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HomeMy WebLinkAbout9/18/14 OVERSIGHT BOARD AGENDA SPECIALSPECIAL MEETING OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA Thursday, September 18, 2014 9:00 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 24, 2014 special meeting. b. The Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency Receive and File the Staff Report and Correspondence from PEI. C. The Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency Receive and File the Staff Report on Draft Asset Transfer Review Findings of State Controller's Office (SCO). d. Recognized Obligation Payment Schedule (ROPS 14 -15B) and administrative budget for the period from January 1, 2015 through June 30, 2015. 4. BOARD COMMENTS 5. ADJOURNMENT OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: September 18, 2014 1 AGENDA ITEM: 3.a TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Minutes of the February 24, 2014 special meeting RECOMMENDATION: Staff recommends approval of the minutes. BACKGROUND: S: \OVERSIGHT BOARD OF SUCCESSOR AGENCY\Agenda ReportskAgenda Report MINUTES.docx 9/12/2014 9:13 AM 1. 2. 3. OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY MINUTES MEETING OF FEBRUARY 24, 2014 Conference Room A, City Hall North, 1600 Truxtun Avenue Special Meeting 9:00 a.m. SPECIAL MEETING -9:00 a.m. ACTION TAKEN ROLL CALL Present: Chairperson Bentley, Board Members Jay, Quiring, Tandy, Teglia Absent: Board Members Burke, Burrow PUBLIC STATEMENTS None. NEW BUSINESS a. Minutes of the December 2, 2013 special meeting. Motion by Board Member Jay, seconded by Board Member Quiring for approval of the minutes. b. A Resolution of the Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency Ratifying the Disposition of Specified Property Previously Conveyed to the City of Bakersfield for Use for Governmental Purposes Deputy City Attorney Rudnick made staff comments and responded to Board Member questions. Community Development Director Mclsaac made additional staff comments. Motion by Board Member Jay, seconded by Board Member Quiring, to adopt a Resolution ratifying the Disposition of Specified Property previously conveyed to the City of Bakersfield for use for Governmental purposes. APPROVED AB BURKE, BURROW RES OB 001 -14 APPROVED AB BURKE, BURROW Bakersfield, California, February 24, 2014 - Page 2 3. NEW BUSINESS continued ACTION TAKEN C. Recognized Obligation Payment Schedule RES OB002 -14 (ROPS 14 -15A) and administrative budget for the period from July 1, 2014 through December 31, 2014. Finance Director Smith made staff comments and recommended the adoption of the Recognized Obligation Payment Schedule as presented. Finance Director Smith responded to questions of the Board. Motion by Board Member Quiring, seconded APPROVED by Board Member Jay, to adopt a Resolution approving the Recognized Obligation Payment Schedule for the period from July 1, 2014 through December 31, 2014. 4. BOARD COMMENTS Community Development Director Mclssac advised the Board about new projects beginning construction this Spring, and stated the Board Members will receive invitations to formal groundbreaking events. 5. ADJOURNMENT Chair Person Bentley adjourned the meeting at 9:21 a. 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 AGENDA REPORT MEETING DATE: September 18, 2014 I AGENDA ITEM:_ TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: The Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency Receive and File the Staff Report and Correspondence from PEI. RECOMMENDATION: Staff recommends the Oversight Board receive and file the staff report and correspondence from PEI. BACKGROUND: The City of Bakersfield as Successor Agency received the attached letter dated June 9, 2014 from Kern County Superintendent of Schools' ( KCSOS) legal counsel regarding the Public Economics Inc., ("PEI") claim for prior year AB1290 pass- through underpayments, and their request for a meeting to discuss the claim. On June 13, 2014, the City responded with the attached letter, expressing its desire to resolve the matter, but that it was waiting for the County regarding the validity of the claim, which at that time was $547,307. On July 25, 2014, Successor Agency staff met with representatives from KCSOS and PEI Associate Carly Simard to discuss PEI's demand on behalf of the schools for the successor agency to place the AB1290 underpayments on this upcoming ROPS. Ms. Simard gave a power point presentation, which is also attached to this report. PEI is seeking AB1290 underpayments from all cities in Kern County that had a redevelopment agency. Successor Agency staff made it clear at the beginning of the meeting that the Successor Agency intends to pay the amount owed by placing the claim on a future recognized obligation payment schedule (ROPS)as long as the County is in agreement with the calculations. S:\Commdevdpt\ Admins\ 14- 15 \Oversightboard- PEI.Admin. Docx 9/9/2014 4:05 PM AGENDA REPORT Page 2 At the meeting, PEI stated that the Successor Agency owes the school and college districts about $600,000 of AB 1290 underpayments over the course of three years. Ms. Simard stated that PEI and the County have been working on getting on the same page with the numbers and AB1290 calculations. PEI confirmed that the County is going to follow the LA decision regarding AB1290 pass through payment calculations starting 13 -14 FY. PEI also talked about the Department of Finance (DOF), and how PEI would supply the Successor Agency with support documents if the Successor Agency needed to request a meet and confer with DOF in the event that the DOF rejected the AB1290 underpayment claim. However, PEI did state that they were in contact with the DOF, and that they are hopeful that the DOF will come out with a uniform policy that will recognize AB1290 underpayments as an enforceable obligation. Finally, Successor Agency staff also discussed doing a settlement agreement to memorialize everything once a final amount due has been determined. Successor Agency staff has also reached out to the County to discuss the figures as well. On September 9, 2014, Successor Agency staff contacted PEI as to the status of the claim. As final figures are still not available, the Successor Agency will continue to work with PEI and the KCSOS on obtaining a final amount due. Since there is not enough time to place an agreed -upon AB1290 underpayment claim on the upcoming ROPS, the Successor Agency plans on bringing this matter back at a special Oversight Board meeting in the near future. The Successor Agency will keep the Oversight Board members posted on any new developments concerning the PEI demand. JHR:dII Attachments: KCSOS Letter dated June 9, 2014 City Letter dated June 13, 2014 Estimated Increase in Pass Through Due to ERAF Allocation Pursuant to LAUSD AB 1290 Payments and ERAF in Kern County SA CommDevDpt\ Admins\ 14- 15 \0versightftard- PEI.Admin. docx 9/9/20144:05 PM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: September 18, 2014 1 AGENDA ITEM: 3.c TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: The Oversight Board to the Successor Agency of the Dissolved Bakersfield Redevelopment Agency Receive and File the Staff Report on Draft Asset Transfer Review Findings of State Controller's Office (SCO) ,RECOMMENDATION: Staff recommends the Oversight Board receive and file the staff report on the draft asset transfer review findings of the SCO. BACKGROUND: On September 2, 2014, the Successor Agency received the SCO's draft asset transfer review findings report. As part of the redevelopment dissolution process, the SCO is conducting an asset transfer review on every jurisdiction that had a redevelopment agency (RDA), and is specifically looking for any assets that were transferred from the RDA to the City between January 1, 2011 and January 31, 2012, which is in violation of the redevelopment law. Pursuant to the Health and Safety Code Section 34167.5, the SCO has the power to claw back those assets from the City and order the return of those assets to the Successor Agency. Although the draft report itself is confidential, the SCO's draft findings involve seven commercial properties that the RDA transferred to the City in March 2011 during the SCO's claw back period, and an "unallowable" transfer of cash assets from the RDA to the City, which consisted of principal and interest payments on Inter - Agency Loans made between the RDA and the City. At the time of the cash transfer, the SCO claims that the Inter - Agency Loans were not enforceable obligations. However, since the Successor Agency obtained its Finding of Completion, the Department of Finance deemed the Inter - Agency Loans as enforceable obligations and has approved the Oversight Board's approval of reinstating the Inter - Agency Loan agreements. The City as Successor Agency filed a response to the draft asset transfer review challenging the SCO's findings. The SCO will review and make comments to our response, and it may make adjustments to its draft findings. The final asset transfer review along with the Successor C: \Documents And Settings\Jobert\Local Settings \Temporary Internet Files\ Content. Outlook\ 6GB3QU3Y\ Scoassettransferreviewoversightboard Admin.Docx 9/12/2014 9:15 AM AGENDA REPORT Page 2 Agency's response will be posted on the SCO's website following the completion of the asset transfer review process. The Successor Agency will keep the Oversight Board members posted on any new developments concerning the SCO's asset transfer review. JHR:dII C' \Documents and Settings \jobert \Local Settings \Temporary Internet Files\ Content. Outlook\ 6GB30U3Y\ SCOAssetTransferReviewOversightBoard Admin.docx 9/12/20149:15 AM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: September 18, 2014 AGENDA ITEM: "3, d TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Recognized Obligation Payment Schedule (ROPS 14 -15 B) and administrative budget for the period from January 1, 2015 through June 30, 2015. 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 14 -15 B) and administrative budget for the period January 1, 2015 through June 30, 2015. 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 dates to allow them sufficient time to review and approve this schedule. Filing due dates are Oct. 1 and March 1 of each fiscal year, with cash distribution dates each January and June. 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 includes 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 13 -14 B period (January 1, 2014 to June 30, 2014) and actual expenses paid during that some period. 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 14 -15 B worksheet. S:\Accounting\Admin\Admin Reports \Successor Agency \SA - OB - Admin ROPS 14 -15 B sept 18 2014 meeting.docx 9/12/2014 8:56 AM AGENDA REPORT Page 2 Staff is recommending adoption of the Resolution approving the ROPS 14 -15 B and administrative budget. A line item ( #43) has been added in the amount of $2,578,531 due to the deficit variance between the approved ROPS amount from the prior ROPS period (14 -15A) of $5,616,966 and the actual amount of cash disbursed by the County of $3,038,435. The instructions provided for this type of event dictate the cash shortfall be added to the next ROPS schedule. The state 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 respective March 1 or October 1 due dates. S:\Accounting\Admin\Admin Reports \Successor Agency \SA - OB - Admin ROPS 14 -15 B sept 18 2014 meeting.dou 9/12/20148:56 AM