HomeMy WebLinkAbout09/10/15 OB AGENDA SPECIALSPECIAL MEETING OF THE OVERSIGHT BOARD
TO THE SUCCESSOR AGENCY
OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY
AGENDA
Thursday, September 10, 2015
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 18, 2015 special meeting.
b. Resolution approving the Settlement Agreements and Mutual Releases between the
Successor Agency and various Kern County School Districts, the Kern County
Superintendent of Schools, and the Kern Community College District regarding AB 1290
Pass - Through Underpayments of the former Bakersfield Redevelopment Agency.
C. State Audit Report of Successor Agency Property Transfers.
d. Resolution approving an Amended Long -Range Property Management Plan pursuant
to Health and Safety Code Section 34191.5.
e. Recognized Obligation Payment Schedule (ROPS 15-16 B) and administrative budget
for the period January 1, 2016 through June 30, 2016.
4. BOARD COMMENTS
5. ADJOURNMENT
OVERSIGHT BOARD TO THE SUCCESSOR AGENCY
OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY
AGENDA REPORT
MEETING DATE: September 10, 2015 AGENDA ITEM: 3.a
TO: Members of the Oversight Board
FROM: Successor Agency Staff
SUBJECT: Minutes of the February 18, 2015 special meeting
RECOMMENDATION: Staff recommends approval of the minutes.
BACKGROUND:
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OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE
DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY
MINUTES
MEETING OF FEBRUARY 18, 2015
Conference Room A, City Hall North, 1600 Truxtun Avenue
Special Meeting 10:00 a.m.
SPECIAL MEETING -10:00 a.m. ACTION TAKEN
1. ROLL CALL
Present: Chairperson Bentley, Board Members
Burrow, Jay, Quiring, Tandy, Teglia
Absent: Board Member Burke
2. PUBLIC STATEMENTS
None.
3. NEW BUSINESS
a. Minutes of the September 18, 2014 special
meeting.
Motion by Board Member Jay, seconded by
Board Member Quiring, for approval of the
minutes.
b. Recognized Obligation Payment Schedule
)ROPS 15-16 A) and administrative budget
for the period from July 1, 2015 through
December 31, 2015.
Motion by Board Member Teglia, seconded
by Board Member Jay, to adopt a Resolution
approving the Recognized Obligation
Payment Schedule for the period from July 1,
2015 through December 31, 2015.
C. Correspondence received from the County of
Kern regarding review of pass- through
payments to schools.
APPROVED
AB BURKE
ABS BURROW
RES 08001 -IS
APPROVED
AB BURKE
NS BURROW
Motion by Board Member Tandy, seconded by APPROVED
Board Member Jay, requesting a letter, on AB BURKE
behalf of the Oversight Board, be sent to the
Kern County Auditor Controller, with copies to
the Board of Supervisors and County Counsel,
requesting the amount owed to the school
districts be calculated as soon as possible.
Bakersfield, California, February 18, 2015 — Page 2
4. BOARD COMMENTS ACTION TAKEN
Board Member Tandy reminded the Board that the law
aggregates all Oversight Boards in the County, into
one Board, as of July 1, 2016.
Board Member Jay asked if the State has released any
figures which show how successful the overall project
has been and if it accomplished what they wonted.
Finance Director Smith, Deputy Attorney Rudnick and
Board Member Tandy provided responses.
5. ADJOURNMENT
Chair Person Bentley adjourned the meefing at
10:24 a.m.
CHAIR of the Oversight Board to the
Successor Agency
ATTEST:
Acting SECRETARY
n
OVERSIGHT BOARD TO THE SUCCESSOR AGENCY
OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY
AGENDA REPORT
MEETING DATE: September 10, 2015 AGENDA ITEM: 3.b.
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 Settlement Agreements and
Mutual Releases between the Successor Agency and various Kern County School
Districts, the Kern County Superintendent of Schools, and the Kern Community
College District regarding AB 1290 Pass- Through Underpayments of the former
Bakersfield Redevelopment Agency
RECOMMENDATION:
Staff recommends approval of the Resolution.
BACKGROUND:
Prior to the dissolution of the former Bakersfield Redevelopment Agency (BRDA) on February 1,
2012, AB 1290 pass- through payments were calculated and paid by the Kern County Auditor -
Controller- County Clerk (KCAC) on behalf of the BRDA to the various school districts and taxing
entities within the former Bakersfield Redevelopment Project Areas. The State redevelopment
dissolution law requires that the KCAC calculate and distribute future AB 1290 pass- through
payments to the school districts and taxing entities.
In 2013, the California Court of Appeals (Fourth Circuit) ruled in the Los Angeles Unified School
District v. County of Los Angeles, et al, case that the Los Angeles school districts were entitled to
AB 1290 pass- throughs based on a post- Education Revenue Augmentation Fund (ERAF) basis
This meant that Los Angeles County and the other taxing entities within Los Angeles County,
including several of the dissolved redevelopment agencies, owed underpayments of the AB 1290
pass- through payments to the various Los Angeles County school districts. The Los Angeles
School District case was not appealed and so it remains the current law in effect. Other counties
started to follow the Los Angeles School District case in terms of calculating their AB 1290 pass -
through payments due to the school districts.
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AGENDA REPORT Page
On June 28, 2013, Public Economics, Inc. (PEI), which was the consultant and "expert witness" in
the Los Angeles School District case, sent a demand letter to the City of Bakersfield on behalf of
the Kern County Superintendent of Schools ( KCSOS), Kern High School District (KHSD), Bakersfield
School District (BSD), and Fairfax School District (FSD). The letter demanded that the Successor
Agency to the dissolved BRDA ( "Successor Agency ") add underpayments of AB 1290 pass -
throughs for those school districts as enforceable obligations to the next ROPS. PEI estimated that
the total amount of the underpayments for those districts for Fiscal Years 2008 -2009 through 2010-
2011 was $811,085 based upon the calculation used in the Los Angeles School District court
decision. PEI then revised its estimate to $547,307 on August 26, 2013, as PEI stated that it
inadvertently included four years of underpayments instead of three years in its demand
calculation. As the PEI demand was an estimate, the Successor Agency expressed its willingness
to put the AB 1290 underpayments on the next ROPS, but only until the KCAC could confirm the
correct figures.
On April 15, 2015, the KCAC notified the Successor Agency of the KCAC's calculations of the AB
1290 pass- through underpayments based on the Los Angeles Court Decision by a letter which is
attached to this administrative report. Subsequently, the KCSOS agreed to adopt the KCAC's
figures for their claim, and the KCSOS revised their total demand to $532,294.41. The Kern
Community College District (KCCD) did not join in this Settlement Agreement and Mutual
Release, but the KCCD entered into a separate settlement agreement and mutual release with
the Successor Agency.
On June 24, 2015, the Successor Agency approved the Settlement Agreement and Mutual
Release with the KCSOS, KHSD, BSD and FSD. On September 2, 2015, the Successor Agency
approved the Settlement Agreement and Mutual Release with the KCCD. Approval of the
Settlement Agreements and Mutual Releases will not affect the City of Bakersfield's general fund
In addition, placing the AB 1290 underpayments on the next ROPS will not jeopardize the existing
Successor Agency's enforceable obligations because those obligations would still be able to be
completely funded on future ROPS. Finally, existing enforceable obligations also take priority over
AB 1290 pass- through obligations.
If the Oversight Board approves the attached Resolution approving the attached Settlement
Agreements and Mutual Releases, staff will forward the Resolution and Settlement Agreements
and Mutual Releases to the State Department of Finance for their approval and staff will also add
the AB 1290 underpayments on the next ROPS.
JHR:dII
Attachments: Letter from KCAC dated April 15, 2015
Resolution
Settlement Agreements and Mutual Releases
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OVERSIGHT BOARD TO THE SUCCESSOR AGENCY
OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY
AGENDA REPORT
MEETING DATE: September 10, 2015 AGENDA ITEM: 3.c.
TO: Members of the Oversight Board
FROM: Successor Agency Staff
SUBJECT: State Audit Report of Successor Agency Property Transfers.
RECOMMENDATION:
Staff recommends report be received and filed.
BACKGROUND:
As part of the rules and regulations surrounding the dissolution of Redevelopment Agencies
the State legislature required the State Controllers' Office (SCO) to review asset transfers made
from each of the over 400 Redevelopment Agencies during the 13 month period prior to the
February 1, 2012 dissolution date of the former Redevelopment Agencies. In February 2014 an
SCO auditor conducted field work regarding the former Bakersfield Redevelopment Agency
(RDA). In August 2014 the SCO provided draft finding for staff review and comment. On
September 10, 2014 the City Attorney's office provided comment regarding the draft findings
of the SCO. On June 11, 2015 the SCO issued its audit report regarding the asset transfers of
the former RDA.
The report contains two findings that require the City of Bakersfield to return certain assets to
the Bakersfield Successor Agency that were previously transferred from the former RDA to the
City during the 13 month period prior to the February 2014 date the RDA was dissolved by the
State. The findings relate to two specific items deemed unallowable by the SCO. The first
finding is regarding the inter - agency loan repayments that were made during this 13 month
period prior to the former RDA being dissolved. Staff felt that since the loan agreements were
accepted by the State Department of Finance as Enforceable Obligations that the loan
payment terms should not have been interrupted, especially prior to the date of dissolution.
The SCO auditors have routinely found exception to such loan payments made across The
state during the 13 months prior to dissolution and have ordered the City to return those funds
totaling $1,175,500 back to the Bakersfield Successor Agency. In complying with the State
order, the respective loan balances have been re- adjusted upward and the City has since
transferred the cash back to the Successor Agency. The City will be re -paid the adjusted
principal and interest due on the inter- agency loans in accordance with State law going
forward. The end result will be the same, where the City will eventually be repaid the funds the
loaned to the former RDA.
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AGENDA REPORT
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The second finding was regarding a property located on the Southeast corner of California
Avenue and Owens Street that was transferred from the former RDA to the City during this
some 13 month period. The SCO determined the transfer to be invalid and ordered the
property to be returned to the Successor Agency. This property is to be sold with the proceeds
of the sale being turned over to the County Auditor Controller for distribution to the various
public agencies in accordance with State law.
The findings of this report were provided to the City Council at their July 22, 2015 meeting and
the adjustments referenced have been incorporated into the 2015 -16 B ROPS schedule being
considered by the Oversight Board at this September 2015 meeting.
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A
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OVERSIGHT BOARD TO THE SUCCESSOR AGENCY
OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY
AGENDA REPORT
MEETING DATE: September 10, 2015 AGENDA ITEM:
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 an Amended 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 lx 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.
On September 6, 2013, the Oversight Board approved Oversight Board Resolution No. OB003 -13
approving the Property Management Plan. The Successor Agency submitted the Property
Management Plan to the DOF in September 2013, which was approved by the DOF on February
4, 2014. On June 11, 2015, the State Controller's Office (the "SCO "), as part of its Asset Transfer
Review Report (pursuant to Health and Safety Code Section 34167.5), ordered the City of
Bakersfield to transfer the California Avenue /Owens Property (APN 018-04070) to the Successor
Agency. The SCO's findings have necessitated the Successor Agency to submit an Amended
Property Management Plan to add the California Avenue /Owens Property to the Property
Management Plan.
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 Properly Management Fund by the
DOF. Properties so designated pursuant to the Amended Property Management Plan will be
transferred from the Property Trust Fund to the City of Bakersfield ( "City ") in the case of Site #1,
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AGENDA REPORT Paget
following approval of the Amended Property Management Plan by DOE Site #2 will transfer
from the City to the Successor Agency for sale following approval of the Amended Property
Management Plan by DOF.
The Amended Property Management Plan must include an inventory of all properties in the
Property Tnist 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.
• 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 Amended 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 of 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.
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Property cannot be transferred to the Successor Agency or City unless the Amended 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 #1 Approved 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 was approved by the Oversight Board and the DOF to be transferred to the City for
use as a public works construction materials staging area.
• Site #1 is described in greater detail in Exhibits A and B.
Site #2 Recommended Transfer to Successor Aaencv for sale
Owner.
City/Successor Agency
Parcel Number.
018-040 -70
Location:
1029 East California Avenue
Current Use:
Vacant undeveloped land.
• Site #2 is recommended to be transferred to the Successor Agency for sale at fair market
value, With the proceeds of the sale to be used for enforceable obligations or distributed
as property tax to the taxing entities.
• Site #2 is described in greater detail in Exhibits A and B.
JHRAI
Attachments: Resolution
Exhibit A- Amended Long -Range Property Management Plan
Exhibit B - Amended Long -Range Property Management Plan Matrix
7130201510:02 AM
OVERSIGHT BOARD TO THE SUCCESSOR AGENCY
OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY
AGENDA REPORT
MEETING DATE: September 10, 2015 AGENDA ITEM: 3.e.
TO: Members of the Oversight. Board
FROM: Successor Agency Staff
SUBJECT: Recognized Obligation Payment Schedule (ROPS 15 -16 B) and administrative
budget for the period from January 1, 2016 through June 30, 2016.
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 15-16 B) and administrative budget for the period January 1, 2016
through June 30, 2016.
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 Kem 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 14-15 B period (January 1, 2015 to June 30, 2015) and actual expenses paid during that
same period.
Health and Safety code section 341770) 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 15 -16 B worksheet.
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This ROPS report includes two new line items related to settlement agreements entered into
between the Bakersfield Successor Agency, various Kern County School Districts, the Kern
County Superintendent of Schools and the Kern Community College District. The settlement
agreements are based on a letter received from the Kern County Auditor Controller and their
recalculation of prior year AB 1290 pass through payments made by the County on behalf of
the former Bakersfield RDA. This ROPS also includes the adjustments made to inter- agency
loan balances in compliance with the State Controllers Office audit report dated June 2015.
Staff is recommending adoption of the Resolution approving the ROPS 15-16 B and
administrative budget. 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.
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