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HomeMy WebLinkAbout5/21/12 OVERSIGHT BOARD AGENDA SPECIALSPECIAL MEETING OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA Monday, May 21, 2012 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. Election of Chair and Vice Chair for 2012 -2013 b. Minutes of the April 9, 2012 special meeting C. Recognized Obligation Payment Schedule (ROPS) for the period from January 1, 2012 through June 30, 2012 Update of Communications between the Successor Agency and the State Department of Finance regarding the ROPS adopted on April 9, 2012; and 2. Adopt a Resolution of the Oversight Board to the Successor Agency of the dissolved Bakersfield Redevelopment Agency approving the Amended Recognized Obligation Payment Schedule (ROPS) for the period January 1, 2012 through June 30, 2012 d. Recognized Obligation Payment Schedule (ROPS) for the period from July 1, 2012 through December 31, 2012 e. Authorization and approval to reenter and restate two loan agreements between the Successor Agency and the City as allowed for under California Health and Safety Code Sections 34178(a) of ABIX -26 that were prior enforceable obligations of the former and dissolved Bakersfield Redevelopment Agency. 1. Authorize and approve an Agreement to Reenter and Restate a Reimbursement agreement previously used by the Redevelopment Agency with a current principal balance of $1,342,959 to replace a September 23, 2009, 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 and with a current principal balance of $1,122,121 to replace a September 23, 2009, 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. 2. Authorize and approve an Agreement to Reenter and Restate a Loan Reimbursement Agreement with a current principal balance of $760,000 to replace an August 11, 2010, 5 year $950,000 loan 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. 3. NEW BUSINESS continued Establishment of future meeting date 4. BOARD COMMENTS 5. ADJOURNMENT OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT I MEETING DATE: May 21, 2012 I AGENDA ITEM: 3.a. TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Election of Chair and Vice Chair for 2012 -2013 RECOMMENDATION: Staff recommends that the Oversight Board elect one member to serve as Chair and one member to serve as Vice Chair for a one -year term. BACKGROUND: This item was originally brought before the Oversight Board on April 9, 2012. At that meeting, Board Member Tandy was voted as the Chair on a temporary basis, as all of the Board members had not yet been appointed, and, therefore, not in attendance. The item was deferred to this meeting so that all of the Oversight Board members could vote to select a member to hold the post on a permanent basis. All actions of the Oversight Board must be taken on a majority vote of the entire membership. Given that the Oversight Board has seven (7) members, four (4) affirmative votes are needed to pass a motion. Since there is not a Chair or Vice Chair currently, staff will open and close the nominations for Chair and Vice Chair, and call for the vote on each position. al S:\Successor Agency \Oversight Board\2012 \May.21\Chair and Vice Chair Election.docx 5/18/201210:01 AM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: May 21, 2012 1 AGENDA ITEM: 3.b. TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Minutes of the April 9, 2012 special meeting RECOMMENDATION: Staff recommends approval of the minutes. BACKGROUND: S: \OVERSIGHT BOARD OF SUCCESSOR AGENCY\Agenda Reports\Agenda Report MINUTES.docx 5/16/2012 10:04 AM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: May 21, 2012 1 AGENDA ITEM: 3.c. TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Recognized Obligation Payment Schedule (ROPS) for the period from January 1, 2012 through June 30, 2012. 1. Update of communications between the Successor Agency and the State Department of Finance regarding the ROPS adopted on April 9, 2012; and 2. Adopt a Resolution of the Oversight Board to the Successor Agency of the dissolved Bakersfield Redevelopment Agency approving the Amended Recognized Obligation Payment Schedule (ROPS) for the period January 1, 2012 through June 30, 2012. RECOMMENDATION: Staff recommends adoption of the Resolution of the Oversight Board to the Successor Agency of the dissolved Bakersfield Redevelopment Agency approving the amended Recognized Obligation Payment Schedule (ROPS) for the period January 1, 2012 through June 30, 2012. BACKGROUND: The Oversight Board approved a Recognized Obligation Payment Schedule (ROPS) for the period January 1, 2012 through June 30, 2012 at its April 9, 2012 meeting. This adopted schedule was provided to the Department of Finance, the State Controllers' Office and the Kern County Auditor Controllers office on April 9, 2012 in accordance with the guidelines of AB 26. At the time of adoption the Oversight Board was informed that certain of the items listed on the schedule were still under review by the Department of Finance. On April 20, 2012 the Successor Agency received the attached correspondence from the Department of Finance (DOF) challenging certain items listed on the ROPS and requesting the ROPS be amended accordingly and returned to the Oversight Board for your reconsideration. On May 1, 2012 staff responded to the Department of Finance with the attached correspondence, providing additional details to support our original position on the HUD Section 108 loans and asking for clarification regarding the DOF comments on Housing set aside transactions. Staff initially agreed to remove the Interagency loans from the ROPS with C:\ Users\ alawrenc \AppData \Local\Mlcrosoft\Windows \Temporary Internet Files\ Content .Outlook \D35NPARX\Successor Agency - OB - Admin May 21 Item 3 c.docx 5/16/2012 10:07 AM AGENDA REPORT Page 2 the understanding that if pending legislation is approved the loans would be reinstated on a future ROPS schedule as enforceable obligations. However, further clarification was recently received from communications between the DOF and the League of California Cities regarding procedural appeals of interagency loan agreements. This new information has caused staff to renew our challenge to re- consider the interagency loans as enforceable obligations. As of the date this administrative report was prepared, we have not received any further response or communication from the Department of Finance. We firmly believe the HUD Section 108 loans and interagency loans are in fact Enforceable Obligations and we have left them on the amended ROPS schedule being considered for adoption. Staff will update the Oversight Board of any further communication received from the DOF up to the date of the Board meeting. The "amended" ROPS for the period from January 1, 2012 through June 30, 2012 is attached for your consideration and approval. The schedule is very similar to the one you approved on April 9, 2012 with the following exceptions: 1. The amounts in the "April" column have been changed to reflect actual costs for that month; with the May and June estimates amended accordingly to retain the same six month estimated costs; 2. The 20% Housing set aside line items have been removed from the schedule as directed by the April 20, 2012 DOF letter. If the DOF should reverse their position on this issue we will accomplish the transfer of funds based on their revised directive. Since this is technically a "one time" issue that will not recur in future ROP Schedules, staff intends to comply with the final directive of the DOF without any further action required by the Oversight Board. 3. We have added an item to the schedule regarding an administrative error made by the County in calculating and distributing prior year unitary tax revenues. The County informed the RDA several months ago regarding their error and informed us of their intent to recover $831,288.21 of tax revenues previously distributed to the RDA, going back to 2008 -09 ( current year plus three prior years ). The County has already taken $100,276.02 from our December 2011 allocation. Prior to the dissolution of the RDA the County had agreed to recapture the remainder of funds over the following two fiscal years ( 2012 -13 and 2013 -14 ). Staff had this item listed on preliminary drafts of the ROPS, but removed it from the schedule adopted in April as we thought the County would recover these funds administratively as they handle tax administration collections. The County has recently inquired with the DOF as to how this "obligation" should be handled. The DOF recommended that the County could either make the entire adjustment in the current tax year or the balance could be included in the ROPS. Staff has advised the County that our preference would be to add the item to the ROPS to reflect the original allowance to recover the balance of funds over the next two years Staff intends to memorialize this item in an Inter - agency agreement to be executed as soon as possible. The ROP Schedules being proposed reflect this intent. C:\ Users\ alawrenc \AppData \Local\Microsoft\Windows \Temporary Internet Files\ Content .Outlook\D35NPARX\Sucoessor Agency - OB - Admin May 21 Item 3 c.docx 5/16/201210:07 AM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: May 21, 2012 1 AGENDA ITEM: 3. D. TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Recognized Obligation Payment Schedule (ROPS) for the period from July 1, 2012 through December 31, 2012. 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) for the period July 1, 2012 through December 31, 2012. -T;T4q1'feJ [*0 Z I State law AB26 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, the State Controllers' Office and the Kern County Auditor Controllers Office. This schedule 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 is similar in content to previous schedules adopted by the Oversight Board, with two significant differences. The first difference is the time period reference has changed to the next six month period with corresponding changes in the estimated dollar amounts for each month. Additionally, the Department of Finance has amended the general format of the forms to clarify funding sources and assist the County Auditor Controllers office in determining the specific enforceable obligations that require additional tax resources. The debt service and capital project line items remain the same; no additional projects or debt items have been added when compared to the prior ROP Schedule. We are also providing an "unofficial" fiscal year schedule for your information and review, as we believe it provides a better overall picture regarding the "forward look" for a full twelve month time period. We are only asking you to adopt the six month schedule for the period from July 1, 2012 through December 31, 2012 at this time, to comply with the AB26 requirements. S:\Admin\Admin Reports \Successor Agency \Successor Agency — OB — Admin May 21 item 3 d.docx 5/8/2012 3:21 PM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: May 21, 2012 AGENDA ITEM: 3.e. TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Authorization and approval to Reenter and Restate Two Loan Agreements between the Successor Agency and the City as allowed for under California Health and Safety Code Sections 34178(a) of AB1 x -26 that were prior enforceable obligations of the former and dissolved Bakersfield Redevelopment Agency. 1) Authorize and approve an Agreement to Reenter and Restate a Reimbursement Agreement previously used by the Redevelopment Agency with a current principal balance of $1,342,959 to replace a September 23, 2009, 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 191h Street Senior Plaza Apartments in the Mill Creek Project and with a current principal balance of $1,122,121 to replace a September 23, 2009, 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. 2) Authorize and approve an Agreement to Reenter and Restate a Loan Reimbursement Agreement with a current principal balance of $760,000 to replace an August 11, 2010, 5 year $950,000 loan 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. RECOMMENDATION: Staff recommends approval and to reenter and restate the loans. BACKGROUND: The City Council on January 11, 2012, adopted Resolution No. 010 -12 pursuant to a provision of AB1x26, in which the City, became the "Successor Agency" to its dissolved Redevelopment Agency and is now charged with the responsibility of winding up the affairs of the Bakersfield Redevelopment Agency. The process requires the successor Agency to submit to the Oversight Board and State Department of Finance (DOF), a schedule of its outstanding obligations referred to as the BOPS. S:Wdmins \Oversight Board\Successor Agency - OB - Admin May 21 item loans.docx 5/16/2012 8:54 AM AGENDA REPORT Page 2 The Oversight Board approved a Recognized Obligation Payment Schedule (BOPS) for the period January 1, 2012 through June 30, 2012 at its April 9, 2012 meeting. This adopted schedule was provided to the Department of Finance, the State Controllers' Office and the Kern County Auditor Controllers office on April 9, 2012 in accordance with the guidelines of AB 26. At the time of adoption the Oversight Board was informed that certain of the items listed on the schedule were still under review by the Department of Finance. On April 20, 2012 the Successor Agency received the attached correspondence from the Department of Finance (DOF) challenging certain items listed on the BOPS and requesting the ROPS be amended accordingly and returned to the Oversight Board for reconsideration. On May 1, 2012 staff responded to the Department of Finance with the attached correspondence, providing additional details to support our original position on the HUD Section 108 loans and asking for clarification regarding the DOF comments on Housing Set Aside transactions. Staff initially agreed to remove the interagency loans from the ROPS with the understanding that if pending legislation is approved the loans would be reinstated on a future BOPS schedule as enforceable obligations. However, further clarification was recently received from communications between the DOF and the League of California Cities regarding procedural appeals of Interagency loan agreements. This new information has caused staff to renew our challenge to re- consider the interagency loans as enforceable obligations. As of the date this administrative report was prepared, we have not received any further response or communication from the Department of Finance. We firmly believe the HUD Section 108 loans and interagency loans are in fact Enforceable Obligations and we have left them on the amended BOPS. Staff will update the Oversight Board of any further communication received from the DOF up to the date of the Board meeting. The guidance information received from the League also indicated that Sections 34178(a) and 34180(h) allows for a second type of agreement between a successor agency and the city. A successor agency may request approval from its oversight board to re -enter into an agreement with the city that created it and allows an oversight board to approve it. The guidance Information also indicates that the Department of Finance hopes to address all of the appeals for Items contested on BOPS that were due in April and again in mid -May no later than May 25, 2012. Staff is hopeful that the contested HUD Section 108 loans and the interagency loans listed above will be approved after review of the additional documentation by DOF, however, it is prudent as a secondary measure to re -enter into new agreements between the Successor Agency and the City for the balance due on these interagency loans, treat them as new agreements and include them on our BOPS in the event we are not successful with our appeal with DOF. Loan Details: A loan was created between the City and the Bakersfield Redevelopment Agency in October 2007 from the City's Equipment Fund in the amount for $2,000,000 for the construction and development of affordable housing for the 19th Street Senior Project. This residential project is an integral part of the Mill Creek Project and the units being created were components for calculation in the amount of the financial award for the Prop1C S:\Admins \Oversight Board\Successor Agency - OB - Admin May 21 item loans.docx 5/16/20128:54 AM AGENDA REPORT Page 3 Infrastructure grant for $10.8 million dollars. The loan has a current principal balance of $1,342,459, with annual payments of $350,000 and the final payment due July 1, 2016. 2. A loan was created between the City and the Bakersfield Redevelopment Agency in October 2007 from the City's Self Insurance Fund in the amount of $1,500,000 for the construction and development of the Courtyard Affordable Housing Project. This residential project is an integral part of the Mill Creek Plan and the units being created were components for calculation in the amount of the financial award for the Propl C Infrastructure grant for $10.8 million dollars. The loan has a current principal balance of $1,122,121, with annual payments of $257,000 and the final payment due December 1, 2016. 3. A loan was created between the City and the Bakersfield Redevelopment Agency in August 2010 from the City's Equipment Fund in the amount of $950,000 for the purchase of a 1.95 linear land strip and easement required for the Chelsea Affordable Housing Development. The 70 unit Chelsea Affordable Family Housing Project located in the South Mill Creek was the "Qualifying Infill Housing Development" necessary to qualify and receive the Prop1C Infrastructure grant for $10.8 million dollars. The project is complete, Silver Leed certified and 100% occupied. The loan has a current principal balance of $760,000, with annual payments of $204,250 and the final payment due August 20, 2015. Attached are the new reimbursement agreements between the Successor Agency and the City that re -state the loans above with the rate and current amounts that are due. S:\Admins \Oversight Board\Successor Agency - OB - Admin May 21 item loans.docx 5/16/20128:54 AM OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE DISSOLVED BAKERSFIELD REDEVELOPMENT AGENCY AGENDA REPORT MEETING DATE: May 21, 2012 I AGENDA ITEM: 3.f. TO: Members of the Oversight Board FROM: Successor Agency Staff SUBJECT: Establishment of Future Meeting Date RECOMMENDATION: Staff recommends that the Oversight Board discuss and approve the next meeting date. BACKGROUND: Future meetings of the Oversight Board are proposed to be held in Conference Room A at City Hall North, 1600 Truxtun Avenue, Bakersfield, California. S:1Successor Agency \Oversight Board\201 ZMay.2 I Tuture Meeting Dates.docx 5/16/201210:20 AM