) may continue to meet the Agency’s recognized obligations. NOW, THEREFORE, BE IT RESOLVED, determined and ordered by the Successor Agency to the Former Redevelopment Agency 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. SECTION 4. The Board hereby approves and adopts ROPS 25-26, 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, 2025 through June 30, 2026. 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 21st day of January 2025. 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. 2025-R01 was duly adopted by the Board Members of the Successor Agency to the Former Redevelopment Agency of the City of Azusa at a regular meeting thereof on the 21st day of January 2025, 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 25-26 July 1, 2025 through June 30, 2026 Recognized Obligation Payment Schedule (ROPS 25-26) - Summary Filed for the July 1, 2025 through June 30, 2026 Period Successor Agency:Azusa County:Los Angeles Current Period Requested Funding for Enforceable Obligations (ROPS Detail) 25-26A Total (July - December) 25-26B Total (January - June) ROPS 25-26 Total A Enforceable Obligations Funded as Follows (B+C+D) $- $ - $- B Bond Proceeds - -- C Reserve Balance - -- D Other Funds - -- E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ 3,169,860 $ 615,502 $3,785,362 F RPTTF 3,065,881 511,523 3,577,404 G Administrative RPTTF 103,979 103,979 207,958 H Current Period Enforceable Obligations (A+E)$ 3,169,860 $ 615,502 $ 3,785,362 Certification of Oversight Board Chairman: Name Title Pursuant to Section 34177 (o) of the Health and Safety code, I hereby certify that the above is a true and accurate Recognized Obligation Payment Schedule for the above named successor agency./s/ Signature Date Azusa Recognized Obligation Payment Schedule (ROPS 25-26) - ROPS Detail July 1, 2025 through June 30, 2026 A B C D E F G I K Q W Item # Project Name Obligation Type Agreement Execution Date Agreement Termination Date Payee Description Total Outstanding Obligation ROPS 25-26 Total 25-26A Total 25-26B Total $30,162,959 $3,785,362 $3,169,860 $615,502 22 Administrative Allocation Admin Costs 07/01/2012 06/30/2025 City of Azusa Successor Agency Administrative Allocation 207,959 $207,958 $103,979 $103,979 39 Tax Allocation Bonds Bonds Issued After 12/31/10 10/14/2014 08/01/2034 Bond Holders 2014 Subordinate Tax Allocation Refunding Bonds 2,150,000 $270,894 $232,822 $38,072 40 Tax Allocation Bonds Bonds Issued After 12/31/10 09/23/2015 08/01/2036 Bond Holders 2015A Subordinate Tax Allocation Refunding Bonds 14,315,000 $504,212 $252,106 $252,106 41 Tax Allocation Bonds Bonds Issued After 12/31/10 09/23/2015 08/01/2036 Bond Holders 2015B Subordinate Tax Allocation Refunding Bonds 11,405,000 $2,511,406 $2,313,953 $197,453 45 Tax Allocation Bonds Bonds Issued After 12/31/10 11/02/2017 08/01/1932 Bond Holders 2017 Series B Refunding bonds 2,085,000 $290,892 $267,000 $23,892 Azusa Recognized Obligation Payment Schedule (ROPS 25-26) - Report of Cash Balances July 1, 2022 through June 30, 2023 (Report Amounts in Whole Dollars) Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation. A B C D E F G H ROPS 22-23 Cash Balances (07/01/22 - 06/30/23) Fund Sources Comments Bond Proceeds Reserve Balance Other Funds RPTTF Bonds issued on or before 12/31/10 Bonds issued on or after 01/01/11 Prior ROPS RPTTF and Reserve Balances retained for future period(s) Rent, grants, interest, etc. Non-Admin and Admin 1 Beginning Available Cash Balance (Actual 07/01/22) RPTTF amount should exclude "A" period distribution amount. - 33,474 640,621 119,861 3,025,047 2 Revenue/Income (Actual 06/30/23) RPTTF amount should tie to the ROPS 22-23 total distribution from the County Auditor-Controller 3,567,674 1 100 925,187 3 Expenditures for ROPS 22-23 Enforceable Obligations (Actual 06/30/23) 3,565,019 7,869 3,799,285 4 Retention of Available Cash Balance (Actual 06/30/23) RPTTF amount retained should only include the amounts distributed as reserve for future period(s) 640,622 5 ROPS 22-23 RPTTF Prior Period Adjustment RPTTF amount should tie to the Agency's ROPS 22-23 PPA form submitted to the CAC No entry required 6 Ending Actual Available Cash Balance (06/30/23) C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5) $- $36,129 $- $112,092 $150,949 RESOLUTION NO. 2025-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, 2025 THROUGH JUNE 30, 2026 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; and 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, 2025 through June 30, 2026, attached hereto as Exhibit A. NOW, THEREFORE, BE IT RESOLVED, determined and ordered by the Successor Agency to the Former Redevelopment Agency 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 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, 2025 through June 30, 2026. 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. APPROVED AND ADOPTED THIS 21st day of January 2025. 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. 2025-R02 was duly adopted by the Board Members of the Successor Agency to the Former Redevelopment Agency of the City of Azusa at a regular meeting thereof on the 21st day of January 2025, 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 PROPOSED ADMINISTRATIVE BUDGET July 1, 2025 through June 30, 2026 Successor Agency of the Former Redevelopment Agency of the City of Azusa PROPOSED ADMINISTRATIVE BUDGET July 1, 2025 to June 30, 2026 Direct Project Costs: Direct Project Management Cost: Required by Bond Documents Principal Accountant (20%) Finance Manager (10%) Purchasing Supervisor (3%) Senior AJP Specialist (3%) Budget & Revenue Mgr. (3%) Accounting, records maintenance and site management Property Disposition Project Cost: City Manager (5%) Deputy City Manager(5%) Dir. Of Admin Services (5%) Dir. Of Econ & Comm Dev. (5%) Planning Manager (5%) Economic Dev Specialist (5%) Senior Accountant (10%) Solicitation and negotiations with Developers Total Direct Project Management Cost Administrative Costs: Agency Legal Counsel Arbitrage calculations Continuing Disclosures Tax Increment Audit Services Weed abatement/treatment Document storage Fence rental Audit Services Reader Board-Electrical Trustee Admin Fees Additional Information: Best Best & Krieger Arbitrage Compliance Specialists Urban Futures HdL Coren & Cone Dukes Landscaping Iron Mountain American Fence Company Badawi & Associates CPAs' Azusa Light & Water Wilmington Trust Total Administrative Costs Total Direct and Administrative Costs $6,000 0 18,000 10,000 500 4,500 3,500 3,000 3,000 9,000 $ $ FY 2025-26 FY 2025-26 Annual Budget Semi-Annual Budget 69,270 $ 34,635 81,190 40,595 150,459 75,230 $57,500 28,750 207,959 $ 103,980 There are two properties held for resale and there aren't any complications with selling these properties. There isn't any outstanding litigation to which the Successor Agency is a party. We can not currently define when the Successor Agency will prepare a Final ROPS.