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AGENDA BILL Agenda Item No. 7(B) Date: February 19, 2013 To: City Council of the City of El Cerrito El Cerrito Redevelopment Agency Successor Agency From: Lori Treviño, Economic Development Manager Subject: El Cerrito Redevelopment Successor Agency’s Fiscal Year 2013-14 Administrative Budget, its draft Recognized Obligations Payment Schedule 13-14A (July-December 2013), and a Cash Flow Loan Agreement Between the City and Successor Agency ACTION REQUESTED Staff requests approval of following actions: 1. Adopt a Successor Agency resolution approving its FY2013-14 administrative budget; 2. Adopt a Successor Agency resolution reviewing and authorizing submittal of the draft Recognized Obligations Payment Schedule 13-14A, covering the period July to December 2013; and 3. Adopt separate City Council and Successor Agency Resolutions approving a cash flow loan agreement for consideration by the Oversight Board to the Successor Agency. BACKGROUND ABx1 26 (“Dissolution Act”) dissolved the El Cerrito Redevelopment Agency (“RDA”) and established the El Cerrito Redevelopment Agency Successor Agency (“Successor Agency”) on February 1, 2012. At that time, the County Auditor-Controller established a Redevelopment Property Tax Trust Fund and the Successor Agency established a Redevelopment Obligation Retirement Fund (“RORF”). Under the Dissolution Act, the portion of property tax revenues collected from the City of El Cerrito Redevelopment Project Area (“Project Area”) that was considered Tax Increment prior to the RDA’s dissolution are deposited into the The A-C distributes the funds in the to the Successor Agency to retire the former RDA’s obligations and to taxing entities that were affected by the Redevelopment Plan for the Project Area. The Successor Agency must review and authorize submittal of a Recognized Obligation Schedule (“ROPS”) for each six-month period. Each ROPS must then be approved by the Oversight Board to the Successor Agency (“Oversight Board”) and the California Department of Finance (“DOF”) before funding is disbursed from the by the A-C for payments on the approved ROPS. Starting with the upcoming ROPS period, the DOF has adopted a new naming convention for ROPS schedule, using the fiscal year. ---PAGE BREAK--- Agenda Item No. 7(B) Page 2 Each fiscal year is broken into two ROPS periods A and B, so the schedule being reviewed this evening is the draft ROPS 13-14A. The Successor Agency must submit ROPS 13-14A approved by the Oversight Board to DOF no later than March 1, 2013. The Oversight Board is scheduled to consider ROPS 13-14A at a special meeting on February 26, 2013. After submittal, DOF then has 45 days to review the ROPS and approve or disapprove of any items. The Successor Agency can request additional review by DOF and an opportunity to meet and confer on disputed items, and must make that request within five business days of receiving a DOF initial determination. The DOF is required to notify the Successor Agency and A-C of its further review at least 15 days prior to the date of distributions from the For ROPS 13-14A, the notification date is May 17, 2013 for the June 1, 2013 disbursement. Pursuant to the Dissolution Act, the Successor Agency must prepare a budget for administrative expenses each fiscal year to be approved by the Oversight Board. The Successor Agency is entitled to an administrative allowance of $250,000 annually, regardless of its actual expenses. The State enacted Assembly Bill 1484 (“Trailer Bill”) in June 2012 amending the Dissolution Act, including Health & Safety Code Section 34173 that allows loans by the City to the Successor Agency for administrative costs, enforceable obligations, or project-related expenses as reported on a ROPS and approved by the Oversight Board. ROPS 13-14A The proposed ROPS 13-14A is Exhibit A to the attached Successor Agency resolution, reviewing and authorizing its submittal. It includes a summary of funds available and total obligations for the period, an itemized listing of obligations, and a reconciliation of ROPS II payments. Obligations included on ROPS 13-14A are as follows: • Tax Allocation Bond Debt Service. Payments are due to the trustee Union Bank by December 27, 2013. • ERAF and SERAF Loans. While the Trailer Bill clarified the enforceability of SERAF and ERAF loans, it also delayed their repayment until FY2013-14. The annual payment listed for FY2013-14 is estimated. However, actual payment will be based on calculations in Health & Safety Code Section 34176, once the amount of residual if any can be determined. • Accrued Vacation Liability. Due to insufficient funding in the ROPS III period for this approved item, funding is being requested on ROPS 13-14A. • Valente Note. No payment is due during the ROPS 13-14A period. • Ohlone Gardens Loan Agreement. Due to insufficient funding in the ROPS III period for this approved item, it is being funded on ROPS 13-14A. • Eden Housing Loan Agreement. This item was initially an obligation of $350,000 when included on the Redevelopment Agency’s Enforceable ---PAGE BREAK--- Agenda Item No. 7(B) Page 3 Obligation Schedule approved in August 2011. The Redevelopment Agency funded $40,000 of the obligation prior to dissolution. The balance of $310,000 was initially disapproved on ROPS I and ROPS II, but then appeared to have been approved on an amended ROPS I to be paid from the Low & Moderate Income Housing Fund (“LMIHF”), although the Successor Agency never received an approval letter for its amended ROPS I and ROPS II from DOF. Due to lack of clarity and insufficient funds, the $310,000 obligation was not paid from ROPS I funds, but was placed on ROPS III to be paid from DOF initially approved $100,000 in on ROPS III, based on the terms of the agreement with Eden Housing (although the balance of the pre-DDA obligation was actually $60,000). The Successor Agency held a meet and confer with DOF on the item to appeal the disapproval of the remaining $250,000 obligation due to Eden Housing once a Disposition and Development Agreement (“DDA”) is negotiated with the Housing Functions Successor. Following the meet and confer, DOF disapproved the entire $310,000. Disapproval of this item on ROPS I and ROPS II and the subsequent unclear communication from DOF appearing to approve the item from LMIHF on ROPS I was one of several subjects of the Successor Agency's True Up Payment litigation against the County A-C and DOF and was addressed in discussions with DOF legal counsel leading up to the stipulated judgment issued by Sacramento County Superior Court on December 21, 2012. Although this item was not directly addressed in the stipulated judgment, the Successor Agency relied upon discussions with DOF legal counsel in determining its use of ROPS I and ROPS III and in its request to amend its Housing Due Diligence Review. The $60,000 balance of the pre-DDA obligation is being listed on ROPS 13-14A for funding with consistent with the stipulated judgment discussions and DOF's initial ROPS III approvals. • Eden Housing Loan Agreement Post-DDA. The full $310,000 obligation to Eden Housing had been placed on ROPS III and initially DOF disapproved $250,000 of the obligation that was contingent on negotiation of a DDA with Eden Housing, stating that the Successor Agency did not have the authority to negotiate a DDA. However, the Housing Functions Successor does have the authority to negotiate a DDA with Eden Housing on a property that was listed on the DOF-approved Housing Asset Transfer List and the Successor Agency retained the obligation to fund the loan agreement. DOF stated that the Successor Agency can terminate the agreement due to dissolution, but the Successor Agency is not required to terminate under the Dissolution Act and the DOF cannot require the Successor Agency to do so. Eden Housing and the Housing Functions Successor are in the process of negotiating a DDA, but do not anticipate requiring funding of this obligation during FY2013-14. • Cooperation Agreement with the El Cerrito Municipal Services Corporation. After a meet and confer on this disputed item, DOF disapproved this item on ROPS III. However, no payment had been requested on ROPS III due to insufficient The Successor Agency intends to continue pursuing funding ---PAGE BREAK--- Agenda Item No. 7(B) Page 4 of this item with on ROPS 13-14A. The total outstanding obligation has been revised from prior ROPS based on estimated funding requirements under the terms of the agreement. • FY 2012-13 Administrative Allowance. Funding was approved on ROPS III. However, due to insufficient funds, the Successor Agency was unable to pay the City the entire amount. The City advanced funds anticipating approval of a loan agreement pursuant to Health & Safety Code Section 34173 This advance is included in the loan agreement being considered by the City and Successor Agency. • Due Diligence Review. Funding was approved on ROPS III. However, due to insufficient funds, the Successor Agency was unable to pay the selected accounting firm. The City advanced funds anticipating approval of a loan agreement pursuant to Health & Safety Code Section 34173 This advance is included in the loan agreement being considered by the City and Successor Agency. • FY2011-12 Administrative Allowance. This item was disapproved on ROPS III because it was required to be funded from ROPS I per original DOF approvals and as discussed with DOF legal counsel during meetings regarding True Up Payment litigation. Subsequent to resolution of the litigation, the Successor Agency used ROPS I to pay its Administrative Allowance to the City for its FY2011-12 expenses administering the Successor Agency. • Cash Flow Loan Agreement. Due to the Successor Agency having insufficient for approved payments on ROPS III, the City advanced funds anticipating approval of a loan agreement pursuant to Health & Safety Code Section 34173 for reimbursement from future distributions. Per discussions with Department of Finance legal counsel, cost of the Successor Agency’s True Up litigation is an enforceable obligation of The City of El Cerrito advanced to the Successor Agency its litigation costs anticipating reimbursement from on ROPS 13-14A. Inclusion of this item on the ROPS 13-14A submitted to DOF is contingent on Oversight Board approval of the loan agreement. • FY13-14 Administrative Allowance. Due to the uneven nature of the Successor Agency's FY2013-14 obligations of the entire administrative allowance is being included on ROPS 13-14A. The total amount of funding required for ROPS 13-14A is estimated to be $2,290,857. However, the amount of expected to be distributed is estimated by the A-C to be $1,368,492. This is based on estimates received from the A-C, which are included in the following table, which summarizes distributions and payments for FY2011-12 and FY2013-14. ---PAGE BREAK--- Agenda Item No. 7(B) Page 5 El Cerrito Redevelopment Successor Agency Distributions and Payments of Redevelopment Property Tax FY2011-12 Actual and FY2013-14 Projected FY2012-13 FY2013-14 ROPS 2 ROPS 3 13-14A 13-14B Projected Available 2,221,333 2,606,039 2,606,039 2,684,220 County Admin 48,673 48,009 48,009 49,449 County Deducted Pass-Thrus 223,412 482,915 482,915 497,402 Prior Subordinated Pass-Thrus - 706,623 - Distribution 1,949,248 2,075,115 1,368,492 2,137,368 Payments Debt Service 1,949,248 1,591,140 389,243 1,694,705 Other ROPS 1,949,248 483,975 1,901,614 288,215 Remainder - - (922,189) 154,448 Based on current projections, there is insufficient for all obligations due during the ROPS 13-14A period. SUCCESSOR AGENCY FY2013-14 ADMINISTRATIVE BUDGET A proposed FY2013-14 Administrative Budget is included as Exhibit A to the Successor Agency Resolution (Attachment Staff related expenses have been kept flat from the FY2012-13 Administrative Budget but other expenses have been reduced to reflect decreased expenses expected after the first year of redevelopment dissolution. Note that this budget does not include litigation costs or the cost of the Due Diligence Review, as provided in the Dissolution Act. This budget will be included within the City’s overall FY2013-14 Operating Budget and the City will be reimbursed once the Successor Agency receives its allowance. Regardless of the Successor Agency’s actual administrative expenses, the administrative allowance is capped at $250,000 annually. CASH FLOW LOAN AGREEMENT Due to the Successor Agency having insufficient for approved payments on ROPS III, the City utilized its cash reserves to fund Successor Agency expenses, anticipating approval of a loan agreement pursuant to Health & Safety Code Section 34173 for reimbursement from future distributions. The estimated amount to be advanced is $78,740 for administrative expenses that are subject to the Successor Agency’s FY2012-13 Administrative Allowance and $30,000 for the Due Diligence Review being performed by MGO CPAs. The cost of the True Up Payment litigation was $127,824. The Dissolution Act allows the City and Successor Agency to enter into a loan agreement pursuant to Health & Safety Code Section 34173 for reimbursement of these expenses out of future if approved by the Oversight Board. The proposed agreement is included as Exhibit A to the attached City and Successor Agency resolutions. (Attachments 3 and To allow for interest payments, the combined amounts in the obligations funded by City advances has been rounded up to $238,000 in the proposed agreement and on ROPS 13-14A. If approved by the City and Successor ---PAGE BREAK--- Agenda Item No. 7(8) Agency, it will be considered by the Oversight Board at its February 26, 2013 special meeting. DUE DILIGENCE REVIEW The Trailer Bill required the Successor Agency to hire a certified accounting firm to complete a Due Diligence Review reviewing the dissolution of the Redevelopment Agency. The DDR includes a review of both Housing and Non-Housing funds. Note that based on the unclear funding source of the Housing loan obligations approved on ROPS I, the Successor Agency reported on its Housing DDR a Low- Moderate Income Housing Fund ("LMIHF") balance as being held to pay those enforceable obligations on ROPS III. However, while the funds reported were deposited into the LMIHF on December 16, 2011 when they were considered tax increment, they were transferred to the Successor Agency as upon dissolution on January 31, 2012, as directed by DOF. The Housing DDR was completed prior to the issuance of the stipulated judgment in the True Up Payment litigation, which made clear that the funds were not LMIHF and should not have been reported on the Housing DDR. Rather, the funds were and were used to pay approved ROPS I items. Despite the Successor Agency's request to amend the Housing DDR prior to receiving a determination letter from DOF, DOF ordered the reported funds to be paid to the A-Cto be distributed to the taxing entities. Staff is working with DOF to resolve this conflicting information and is attempting to amend the Housing DDR at the same time the Non-Housing DDR is being completed. Oversight Board review of both DDRs is anticipated at its February 26, 2012 special meeting. LEGAL CONSIDERATIONS Actions being taken by the City and Successor Agency are consistent with the Dissolution Act, as amended by the Trailer Bill. Scott Hanin City Manager Attachments: 1. Successor Agency Resolution, approving its FY20 13-14 Administrative Budget 2. Successor Agency Resolution, reviewing and authorizing submittal of the draft Recognized Obligation Payment Schedule 13-14A 3. City Council Resolution, approving a loan agreement with the Successor Agency for $238,000 4. Successor Agency Resolution approving a loan agreement with the City of El Cerrito for $238,000 Page 6 ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 1 SUCCESSOR AGENCY RESOLUTION 2012-XX RESOLUTION OF THE EL CERRITO REDEVELOPMENT AGENCY SUCCESSOR AGENCY APPROVING ITS FY2013-14 ADMINISTRATIVE BUDGET WHEREAS, pursuant to the California Community Redevelopment Law (the “Redevelopment Law”), the City Council (the “City Council”) of the City of El Cerrito (the “City”) adopted the Redevelopment Plan for the City of El Cerrito Redevelopment Project Area by Ordinance No. 77-17, as amended by Ordinances No. 80-13; No. 89-5; No. 94-4; No. 2004-3; No. 2005-01; and No. 2006-10 (collectively, the “Redevelopment Plan”); and WHEREAS, the El Cerrito Redevelopment Agency (the “RDA”) was responsible for implementation of the Redevelopment Plan; and WHEREAS, as part of the 2011-12 State budget bill, ABx1 26 (the “Dissolution Act”) was enacted significantly modifying the Redevelopment Law to require the dissolution of redevelopment agencies throughout California and the establishment of successor agencies to wind down the former redevelopment agencies’ affairs; and WHEREAS, on August 15, 2011, pursuant to the Dissolution Act, the City elected to serve as the El Cerrito Redevelopment Agency Successor Agency (the “Successor Agency”), should the RDA be dissolved; and WHEREAS, California redevelopment agencies were dissolved on February 1, 2012; and WHEREAS, pursuant to the Dissolution Act, upon dissolution, the RDA transferred as a matter of law all remaining liabilities, debts and obligations to the Successor Agency; and transferred all unencumbered funds and assets to the Successor Agency’s Redevelopment Obligation Retirement Fund (the “RORF”), for disposition and/or use by the Successor Agency to retire RDA debt and pay for RDA obligations; and WHEREAS, AB 1484 adopted in June 2012 amending the Dissolution Act made clear that the Successor Agency is a separate public entity and is not a component unit of the City, but the City is providing administrative services for the Successor Agency; and WHEREAS, pursuant to the Dissolution Act, the Successor Agency is entitled to an administrative allowance of $250,000 annually to be paid from the property tax revenues collected in the Project Area, regardless of its actual administrative expenses; and WHEREAS, the Successor Agency must prepare a budget for those administrative expenses each fiscal year to be approved by an Oversight Board, as required in the Dissolution Act; and WHEREAS, the Oversight Board to the Successor Agency to the El Cerrito Redevelopment Agency (the “Oversight Board”) was formed on April 4, 2012; and ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 1 WHEREAS, an Administrative Budget prepared for FY2013-14 is attached and incorporated into this Resolution as Exhibit A. NOW THEREFORE, BE IT RESOLVED that the El Cerrito Redevelopment Agency Successor Agency hereby finds the above recitals to be true and accurate. BE IT FURTHER RESOLVED that the El Cerrito Redevelopment Agency Successor Agency approves its Administrative Budget for FY2013-14. BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption. * * * * * I CERTIFY that at the regular meeting on February 19, 2013, the City Council of the City of El Cerrito acting as the El Cerrito Redevelopment Agency Successor Agency passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: IN WITNESS of this action, I sign this document on February 2013. Cheryl Morse, City Clerk APPROVED: Gregory B. Lyman, Mayor ---PAGE BREAK--- Exhibit A Successor Agency Administrative Budget Fiscal Year 2013‐14 Entity/Activity Successor Agency Oversight Board Staffing Functions (Total Compensation plus Overhead for Indirect Costs) City Management $50,000 $30,000 Finance $50,000 $30,000 Risk Management $4,000 $2,000 Economic Development $25,000 $10,000 City Clerk $15,000 $10,000 Information Systems $4,000 $4,000 Legal Services $50,000 Financial & Audit Services $10,000 Bond‐related Costs $10,000 Supplies $1,000 $500 Postage $250 $250 Copies $200 $200 Website $1,500 $1,500 Advertising/Legal Notices $1,000 $1,000 Property Management $1,000 Total $222,950 $89,450 Combined Total $312,400 Funding Source Redevelopment Property Tax Trust Fund $250,000 Unfunded $62,400 Agenda Item No. 7(B) Attachment 1, Exh. A ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 2 SUCCESSOR AGENCY RESOLUTION 2013-XX RESOLUTION OF THE EL CERRITO REDEVELOPMENT AGENCY SUCCESSOR AGENCY AUTHORIZING SUBMITTAL OF THE DRAFT RECOGNIZED OBLIGATION PAYMENT SCHEDULE 13-14A, AS REQUIRED UNDER THE DISSOLUTION ACT WHEREAS, pursuant to the California Community Redevelopment Law (the “Redevelopment Law”), the City Council (the “City Council”) of the City of El Cerrito (the “City”) adopted the Redevelopment Plan for the City of El Cerrito Redevelopment Project Area by Ordinance No. 77-17, as amended by Ordinances No. 80-13; No. 89-5; No. 94-4; No. 2004-3; No. 2005-01; and No. 2006-10 (collectively, the “Redevelopment Plan”); and WHEREAS, the El Cerrito Redevelopment Agency (the “RDA”) was responsible for implementation of the Redevelopment Plan; and WHEREAS, as part of the 2011-12 State budget bill, ABx1 26 (the “Dissolution Act”) was enacted significantly modifying the Redevelopment Law to require the dissolution of redevelopment agencies throughout California and the establishment of successor agencies to wind down the former redevelopment agencies’ affairs; and WHEREAS, on August 15, 2011, pursuant to the Dissolution Act, the City elected to serve as the El Cerrito Redevelopment Agency Successor Agency (the “Successor Agency”), should the RDA be dissolved; and WHEREAS, California redevelopment agencies were dissolved on February 1, 2012; and WHEREAS, pursuant to the Dissolution Act, upon dissolution, the RDA transferred as a matter of law all remaining liabilities, debts and obligations to the Successor Agency; and transferred all unencumbered funds and assets to the Successor Agency’s Redevelopment Obligation Retirement Fund (the “RORF”), for disposition and/or use by the Successor Agency to retire RDA debt and pay for RDA obligations; and WHEREAS, pursuant to the Dissolution Act, the Contra Costa County Auditor Controller (the “Auditor-Controller”) established the Redevelopment Property Tax Trust Fund (the to hold Redevelopment Property Tax collected from the City of El Cerrito Redevelopment Project Area to be disbursed to the Successor Agency for payment of its enforceable obligations and to taxing entities affected by the Redevelopment Plan; and WHEREAS, AB 1484 (the “Trailer Bill”) was enacted on July 1, 2012 modifying the Dissolution Act to require the Successor Agency to submit an Oversight Board-approved Recognized Obligations Payment Schedule 13-14A (“ROPS 13-14A”) covering the period July through December, 2013 to the DOF by March 1, 2013; and WHEREAS, the Trailer Bill made clear that the Successor Agency is a separate public entity from the City; and ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 2 WHEREAS, the Successor Agency has reviewed the draft ROPS 13-14A that was prepared pursuant to the Dissolution Act and the Trailer Bill, which is attached and incorporated as Exhibit A to this Resolution, for submittal to the Oversight Board of the Successor Agency, the Auditor-Controller, and DOF; and WHEREAS, the Successor Agency wishes to authorize Successor Agency staff to amend the ROPS 13-14A administratively to account for any additional changes made by the Department of Finance (“DOF”) to the ROPS form that occur after the Successor Agency’s consideration. NOW THEREFORE, BE IT RESOLVED that the City El Cerrito Redevelopment Agency Successor Agency hereby finds the above recitals to be true and accurate. BE IT FURTHER RESOLVED that the El Cerrito Redevelopment Agency Successor Agency authorizes the submittal of the draft Recognized Obligation Payment Schedule 13-14A as required under the Dissolution Act, subject to such changes as may be necessary to accommodate changes in the DOF approved form, any such changes to be approved by the City Manager. BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption. I CERTIFY that at the regular meeting on February 19, 2013, the City Council of the City of El Cerrito acting as the El Cerrito Redevelopment Agency Successor Agency passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: IN WITNESS of this action, I sign this document on February 2013. Cheryl Morse, City Clerk APPROVED: Gregory B. Lyman, Mayor ---PAGE BREAK--- Name of Successor Agency: Outstanding Debt or Obligation Total Total Outstanding Debt or Obligation $27,435,253 Current Period Outstanding Debt or Obligation Six‐Month Total A $0 B $2,040,857 C $250,000 D $2,290,857 E Total Current Period Outstanding Debt or Obligation (A + B + C = E) Should be same amount as ROPS form six‐month total $2,290,857 F $1,368,492 G ($922,365) Prior Period (July 1, 2012 through December 31, 2012) Estimated vs. Actual Payments (as required in HSC section 34186 H $1,949,250 I $1,949,250 J Enter Actual Administrative Expenses Paid with $0 K Adjustment to Redevelopment Obligation Retirement Fund (H ‐ (I + J) = K) $0 L Adjustment to (D ‐ K = L) $2,290,857 Certification of Oversight Board Chairman: Pursuant to Section 34177(m) of the Health and Safety code, Name Title I hereby certify that the above is a true and accurate Recognized Obligation Payment Schedule for the above named agency. Signature Date SUMMARY OF RECOGNIZED OBLIGATION PAYMENT SCHEDULE Filed for the July 1, 2013 to December 31, 2013 Period Available Revenues Other Than Anticipated Funding Enforceable Obligations Funded with EL CERRITO (CONTRA COSTA) Enter Actual Obligations Paid with Administrative Allowance Funded with Total Funded (B + C = D) Enter Total Six‐Month Anticipated Funding Variance (F ‐ D = G) Maximum Allowable should not exceed Total Anticipated Funding Enter Estimated Obligations Funded by (lesser of Finance’s approved amount including admin allowance or the actual amount distributed) Agenda Item No. 7(B) Attachment 2, Exhibit A ---PAGE BREAK--- Oversight Board Approval Date: Bond Proceeds Reserve Balance Admin Allowance Other Six‐Month Total $27,435,253 $4,273,777 $0 $0 $250,000 $2,040,857 $0 $2,290,857 1 Tax Allocation Bonds 1997 A 12/17/1997 7/1/2019 Union Bank Refunding of prior TAB for Redev Projs City of El Cerrito 3,150,250 563,750 0 0 0 66,875 0 66,875 2 Tax Allocation Bonds 1998 B 12/17/1997 7/1/2015 Union Bank Refunding of prior TAB for L&M Hsg Projs City of El Cerrito 437,182 221,788 0 0 0 10,894 0 10,894 3 Tax Allocation Bonds 2004 A 10/21/2004 7/1/2023 Union Bank Tax‐exempt TAB for Infrastructure Projs City of El Cerrito 12,461,626 1,026,690 0 0 0 213,114 0 213,114 4 Tax Allocation Bonds 2004 B Non‐Hsg 10/21/2004 7/1/2012 Union Bank Taxable TAB for Redev Projs City of El Cerrito 0 0 0 0 0 0 0 0 5 Tax Allocation Bonds 2004 B Hsg 10/21/2004 7/1/2023 Union Bank Taxable TAB for L&M Hsg Projs City of El Cerrito 4,983,212 271,720 0 0 0 98,360 0 98,360 6 2009‐10 SERAF Loan 2/16/2010 City L&M Housing Fund Funds advanced for SERAF payment City of El Cerrito 995,741 132,776 0 0 0 132,776 0 132,776 7 2005‐06 ERAF Loan 4/17/2006 City L&M Housing Fund Funds advanced for ERAF payment City of El Cerrito 251,577 33,544 0 0 0 33,544 0 33,544 8 Accrued Vacation Liability 2/1/2012 City of El Cerrito Accrued Vacation Liability of RDA‐funded employees City of El Cerrito 19,392 19,392 0 0 0 19,392 0 19,392 9 Valente Promissory Note 3/5/2009 3/5/2024 George Valente Loan for land acquistion City of El Cerrito 3,170,371 288,215 0 0 0 0 0 0 10 Ohlone Gardens Loan Agreement 6/24/2009 Ohlone Gardens LP Undisbursed loan commitment City of El Cerrito 471,152 471,152 0 0 0 471,152 0 471,152 11 Eden Housing Loan Agreement 5/17/2011 Eden Housing Undisbursed loan commitment City of El Cerrito 0 0 0 0 0 0 0 0 12 Cooperation Agreement 3/7/2011 11/24/2024 El Cerrito MSC Implementation of City of El Cerrito Redevelopment Plan City of El Cerrito 0 0 0 0 0 0 0 0 13 FY 2012‐13 Administrative Allowance City of El Cerrito Administrative Allowance per AB1x26 City of El Cerrito 0 0 0 0 0 0 0 0 14 Due Diligence Review NONE Accountant for AB1484 Due Diligence Review City of El Cerrito 0 0 0 0 0 0 0 0 15 FY 2011‐12 Administrative Allowance City of El Cerrito Administrative Allowance per AB1x26 City of El Cerrito 0 0 0 0 0 0 0 0 16 Cash Flow Loan Agreement 2/19/2013 12/31/2012 City of El Cerrito Cash Flow Loan pursuant to H&S Code Section 34173(h) for ROPS III Items and Successor Agency litigation costs funded by City of El Cerrito City of El Cerrito 238,000 238,000 238,000 238,000 17 Eden Housing Loan Agreement Pre‐DDA 5/17/2011 Eden Housing Undisbursed loan commitment for pre‐development City of El Cerrito 60,000 60,000 60,000 60,000 18 Eden Housing Loan Agreement Post‐DDA 5/17/2011 Eden Housing Undisbursed loan commitment contingent on DDA City of El Cerrito 250,000 0 0 0 19 Cooperation Agreement 3/7/2011 11/24/2024 El Cerrito MSC Implementation of Redevelopment Plan City of El Cerrito 696,750 696,750 696,750 696,750 20 FY13‐14 Administrative Allowance City of El Cerrito Administrative Allowance per AB1x26 City of El Cerrito 250,000 250,000 250,000 250,000 Description/Project Scope Payee Contract/Agreement Termination Date Contract/Agreement Execution Date Project Name / Debt Obligation EL CERRITO (CONTRA COSTA) RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS 13‐14A) July 1, 2013 through December 31, 2013 Project Area Total Outstanding Debt or Obligation Total Due During Fiscal Year 2013‐14 Funding Source Item # ---PAGE BREAK--- Item # Project Name / Debt Obligation Payee Description/Project Scope Estimate Actual Estimate Actual Estimate Actual Estimate Actual Estimate Actual Estimate Actual $781,152 $0 $0 $0 $0 $0 $250,000 $0 $2,157,137 $1,949,250 $0 $0 1 Tax Allocation Bonds 1997 A Union Bank Refunding of prior TAB for Redev Projs City of El Cerrito 553,805 553,805 1 Tax Allocation Bonds 1998 B Union Bank Refunding of prior TAB for L&M Hsg Projs City of El Cerrito 216,751 216,751 1 Tax Allocation Bonds 2004 A Union Bank Tax‐exempt TAB for Infrastructure Projs City of El Cerrito 426,228 426,228 1 Tax Allocation Bonds 2004 B Non-Hsg Union Bank Taxable TAB for Redev Projs City of El Cerrito 481,045 481,045 1 Tax Allocation Bonds 2004 B Hsg Union Bank Taxable TAB for L&M Hsg Projs City of El Cerrito 271,421 271,421 2 Valente Promissory Note George Valente Loan for land acquistion City of El Cerrito 0 0 3 Cooperation Agreement El Cerrito MSC Redevelopment Plan implementation (non‐housing) City of El Cerrito 0 0 4 Cooperation Agreement City of El Cerrito Redevelopment Plan implementation (housing) City of El Cerrito 0 0 5 2009-2010 SERAF Loan L&M Housing Fund Funds advanced for SERAF payment City of El Cerrito 165,957 0 6 2005-2006 ERAF Loan L&M Housing Fund Funds advanced for ERAF payment City of El Cerrito 41,930 0 7 FY12-13 Administrative Allowance City of El Cerrito Administrative Allowance per AB1x26 City of El Cerrito 250,000 0 0 0 8 Ohlone Gardens Loan Agreement Ohlone Gardens LP Undisbursed loan commitment City of El Cerrito 471,152 0 0 0 9 Eden Housing Loan Agreement Eden Housing Undisbursed loan commitment City of El Cerrito 310,000 0 0 0 10 Unpaid 2009-2010 SERAF Loan L&M Housing Fund Funds advanced for SERAF payment City of El Cerrito 0 0 11 Unpaid 2005‐2006 ERAF Loan L&M Housing Fund Funds advanced for ERAF payment City of El Cerrito 0 0 12 FY11‐12 Pass‐Through Payments Taxing Entities Attributable to 12/16/2011 Tax Increment Payment City of El Cerrito 0 0 13 Unpaid FY11‐12 Admin Allowance City of El Cerrito Administrative Allowance per AB1x26 City of El Cerrito 0 0 14 ROPS II Pass-Through Payments Taxing Entities Per County Auditor-Controller for 6/1/12 RPT Distribution City of El Cerrito 0 0 EL CERRITO (CONTRA COSTA) Reserve Balance Admin Allowance Other Pursuant to Health and Safety Code section 34186 PRIOR PERIOD ESTIMATED OBLIGATIONS vs. ACTUAL PAYMENTS RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS II) July 1, 2012 through December 31, 2012 Project Area LMIHF Bond Proceeds ---PAGE BREAK--- Item # Project Name / Debt Obligation Notes/Comments 1 Tax Allocation Bonds 1997 A 2 Tax Allocation Bonds 1998 B 3 Tax Allocation Bonds 2004 A 4 Tax Allocation Bonds 2004 B Non‐Hsg The debt service schedule for TAB 2004B was structured such that the portion being paid from tax increment (Item was retired in 2012 and the remainder was an obligation of LMIHF (Item However, this distinction is no longer relevant, as there is no longer LMIHF, so all debt service payments are obligations of 5 Tax Allocation Bonds 2004 B Hsg The debt service schedule for TAB 2004B was structured such that the portion being paid from tax increment (Item was retired in 2012 and the remainder was an obligation of LMIHF (Item However, this distinction is no longer relevant, as there is no longer LMIHF, so all debt service payments are obligations of 6 2009‐10 SERAF Loan Annual payment is estimated. However, actual payment will be based on calculations in H&S Code Section 34176, once the amount of residual if any can be determined. 7 2005‐06 ERAF Loan Annual payment is estimated. However, actual payment will be based on calculations in H&S Code Section 34176, once the amount of residual if any can be determined. 8 Accrued Vacation Liability Due to insufficient funding in ROPS III period for this approved item, funding is included on ROPS 13‐14A. 9 Valente Promissory Note Payment due on ROPS 13‐14B. 10 Ohlone Gardens Loan Agreement Due to insufficient funding in ROPS III period for this approved item, funding is being included on ROPS 13‐14A. 11 Eden Housing Loan Agreement See Notes 17 and 18 below. 12 Cooperation Agreement see Note 19 below. 13 FY 2012‐13 Administrative Allowance Funding approved on ROPS III. However, due to insufficient funds, the Successor Agency was unable to pay the City the entire amount. The City advanced funds anticipating approval of a loan agreement pursuant to Health & Safety Code Section 34173 This advance is included in Item #16. 14 Due Diligence Review Funding approved on ROPS III. However, due to insufficient funds, the Successor Agency was unable to pay the City the entire amount. The City advanced funds anticipating approval of a loan agreement pursuant to Health & Safety Code Section 34173 This advance is included in Item #16. 15 FY 2011‐12 Administrative Allowance Approved ROPS I Item, paid from ROPS I subsequent to resolution of True Up Payment litigation. RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS 13‐14A) Notes (Optional) July 1, 2013 through December 31, 2013 EL CERRITO (CONTRA COSTA) ---PAGE BREAK--- Item # Project Name / Debt Obligation Notes/Comments RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS 13‐14A) Notes (Optional) July 1, 2013 through December 31, 2013 EL CERRITO (CONTRA COSTA) 16 Cash Flow Loan Agreement Due to insufficient the City of El Cerrito advanced funds to the Successor Agency for approved ROPS III obligations. The City and Successor Agency entered into a loan agreement pursuant to H&S Code Section 34173 for reimbursement of these expenses out of future Per discussions with Department of Finance legal counsel, cost of litigation is an enforceable obligation of The City of El Cerrito advanced funds to the Successor Agency its litigation costs, anticipating reimbursement from on ROPS 13‐14A. 17 Eden Housing Loan Agreement Pre‐DDA This item was initially an obligation of $350,000 when included on the Redevelopment Agency’s Enforceable Obligation Schedule approved in August 2011. The Redevelopment Agency funded $40,000 of the obligation prior to dissolution. The balance of $310,000 was initially disapproved on ROPS I and ROPS II, but then appeared to have been approved on an amended ROPS I to be paid from LMIHF, although the Successor Agency never received an approval letter for its amended ROPS I and ROPS II from DOF. Due to lack of clarity and insufficient funds, the $310,000 obligation was not paid from ROPS I funds, but was placed on ROPS III to be paid from DOF initially approved $100,000 in on ROPS III, based on the terms of the agreement with Eden Housing (although the balance of the pre‐ DDA obligation was actually $60,000). The Successor Agency held a meet and confer with DOF on the item to appeal the disapproval of the remaining $250,000 obligation due to Eden Housing once a Disposition and Development Agreement (DDA) is negotiated with the Housing Functions Successor. Following the meet and confer, DOF disapproved the entire $310,000. Disapproval of this item on ROPS I and ROPS II and the subsequent unclear communication from DOF appearing to approve the item from LMIHF on ROPS I was one of several subjects of the Successor Agency's True Up Payment litigation against the County Auditor‐Controller and DOF and was addressed in discussions with DOF legal counsel leading up to the stipulated judgment issued by Sacramento County Superior Court on December 21, 2012. Although this item was not directly addressed in the stipulated judgment, the Successor Agency relied upon discussions with DOF legal counsel in determining its use of ROPS I and ROPS III and in its request to amend its Housing Due Diligence Review. The $60,000 balance of the pre‐DDA obligation is being listed on ROPS 13‐14A for funding with consistent with the stipulated judgment discussions and DOF's initial ROPS III approvals. 18 Eden Housing Loan Agreement Post‐DDA As discussed in Note 20, the full $310,000 obligation to Eden Housing had been placed on ROPS III and initially DOF disapproved $250,000 of the obligation that was contingent on negotiation of a DDA with Eden Housing, stating that the Successor Agency did not have the authority to negotiate a DDA. However, the Housing Functions Successor does have the authority to negotiate a DDA with Eden Housing on a property that was listed on the DOF‐approved Housing Asset Transfer List and the Successor Agency retained the obligation to fund the loan agreement. DOF stated that the Successor Agency can terminate the agreement due to dissolution, but the Successor Agency is not required to terminate under the Dissolution Act and the DOF cannot require the Successor Agency to do so. Eden Housing and the Housing Functions Successor are in the process of negotiating a DDA and anticipate requiring funding of this obligation during FY2013‐14. ---PAGE BREAK--- Item # Project Name / Debt Obligation Notes/Comments RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS 13‐14A) Notes (Optional) July 1, 2013 through December 31, 2013 EL CERRITO (CONTRA COSTA) 19 Cooperation Agreement After a meet and confer on this disputed item, DOF dissapproved this item on ROPS III. However, no payment had been requested on ROPS III due to insufficient The Successor Agency intends to continue pursuing funding of this item with on ROPS 13‐14A. The outstanding obligation has been revised from prior ROPS based on estimated funding requirements under the terms of the agreement. 20 FY13‐14 Administrative Allowance Due to the uneven nature of the Successor Agency's FY2013‐14 obligations of the entire administrative allowance is being included on ROPS 13‐14A. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3 CITY COUNCIL RESOLUTION 2012-XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO APPROVING A CASH FLOW LOAN AGREEMENT WITH THE EL CERRITO REDEVELOPMENT AGENCY SUCCESSOR AGENCY WHEREAS, pursuant to the California Community Redevelopment Law (the “Redevelopment Law”), the City Council (the “City Council”) of the City of El Cerrito (the “City”) adopted the Redevelopment Plan for the City of El Cerrito Redevelopment Project Area by Ordinance No. 77-17, as amended by Ordinances No. 80-13; No. 89-5; No. 94-4; No. 2004-3; No. 2005-01; and No. 2006-10 (collectively, the “Redevelopment Plan”); and WHEREAS, the El Cerrito Redevelopment Agency (the “RDA”) was responsible for implementation of the Redevelopment Plan; and WHEREAS, as part of the 2011-12 State budget bill, ABx1 26 (the “Dissolution Act”) was enacted significantly modifying the Redevelopment Law to require the dissolution of redevelopment agencies throughout California and the establishment successor agencies to wind down the former redevelopment agencies’ affairs; and WHEREAS, on August 15, 2011, pursuant to the Dissolution Act, the City elected to serve as the El Cerrito Redevelopment Agency Successor Agency (the “Successor Agency”), should the RDA be dissolved; and WHEREAS, California redevelopment agencies were dissolved on February 1, 2012; and WHEREAS, pursuant to the Dissolution Act, upon dissolution, the RDA transferred as a matter of law all remaining liabilities, debts and obligations to the Successor Agency; and transferred all unencumbered funds and assets to the Successor Agency’s Redevelopment Obligation Retirement Fund (the “RORF”), for disposition and/or use by the Successor Agency to retire RDA debt and pay for RDA obligations; and WHEREAS, AB 1484, adopted in June 2012, amending the Dissolution Act, made clear that the Successor Agency is a separate public entity from the City and is not a component unit of the City, but the City is providing administrative services for the Successor Agency; and WHEREAS, pursuant to the Dissolution Act, the Contra Costa County Auditor Controller (the “Auditor-Controller”) established the Redevelopment Property Tax Trust Fund (the to hold Redevelopment Property Tax collected from the City of El Cerrito Redevelopment Project Area to be disbursed to the Successor Agency for payment of its enforceable obligations and to taxing entities affected by the Redevelopment Plan; and WHEREAS, the Dissolution Act requires the Successor Agency to prepare a Recognized Obligations Payment Schedule (“ROPS”) for each six-month period setting forth its enforceable obligations, including an administrative cost allowance of $250,000 per fiscal year; and ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3 WHEREAS, Health & Safety Code Section 34173 allows the City to loan funds to the Successor Agency for administrative costs, enforceable obligations and project-related expenses reported on a ROPS and approved by the Oversight Board; and WHEREAS, the Successor Agency prepared ROPS III for obligations payable during the period January through June, 2013 and the Department of Finance (“DOF”) approved the enforceable obligations listed on ROPS III; and WHEREAS, the Successor Agency filed litigation against the Auditor-Controller and DOF over the True Up Payment, the cost of which is an enforceable obligation of that was included on the ROPS for July through December, 2013 (“ROPS 13-14A”), so that the Successor Agency can repay the advance from the City for its litigation costs; and WHEREAS, there are insufficient funds available in the to pay all approved enforceable obligations and administrative expenses approved by the DOF during the ROPS III period and the litigation costs on ROPS 13-14A; and WHEREAS, the estimated cash flow advance to the Successor Agency required during the ROPS III period will be $238,000; and WHEREAS, to enable the Successor Agency to meet its fiduciary responsibilities to holders of enforceable obligations and for the Successor Agency to have adequate funds for administrative costs and other obligations, the City desires to loan to the Successor Agency an amount not to exceed $238,000; and WHEREAS, Exhibit A to this Resolution is a proposed Cash Flow Loan Agreement (“Loan Agreement”) pursuant to the authority granted by Health and Safety Code Section 34173 and WHEREAS, the City and Successor Agency have determined that entering into the proposed Loan Agreement is in the best interests of the City and the Successor Agency; and WHEREAS, the Loan Agreement is subject to the approval of the Oversight Board of the El Cerrito Redevelopment Successor Agency (“Oversight Board”). NOW THEREFORE, BE IT RESOLVED that the City Council of the City of El Cerrito hereby finds the above recitals to be true and accurate. BE IT FURTHER RESOLVED that the City Council of the City of El Cerrito approves execution of the Cash Flow Loan Agreement substantially in the form attached hereto as Exhibit A subject only to those changes approved by the City Manager and further subject to approval of the Oversight Board. BE IT FURTHER RESOLVED that consistent with the terms of the Loan Agreement, the City’s advance of the Loan shall not exceed $238,000 and the Successor Agency shall list the loan as an enforceable obligation on future ROPS until the loan is paid in full, at an interest rate ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3 on the Loan equal to the rate applicable to funds on deposit in the Local Agency Investment Fund. BE IT FURTHER RESOLVED that this Resolution shall take effect at the time and in the manner prescribed in Health and Safety Code Section 34179 I CERTIFY that at the regular meeting on February 19, 2013, the City Council of the City of El Cerrito passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on February 2013. Cheryl Morse, City Clerk APPROVED: Gregory B. Lyman, Mayor ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3, Exhibit A 1 Exhibit A CASH FLOW LOAN AGREEMENT (City Advance to Successor Agency) This Cash flow Loan Agreement (the “Loan Agreement”) is made and entered into as of February 2013, by and between the City of El Cerrito, a municipal corporation (the “City”), and the El Cerrito Redevelopment Agency Successor Agency (“Successor Agency”). RECITALS WHEREAS, pursuant to AB1x 26 (the “Dissolution Act”), the Successor Agency must prepare a Recognized Obligation Payment Schedule (“ROPS”) for each six-month period setting forth all enforceable obligations (as defined in the Dissolution Act) of the Successor Agency; and WHEREAS, the Dissolution Act created an oversight board (“Oversight Board”) to oversee the wind down of the El Cerrito Redevelopment Agency; and WHEREAS, on February 26, 2013 the Successor Agency requested that the Oversight Board approve a proposed loan between the City and the Successor Agency pursuant to Health & Safety Code Section 34173(h), wherein the City would advance funds to the Successor Agency in an amount not to exceed $238,000 (the “Loan”) for the purpose of paying certain Successor Agency administrative costs and enforceable obligations approved as part of ROPS III, for which there were insufficient funds in the Redevelopment Property Tax Trust Fund and to pay costs associated with litigation related to the True Up Payment required by the Successor Agency pursuant to the Dissolution Act; and WHEREAS, pursuant to Health & Safety Code Section 34173(h), the Successor Agency listed the enforceable obligations and administrative costs to be paid for with the Loan on the Third ROPS approved by the Oversight Board covering the period from January through June, 2013 and the costs were approved by the Department of Finance; and WHEREAS, pursuant to Health & Safety Code Section 34173(h), the Successor agency listed as an enforceable obligation on the ROPS for the period from July 1, 2013 through December 31, 2013 (the “ROPS 13-14A”) to be paid for with the Loan the cost of repaying the City for the cost of the Successor Agency’s True Up Payment litigation; and WHEREAS, the City and the Successor Agency have determined that entering into this Loan Agreement is in the best interests of the City and the Successor Agency. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3, Exhibit A 2 NOW, THEREFORE, in consideration of the promises and the mutual agreements herein contained, the parties hereto do hereby agree as follows. The foregoing recitals are hereby incorporated by reference and made part of this Loan Agreement. ARTICLE I. LOAN PROVISIONS Section 1.01 Loan. The City hereby agrees to lend to the Successor Agency the principal amount of Two Hundred Third Eight Thousand Dollars ($238,000) (the “Loan”) for the purposes set forth in Section 1.03. Section 1.02 Interest. Interest. Interest on the Loan shall accrue as of the Effective Date, continuing until such time as the Loan is repaid in full, at a rate equal to the interest rate applicable to funds on deposit in the Local Agency Investment Fund as of the Effective Date, compounded annually. Default Interest. In the event of a Default, interest on the Loan shall begin to accrue as of the date of Default and continuing until such time as the Loan is repaid in full or the Default is cured, at the default rate of the lesser of eight percent per annum, compounded annually (the “Default Rate”) or the highest rate permitted by law. Section 1.03 Use of Loan Funds. The Successor Agency shall use the Loan for the purpose of paying the following obligations: those Successor Agency administrative costs as set forth in Item 13 on the Third ROPS, the consulting contract for the Due Diligence Review as set forth in Item 14 on the Third ROPS, and for the purpose of reimbursing the City for litigation expenses incurred by the Successor Agency related to the filing and settlement of El Cerrito vs. Robert Campbell, et al. Section 1.04 Repayment of Loan. Pursuant to Health & Safety Code Section 34173(h), the Loan is an enforceable obligation of the Successor Agency and is payable on June 1 and January 2 of each year from the maintained by the Contra Costa County Auditor-Controller for the purpose of paying enforceable obligations of the Successor Agency. The Loan shall be set forth in full as an enforceable obligation of the Successor Agency on ROPS 13-14A. It shall be due and payable in full from the Successor Agency’s Redevelopment Obligation Retirement Fund (“RORF”) following the June 1, 2013 payment to the RORF by the Contra Costa County Auditor-Controller. However, should the Successor Agency receive insufficient funds from the to pay all costs shown on the ROPS13-14A, then the amount due and payable on the Loan shall equal the amount deposited into the RORF less all other approved costs shown on the ROPS13-14A and the balance of any principal and interest due on the Loan shall be due and payable in full on the next ROPS. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3, Exhibit A 3 The procedure described in subsection of this Section shall continue to be followed for each ROPS until the principal and interest due on the Loan are paid in full. Any remaining principal and interest due on the Loan shall continue to be shown as an enforceable obligation on each ROPS until the Successor Agency has received sufficient funds to pay all principal and interest due on the Loan. All Loan payments shall first be used to pay all accrued interest and then to reduce the principal balance. Section 1.05 Optional Prepayment of the Loan. The Successor Agency shall have the right to prepay the unpaid principal and interest of the Loan at any time. Section 1.06 Books and Accounts; Financial Statements. The Successor Agency will keep, or cause to be kept, proper books of record and accounts showing the use of the Loan funds, interest due on the Loan, Loan repayments, and principal and interest outstanding. ARTICLE II. DEFAULT AND REMEDIES Section 2.01 Event of Default. Failure by the Successor Agency to pay the principal or interest on the Loan when due and payable shall constitute a Default. Section 2.02 No Waiver. A waiver of any Default by the City shall not affect any subsequent Default or impair any rights or remedies on the subsequent default. Section 2.03 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise. ARTICLE III. MISCELLANEOUS Section 3.01 No Merger. In entering into this Loan Agreement, the City is acting in its capacity as a municipal corporation, and, pursuant to Health & Safety Code Section 34173(g), the Successor Agency is a separate public entity from the City; and both the City and the Successor Agency are acting pursuant to the specific authority granted by the Oversight Board and by Health & Safety Code Sections 34173(h) and 34180(h) authorizing agreements between the City and the Successor Agency. In consequence, the parties to this Loan Agreement are not merged. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3, Exhibit A 4 Section 3.02 Successor is Deemed Included in All References to Predecessor. Whenever in this Loan Agreement either the Successor Agency or the City is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Loan Agreement contained by or on behalf of the Successor Agency or the City shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 3.03 Amendment. This Loan Agreement may be amended by the parties hereto but only by a written instrument signed by both parties and with the approval of the Oversight Board. Section 3.04 Effective Date. This Loan Agreement shall take effect upon approval by the Oversight Board and, following that approval, at the time and in the manner prescribed in Health & Safety Code Section 34179(h) (the “Effective Date”). Section 3.05 Severability. If any Section, paragraph, sentence, clause or phrase of this Loan Agreement shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Loan Agreement. The City and the Successor Agency hereby declare that they would have adopted this Loan Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the Loan irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Loan Agreement may be held illegal, invalid or unenforceable. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3, Exhibit A 5 IN WITNESS WHEREOF, the City of El Cerrito and the El Cerrito Redevelopment Agency Successor Agency have caused this Agreement to be signed by their respective officers. CITY OF EL CERRITO, CALIFORNIA, a California municipal corporation (“CITY”) Approved: Date: Scott Hanin, City Manager APPROVED AS TO FORM: Sky Woodruff, City Attorney EL CERRITO REDEVELOPMENT AGENCY SUCCESSOR AGENCY, the successor to the former El Cerrito Redevelopment Agency (“SUCCESSOR AGENCY”) Approved: Date: Scott Hanin, Executive Officer APPROVED AS TO FORM: Karen Tiedemann, Successor Agency Attorney ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 4 SUCCESSOR AGENCY RESOLUTION 2012-XX RESOLUTION OF THE EL CERRITO REDEVELOPMENT AGENCY SUCCESSOR AGENCY APPROVING A CASH FLOW LOAN AGREEMENT WITH THE CITY OF EL CERRITO WHEREAS, pursuant to the California Community Redevelopment Law (the “Redevelopment Law”), the City Council (the “City Council”) of the City of El Cerrito (the “City”) adopted the Redevelopment Plan for the City of El Cerrito Redevelopment Project Area by Ordinance No. 77-17, as amended by Ordinances No. 80-13; No. 89-5; No. 94-4; No. 2004-3; No. 2005-01; and No. 2006-10 (collectively, the “Redevelopment Plan”); and WHEREAS, the El Cerrito Redevelopment Agency (the “RDA”) was responsible for implementation of the Redevelopment Plan; and WHEREAS, as part of the 2011-12 State budget bill, ABx1 26 (the “Dissolution Act”) was enacted significantly modifying the Redevelopment Law to require the dissolution of redevelopment agencies throughout California and the establishment successor agencies to wind down the former redevelopment agencies’ affairs; and WHEREAS, on August 15, 2011, pursuant to the Dissolution Act, the City elected to serve as the El Cerrito Redevelopment Agency Successor Agency (the “Successor Agency”), should the RDA be dissolved; and WHEREAS, California redevelopment agencies were dissolved on February 1, 2012; and WHEREAS, pursuant to the Dissolution Act, upon dissolution, the RDA transferred as a matter of law all remaining liabilities, debts and obligations to the Successor Agency; and transferred all unencumbered funds and assets to the Successor Agency’s Redevelopment Obligation Retirement Fund (the “RORF”), for disposition and/or use by the Successor Agency to retire RDA debt and pay for RDA obligations; and WHEREAS, the AB 1484, adopted in June 2012, amending the Dissolution Act, made clear that the Successor Agency is a separate public entity from the City and is not a component unit of the City, but the City is providing administrative services for the Successor Agency; and WHEREAS, pursuant to the Dissolution Act, the Contra Costa County Auditor Controller (the “Auditor-Controller”) established the Redevelopment Property Tax Trust Fund (the to hold Redevelopment Property Tax collected from the City of El Cerrito Redevelopment Project Area to be disbursed to the Successor Agency for payment of its enforceable obligations and to taxing entities affected by the Redevelopment Plan; and WHEREAS, the Dissolution Act requires the Successor Agency to prepare a Recognized Obligations Payment Schedule (“ROPS”) for each six-month period setting forth its enforceable obligations, including an administrative cost allowance of $250,000 per fiscal year; and ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 4 WHEREAS, Health & Safety Code Section 34173 allows the City to loan funds to the Successor Agency for administrative costs, enforceable obligations and project-related expenses reported on a ROPS and approved by the Oversight Board; and WHEREAS, the Successor Agency prepared ROPS III for obligations payable during the period January through June, 2013 and the Department of Finance (“DOF”) approved the enforceable obligations listed on ROPS III; and WHEREAS, the Successor Agency filed litigation against the Auditor-Controller and DOF over the True Up Payment, the cost of which is an enforceable obligation of that was included on the ROPS for July through December, 2013 (“ROPS 13-14A”), so that the Successor Agency can repay the advance from the City for its litigation costs; and WHEREAS, there are insufficient funds available in the to pay all approved enforceable obligations and administrative expenses approved by the DOF during the ROPS III period and the litigation costs on ROPS 13-14A; and WHEREAS, the estimated cash flow advance to the Successor Agency required during the ROPS III period will be $238,000; and WHEREAS, to enable the Successor Agency to meet its fiduciary responsibilities to holders of enforceable obligations and for the Successor Agency to have adequate funds for administrative costs and other obligations, the City desires to loan to the Successor Agency an amount not to exceed $238,000; and WHEREAS, Exhibit A to this Resolution is a proposed Cash Flow Loan Agreement (“Loan Agreement”) pursuant to the authority granted by Health and Safety Code Section 34173(h); and WHEREAS, the City and Successor Agency have determined that entering into the proposed Loan Agreement is in the best interests of the City and the Successor Agency; and WHEREAS, the Loan Agreement is subject to the approval of the Oversight Board of the El Cerrito Redevelopment Successor Agency (“Oversight Board”). NOW THEREFORE, BE IT RESOLVED that the El Cerrito Redevelopment Agency Successor Agency hereby finds the above recitals to be true and accurate. BE IT FURTHER RESOLVED that the El Cerrito Redevelopment Agency Successor Agency approves execution of the Cash Flow Loan Agreement substantially in the form attached hereto as Exhibit A subject only to those changes approved by the Successor Agency Executive Officer and further subject to approval of the Oversight Board. BE IT FURTHER RESOLVED that consistent with the terms of the Loan Agreement, the City’s advance of the Loan shall not exceed $238,000 and the Successor Agency shall list the loan as an enforceable obligation on future ROPS until the loan is paid in full, at an interest rate ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 4 on the Loan equal to the rate applicable to funds on deposit in the Local Agency Investment Fund. BE IT FURTHER RESOLVED that this Resolution shall take effect at the time and in the manner prescribed in Health and Safety Code Section 34179 I CERTIFY that at the regular meeting on February 19, 2013, the City Council of the City of El Cerrito acting as the governing board of the El Cerrito Redevelopment Agency Successor Agency passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: IN WITNESS of this action, I sign this document on February 2013. Cheryl Morse, City Clerk APPROVED: Gregory B. Lyman, Mayor ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 4, Exhibit A 1 Exhibit A CASH FLOW LOAN AGREEMENT (City Advance to Successor Agency) This Cash flow Loan Agreement (the “Loan Agreement”) is made and entered into as of February 2013, by and between the City of El Cerrito, a municipal corporation (the “City”), and the El Cerrito Redevelopment Agency Successor Agency (“Successor Agency”). RECITALS WHEREAS, pursuant to AB1x 26 (the “Dissolution Act”), the Successor Agency must prepare a Recognized Obligation Payment Schedule (“ROPS”) for each six-month period setting forth all enforceable obligations (as defined in the Dissolution Act) of the Successor Agency; and WHEREAS, the Dissolution Act created an oversight board (“Oversight Board”) to oversee the wind down of the El Cerrito Redevelopment Agency; and WHEREAS, on February 26, 2013 the Successor Agency requested that the Oversight Board approve a proposed loan between the City and the Successor Agency pursuant to Health & Safety Code Section 34173(h), wherein the City would advance funds to the Successor Agency in an amount not to exceed $238,000 (the “Loan”) for the purpose of paying certain Successor Agency administrative costs and enforceable obligations approved as part of ROPS III, for which there were insufficient funds in the Redevelopment Property Tax Trust Fund and to pay costs associated with litigation related to the True Up Payment required by the Successor Agency pursuant to the Dissolution Act; and WHEREAS, pursuant to Health & Safety Code Section 34173(h), the Successor Agency listed the enforceable obligations and administrative costs to be paid for with the Loan on the Third ROPS approved by the Oversight Board covering the period from January through June, 2013 and the costs were approved by the Department of Finance; and WHEREAS, pursuant to Health & Safety Code Section 34173(h), the Successor agency listed as an enforceable obligation on the ROPS for the period from July 1, 2013 through December 31, 2013 (the “ROPS 13-14A”) to be paid for with the Loan the cost of repaying the City for the cost of the Successor Agency’s True Up Payment litigation; and WHEREAS, the City and the Successor Agency have determined that entering into this Loan Agreement is in the best interests of the City and the Successor Agency. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 4, Exhibit A 2 NOW, THEREFORE, in consideration of the promises and the mutual agreements herein contained, the parties hereto do hereby agree as follows. The foregoing recitals are hereby incorporated by reference and made part of this Loan Agreement. ARTICLE I. LOAN PROVISIONS Section 1.01 Loan. The City hereby agrees to lend to the Successor Agency the principal amount of Two Hundred Third Eight Thousand Dollars ($238,000) (the “Loan”) for the purposes set forth in Section 1.03. Section 1.02 Interest. Interest. Interest on the Loan shall accrue as of the Effective Date, continuing until such time as the Loan is repaid in full, at a rate equal to the interest rate applicable to funds on deposit in the Local Agency Investment Fund as of the Effective Date, compounded annually. Default Interest. In the event of a Default, interest on the Loan shall begin to accrue as of the date of Default and continuing until such time as the Loan is repaid in full or the Default is cured, at the default rate of the lesser of eight percent per annum, compounded annually (the “Default Rate”) or the highest rate permitted by law. Section 1.03 Use of Loan Funds. The Successor Agency shall use the Loan for the purpose of paying the following obligations: those Successor Agency administrative costs as set forth in Item 13 on the Third ROPS, the consulting contract for the Due Diligence Review as set forth in Item 14 on the Third ROPS, and for the purpose of reimbursing the City for litigation expenses incurred by the Successor Agency related to the filing and settlement of El Cerrito vs. Robert Campbell, et al. Section 1.04 Repayment of Loan. Pursuant to Health & Safety Code Section 34173(h), the Loan is an enforceable obligation of the Successor Agency and is payable on June 1 and January 2 of each year from the maintained by the Contra Costa County Auditor-Controller for the purpose of paying enforceable obligations of the Successor Agency. The Loan shall be set forth in full as an enforceable obligation of the Successor Agency on ROPS 13-14A. It shall be due and payable in full from the Successor Agency’s Redevelopment Obligation Retirement Fund (“RORF”) following the June 1, 2013 payment to the RORF by the Contra Costa County Auditor-Controller. However, should the Successor Agency receive insufficient funds from the to pay all costs shown on the ROPS13-14A, then the amount due and payable on the Loan shall equal the amount deposited into the RORF less all other approved costs shown on the ROPS13-14A and the balance of any principal and interest due on the Loan shall be due and payable in full on the next ROPS. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 4, Exhibit A 3 The procedure described in subsection of this Section shall continue to be followed for each ROPS until the principal and interest due on the Loan are paid in full. Any remaining principal and interest due on the Loan shall continue to be shown as an enforceable obligation on each ROPS until the Successor Agency has received sufficient funds to pay all principal and interest due on the Loan. All Loan payments shall first be used to pay all accrued interest and then to reduce the principal balance. Section 1.05 Optional Prepayment of the Loan. The Successor Agency shall have the right to prepay the unpaid principal and interest of the Loan at any time. Section 1.06 Books and Accounts; Financial Statements. The Successor Agency will keep, or cause to be kept, proper books of record and accounts showing the use of the Loan funds, interest due on the Loan, Loan repayments, and principal and interest outstanding. ARTICLE II. DEFAULT AND REMEDIES Section 2.01 Event of Default. Failure by the Successor Agency to pay the principal or interest on the Loan when due and payable shall constitute a Default. Section 2.02 No Waiver. A waiver of any Default by the City shall not affect any subsequent Default or impair any rights or remedies on the subsequent default. Section 2.03 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise. ARTICLE III. MISCELLANEOUS Section 3.01 No Merger. In entering into this Loan Agreement, the City is acting in its capacity as a municipal corporation, and, pursuant to Health & Safety Code Section 34173(g), the Successor Agency is a separate public entity from the City; and both the City and the Successor Agency are acting pursuant to the specific authority granted by the Oversight Board and by Health & Safety Code Sections 34173(h) and 34180(h) authorizing agreements between the City and the Successor Agency. In consequence, the parties to this Loan Agreement are not merged. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 4, Exhibit A 4 Section 3.02 Successor is Deemed Included in All References to Predecessor. Whenever in this Loan Agreement either the Successor Agency or the City is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Loan Agreement contained by or on behalf of the Successor Agency or the City shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 3.03 Amendment. This Loan Agreement may be amended by the parties hereto but only by a written instrument signed by both parties and with the approval of the Oversight Board. Section 3.04 Effective Date. This Loan Agreement shall take effect upon approval by the Oversight Board and, following that approval, at the time and in the manner prescribed in Health & Safety Code Section 34179(h) (the “Effective Date”). Section 3.05 Severability. If any Section, paragraph, sentence, clause or phrase of this Loan Agreement shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Loan Agreement. The City and the Successor Agency hereby declare that they would have adopted this Loan Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the Loan irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Loan Agreement may be held illegal, invalid or unenforceable. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 4, Exhibit A 5 IN WITNESS WHEREOF, the City of El Cerrito and the El Cerrito Redevelopment Agency Successor Agency have caused this Agreement to be signed by their respective officers. CITY OF EL CERRITO, CALIFORNIA, a California municipal corporation (“CITY”) Approved: Date: Scott Hanin, City Manager APPROVED AS TO FORM: Sky Woodruff, City Attorney EL CERRITO REDEVELOPMENT AGENCY SUCCESSOR AGENCY, the successor to the former El Cerrito Redevelopment Agency (“SUCCESSOR AGENCY”) Approved: Date: Scott Hanin, Executive Officer APPROVED AS TO FORM: Karen Tiedemann, Successor Agency Attorney