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El Cerrito Agenda Report Item No.5 Municipal Services ··Corporation Date: To: From: Subject: May 1, 2012 El Cerrito Municipal Services Corporation Board Lori Trevino, City Economic Development Manager Mary Dodge, Chief Financial Officer Approval of the proposed Revitalization Grant Program and grant awards Amendment to FY 2011-12 Budget Proposed FY 2012-13 Budget ACTION REQUESTED Adopt two resolutions approving: ( 1) the proposed Revitalization Grant Program, grant awards, and an amendment to the FY 2011-12 Budget; and the Corporation's Proposed FY 2012-13 Budget. BACKGROUND The purpose of the El Cerrito Municipal Services Corporation ("Corporation") is to benefit and support the City of El Cerrito ("City") and the El Cerrito Redevelopment Agency ("Agency''), by lessening the burden of government by pursuing projects and programs that create, support, and retain a strong and diverse economic base; provide housing and employment opportunities; increase sales and property tax revenue; and provide desired goods and services to the community. The most significant role of the Corporation is responsibility for economic development and redevelopment projects and programs on behalf of the City and Agency. In particular, the Corporation's activities implement the Agency's goals and objectives within the City of El Cerrito Redevelopment Project Area ("Project Area") as described in the Agency's Redevelopment Plan ("Redevelopment Plan") and Five-Year Implementation Plan. The Corporation's implementation responsibilities ,and the Agency's corresponding funding obligations are contained in the Public Improvement and Cooperation Agreement for the City of El Cerrito Redevelopment Project Area ("Cooperation Agreement"). The Agency has agreed to provide the Corporation with the funds necessary for such activities and projects from the Agency's available resources, including tax increment funds allocated to the Agency. The Corporation may use other funding sources for these and other activities. DISSOLUTION LEGISLATION On February 1, 2012, State budget legislation for FY 2011-12 known as AB1x26 ("Dissolution Act") dissolved the Agency and replaced it with the Successor Agency to the El Cerrito Redevelopment Agency ("Successor Agency"), which is responsible for ---PAGE BREAK--- Agenda Item No. 5 paying the Agency's debts and funding its obligations. Through the Cooperation Agreement, the Agency wa~ obligated to fund the Corporation's completion of the Agency's projects and programs.· The Successor Agency included the Cooperation Agreement on its schedule of recognized obligations, but the final approval of the schedule will not be known prior to the adoption of the Corporation's budget. The Corporation's revenues rely on the Successor Agency funding the Agency's obligations under the Cooperation Agreement. As such, the proposed FY 2012-13 Budget may need to be reviewed early in the fiscal year to account for the outcome of the dissolution process. REVIEW OF FV 2011-12 AND USE OF RESERVES Overall, the Corporation's revenues in FY 2011-12 were greater than expected. Lease revenue from the Cerrito Theater is exceeding the budget due to the percentage rent paid by Rialto Cinemas being greater than anticipated. Upon receipt by the Agency of its tax increment revenue in December, the Agency determined the amount of funding for the Cooperation Agreement based on the tax increment not already been committed. The payment was somewhat lower than the original amount requested and was not received prior to the end of December. The Corporation also received an unanticipated fee paid for the assignment of an option on a piece of property to a developer. The Corporation limited expenditures during the first half of the fiscal year due to the uncertainty regarding funding from the Agency. During the second half of the fiscal year, the Corporation increased its consulting budget for a staffing contract with the City to reactivate the Corporation and manage its priority programs and projects; awarded a grant for public safety radios; maintained and leased land held; explored development opportunities; and made progress on maintenance and improvement obligations at the Cerrito Theater. The Corporation has a significant fund balance, primarily from receipt of the assignment fee, a one-time payment received during FY 2011-12. However, the Corporation's FY 2012-13 funding under the Cooperation Agreement is at risk due to the uncertainty about the outcome of the redevelopment agency dissolution process currently underway statewide. While the Successor Agency has included the Cooperation Agreement on its schedule of recognized enforceable obligations, which has been approved by the Oversight Board to the Successor Agency, the California Department of Finance has yet to do so. This uncertainty also affects the City of El Cerrito, which relies on the Corporation for funding projects and programs, as well as for payment of its costs associated with serving as the fiduciary and administrative agent for the Corporation. Given that two thirds of the Corporation's FY 20,11-12 revenues are from sources unrelated to the Cooperation Agreement, and therefore not at risk, the Corporation is in a position to fund its commitments to the City for FY 2012-13 from those sources. Included in the projections for FY 2011-12 is a grant to the City of $1,007,000, an amount roughly equivalent to the funds at risk to the City for the next fiscal year. The City has committed to using these funds for ongoing economic development programs and other uses that are consistent with Corporation's charitable and public purpose. These funds are currently uncommitted and should they not be needed, they will be Page 2 ---PAGE BREAK--- Agenda Item No. 5 returned to the Corporation or directed to a purpose consistent with the mission of the Corporation. PROJECTS AND PROGRAMS The proposed FY 2012-13 Operating Budget provides funding of economic development programs, grants for projects and programs that benefit the El Cerrito community, initiation of efforts to develop the Corporation's properties, lease obligations for improvements and maintenance of the Cerrito Theater, and administrative expenses, as well as maintaining a fund balance to sustain operations while funding is uncertain. The Corporation's focus in FY 2012-13 is proposed to support the City's efforts to facilitate transit-oriented and infill development, attract and retain businesses, promote public safety, and improve public facilities. More specifically, those City efforts would include: • Completion and implementation of the City's San Pablo Avenue Specific Plan, with economically feasible, transit-oriented development standards that promote infill development opportunities • Development of parking standards and programs and multi-modal traffic standards that support transit-oriented development, revitalization, and sustainability efforts • Participation in regional sustainability efforts • Ongoing business recruitment, retention and marketing programs to increase shopping and dining opportunities for residents and visitors, and to bolster economic development efforts and City revenues • Improvement to City facilities in the Project Area or that benefit the Project Area • Capital expenses in support of public safety efforts in the Project Area or that benefit the Project Area • Public information and community engagement programs The Corporation will also focus on the following programs and projects: • Predevelopment activities on Corporation-owned properties to implement the City's San Pablo Avenue Specific Plan, focusing in particular on the Del Norte area • The previously funded Commercial Rehabilitation Loan Program with priority given to the southern end of San Pablo A venue around the Cerrito Theater and El Cerrito Plaza Shopping Center Page 3 ---PAGE BREAK--- Agenda Item No. 5 • Collaboration with key property owners on San Pablo A venue on potential development, redevelopn1ent or other improvements to their properties . • Coordination with Pleasantown Motion Picture Company to complete tenant improvements to the Cerrito Theater as provided in the Cerrito Theater Lease Agreement • Development of new and improved website content PROPOSED REINVESTMENT GRANT PROGRAM In keeping with the Corporation's charitable and public purpose, a grant was made to the City during FY 2011-12 for the Fire Department's purchase of radio equipment to be used by public safety and other employees in conjunction with a regional radio system. Similar grants could be made to benefit and support the El Cerrito community. Under the proposed Reinvestment Grant Program, grants would be considered to the City of El Cerrito and any organization that serves the community, particularly focusing on the San Pablo Avenue corridor. Preferably, grants would leverage other sources of funds. Criteria for the proposed Reinvestment Grant Program would require that the program or project to be funded will: • Lessen the burden of government on the City or other public entity • Result in physical improvements or reduce blight and deterioration, particularly in the Project Area • Provide and/or expand economic and housing opportunities in El Cerrito • Increase public safety • Support one or more of the Corporation's current activities, particularly related to development of its properties The proposed program would give the Corporation Board discretion to make grants that are 1) consistent with these criteria, 2) in keeping with the Corporation's charitable purpose, and 3) beneficial to the El Cerrito community. The Executive Director would report back to the Board after grants are awarded and how the investment meets the goals of the program. Grants proposed for FY 2011-12 are $10,000 for the City's membership in the Green Corridor Program and $45,000 for the City's Strategic Plan. Grants proposed for FY 2012-13 are $10,000 for the City's membership in the Green Corridor Program and $150,000 to initiate the update of the City's General Plan; further grants to the City for its General Plan will be considered in future years to support an overall funding plan being developed by the City. Additionally, a $150,000 grant is proposed to the City for other purposes consistent with the Corporation's mission. The City will determine the use of these funds in the overall consideration of the City FY 2012-13 budget. Page 4 ---PAGE BREAK--- Agenda Item No. 5 Attachment 1 to this report is a resolution approving the creation of the Reinvestment Grant Program, described in Exhibit A. Also included in the resolution is a provision to increase the Corporation's FY 2011-12 expense budget sufficiently to fund both for the Reinvestment Grant Program awards for the current fiscal year and the risk mitigation contribution discussed earlier in this report. Staff will return early in fiscal year 2012-13 to discuss additional grant projects as funding is solidified. REVENUE Per the Cooperation Agreement, the Agency's funding to the Corporation is based on tax increment revenues from the Project Area. City staff provided projections of what that tax increment revenue would have been if the Agency had continued to exist and what is likely to be available, so that the Corporation could make its annual funding demand. Based on those projections, tax revenue anticipated to be available to the Successor Agency to fund the Cooperation Agreement is $1,287,000 for FY 2012-13. However, while the Successor Agency has included the Cooperation Agreement on its schedule of recognized enforceable obligations, the funding remains uncertain through the first phase of dissolution. The proposed FY 2012-13 revenue budget includes program income from the Cooperation Agreement, lease income and interest income. While interest income is expected to be minimal, lease revenue from the Cerrito Theater paid by Rialto Cinemas has been strong and is expected to increase as the restaurant spaces become operational during FY 2012-13. The total revenue budget is $1,368,000, which is detailed in the Proposed FY 2012-13 Budget, Exhibit A to the Resolution, and summarized in a table that follows. EXPENSES The proposed FY 2012-13 expense budget includes professional, property and other services and supplies needed for the Corporation's activities described above, including continuing the contract with the City for administration and economic development. It also includes funds to pay for the Corporation's obligation to fund capital improvements at the Cerrito Theater and public improvements on Hill Street. Lastly, there is a budget for the proposed Revitalization Grant Program. The total proposed expense budget is $1,377,500, which is detailed in the Proposed FY 2012-13 Budget, which is Attachment 2 to this report and summarized in the table below. Page 5 ---PAGE BREAK--- Agenda Item No. 5 I El Cerrito Municipal Services Corporation FY 2011-12 Projected and FY 2012-13 Proposed Budget Beginning Fund Balance Revenue Cooperation Agreement Lease Revenue Developer Proceeds Interest Total Revenues Expenditures Professional Services Programs Property Maintenance and Supplies Capital Expenses Loans & Grants Pre-funded Program Grant Total Expenditures Net Revenue over (under) Expenditures Ending Fund Balance lEGAL CONSIDERATIONS Projected FY 2011-12 $636,454 $1,031,340 69,201 2,200,000 1,000 $3,301,541 $709,600 34,140 30,400 437,400 328,000 1,007,000 $2,546,540 755,001 $1,391,455 Proposed FY 2012-13 $1,391,455 $1,287,000 80,000 1,000 $1,368,000 $932,000 45,000 20,000 70,500 310,000 $1,377,500 (9,500) $1,385,955 The actions being considered are consistent with California Corporations Law, the Corporation's public and charitable purposes, its Amended and Restated Bylaws, and the Board's previous actions. Should the enforceability of the Cooperation Agreement with the Successor Agency be disputed, the professional services budget includes funding for legal expenses. RECOMMENDATION Approve resolutions adopting the proposed Revitalization Grant Program, approving grant awards, and amending the FY 2011-12 Budget to provide its funding, and adopting the proposed FY 2012-13 Budget. Page 6 ---PAGE BREAK--- Scott Hanin, Executive Director Attachments: 1. Resolution 2012-XX, approving the Reinvestment Grant Program, grant awards, and amendment of the FY 2011-12 Budget 2. Resolution 2012-XX, adopting the proposed FY 2012-13 Budget Page 7 Agenda Item No. 5 ---PAGE BREAK--- RESOLUTION NO. 2012-XX Agenda Item No. 5 Attachment 1 RESOLUTION OF THE BOARD OF DIRECTORS OF THEEL CERRITO MUNICIPAL SERVICES CORPORATION APPROVING THE REINVESTMENT GRANT PROGRAM, GRANT AWARDS, AND AMENDMENT OF THE FY2011-12 BUDGET WHEREAS, the El Cerrito Municipal Services Corporation (the "Corporation") is a nonprofit public benefit corporation organized under the California Nonprofit Public Benefit Corporation Law for charitable purposes; and WHEREAS, the specific charitable and public purposes for which the Corporation is organized are to benefit and support the City of El Cerrito (the "City") and the El Cerrito Redevelopment Agency (the "Agency"), in accordance with Section 509(a)(3) ofthe Internal Revenue Code of 1986, as amended, and to lessen the burdens of government of the City and the Agency by utilizing private and public funding sources to combat community blight and deterioration in the City and contribute to the physical improvement of the City; providing and expanding economic opportunities for low and moderate income households in the City; encouraging and stimulating economic development within the City by assisting the Agency to eliminate blight within the Agency's project areas; and implementing and assisting the Agency in redevelopment activities and programs that will lessen neighborhood tensions, and combat community deterioration; and WHEREAS, creation of a grant program that benefits and supports the El Cerrito community would be consistent with the Corporation's charitable and public purposes; and WHEREAS, the Board of Directors of the Corporation (the "Board") finds the proposed Reinvestment Grant Program, as set forth in Exhibit A, consistent with the Corporation's charitable and public purpose and wishes to approve the program as described; and WHEREAS, the Board finds that grants proposed for FY 2011-12 to the City of El Cerrito for its membership in the Green Corridor Program, a Community Wide Strategic Plan, and other initiatives to be identified by the City are consistent with the criteria for the Reinvestment Grant Program, and desires to approve the grants; and WHEREAS, the Corporation received significant one-time revenue in FY 2011-12, but there is uncertainty regarding its program revenue for FY 2012-13; and WHEREAS, the City relies upon the Corporation for funding of its economic development program and other projects and programs that consistent with the Corporation's mission, as well as paying the costs associated with serving as its fiduciary and administrative agent, and therefore the City's FY 2012-13 revenue from the Corporation is also uncertain; and WHEREAS, the Corporation is currently in a position to 'utilize its FY 2011-12 revenue that is not at risk to fund its future obligations to the City from those sources; and WHEREAS, the Board finds that pre-funding program grants and other obligations to the City is consistent with the Corporation's charitable and public purpose of lessening the burdens of government, and the City has committed to using the funding consistent with the Corporation's charitable and public purposes, or to return unused funds to the Corporation; and WHEREAS, the Board wishes to amend the Corporation's FY20 11-12 Budget in order to provide funding for the Reinvestment Grant Program and for a prefunded program grant to the City of El Cerrito. ---PAGE BREAK--- Agenda Item No. 5 Attachment 1 NOW, THEREFORE, BE IT RESOLVED, The Board finds that the above recitals are true and correct. BE IT FURTHER RESOLVED, that the Board does hereby approve: 1. The proposed Reinvestment Grant Program, as described in Exhibit A. 2. Award of Reinvestment Grants in FY 2012-13 to the City of El Cerrito of $10,000 for its membership in the Green Corridor Program and $45,000 for its Community Wide Strategic Plan. 3. Providing $1,007,000 to the City of El Cerrito as a pre-funded program grant for economic development programs and expenses related to administering the Corporation. 4. Amendment ofthe FY 2011-12 Budget to increase the expense budget by $1,062,000. BE IT FURTHER RESOLVED, that this Resolution shall become effective immediately upon its adoption. I CERTIFY that at a regular meeting on May 1, 2012, the Board of Directors of the El Cerrito Municipal Services Corporation passed this Resolution by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: IN WITNESS of this action, I sign this document on May_, 2012. Chery I Morse, Secretary APPROVED: William C. Jones III, Board Chairperson ---PAGE BREAK--- Exhibit A Reinvestment Grant Program El Cerrito Municipal Services Corporation Agenda Item No. 5 Attachment 1 The El Cerrito Municipal Services Corporation's Reinvestment Grant Program is intended to benefit and support the El Cerrito community, consistent with its charitable and public purposes. The specific charitable and public purposes for which the Corporation is organized are to benefit and support the City of El Cerrito (the '"City") and the El Cerrito Redevelopment Agency (the '"Agency"), in accordance with Section 509(a)(3) of the Internal Revenue Code of 1986, as amended, and to lessen the burdens of government of the City and the Agency by ( 1) utilizing private and public funding sources to combat community blight and deterioration in the City and contribute to the physical improvement of the City; providing and expanding economic opportunities for low and moderate income households in the City; encouraging and stimulating economic development within the City by assisting the Agency to eliminate blight within the Agency's project areas; and ( 4) implementing and assisting the Agency in redevelopment activities and programs that will lessen neighborhood tensions, and combat community deterioration. Currently anticipated grants areas of focus include projects and programs that promote transit- oriented development, sustainability planning efforts, facilities improvements, community engagement, public information, and economic development. Grants will be considered to the City of El Cerrito and any organization that serves the community, particularly focusing on the San Pablo Avenue corridor. Preferably grants would leverage other sources of funds. Criteria for the proposed Reinvestment Grant Program are as follows. The program or project to be funded will: • Lessen the burden of government on the City or other public entity • Result in physical improvements or reduce blight and deterioration, particularly on San Pablo A venue • Provide and/or expand economic and housing opportunities in El Cerrito • Increase public safety • Support one or more of the Corporation's current activities, particularly related to development of its properties The Corporation Board will have discretion to make grants that are 1) consistent with these criteria, 2) in keeping with the Corporation's charitable purpose, and 3) beneficial to the El Cerrito community. The Executive Director will report back to the Board when grants are awarded and how the investment meets the goals of the program. ---PAGE BREAK--- RESOLUTION NO. 2012-XX Agenda Item No. 5 Attachment 2 RESOLUTION OF THE BOARD OF DIRECTORS OF THE EL CERRITO MUNICIPAL SERVICES CORPORATION APPROVING ITS FISCAL YEAR 2012-13 BUDGET WHEREAS, the El Cerrito Municipal Services Corporation (the "Corporation") is a nonprofit public benefit corporation organized under the California Nonprofit Public Benefit Corporation Law for charitable purposes; and WHEREAS, the specific charitable and public purposes for which the Corporation is organized are to benefit and support the City of El Cerrito (the "City") and the El Cerrito Redevelopment Agency (the "Agency"), in accordance with Section 509(a)(3) of the Internal Revenue Code of 1986, as amended, and to lessen the burdens of government of the City and the Agency by ( 1) utilizing private and public funding sources to combat community blight and deterioration in the City and contribute to the physical improvement of the City; providing and expanding economic opportunities for low and moderate income households in the City; encouraging and stimulating economic development within the City by assisting the Agency to eliminate blight within the Agency's project areas; and ( 4) implementing and assisting the Agency in redevelopment activities and programs that will lessen neighborhood tensions, and combat community deterioration; and WHEREAS, the Board of Directors of the Corporation (the "Board") has been presented for its consideration a proposed budget for Fiscal Year 2012-13, which has been reviewed and analyzed in a public session; and WHEREAS, the proposed budget represents anticipated revenues and proposed expenditures for the Corporation; and WHEREAS, the Corporation requires a revenue budget of $1,368,000 and an expenditure budget of$1,377,500; and WHEREAS, the Board desires to adopt the necessary revenue and expenditure budgets for the Corporation. NOW, THEREFORE, BE IT RESOLVED, The Board finds that the above recitals are true and correct. BE IT FURTHER RESOLVED, that the Board of Directors of the El Cerrito Municipal Services Corporation, in accordance with its authority and responsibility, hereby adopts the Fiscal Year 2012-13 Budget, attached as Exhibit A. BE IT FURTHER RESOLVED, that this Resolution shall become effective immediately upon its adoption. I CERTIFY that at a regular meeting on May 1, 2012, the Board of Directors of the El Cerrito Municipal Services Corporation passed this Resolution by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: ---PAGE BREAK--- Agenda Item No. 5 Attachment 2 IN WITNESS of this action, I sign this document on May_, 2012. Cheryl Morse, Secretary APPROVED: William C. Jones III, Board Chairperson ---PAGE BREAK--- Agenda Item No. 5 Attachment 2 Exhibit A EL CERRITO MUNICIPAL SERVICES CORPORATION PROPOSED FISCAL YEAR 2012-13 BUDGET Board of Directors William C. Jones Ill, Chairperson Greg Lyman, Vice Chairperson Janet Abelson, City Board Member Rebecca Benassini, Board Member Ann Cheng, Board Member Scott Hanin, Executive Director Karen Pinkos, Board Member Officers Mary Dodge, Chief Financial Officer Cheryl Morse, Secretary ---PAGE BREAK--- The El Cerrito Municipal Services Corporation is a nonprofit public benefit corporation and is not organized for the private gain of any person. It is organized under the California Nonprofit Public Benefit Corporation Law for charitable purposes. The general purpose of this Corporation is to have and exercise all rights and powers conferred on nonprofit corporations under the laws of California, provided that this Corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the primary purposes of this Corporation. ---PAGE BREAK--- FI~CAL YEAR 2012-13 B.UDGET EL CERRITO MUNICIPAL SERVICES CORPORATION To serve its purpose of benefiting and supporting the City of El Cerrito and the El Cerrito Redevelopment Agency, the mission of the El Cerrito Municipal Services Corporation is to lessen the burden of government by pursuing projects and programs that create, support, and retain a strong and diverse economic base; provide housing and employment opportunities; increase sales and property tax revenue; and provide desired goods and services to the community throughout the City and the Redevelopment Project Area. INTRODUCTION This document presents the Proposed Fiscal Year 2012-13 Budget for the El Cerrito Municipal Services Corporation (uCorporation"). The Corporation is a California nonprofit public benefit corporation. The charitable and public purposes for which the Corporation is organized are to benefit and support the City of El Cerrito,(uCity") and the El Cerrito Redevelopment Agency (uAgency") by: utilizing private and public funding sources to combat community blight and deterioration in the City and contribute to the physical improvement of the City; providing and expanding economic opportunities for low and moderate income households in the City; encouraging and stimulating economic development within the City by assisting the Agency to eliminate blight within the Agency's project areas; and implementing and assisting the Agency in redevelopment activities and programs that will lessen neighborhood tensions, and combat community deterioration. The Corporation is primarily responsible for economic development and redevelopment projects and programs on behalf of the City and the Agency. In particular, the Corporation's activities implement the Agency's goals and objectives within the City of El Cerrito Redevelopment Project Area (uProject Area") as described in the Agency's Redevelopment Plan ((IRedevelopment Plan") and Five-Year Implementation Plan. The Corporation's implementation responsibilities and the Agency's corresponding funding obligations are contained in the Public Improvement and Cooperation Agreement for the City of El Cerrito Redevelopment Project Area ((ICooperation Agreement"). The complete list of projects and programs that the Corporation has agreed to undertake on behalf of the Agency over the life of the Redevelopment Plan is contained in the Cooperation Agreement and is included in this budget document as Appendix A. The Agency has agreed to provide the Corporation with the funds necessary for such activities and projects from the Agency's available resources, including tax increment funds allocated to the Agency. The Corporation is to use the Agency funds for the completion of projects and programs, which may include predevelopment costs, economic development programs, staffing, and administrative costs. The Corporation pays the City to serve as its fiscal agent and handle its administrative functions through an administrative services contract. The Corporation may use other funding sources for its projects and programs. For example, the Corporation has real estate holdings, including the Cerrito Theater that it leases to Rialto Cinemas for operation as a movie theater and restaurant, and vacant land it intends to develop, ---PAGE BREAK--- thereby catalyzing the revitalization of the San Pablo Avenue Corridor. The Corporation has received developer fees and contributions through its real estate transactions as well. FINANCIAL OVERVIEW On February 1, 2012, State Budget legislation for FY 2011-12 known as AB1x26 ( 11Dissolution Act") dissolved the Agency and replaced it with the Successor Agency to the El Cerrito Redevelopment Agency ( 11Successor Agency"), which is responsible for paying the Agency's debts and funding its obligations. Through the Cooperation Agreement, the Agency was obligated to fund the Corporation's completion of the Agency's projects and programs. Under the Dissolution Act, the Successor Agency included the Cooperation Agreement on its schedule of recognized obligations, but the final approval of the schedule will not be known prior to the adoption of the Corporation's budget. The Corporation's revenues rely on the Successor Agency funding the Agency's obligations under the Cooperation Agreement. As such, the proposed budget may need to be reviewed early in the fiscal year to account for the outcome of the dissolution process. In FY 2011-12, the Corporation had four sources of revenue: Agency funding for the Cooperation Agreement, developer contributions, rent and lease income, and interest earnings. Overall, the Corporation's FY 2011-12 revenues were greater than expected. Lease revenue from the Cerrito Theater is exceeding the budget due to the percentage rent paid by Rialto Cinemas being greater than anticipated. The Corporation funding demand to the Agency was not received until January 2012 and was lower than anticipated. The Corporation received an unanticipated assignment fee for its option on a piece of property. Due to the uncertainty of its revenues from the Cooperation Agreement, the Corporation limited expenditures during the first half of FY 2011-12, but was able to undertake several initiatives and meet its own financial obligations during the second half of the fiscal year. In particular, the Revitalization Grant Program was established and funded to support projects and programs that are of benefit to the El Cerrito community and meet criteria in keeping with the Corporation's purposes. At the end of the FY 2011-12, the Corporation has a sufficient fund balance to enable it to weather the near-term uncertainty of its funding sources. 2 ---PAGE BREAK--- PROJECTS AND PROGRAMS The proposed Fiscal Year 2012-13 Operating Budget provides funding for economic development programs, continuation of the Revitalization Grant Program, initiation of efforts to develop the Corporation's properties, fulfilling lease obligations for improvements and maintenance of the Cerrito Theater, and administrative expenses. The Corporation's focus in FY 2012-13 will be to support, whether through a grant or involvement, the City's efforts to facilitate sustainable, transit-oriented, and infill development; attract and retain businesses; promote public safety; and improve public facilities. More specifically, those City efforts include: • Public information programs and a Community wide Strategic Plan • Initiating an update of the City's General Plan • Completion of the City's San Pablo Avenue Specific Plan, with economically feasible, transit-oriented development standards that promote infill development opportunities • Development of parking standards and programs and multi-modal traffic standards that support transit-oriented development, revitalization, and sustainability efforts • Participation in regional sustainability efforts like Green Corridor • Ongoing business recruitment, retention and marketing programs to increase shopping and dining opportunities for residents and visitors, and to bolster economic development efforts and City revenues • Improvement to City facilities in the Project Area or that benefit the Project Area • Capital expenses in support of public safety efforts in the Project Area or that benefit the Project Area The Corporation will also focus on the following programs and projects: • Predevelopment activities on Corporation-owned properties to implement the City's San Pablo Avenue Specific Plan, focusing in particular on the Del Norte area • The previously funded Commercial Rehabilitation Loan Program with priority given to the southern end of San Pablo Avenue around the Cerrito Theater and El Cerrito Plaza Shopping Center • Continuation of the graffiti abatement program, entrepreneur training program, and marketing efforts I • Collaboration with key property owners on San Pablo Avenue on potential development, redevelopment or other improvements to their properties • Coordination with Pleasantown Motion Picture Company to complete tenant improvements to the Cerrito Theater as provided in the Cerrito Theater Lease Agreement • Development of new and improved website content 3 ---PAGE BREAK--- BUDGET OVERVIEW Per the Cooperation Agreement, the Agency's funding to the Corporation is based on tax increment generated within the Project Area. City staff has projected what the Redevelopment Agency's tax increment revenue would have been if the Dissolution Act had not been implemented and what is likely to be available in the upcoming fiscal year, so that the Corporation can make its annual funding demand. That amount is $1,287,000 for FY 2012-13. While the Successor Agency has included the Cooperation Agreement on its schedule of recognized enforceable obligations, the funding remains uncertain through the first phase of dissolution and therefore the revenue budgeted is at risk. The City of El Cerrito relies on the Corporation for funding its economic development program and other projects and programs consistent with the Corporation's mission. Given the uncertain nature of the funding under the Cooperation Agreement, the Corporation is able to fund the City's economic development programs with the Corporation's FY 2011-12 revenues that were from sources unrelated to the Cooperation Agreement and thus are not at risk. Therefore, included in the projections for FY 2011-12 is a pre-funded program grant to the City from the Corporation totaling $1,007,000. The City has committed to using these funds for ongoing economic development programs and other uses that are consistent with Corporation's charitable and public purpose. Should the funds not be needed, they will be returned to the Corporation or directed to a purpose consistent with the Corporation's mission. The proposed FY 2012-13 revenue budget of $1,368,000 includes program income from the Cooperation Agreement, lease income and interest income. While interest income is expected to be minimal, lease revenue from the Cerrito Theater has been strong and is expected to increase as the restaurant spaces become operational during FY 2012-13. The proposed FY 2012-13 expense budget of $1,377,500 includes professional, property and other services and supplies needed for the Corporation's projects, programs, and activities. It includes funds to pay for the Corporation's obligation to fund capital improvements at the Cerrito Theater and public improvements on Hill Street. There is a budget for proposed grant awards through the Revitalization Grant Program. The projected actual for FY 2011-12 and the proposed budget for FY 2012-13, with categories broken down by funding source, are as follows: 4 ---PAGE BREAK--- Beginning Balance Revenue Program Rev Pre-Dissolution Program Rev Post-Dissolution Lease Revenue Developer Contribution Interest Income Total Revenue Expenditures Professional Services Administration Program Staffing Svcs Technical Professional Svcs Legal/Financial Total Professional Services Programs Marketing/Website Entrepreneur Training Program Graffiti Total Programs Property Maintenance & Supplies Maintenance Contracts Maintenance Supplies Total Property Maintenance Capital Expenses Hill Street Contribution Theater Eastshore Fence Total Capital Projects Loans & Grants Public Safety Radios Green Corridor Strategic Plan General Plan Other Grants Total Loans & Grants Pre-funded Program Grant Total Expenditures Net Revenue over Expenditures Ending Balance El Cerrito Muni.cipal Services Corporation FY 2011-12 Projected and FY 2012-13 Proposed Budget Revenue & Expenditures by Source of Funds Projected Developer Program Proposed Developer FY 2011-12 Contribution Revenue Other FY 2012-13 Contribution $ 636,454 $ - $600,000 $36,454 $1,391,455 $ 515,000 1,031,340 1,031,340 0 0 1,287,000 69,201 69,201 80,000 2,200,000 2,200,000 0 1,000 1,000 1,000 3,301,541 2,200,000 1,031,340 70,201 1,368,000 0 498,000 498,000 450,000 155,000 155,000 307,000 51,800 51,800 25,000 4,800 4,800 150,000 125,000 709,600 932,000 4,700 4,700 5,000 8,500 8,500 10,000 20,940 20,940 30,000 34,140 45,000 13,100 13,100 15,000 17,300 17,300 5,000 30,400 20,000 350,000 350,000 0 75,500 5,500 70,000 70,500 11,900 11,900 0 437,400 70,500 273,000 273,000 0 10,000 10,000 10,000 10,000 45,000 45,000 0 0 150,000 150,000 0 150,000 150,000 328,000 I 310,000 1,007,000 1,007,000 0 2,546,540 1,685,000 791,540 70,000 1,377,500 435,000 755,001 515,000 239,800 201 (9,500) (435,000} $1,391,455 $ 515,000 $839,800 $36,655 $1,381,955 $ 80,000 Program Revenue Other $839,800 $36,655 1,287,000 80,000 1,000 1,287,000 81,000 450,000 307,000 25,000 25,000 5,000 10,000 30,000 15,000 5,000 5,500 65,000 862,500 80,000 424,500 1,000 $1,264,300 $37,655 5 ---PAGE BREAK--- APPENDIX A Exhibit A to the Cooperation Agreement: List of Projects and Schedule of Performance and Payment Map of City of El Cerrito Redevelopment Project Area 6 ---PAGE BREAK--- Exhibit A El Cerrito Redevelopment Project Area List of Projects and Schedule of Performance and Payment Assigned to the El Cerrito Municipal Services Corporation Cost Estimates in Millions Timeframe for Project Soft Admin Total Performance Timeframe Projects and Programs Costs Costs Costs Cost (FY ending) for Payment Facilitation of Private Investment* Specific Plan Completion and Implementation 0.00 0.50 0.08 0.58 2012-2021 2012-2026 Del Norte Transit-Oriented Development Transit/Public Infrastructure 13.00 4.00 1.10 18.10 2012-2021 2012-2026 Knott Triangle 0.87 0.13 0.13 1.13 2012-2016 2012-2016 Mayfair Block 0.10 0.10 0.13 0.33 2012-2016 2012-2016 BART Parking Lots 0.44 0.07 0.07 0.57 2012-2016 2012-2016 Hill Street Parcel 0.10 0.10 0.13 0.33 2012-2016 2012-2016 Eastshore Triangle 1.31 0.20 0.20 1.70 2012-2016 2012-2016 North Gateway 0.44 0.07 0.07 0.57 2014-2018 2014-2018 Mitsubishi Block 0.65 0.10 0.10 0.85 2012-2016 2012-2016 Wall Streeet North 0.22 0.03 0.03 0.28 2017-2021 2017-2021 Wall Street South 0.22 0.03 0.03 0.28 2017-2021 2017-2021 South Blake 0.33 0.05 0.05 0.42 2017-2021 2017-2021 South Potrero 0.44 0.07 0.07 0.57 2017-2021 2017-2021 Madison Blocks 0.74 0.11 0.11 0.96 2017-2021 2017-2021 San Pablo/Alameda Midtown Site 0.44 0.07 0.07 0.57 2012-2016 2012-2016 Civic Center Parcel 0.10 0.10 0.10 0.30 2012-2016 2012-2016 DMV Block 0.87 0.13 0.13 1.13 2017-2021 2017-2021 Marshall's Center 0.87 0.13 0.13 1.13 2017-2021 2017-2021 Moeser Lane Shopping Center 0.44 0.07 0.07 0.57 2012-2014 2012-2014 Bank of America Block 0.44 0.07 0.07 0.57 2017-2021 2017-2021 South Stockton 0.44 0.07 0.07 0.57 2017-2021 2017-2021 South Eureka 0.22 0.03 0.03 0.28 2014-2018 2014-2018 Avila Site 0.26 0.04 0.04 0.34 2012-2016 2012-2016 Theater Block 0.87 0.13 0.13 1.13 2012-2016 2012-2016 Plaza BART Lots 0.87 0.13 0.13 1.13 2017-2021 2017-2021 Fairmount Auto Lots 0.44 0.07 0.07 0.57 2014-2018 2014-2018 Plaza Connection Fairmount/San Pablo 0.65 0.10 0.10 0.85 2014-2018 2014-2018 South Gateway 0.44 0.07 0.07 0.57 2017-2021 2017-2021 Cerrito Theater Property 1.00 0.15 0.15 1.30 2012-2021 2012-2026 Subtotal 27.17 6.38 3.54 37.09 Soft costs are those costs associated with the actual design and construction of a project, including: preparation of engineering/architectural plan and specifications, design development and review, coordination of bidding processes, construction inspections, construction management and those other costs necessary to implement the design and construction of a public improvement. Administrative Costs are those costs for services associated with the development of a public improvement or program, including: the purchase of land; negotiation and development of agreements; public outreach processes; approval and permitting processes; financial, legal and other specialized consulting services; financial compliance and other governmental reporting, including financial administrative oversight; the administration of housing projects including monitoring of affordable housing agreements and prevailing wage requirements, resale restrictions, or other covenants associated with affordable housing projects; the drafting of funding availability notices and development of affordable housing agreement documents; and additional indirect City costs associated with the administrative support needed to carry out these public improvements and programs. *May include land acquisition and/or assembly, site preparation, disposition and development of Agency properties, project specific infrastructure, Specific Plan implementation) ---PAGE BREAK--- Exhibit A El Cerrito Redevelopment Project Area List of Projects and Schedule of Performance and Payment Assigned to the El Cerrito Municipal Services Corporation Cost Estimates in Millions Project Soft Admin Total Projects and Programs Costs Costs Costs Cost Business Recruitment and Retention Business Attraction, Retention and Expansion 0.72 0.00 0.34 1.06 Community Promotion and Events 0.20 0.00 0.10 0.30 Commercial Building Rehabilitation Assistance 1.20 0.00 0.57 1.77 Graffiti Abatement 0.40 0.00 0.19 0.59 Subtotal 2.52 0.00 1.20 3.72 Public Improvements San Pablo Avenue transit & public infrastructure 1.00 0.20 0.00 1.20 Upper Fairmount streetscape improvements 0.17 0.00 0.00 0.17 Creekside Park Lighting 0.20 0.00 0.00 0.20 Fairmount/Ashbury Intersection Improvements 0.70 0.10 0.00 0.80 Central/Liberty Streetscape Enhancements 1.10 0.20 0.00 1.30 Central/San Mateo Intersection (1-80) 1.30 0.20 0.10 1.60 Potrero/1-80 Intersection Improvements 0.85 0.10 0.04 0.99 Ohlone Greenway Urban Greening (Plaza & Safeway) 1.20 0.20 0.00 1.40 Ohlone Greenway Crossing Safety Projects 0.50 0.06 0.00 0.56 Ohlone Greenway Master Plan Implementation 3.40 0.30 0.10 3.80 New Public Safety Building 18.80 5.00 1.20 25.00 New Senior Center 7.50 2.00 0.50 10.00 County-owned Facility (New Library) 13.80 3.80 0.80 18.40 Subtotal 50.52 12.16 2.74 65.42 TOTAL 106.23 Timeframe for Performance Timeframe (FY ending) for Payment 2012-2021 2012-2026 2012-2021 2012-2026 2012-2021 2012-2026 2012-2021 2012-2026 2012-2021 2012-2026 2012 2012 2012 2012 2012 2012 2012 2013 2014-2016 2014-2016 2012 2013 2014 2015 2012 2013 2012-2020 2012-2020 2012-2021 2012-2026 2012-2021 2012-2026 2012-2021 2012-2026 Soft costs are those costs associated with the actual design and construction of a project, including: preparation of engineering/architectural plan and specifications, design development and review, coordination of bidding processes, construction inspections, construction management and those other costs necessary to implement the design and construction of a public improvement. Administrative Costs are those costs for services associated with the development of a public improvement or program, including: the purchase of land; negotiation and development of agreements; public outreach processes; approval and permitting processes; financial, legal and other specialized consulting services; financial compliance and other governmental reporting, including financial administrative oversight; the administration of housing projects including monitoring of affordable housing agreements and prevailing wage requirements, resale restrictions, or other covenants associated with affordable housing projects; the drafting of funding availability notices and development of affordable housing agreement documents: and additional indirect City costs associated with the administrative support needed to carry out these public improvements and programs. ---PAGE BREAK--- " CITY 0 F E L CERRITO Redevelopment Kenilworth Ave G) Snowdon Ave ~ Glen Mawr Ave V> ~ Railroad Highway/Freeway OS claimer. AltholiJh&VeJY reasonable effort has been made to data. the Cily o4E1Carrilo makes no warranty. repmsenlation or guarariyas to the cortant. sequence. accuracy, timelhess or completenassof any ot the data provided herein and any representations and warranties, hcludng, without limitation, the Impled warranties ofmerchanlablhy and fitness for a pwpose. The City ofEI Cerrlo assumes no liability lor arrt errors, omissions, Of inaccurachts in the informatDn provided regarcless of how caused and assumes no liability for any decisions made or actions taken or upon any irlormationordata furnis.hadhereLnder. Because lhe GIS data provided 6 not warranted to be l4HO·date. the user shoUd verify lrlotmalion with City staff (Q ~ Area Boundary L c E R R T 0