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AGENDA BILL Agenda Item No. 7(8) Date: April 17, 2012 To: City Cotmcil of the City ofEl Cerrito acting as Successor Agency to the El Cerrito Redevelopment Agency From: Subject: Lori Trev:ifio, Economic Development Manager Mary Dodge, Administrative Services Director Authorization to Submit Draft Second Recognized Obligations Payment Schedule and Approval of Successor Agency, FY12-13 Administrative Budget ACTION REQUESTED Adopt two Successor Agency resolutions reviewing and authorizing submittal of the draft Second Recognized Obligations Payment Schedule required under AB 1 x26, and approving the Successor Agency~s Administrative Budget for Fiscal Year 2012-13. REDEVELOPMENT AGENCY SUSPENSION On July 1, 2011, activities of the El Cerrito Redevelopment Agency ("RDA") were suspended pursuant to AB 1x26. On August 15, 2011, the City of El Cerrito ("City") elected to serve as the Successor Agency to the El Cerrito Redevelopment Agency At the same time, the RDA adopted an Enforceable Obligations Payment Schedule ("EOPS") for those payments due during its suspension. While in suspension during the CRA v. Matosantos litigation, the RDA received its usual tax increment payment on December 16, 2011, rather than property tax revenue a month later subject to the distribution process outlined in AB1x26. The EOPS was amended January 17, 2012, reflecting payments due on the RDA's obligations due prior to its dissolution. The RDA transferred its assets and liabilities to a SA fiduciary fund, including sufficient cash to pay obligations due prior to the next scheduled revenue payment from the County. The EOPS was also intended to serve as the basis for the first Recognized Obligations Payment Schedule ("ROPS") to be considered by the SA no later than March 1, 2012. DISSOLUTION ACTIONS On February 21, 2012, the SA reviewed and authorized submittal of the draft first ROPS, which included the following: • Tax Allocation Bond Payments • Valente Note • Cooperation Agreement with the El Cerrito Municipal Services Corporation • Cooperation Agreement with the City of El Cerrito • ERAF and SERAF Loan Payments • Undisbursed Loan Commitments • Administrative Allowance ---PAGE BREAK--- Agenda Item No. 7(8) The City Council ratified the appojntments of Mayor Jones and staff member Hilde Myall to the Oversight Board Other members of the OB, with their appointing entities are as follows: • Whitney Dotson, East Bay Regional Parks District • Mark Friedman, Contra Costa Community College District • Hale Kronenberg, Contra Costa County • Sandi Potter, County Superintendent of Schools • Kristine Solseng, Contra Costa County The OB held its first meeting on April 4, 2012. It elected Mayor Jones as its Chair and Mark Friedman as its Vice Chair. It approved its rules, procedures and meeting schedule; a FY11-12 administrative budget for the SA that staff had prepared; and the draft first ROPS that the SA had reviewed and authorized. ,A copy of the background presentation provided to the 0 B is Attachment 1 to this Report. The approved first ROPS was submitted to the Department of Finance ("DOF") on April 5, 2012, prior to the requested submittal date of April15, 20.12. The County Auditor-Controller ("CAC") provided notice to all SAs in the County that any funds that the legislation . intend~d to cover payments on the first ROPS were distributed as tax increment to the RDA on December 16, 2011 and no additional payments will be made on May 15, 2012. However, the CAC also noted that funds to cover the second ROPS (covering July 1 to December 31, 2012) would be distributed on June 15, 2012 and that funds could be advanced prior to the date if needed to cover expenses on the first ROPS. The CAC also contacted all SAs to initiate the independent audit of the former RDA required under AB1x26. Due to the timing issues created by the delay in dissolution, the audit will not be completed prior to submittal of the first two ROPS. Regardless, the DOF and the CAC have said that payments of obligations will be made prior to their certificati~n by the independent auditor, though the DOF still retains the ability to require reconsideration of an item on a ROPS by the OB prior to the audit and certification of obligations. SECOND RECOGNIZED OBLIGATIONS PAYMENT SCHEDULE Beginning in FY12-13, the SA will prepare a ROPS for each six-month period. When the SA reviewed and authorized the first ROPS, a draft of the second ROPS was included for informational purposes. The DOF has requested submittal of the second ROPS by May 11, 2012. The second ROPS is Exhibit A to the attached proposed SA resolution reviewing and authorizing submittal of the second ROPS. SUCCESSOR AGENCY ADMINISTRATIVE BUDGET A proposed SA FY12-13 Administrative Budget is Exhibit A to the attached proposed SA resolution for its approval. Regardless of the SA's actual administrative expenses, the SA is entitled to an administrative allowance of $250,000 annually. However, should there be insufficient funds available for obligations payable in any ROPS period, the administrative allowance for that ROPS period will be the first item to be reduced. Page2 ---PAGE BREAK--- Agenda Item No. 7(8) LEGAL CONSIDERATIONS The preparation of the ROPS. fulfills the requirements of the SA under AB 1 x26 regarding the ROPS. As noted above, the ROPS will not be final until it is certified by the external auditor hired by the County Auditor-Controller and approved by the Oversight Board. The ROPS is not final until three days after the Oversight Board approval, during which time the Department of Finance can request to review any items on the ROPS. Reviewed by: ren Pinkos Assistant City Manager Attachments: 1. Background Presentation to the Oversight Board, April4, 2012 2. Successor Agency Resolution 2012-XX, reviewing and authorizing submittal of the second draft Recognized Obligation Payment Schedule Required under AB1x26 ' 3. Successor Agency Re~olutio~ 2012-XX, approving the Successor Agency Annual Budget for FY12-13 Page 3 ---PAGE BREAK--- Background on Dissolution of the El Cerrito Redevelopment Agency Pursuant to AB1x26 Oversight Board of the Successor Agency to the El Cerrito RedevelopmentAgency to the El Cerrito Redevelopment Agency Special Meeting, April 4, 2012 Agenda Item No. 7(B) Attachment 1 ---PAGE BREAK--- Background Background y Historical and Legislative Overview y F El C it R d l tA y Former El Cerrito Redevelopment Agency y Dissolution Legislation y Role and Actions Required of the Oversight Board y Fi i l O i y Financial Overview y Assets and Liabilities transferred to the City or the Successor Agency y Successor Agency Obligations as of February 1, 2012 d d y Successor Agency Administrative Budget y Fiscal Benefit of Approving Economic Development Obligations - Financial Projections y FirstYear Cash Flo Issues y First Year Cash Flow Issues y Items for Consideration y Oversight Board Rules; Procedures; Date, Time and Location for Meetings S d d y Successor Agency Administrative Budget y First Recognized Obligation Payment Schedule (ROPS) April 4, 2012 2 ---PAGE BREAK--- Former El Cerrito R d l t A Redevelopment Agency Facts and Project Area Map y Cumulative Tax Increment Collected Through FY10/11 A i l 70M FY10/11: Approximately $70M y FY11/12 Assessed Value: $573M (Prior to Expected $15M Correction) y FY11/12 Incremental AssessedValue: 3 April 4, 2012 FY11/12 Incremental Assessed Value: Approximately $480M ($495M with Correction) ---PAGE BREAK--- El Cerrito Redevelopment Agency Goals and Objectives Goals and Objectives y Facilitate commercial and residential transit-oriented development at El Cerrito’s two BART stations y Strengthen the City’s economic base by increasing opportunities to purchase local goods services and opportunities to purchase local goods, services, and entertainment y Improve El Cerrito’s image and strengthen the sense of p g g community, while enhancing property values y Ensure a wide range of quality housing choices in El Cerrito, including mixed-use and affordable housing developments y Improve the physical and natural environment and maintain h Ci ’ l i f i the City’s long-term infrastructure investment April 4, 2012 4 ---PAGE BREAK--- El Cerrito Redevelopment Agency Recent Projects and Programs Recent Projects and Programs y Public Improvements y San PabloAvenue Streetscape y Encouraging Infill Development y CerritoTheater y San Pablo Avenue Streetscape y Civic Center Plaza y Library y Economic Development y Cerrito Theater y Mayfair Acquisition y San Pablo Avenue Specific Plan and Del Norte TOD Strategy p y Business Recruitment and Retention y URM Abatement (Technical Assistance to Nearly 30 Businesses) y Target Option Negotiation y Sale of Properties with Obligations to EC Municipal Services Corp. y Aff d bl H i y Video Equipment Loan Program (Over 50 Businesses) y Funded Implementation of Economic Development Projects and Programs by y Affordable Housing y Loan to Resources for Community Development for Property Acquisition y Acquisition of Tradeway Site, Developer p g y EC Municipal Services Corp. y Commercial Loan Program (Elevation 66) y Program and Project Staff y Grant Program (First Grant to Fire Department q y p Solicitation, predevelopment loan and exclusive negotiating agreement y Sale of Tradeway Property with Development Obligations to for Regional Radio System) p g City of El Cerrito April 4, 2012 5 ---PAGE BREAK--- Project Area Assessed Value FY1992/93 to FY2011/12 FY1992/93 to FY2011/12 $700 Market Peak $631.4M in FY08/09 $572.7M in FY11/12 $500 $600 llions) Down 9% from Peak $300 $400 sed Value (mil $92.9M in FY77/78 $100 $200 Assess Base Assessed Value $ $0 Historical AV (FY92/93-FY11/12) Base AV 6 April 4, 2012 ---PAGE BREAK--- Tax Increment FY1992/93 FY2011/12 FY1992/93 – FY2011/12 $5.4M in FY08/09 $6.0 $4.9M in FY11/12 $4.0 $5.0 ions) $3.0 $ crement (milli FY11/12 includes anticipated Prior Year Supplemental Payment for Anticipated AV Correction $1.0 $2.0 Tax Inc hl 20% fT d h h h $0.0 Roughly 20% of Tax Increment was passed through to taxing entities each year, with the split calculated by County according to Property Tax Shares. April 4, 2012 7 ---PAGE BREAK--- Taxing Entities Serving Redevelopment Project Area* Redevelopment Project Area* y Education y Contra Costa County Superintendant of Schools PropertyTaxSharesApplicable y West Contra Costa Unified School District y Contra Costa Community College District y ERAF y City of El Cerrito y C t C t C t CCERAF2% toPassͲThroughPayments y Contra Costa County y Special Districts y East Bay Regional Park District y Contra Costa Water Agency y Mosquito Abatement District WCCUSD29% Other KͲ12ERAF 15% q y Stege Sanitary District y West Contra Costa Hospital District y East Bay Municipal Utility District y AC Transit y BayArea RapidTransit District Supof Schools1% City22% County14% EBRPD3% Districts10% y Bay Area Rapid Transit District y Bay Area Air Quality Management District * Number in parentheses is the entity’s number of appointments to the Oversight Board. 8 April 4, 2012 ---PAGE BREAK--- Continued Goal: Revitalization Through Economic Development and Affordable Housing Funding Obligations for Economic Development & Housing Programs y Policies y Priority Development Area y Adoption of New Zoning Based on y Midtown y URM Abatement y Senior Housing/Mixed-Use Project San Pablo Avenue Specific Plan y Del Norte TOD Parking and Feasibility Strategy y D l N BART A M Adjacent to City Hall y Multi-family/Special Needs Project on Portola Drive l y Del Norte BART Area Master Planning y El Cerrito Plaza Area y T R i y Del Norte y Master Development in Partnership with Property Owners and BART l y Tenant Recruitment y Developer/Property Owner Facilitation y Economic Development Programs y Maintaining Existing Affordable Housing Stock April 4, 2012 9 ---PAGE BREAK--- Summary of AB1x26 Summary of AB1x26 y Effect on public agencies y Requires successor agencies to d d y Dissolves redevelopment agency y Transfers assets and liabilities to a successor agency use tax revenue, proceeds, and encumbered reserves to pay: 1. County Auditor-Controller y Creates oversight boards for successor agencies y Impact on existing projects and administration costs 2. Enforceable obligations (including both debt service p g p j finances y Allows projects to proceed and be funded if there is a financial and contractual obligations) 3. Administrative cost allowance to the successor agency funded if there is a financial commitment y Invalidates property conveyances to and contracts with public agencies y Remaining funds distributed to the taxing entities serving the project area and contracts with public agencies (occurring after Jan. 1, 2011) project area April 4, 2012 10 ---PAGE BREAK--- Legislative Provisions Related to Oversight Boards to Oversight Boards y Representatives of city, county, community college district, county board of education, largest special district y Unpaid position, serves at pleasure of appointing entity S b h B A P bl R d A d P l l y Subject to the Brown Act, Public Records Act, and Political Reform Act of 1974 y Personal immunity but not legal counsel provided y Personal immunity, but not legal counsel provided y Actions subject to review by Department of Finance y Fiduciary duty to holders of enforceable obligations and Fiduciary duty to holders of enforceable obligations and taxing entities y One county-wide Oversight Board starting in 2016 y g g April 4, 2012 11 ---PAGE BREAK--- Oversight Board Required Actions Oversight Board Required Actions Direct and/or approve actions of the Successor Agency to: y Approve Successor Agency Administrative Budget y Establish of new repayment schedules or refunding of debt y S t id d d y Set aside needed reserves y Merge of project areas y Continue acceptance of financial assistance Continue acceptance of financial assistance y Make payments or perform obligations on recognized obligation payment schedules y Dispose of property and assets y Terminate unenforceable obligations or renegotiate contracts y Transfer housing functions April 4, 2012 12 ---PAGE BREAK--- Process Process y Successor Agency: prepares Recognized Obligations Payment Schedule (ROPS) with debt payments and contractual obligations by month with debt payments and contractual obligations by month y County Auditor-Controller: uses independent auditor to certify obligations on ROPS are valid O h d d f f bl O S y Oversight Board: approves payment and performance of obligations on ROPS (Department of Finance has requested action by April 15) y Department of Finance: allowed three days to request review of any oversight b d i ( i ff i f h d i d) board actions (actions are not effective for three-day period) y Department of Finance: has ten days to approve the oversight board action being reviewed or return it to the oversight board y County Auditor-Controller: disburses funds in January and June each year y Successor Agency: makes debt payments and ensures performance of contractual obligations April 4, 2012 13 ---PAGE BREAK--- Actions Already Taken for Dissolution: Cit El t d t A H i F ti City Elected to Assume Housing Functions y Assets (as of February 1) y A ’ b d h i f d t f d t Cit H i F d y Agency s encumbered housing funds transferred to new City Housing Fund y Receivables for loans to Agency to pay prior funding takeaways by the State y Loan portfolio of affordable housing projects y Idaho Apartments y Idaho Apartments y El Cerrito Royale and St. John’s Land Partnership y Land acquisition for Ohlone Gardens Project by Resources for Community Development y Tradeway property (conveyed prior to dissolution legislation) y p p y ( y p g ) y Contractual and Statutory Obligations y Loan commitments to Ohlone Gardens and Eden Housing y Exclusive NegotiatingAgreement with Eden Housing forTradeway property y Exclusive Negotiating Agreement with Eden Housing for Tradeway property y Monitoring existing housing projects for compliance with affordability restrictions AB1x26 provides no additional funding. If Housing obligations on ROPS are not approved current and future will be eliminated not approved, current and future will be eliminated. April 4, 2012 14 ---PAGE BREAK--- Actions Already Taken for Dissolution: Cit El t d t S S A City Elected to Serve as Successor Agency y Assets as of February 1 y Funds remaining in Redevelopment Capital Fund y Real property (remnants of right-of-way from prior projects) y Performance Deeds ofTrust by EC Municipal Services Corp y Performance Deeds of Trust by EC Municipal Services Corp. to redevelop or operate properties conveyed y EastshoreTriangle y Mayfair Block y Civic Center Parcel y Cerrito Theater y McMorgan Owner Participation Agreement- Right to approve tenants (currently occupied by OSH) y L i bl f Vid E i P (P i f y Loan receivables for Video Equipment Program (Portion of balance forgiven annually) April 4, 2012 15 ---PAGE BREAK--- February 1: Enforceable Obligations and Li biliti T f d t S A Liabilities Transferred to Successor Agency y Debt Payments y Contracts y Tax Allocation Bonds y Valente Note (secured by third-party deed of trust) y Coop Agmt with City for El Cerrito Redev Project Area (Housing) h f y Payments to Housing Fund for loans to fund Educational Revenue Augmentation F d (ERAF) 2005 06 d y Coop Agmt with EC MSC for El Cerrito Redev Project Area (Ec Dev) Fund (ERAF) 2005-06 and Supplemental ERAF 2009-10 y Commitment to County for y Project Commitments y Ohlone Gardens Loan Agreement $5.1M facilities funding – enforceability is unclear y SuccessorAgency y Eden Housing Loan Agreement y Project Related Costs y Successor Agency Administrative Allowance j y Affordable housing monitoring April 4, 2012 16 ---PAGE BREAK--- ROPS February-June 2012 Obligation (Payee) Description Total Obligation Feb Mar Apr May June Total ROPS 1997A Bonds (Union Bank) Redev Projs 4,662,048 470,868 $470,868 1998B Bonds (Union Bank) L&M Hsg Projs 1,071,038 195,200 $192,200 ( ) g j , , , $ , 2004A Bonds (Union Bank) Infrastructure Projs 13,636,426 213,114 $213,114 2004B Bonds (Union Bank) Redev Projs 481,045 481,045 $481,045 2004B Bonds (Union Bank) L&M Hsg Projs 5,419,513 171,533 $171,533 g Promissory Note (Valente) Land acquistion 3,746,801 288,215 $288,215 Coop Agreement (EC Mun Svcs Corp) Redev Plan Impl. (Ec Dev) 105,199,000 $0 Coop Agreement Redev Plan Impl (Hsg) 50 499 000 $0 (City of El Cerrito) Redev Plan Impl. (Hsg) 50,499,000 $0 2009-10 SERAF Loan (L&M Hsg Fund) Advance for SERAF payment 1,327,655 331,914 $[PHONE REDACTED]-06 ERAF Loan (L&M Hsg Fund) Advance for ERAF payment 335,436 83,859 $83,859 Ohlone Gardens Loan Agmt Loan commitment 471,152 471,152 $471,152 Eden Housing Loan Agmt Loan commitment 310,000 310,000 $310,000 Administrative Budget (City as Successor Agency) Administrative Allowance 3,500,000 50,000 50,000 50,000 50,000 50,000 $250,000 Total $190,659,113 $50,000 $338,215 $50,000 $1,246,925 $1,581,759 $3,266,899 April 4, 2012 17 ---PAGE BREAK--- Draft ROPS July-December 2012 Obligation (Payee) Description Jul Aug Sep Oct Nov Dec Total ROPS 1997A Bonds (Union Bank) Redev Projs $77,125 $77,125 1998B Bonds (Union Bank) L&M Hsg Projs $16,013 $16,013 g 2004A Bonds (Union Bank) Infrastructure Projs $213,114 $213,114 2004B Bonds (Union Bank) Redev Projs $0 2004B Bonds (Union Bank) L&M Hsg Projs $99,888 $99,888 Promissory Note (Valente) Land acquistion Coop Agreement (EC Mun Svcs Corp) Redev Plan Impl. (Ec Dev) $643,000 $643,000 Coop Agreement (City of El Cerrito) Redev Plan Impl. (Hsg) $229,000 $229,000 ( y ) 2009-10 SERAF Loan (L&M Hsg Fund) Advance for SERAF payment $165,957 $165,957 2005-06 ERAF Loan (L&M Hsg Fund) Advance for ERAF payment $41,930 $41,930 Ohlone Gardens Loan Agmt Loan commitment $0 g $ Eden Housing Loan Agmt Loan commitment $0 Administrative Budget (City as Successor Agency) Administrative Allowance $25,000 $25,000 $25,000 $25,000 $25,000 $125,000 l Total $897,000 $25,000 $25,000 $25,000 $25,000 $614,025 $1,611,025 April 4, 2012 18 ---PAGE BREAK--- Timing Issues for First and Second ROPS Created by Stay on AB1x26 ROPS Created by Stay on AB1x26 Required Action Timing CountyAuditor Controller to certify obligations Delayed by Supreme Court Stay to June 30 after first and County Auditor-Controller to certify obligations Delayed by Supreme Court Stay to June 30, after first and second ROPS Successor Agency to authorize first ROPS (Feb-Jun 2012) Completed February 21 (delayed by Stay) Oversight Board to approve first ROPS Due by April 15 (delayed by Stay) County to disburse funds for first ROPS Due on May 15 (however, no funds will be disbursed as they were disbursed in December, during Stay and used for expenses due prior to May 15) Successor Agency to consider second ROPS (Jul-Dec 2012) Due by May 1 (Scheduled for April 17, initial draft of second ROPS to be adjusted for June payments on first ROPS) Oversight Board will approve second ROPS Due by May 11 County to disburse funds for second ROPS Due on June 1 April 4, 2012 19 ---PAGE BREAK--- Successor Agency Administrative Budget FY2011 12 Administrative Budget FY2011-12 Entity/Activity Successor Agency Oversight Board StaffingFunctions(TotalCompensation y Start-up costs are high plusOverheadforIndirectCosts) CityManagement $51,674 $33,910 Finance $60,532 $29,335 RiskManagement $4,126 $2,063 EconomicDevelopment $37,014 $18,507 y Setting up a new agency requires numerous one- time actions CityClerk $13,674 $8,204 InformationSystems $4,536 $2,268 LegalServices $60,000 Financial & Audit Services $ 15,000 y Legislation provides very little and sometimes fli i di i Financial&AuditServices $15,000 BondͲrelatedCosts $7,500 Supplies $1,500 $500 Postage $100 $100 Copies $500 $500 Website $ 2 000 $ 500 conflicting direction y Learning curve Website $2,000 $500 Advertising/LegalNotices $1,500 $1,500 PropertyManagement $1,000 Total $260,656 $97,387 CombinedTotal $358,043 F di S FundingSource Redev PropertyTaxTrustFund $250,000 Unfunded $108,043 April 4, 2012 20 ---PAGE BREAK--- Fiscal Impact of Oversight Boards Decisions Boards Decisions Through the ability to approve a successor agency’s contractual bli i f j i h b d i fl h h d obligations for projects, an oversight board influences the short- and long-term fiscal impact on taxing entities and the economic development of the community. Oversight boards can: y g y Support new development, increasing tax base and resulting in greater property tax revenue to taxing entities over time f bl bl k y Limit enforceable obligations, making property tax revenue available to taxing entities now, but also constraining its growth Note that any increased revenue from successor agencies to school districts would replace revenue from the State General Fund, freeing it up for other State obligations, potentially resulting in no fiscal benefit for education, regardless of oversight board actions. g f f f , g f g April 4, 2012 21 ---PAGE BREAK--- T All ti B d Tax Allocation Bonds Payment (to be moved to Issue Balance Purpose ( second ROPS) 1997 A $4,662,048 Refinancing of 1991 Bonds (Projects in the Del Norte Area) $470,868 1998 B $1,071,038 Refinancing of 1993 Bonds (Del Norte Place Project) $195,200 2004 A $13,636,426 Public Improvements (Tax-Exempt) $213,114 2004 B $481,045 Economic Development & Affordable Housing Projects (Taxable) $481,045 Note: Payments due July 1, but funds to be delivered to Trustee June 15 and therefore can be moved to second ROPS April 4, 2012 22 ---PAGE BREAK--- Valente Promissory Note Valente Promissory Note y Principal Balance: $2.3M y Payment of $288,215 was made on March 5, 2012 y Purpose: Land at 11600 San Pablo Avenue—Property is a key catalyst for revitalization of the Del Norte BART area with transit catalyst for revitalization of the Del Norte BART area with transit- oriented development y Purchased in March 2009 for $3.3M with a $2.7M seller carry back note y Note is secured by a third-party deed of trust on the property, now owned by the El Cerrito Municipal Services Corporation now owned by the El Cerrito Municipal Services Corporation y Current value of the property is less than balance due on the note April 4, 2012 23 ---PAGE BREAK--- ERAF and SERAF Loans ERAF and SERAF Loans y Combined Balance Remaining: $1,663,091 y Combined Payment due in May: $415,773 y Purpose: Housing Fund loans to pay prior State takeaways – 2005 06 Ed l R A F d (ERAF) 2005-06 Educational Revenue Augmentation Fund (ERAF) and 2009-10 Supplemental ERAF y Statute requires repayment in full by June 2015 for use on y Statute requires repayment in full by June 2015 for use on affordable housing April 4, 2012 24 ---PAGE BREAK--- Undisbursed Loan Commitments Undisbursed Loan Commitments y Contracts with affordable housing developers for housing projects already underway y Eden Housing y Remaining commitment: $310 000 Remaining commitment: $310,000 y Senior Housing/Mixed-Use Project Adjacent to City Hall y Property subject to transfer through future disposition and development agreement agreement y Resources for Community Development y Remaining commitment: $471,152 y Multi-family/Special Needs Project on Portola Drive y RCD owns property and has project entitlements April 4, 2012 25 ---PAGE BREAK--- Successor Agency Administrative Allowance Administrative Allowance y Minimum administrative cost allowance of $250,000 annually y Separate obligation to prepare a budget for approval by the Oversight Board regardless of funding sources Oversight Board, regardless of funding sources April 4, 2012 26 ---PAGE BREAK--- Cooperation Agreement with the City of El Cerrito (Housing) City of El Cerrito (Housing) y Balance: $50M (equals the contract value) y Annual payments thru 2025 are based on previously projected tax increment available and project needs N f f ROPS y No payment request for first ROPS y Ongoing housing activities can be funded through Coop Agreement Agreement y Should this agreement be invalidated under AB1x26, specific project commitments are also listed on the ROPS p j April 4, 2012 27 ---PAGE BREAK--- Cooperation Agreement with Municipal Services Corp (Ec Dev) Municipal Services Corp (Ec Dev) y MSC is a separate nonprofit, public benefit corporation y Balance: $105M (equals the contract value) y Annual payments thru 2025 are based on previously d l bl d d projected tax increment available and project needs y No payment request for first ROPS y P j t t b f d d i l d i d l t y Projects to be funded include economic development activities, development of MSC-owned land, coordination with City and other taxing entities (transit agencies) on y g ( g ) sustainable transit-oriented development efforts y Cooperation Agreement is key to increasing the property tax base, benefiting all taxing entities in the long term April 4, 2012 28 ---PAGE BREAK--- Maximize Future Revenue Through Economic Development and Increased Tax Base y Funding the Coop Agmts and/or project obligations will create i d fi l b fi f ll i i i community and fiscal benefit for all taxing entities y MSC Focus y Funding and staffing for economic development programs (important to u g a sta g o eco o c eve op e t p og a s ( po ta t to fiscal impact, but less direct) y Investment in development of vacant land it owns and facilitating development of other land (key to having a significant impact on the tax p ( y g g p base) y Example: One 180-unit project could be valued at $60M and fit on the Mayfair Block y y Creation of affordable housing has an indirect fiscal impact but is crucial to equitable and sustainable revitalization of San Pablo A b i i id i l d i d li d l Avenue by increasing residential density and quality development April 4, 2012 29 ---PAGE BREAK--- Projected Tax Increment Thru FY24-25 U d V i G th S i Under Various Growth Scenarios 11 0 $12.0 M $9.0 $10.0 $11.0 millions) ock $60M 7 Additional $60M Dev FY18-19 $7.0 $8.0 Increment (m rket Peak 8-09 et Low 2 c. Correction -13 Mayfair Blo Dev FY16-17 $4.0 $5.0 $6.0 Tax Mar FY08 Marke FY11-1 Antic FY12 $4.0 Historical TI 2% Growth After FY12/13 5% Growth After FY12/13 Plus $60M Development Plus $120M Development $ p $ p April 4, 2012 30 ---PAGE BREAK--- Potential Annual New Revenue to T i E titi U d G th S i Taxing Entities Under Growth Scenarios $9 0 $10.0 ions) M kip 22-23 $6 0 $7.0 $8.0 $9.0 ayments (Milli id Off FY15-16 d Off FY16-17 $60M Mayfair ment FY17-18 act of Add’l $60M FY18-19 2004 TABs Sk Payment FY2 $3 0 $4.0 $5.0 $6.0 xing Entity Pa ERAF Loans Pai TAB 1998B Paid Impact of Developm Impa Dev F $0.0 $1.0 $2.0 $3.0 Total New Tax Debts Paid in Full, Redev. Plan Ends FY24-25 $0.0 T No Funding 2% AV Growth Partial Funding, 5% AV Growth Full Funding, Add $60M Mayfair Full Funding, Add'l $60M in Dev April 4, 2012 31 g, $ y g, $ Note: due to AB1x26 cash flow timing for first ROPS, no taxing entity payments are anticipated for FY11-12. ---PAGE BREAK--- First Year Cash Flow Issue First Year Cash Flow Issue y Legislation does not work with common redevelopment agency funding cycles, particularly for large and irregular debt service payments (AB1585 recently particularly for large and irregular debt service payments (AB1585 recently approved by Assembly and Senate addresses this problem, not signed by governor as of March 29) y Supreme Court Stay onAB1x26 complicated and compressed the timing of y Supreme Court Stay on AB1x26 complicated and compressed the timing of payments for the first and second ROPS y County notification of no additional May 15 payment after ROPS’ authorization ff ll k h d ll d l h h fl y Staff will work with County Auditor-Controller to deal with cash flow issue y Debt Service Payments can be funded from second ROPS payment on June 1 y Successor Agency will authorize second ROPS on April 17, adjusted for cash g y p j flow y Oversight Board approval of second ROPS needed before May 11 (need to schedule a meeting and then will be on a twice-yearly schedule) g y y ) April 4, 2012 32 ---PAGE BREAK--- Consideration of Resolutions Consideration of Resolutions y Establishing Rules; Procedures; Date, Time and Location for Meetings of the Oversight Board y Approving the Successor Agency Administrative Budget A h f R d Obl P S h d l y Approving the first Recognized Obligation Payment Schedule 33 April 4, 2012 ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 2 SUCCESSOR AGENCY RESOLUTION 2012-XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO ACTING AS SUCCESSOR AGENCY TO THE EL CERRITO REDEVELOPMENT AGENCY AUTHORIZING SUBMITTAL OF THE SECOND DRAFT RECOGNIZED OBLIGATION PAYMENT SCHEDULE AS REQUIRED UNDER AB 1 X26 WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.; 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, adopted on November 28, 1977, as amended by Ordinance No. 80-13, adopted on December, lS, 1980; as amended by Ordinance No. 89-5, adopted on July 10, 1989; as amended by Ordinance No. 94-4, adopted on July 25, 1994; as amended by Ordinance No. 2004-3, adopted March 1, 2004; as amended by Ordinance No. 2005-01, adopted March 21, 2005; and as further amended by Ordinance No. 2006-10, adopted November 6, 2006 (collectively, the "Redevelopment Plan"); and WHEREAS, the El Cerrito Red~velopment Agency (the "Agency") was responsible for implementation of the Redevelopment Plan; and WHEREAS, as part of the 2011-12 State budget bill, AB1x26 (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 Successor Agency to the El Cerrito Redevelopment Agency (the "Successor"), should it be dissolved; and WHEREAS, on December 29, 2011, the California Supreme Court ruled that the Dissolution Act is constitutional, resulting in the dissolution of all California redevelopment agencies on February 1, 20 12; and WHEREAS, pursuant to the Dissolution Act, upon dissolution, the Agency transferred as a matter of law all remaining liabilities, debts and obligations to the Successor; and WHEREAS, pursuant to the Dissolution Act, upon dissolution the Agency transferred all unencumbered funds and assets to the Successor as a matter of law, for disposition and/or use by the Successor to retire Agency debt and pay for Agency obligations; and WHEREAS, the Successor is not a component unit of the City of El Cerrito and the City is not liable for the obligations of the Successor; and WHEREAS, the City's role as the Successor is limited to taking actions necessary to facilitate completion and/or payment of the Successor's recognized obligations and therefore the City established a Fiduciary Fund to receive the Successor's assets and liabilities; and ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 2 WHEREAS, the Successor reviewed and authorized submittal of an initial draft of its first Recognized Obligations Payment Schedule (the "ROPS") on February 21, 2012; and WHEREAS, the County Auditor-Controller (the "Controller") has established a Redevelopment Property Tax Trust Fund (the from which the Controller will disburse funds to the Successor for payment of its obligations on an approved ROPS; 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 approved the initial draft of the first ROPS, which is under review by the California Department of Finance (the "DOF") prior to disbursement by the Controller of any funds· in :the intended for payment of the obligations on the first ROPS; and WHEREAS, the Dissolution Act requires the Successor to prepare a draft ROPS for each successive six-month period, which is now necessary for payments due between July 1 and December 31, 2012; and WHEREAS, the DOF has requested that the second ROPS be considered by the Oversight Board and submitted to the DOF and Controller no later than May 11, 2012, so that the necessary review may be completed in time to disburse funds for the obligations on the second ROPS on June 15, 2012; and WHEREAS, the City Council, acting in its role as Successor, has reviewed the draft ROPS for the period July 1 through December 31, 2012 that was prepared pursuant to the Dissolution Act, which is Exhibit A to this Resolution, for submittal to the Oversight Board, the Controller and the DOF. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of El Cerrito acting as Successor Agency to the El Cerrito Redevelopment Agency hereby finds the above recitals to be true and accurate. BE IT FURTHER RESOLVED that the City Council of the City of El Cerrito acting as Successor Agency to the El Cerrito Redevelopment Agency authorizes the submittal of the initial draft Recognized Obligation Payment Schedule as required under the Dissolution Act. BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption. * * * * * ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 2 I CERTIFY that at the regular meeting on April 1 7, 2012, the City Council of the City of El Cerrito as Successor Agency to the El Cerrito Redevelopment Agency passed this resolution by the following vote: A YES: 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 April_, 2012. Cheryl Morse, City Clerk APPROVED: William C. Jones III, Mayor ---PAGE BREAK--- DRAFT RECOGNIZED OBLIGATION PAYMENT SCHEDULE PER AB1 X26 Of the Successor Agency to the El Cerrito Redevelopment Agency City of El Cerrito Redevelopment Project Area Project Name I Date of Debt Obligation Agreement Payee Description 1) 1997 Tax Allocation Refunding of prior 12/17/1997 Union Bank Bonds, Series A TAB for Redev Projs 2) 1998 Tax Allocation Refunding of prior 12/17/1997 Union Bank TAB for L&M Hsg Bonds, Series B Projs 3) 2004 Tax Allocation Tax-exempt TAB for 10/24/2004 Union Bank Bonds, Series A Infrastructure Projs 2004 Tax Allocation Portion of Taxable 4) Bonds, Series B 10/24/2004 Union Bank T~B for Redev Projs (Non-Housing) 2004 Tax Allocation Portion of Taxable 5) Bonds, Series B 10/24/2004 Union Bank TAB for L&M Hsg (Housing) Projs 6) Valente Promissory Loan for land 3/5/2009 George Valente acquistion Note 7) Cooperation El Cerrito Municipal Redevelopment Plan 3n/2011 implementation (non- Agreement* Services Corporation housing) 8) Cooperation Redevelopment Plan 2/22/2011 City of El Cerrito implementation Agreement* (housing) 9) 2009-2010 SERAF Funds advanced for 2/16/2010 L&M Housing Fund SERAF payment Loan · 2005-2006 ERAF Funds advanced for 10) Loan . : 4/17/2006 L&M Housing Fund ERAF payment Ohlone Gardens Undisbursed loan 11) Loan Agreement** 6/24/2009 Ohlone Gardens LP commitment Eden Housing Loan Undisbursed loan 12) Agreement** 5/17/2011 Eden Housing commitment Administrative Administrative 13) Allowance*** Statutory City of El Cerrito Allowance per AB1x26 14) 15) Totals Notes Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelop_ruent Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area City of El Cerrito Redevelopment Project Area Total Total Due Funding Outstanding During Source Obligation FY2012-13 4,191,180 553,805 875,838 216,750 13,423,313 971,228 - - 5,247,980 264,775 3,458,586 288,215 105,198,660 1,287,000 50,498,839 458,000 995,741 331,914 251,577 83,859 - - - - 3,250,000 250,000 ~7,391,713 ~05,54~ SA Resolution 2012-XX Exhibit A Payable from the Redevelopment Property Tax Trust Fund Payments by month Jul2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012 Total 77,125 77,125 16,013 16,013 213,114 213,114 - 99,888 99,888 - 643,000 643,000 229,000 229,000 165,957 165,957 41,930 41,930 - - 50,000 50,000 50,000 50,000 50,000 250,000 - - 922,000 JiO,OOO L_ 50,9QQ_ 50,000 50~000 614,!:g6 1,736,~ * During the three-day review by the Department of Finance (DOF) of the first Recognized Obligations Payment Schedule (ROPS), which was approved by the Oversight Board to the Successor Agency to the El Cerrito Redevelopment Agency on April4, 2012 and submitted on AprilS, 2012, the DOF indicated that it would object to Item 7- Cooperation Agreement with the El Cerrito Municipal Services Corporation and Item 8 Cooperation Agreement with the City of El Cerrito during the subsequent ten-day period. Should the items be disputed, the payments shown on this draft ROPS should be considered the establishment of reserves for those items, so that the Successor Agency may pursue resolution of the potential dispute. Payments are disbursed for Item 11 Ohlone Gardens Loan Agreement and Item 12 Eden Housing Loan Agreement when the payee submits a demand for payment and are to be paid with funds disbursed from the to the Successor Agency in June 15, 2012 as provided in the approved first ROPS. payments for Item 13- Administrative Allowance are estimates of expenses. ---PAGE BREAK--- Agenda Item No. 7(B) Attachment 3 SUCCESSOR AGENCY RESOLUTION 2012-XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO ACTING AS SUCCESSOR AGENCY TO THE EL CERRITO REDEVELOPMENT AGENCY APPROVING ITS FY12-13 ADMINISTRATIVE BUDGET AS PROVIDED IN AB1X26 WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.; 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 (the "Project Area") by Ordinance No. 77-17, adopted on November 28, 1977, as amended by Ordinance No. 80-13, adopted on December 15, 1980; as amended by Ordinance No. 89-5, adopted on July 10, 1989; as am~nded by Ordinance No. 94-4, adopted on July 25, 1994; as amended by Ordinance No. 2004-3, adopted March 1, 2004; as amended by Ordinance No. 2005-01, adopted March 21, 2005; and as further amended by Ordinance No. 2006-10, adopted November 6, 2006 (collectively, the "Redevelopment Plan"); and WHEREAS, the El Cerrito Red~velopment Agency (the "Agency") was responsible for implementation of the Redevelopment Plan; and WHEREAS, pursuant to the 2011-12 State budget bill, AB1x26 (the "Dissolution Act"), the Agency was dissolved on February 1, 2012; and the City elected to serve as the Successor Agency to the El Cerrito Redevelopment Agency (the "Successor"); and WHEREAS, the Successor is not a component unit of the City, but the City is providing administrative services for the Successor; and WHEREAS, pursuant to the Dissolution Act, the Successor 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 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 approved an administrative budget prepared for FY11-12; and WHEREAS, an Administrative Budget prepared for FY12-13 is Exhibit A to this Resolution. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of El Cerrito acting as Successor Agency to the El Cerrito Redevelopment Agency hereby finds the above recitals to be true and accurate. ---PAGE BREAK--- Agenda Item No. 7 Attachment 3 BE IT FURTHER RESOLVED 'that the City Council of the City of El Cerrito acting as Successor Agency to the El Cerrito Redevelopment Agency approves its Administrative Budget for FY12-13. BE IT FURTHER RESOLVED that this Resolution shall become effective immediately upon its passage and adoption. I CERTIFY that at the regular meeting on April 1 7, 2012, the City Council of the City of El Cerrito as Successor Agency to the El Cerrito Redevelopment Agency passed this resolution by the following vote: A YES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City ofEl Cerrito on April_, 2012. · Cheryl Morse, City Clerk APPROVED: William C. Jones III, Mayor ---PAGE BREAK--- Exhibit A Successor Agency Administrative Budget ' Fiscal Year 2012-13 Entity/ Activity Staffing Functions (Total Compensation plus Overhead for Indirect Costs) City Management Finance Risk Management Economic Development City Clerk Information Systems Legal Services Financial & Audit Services Bond-related Costs Supplies Postage Copies Website Advertising/Legal Notices Property Management Total Combined Total Funding Source Redevelopment Property Tax Trust Fund Unfunded Successor Agency $50,000 $50,000 $4,000 $25,000 $15,000 $4,000 $75,000 $25,000 $10,000 $1,500 $250 $500 $3,000 $3,000 $1,000 $267,250 Oversight Board $30,000 $30,000 $2,000 $10,000 $10,000 $4,000 $500 $250 $500 $1,500 $3,000 $91,750 $359,000 $250,000 $109,000