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HomeMy WebLinkAbout09/06/13 OVERSIGHT BOARD AGENDA SPECIALSPECIAL MEETING OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA Friday, September 6, 2013 10:00 a.m. City Hall North - Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 1. ROLL CALL 2. PUBLIC STATEMENTS 3. NEW BUSINESS a. Minutes of the February 25, 2013 special meeting b. A Resolution of the Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency approving the Amended and Restated Reimbursement Agreement between the City of Bakersfield and the Successor Agency to the Bakersfield Redevelopment Agency. C. A Resolution of the Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency approving a Long -Range Property Management Plan pursuant to Health and Safety Code Section 34191.5. d. Recognized Obligation Payment Schedule (ROPS 13 -14B) and administrative budget for the period from January 1, 2014 through June 30, 2014. e. Correspondence dated June 28, 2013 from Public Economics, Inc. ( "PEI ") 4. BOARD COMMENTS 5. ADJOURNMENT OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: September 6, 2013 1 AGENDA ITEM: 3.a 1 TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Minutes of the February 25, 2013 special meeting RECOMMENDATION: Staff recommends approval of the minutes. BACKGROUND: S: \OVERSIGHT BOARD OF SUCCESSOR AGENCY\Agenda Reports\Agenda Report MINUTES.docx 8/21/2013 3:47 PM 1. OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY MINUTES MEETING OF FEBRUARY 25, 2013 Conference Room A, City Hall North, 1600 Truxtun Avenue Special Meeting 2:00 p.m. SPECIAL MEETING - 2:00 p.m. ACTION TAKEN ROLL CALL Present: Chairperson Bentley, Board Members Burke, Jay, Quiring, Tandy, Teglia Absent: Board Member Burrow 2. PUBLIC STATEMENTS None. 3. NEW BUSINESS a. Minutes of the October 15, 2012 special meeting. Motion by Board Member Jay, seconded by APPROVED Board Member Teglia for approval of the AB BURROW minutes. b. Update on the Meet and Confer Process with Department of Finance and Litigation. Deputy City Attorney Rudnick made staff comments. Board Member Tandy made additional comments. Motion by Board Member Jay, seconded by APPROVED Board Member Tandy, to receive and file AB BURROW the staff report. 3. Bakersfield, California, February 25, 2013 - Page 2 NEW BUSINESS continued c. Recognized Obligation Payment Schedule (ROPS 13-14 A) for the period from July 1, 2013 through December 31, 2013. Finance Director Smith made staff comments and recommended the adoption of the Recognized Obligation Payment Schedule as presented. Motion by Board Member Burke, seconded by Board Member Quiring, to adopt a Resolution approving the Recognized Obligation Payment Schedule for the period from July 1, 2013 through December 31, 2013. 4. BOARD COMMENTS In response to Board Member Jay's question, Board Member Tandy stated that the City attends the California League of Cities meetings and other webinar seminars that are keeping them current on issues including a shared litigation report that includes all those who have sued the State of California and what the issues are. Chairperson Bentley asked how many years litigation might take to be completed. Deputy City Attorney Rudnick responded that each case is different and that the RDA Laws have directed all lawsuits to be filed in Sacramento Superior Court. Board Member Tandy estimated that a very optimistic scenario for litigation might run at 6 months to a year but that it could take as long as four or five years. Board Member Jay asked what kind of an impact will the shortfall have on the City? Board Member Tandy explained that as long as the RDA and Arena debt is not resolved, it will come out of the City's General Fund. Ultimately, the rates for inter- city departments would be raised if the loans have to be written off. If the City does not meet the State's deadlines on the housing projects along Mill Creek, they could ask for a repayment of the $11 million infrastructure grant that the City received. ACTION TAKEN RES OB001 -13 APPROVED AB BURROW Bakersfield, California, February 25, 2013 — Page 3 5. ADJOURNMENT ACTION TAKEN Chair Person Bentley adjourned the meeting at 2:25 p.m. CHAIR of the Oversight Board to the Successor Agency ATTEST: Acting SECRETARY OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY ADMINISTRATIVE REPORT MEETING DATE: September 6, 2013 1 AGENDA ITEM: 3. b I TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: A Resolution of the Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency approving the Amended and Restated Reimbursement Agreement between the City of Bakersfield and the Successor Agency to the Bakersfield Redevelopment Agency RECOMMENDATION: Staff recommends adoption of the Resolution. BACKGROUND: As you may recall, as part of the dissolution of Redevelopment the State Department of Finance denied the repayment of three interagency loans made between the City and the former Bakersfield Redevelopment Agency totaling approximately $2.8 million. Subsequent amendments to the State law allowed for the provision for reinstatement of the interagency loans if the Successor Agency complied with a series of required actions. The City acting as Successor Agency has now complied with all the requirements of the Department of Finance in order to pursue reinstatement of the interagency loans. The action before you is a Resolution to approve the Amended and Restated Reimbursement Agreement, which will then allow the City to request repayment of $2.8 million that would have otherwise been written off as a loss to the City. On August 14, 2013, the Amended and Restated Reimbursement Agreement was approved by both the City and the Successor Agency. Prior to the Amended and Restated Reimbursement Agreement being placed on the ROPS, and subsequent to the adoption of the attached resolution, the Oversight Board must make a similar finding that the Amended and Restated Reimbursement Agreement expenditures were for legitimate redevelopment purposes and a finding that the Amended and Restated Reimbursement Agreement is an Enforceable Obligation. Loan Details: 1. On September 23, 2009, the CITY and the Former RDA entered into a Reimbursement Agreement ( "2009 Reimbursement Agreement ") whereby the CITY agreed to loan the Former RDA funds to be used for the purpose of providing assistance for the 19th Street Senior Housing project and the Mill Creek Courtyard project, and the Former RDA agreed to repay the CITY over time from available tax increment revenues. S: \CommDevDpt\Adm ins\ 2013- 14 \OversightBoard. ReimbAgr- Admin- revised.docx 8119/2013 11:13 AM ADMINISTRATIVE REPORT Page 2 The 2009 Reimbursement Agreement involved two loans: 1) a 7 year $2,000,000 loan at 5% interest from the City Equipment Fund to provide construction and development assistance of affordable housing for the 19th Street Senior Plaza Apartments in the Mill Creek Project. The current principal balance of the loan is $1,342,959; and, 2) a 7 year $1,500,000 loan at 5% interest from the City Self Insurance Fund to provide construction assistance to the Courtyard Apartments located on S Street in South Mill Creek. The current principal balance of the loan is $1,122,121. Both projects are an integral part of the Mill Creek Plan and the housing units being created were components for calculation in the amount of the financial award for the Prop1C Infrastructure Grant for $10.8 million dollars. Both projects have not begun construction as the current owners are in the process of obtaining financing for their projects. 2. On August 11, 2010, the CITY and the Former RDA entered into a Loan Reimbursement Agreement ( "2010 Loan Reimbursement Agreement ") whereby the CITY agreed to loan the Former RDA funds to be used for the purpose of purchasing a 1.95 acre strip of land and easement from the CITY in order to facilitate the development of property for the Chelsea Housing Project and Southeast Mill Creek commercial project, and the Former RDA agreed to repay the CITY over time from available tax increment revenues. The 2010 Loan Reimbursement Agreement consisted of a 5 year loan in the amount of $950,000 at 3% interest from the City Equipment Fund previously used by the Bakersfield Redevelopment Agency to purchase a 1.95 acre strip of land from the City required for the construction of the Chelsea Family Apartments located on 14th and S Streets in South Mill Creek. The current principal balance of the loan is $760,000. The project is complete and 100% occupied. Both the 2009 Reimbursement Agreement and the 2010 Loan Reimbursement Agreement (collectively "Reimbursement Agreements ") were necessary because the redevelopment project areas did not generate sufficient property tax increment to undertake necessary redevelopment activities and improvements, and so the City loaned funds from the Equipment and Self Insurance Funds to the Former RDA to cover the cash shortfalls. Attached is the approved Amended and Restated Reimbursement Agreement between the Successor Agency and the City that re -state the loans above with the rate and current amounts that are due. JH R:vl Attachments: 1. Resolution 2. Amended and Restated Reimbursement Agreement S: \CommDevDpt\Adm ins\ 2013- 14 \OversightBoard. ReimbAgr- Admin- revised.docx 8/19/201311:13 AM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: September 6, 2013 AGENDA ITEM: 3.c TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: A Resolution of the Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency approving a Long -Range Property Management Plan pursuant to Health and Safety Code Section 34191.5 RECOMMENDATION: Staff recommends adoption of the Resolution. BACKGROUND: The Successor Agency is required by AB Ix 26 and AB 1484 (collectively the "Dissolution Bills ") to prepare the Long- Range Property Management Plan ( "Property Management Plan ") that addresses the disposition and use of the properties of the former Agency. The Property Management Plan must be submitted to the Oversight Board and the Department of Finance ( "DOF ") for approval no later than six months following the issuance to the Successor Agency of the Finding of Completion ( "FOC "). The Successor Agency's FOC was issued by DOF on March 25, 2013. The Dissolution Bills require the establishment of a Community Redevelopment Property Trust Fund, ( "Property Trust Fund ") administered by the Successor Agency, to serve as the repository of the Successor Agency's real properties upon approval of the Property Management Fund by the DOF. Properties so designated pursuant to the Property Management Plan will be transferred from the Property Trust Fund to the City of Bakersfield ( "City ") following approval of the Property Management Plan by DOF. The Property Management Plan must include an inventory of all properties in the Property Trust Fund. The inventory shall consist of all of the following information: • The date of the acquisition of the property and the value of the property at the time, and an estimate of the current value of the property. • The purpose for which the property was acquired. Parcel date, including address, lot size, and current zoning in the former agency redevelopment plan or specific, community, or general plan. S:\CommDevDpt\Admins\2013-14\LongRangeProp.MngPlan-Admin.docx 8/19/2013 11:22 AM ADMINISTRATIVE REPORT Page 2 • An estimate of the current value of the parcel including, if available, any appraisal information. • An estimate of any lease, rental, or any other revenues generated by the property, and a description of the contractual requirements of the disposition of those funds. • The history of environmental contamination, including designation as a brownfield site, any related environmental studies, and history of any remediation efforts. • A description of the property's potential for transit - oriented development and the advancement of the planning objectives of the successor agency. • A brief history of previous development proposals and activity, including the rental or lease of property. • Address the use or disposition of all of the properties in the Property Trust Fund. Permissible uses include the retention of the property for governmental use, the retention of the property for future development, the sale of property, or the use of the property to fulfill an enforceable obligation. The Property Management Plan shall separately identify and list properties in the Property Trust Fund dedicated to governmental use purposes and properties retained for purposes of fulfilling an enforceable obligation. With respect to the use or disposition of all other properties, all of the following shall apply: • If the plan directs the use of liquidation of the property for a project identified in an approved redevelopment plan, the property shall transfer to the City. • If the plan directs the liquidation of the property or the use of revenues generated from the property, such as lease or parking revenues, for any purpose other than to fulfill an enforceable obligation or other than that specified immediately above, the proceeds from the sale shall be distributed as property tax to the taxing entities. Property cannot be transferred to the Successor Agency or City unless the Property Management Plan has been approved by the Oversight Board and the DOF. With the approval of the Oversight Board and DOF, real property assets will transfer to the City for either: 1) governmental use; 2) future development; or 3) use of the property for a project identified in an approved redevelopment plan. Site #I Recommended Transfer to City for Governmental Use Owner: Successor Agency Parcel Number: 006 - 540 -02 Location: 1500 S. Street Current Use: Vacant undeveloped remnant site without street access. • Site # 1 is recommended to be transferred to the City as it is adjacent to a City -owned parcel, used as a public works construction materials staging area. • Site #1 is described in greater detail in Exhibits A and B. S: \Comm DevDpt\Admins\ 2013- 14 \LongRangeProp.MngPlan- Admin.docx 8/19/201311:22 AM ADMINISTRATIVE REPORT FISCAL IMPLICATIONS Page 3 Once the Property Management Plan is approved by the Oversight Board and the DOF, and the property is transferred to the City, the City will be responsible for the maintenance and use of the property consistent with the Property Management Plan. Cost to maintain property transferred to the City for governmental use will be borne by the City. ATTACHMENTS: • Resolution • Exhibit A- Long Range Property Management Plan • Exhibit B - Long Range Property Management Plan Matrix JHR /vl S: \Comm DevDpt\Hdmins \2013- 14 \LongRangeProp. MngPlan- Admin.docx 8/19/201311:22 AM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: September 6, 2013 1 AGENDA ITEM: 3.d TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Recognized Obligation Payment Schedule (ROPS 13 -14 B) and administrative budget for the period from January 1, 2014 through June 30, 2014. RECOMMENDATION: Staff recommends adoption of a Resolution of the Oversight Board to the Successor Agency of the dissolved Bakersfield Redevelopment Agency approving the Recognized Obligation Payment Schedule (ROPS 13 -14 B) and administrative budget for the period January 1, 2014 through June 30, 2014. BACKGROUND: State law AB 26 requires the Oversight Board to review and approve a Recognized Obligation Payment Schedule (ROPS) looking forward for each six month period from January to June and from July to December of each year. The adopted ROPS is then reviewed by the Department of Finance (DOF), the State Controllers' Office (SCO) and the Kern County Auditor Controllers Office. This law was further amended by AB 1484 to require the schedule to be approved by the Oversight Board and submitted to the DOF three months in advance of the cash distribution date (in this case, submit by October 1, 2013 for a January 2, 2014 disbursement date) to allow them sufficient time to review and approve this schedule. The DOF has again redesigned the forms and have implemented new instructions and guidelines regarding the spreadsheets and data to be entered. Once the DOF approves the ROPS, the document then becomes the basis for County disbursements of funds to the Successor Agency to make debt service payments and pay other enforceable obligations of the former Bakersfield Redevelopment Agency. The attached schedule format is fairly similar to the most recent schedule approved by the Oversight Board. The schedules include a listing of the obligations for the next six month period as well as a reconciliation page identifying the variances between the estimated payments for the ROPS III period (Jan. 1, 2013 to June 30, 2013) and actual expenses paid during that same period. C:\ Users\ alawrenc\AppData \Local\Microsoft \Windows \Temporary Internet Files \Content.Outlook \V3QOM85T\SA - OB - Admin ROPS 13 -14 B Sept 6 mtg.docx 8/28/2013 8:35 AM AGENDA REPORT Page 2 We continue to list the items previously rejected by the DOF, which are still in dispute and pending further litigation. These items include the $3 million Park 20th Senior /Veteran housing project and $1.2 million down payment assistance for the Millcreek Courtyard Senior housing. Additionally, we are listing the proposed "reinstatement" the three Inter - agency loans with the City as allowed under the law, based on our Notice of Completion received from the DOF. This action is a separate agenda item for the Oversight Board and was approved by the City Council and the Successor Agency at their August 14, 2013 meeting. The reinstatement combines the prior loan agreements into one master reimbursement agreement. The DOF guidelines required the City to lower the interest rates from the inception of the loans down to the current Local Agency Investment Fund (LAIF), which is currently 0.00244 (0.244 %). Also, actual repayments cannot begin until the next ROPS cycle and 20% of any payments made will be deposited into the Successor Housing Agency fund to be used for housing purposes. Health and Safety code section 34177(j) also requires the Oversight Board to approve the Successor Agency's administrative budget. The proposed administrative budget of the Successor Agency of the dissolved Bakersfield Redevelopment Agency for the six month period is $125,000 and is shown on the ROPS 13 -14 B worksheet. Staff is recommending adoption of the Resolution approving the ROPS 13 -14 B and administrative budget. The new law (AB 1484) potentially imposes severe penalties against the City of Bakersfield (up to $10,000 per day) should the Oversight Board not approve the ROPS prior to the October 1, 2013 due date. C:\ Users\ alawrenc\AppData \Local\Microsoft \Windows \Temporary Internet Files \Content.Outlook \V3QOM85T\SA - OB - Admin ROPS 13 -14 B Sept 6 mtg.docx 8/28/20138:35 AM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY ADMINISTRATIVE REPORT MEETING DATE: September 6, 2013 1 AGENDA ITEM: 3•e TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Correspondence dated June 28, 2013 from Public Economics, Inc. ( "PEI ") RECOMMENDATION: Staff recommends that the Oversight Board receive and file the Staff Report and correspondence from PEI. BACKGROUND: The City of Bakersfield received the attached letter dated June 28, 2013, from the Public Economics, Inc. ( "PEI ") on behalf of the Kern High School District, Bakersfield School District, and Fairfax School District. The letter demands that the Successor Agency to the dissolved Bakersfield Redevelopment Agency ( "Successor Agency ") add underpayments of AB 1290 pass - throughs for those districts as enforceable obligations to the next ROPS 13 -14B. PEI estimated that the total amount of the underpayments for those districts for Fiscal Years 2008- 2009 through 2010 -2011 is $811,085. PEI stated in its letter that in the "near future" that it would provide detailed documentation of how it determined its estimate. To date, the City and the Successor Agency have not received any further information from either PEI or Kern County concerning the allegations contained in the letter. In addition, it is not clear how the County of Kern calculated the AB 1290 pass through payments at issue. Without the necessary information to evaluate the demand, the Successor Agency is unable to add any "underpayments of AB 1290 pass - throughs" for those districts as enforceable obligations to the next ROPS 13 -14B as demanded by PEI. The Successor Agency will keep the Oversight Board members posted on any new developments concerning the PEI demand letter. JHR:vl Attachment: 1. Letter from PEI dated June 28, 2013 S: \Comm DevDpt\Adm ins\ 2013- 14\ OversightBoard .AB1290Pass- Through.Itr.Adm in. docx 8/22/2013 9:06 AM