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Home My WebLink About2012-05-08 OB Agenda Item No. 3OVERSIGHT BOARD OF THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE TO: MEMBERS OF THE OVERSIGHT BOARD FROM: BARBARA LEIBOLD, SUCCESSOR AGENCY COUNSEL DATE: MAY 8, 2012 SUBJECT: ADOPTION OF RESOLUTION OB 2012 - 008 APPROVING THE DRAFT RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) FOR JULY 2012 - DECEMBER 2012 Background: By Resolution No. 2012 -001 adopted on January 10, 2012, the City Council elected to become the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore upon the Agency's dissolution on February 1, 2012 pursuant to Assembly Bill x1 26. Health and Safety Code Section 34177 requires that the Successor Agency adopt a Recognized Obligation Payment Schedule (ROPS) that lists all obligations of the former redevelopment agency that are enforceable within the meaning of subdivision (d) of Section 34167 for each six month period of each fiscal year. The ROPS must be submitted to and approved by the Oversight Board for each six month period. Discussion: The Successor Agency adopted its initial ROPS on February 28, 2012, and adopted the First Amended ROPS on April 10, 2012. The Oversight Board approved the Initial ROPS and the First Amended ROPS at its first meeting on April 10, 2012. The Department of Finance and other governmental agencies are in the process of reviewing the First Amended ROPS. ABx1 26 also requires that a ROPS for the period July 2012 through December 2012 be adopted by the Successor Agency prior to July 1, 2012. In March 2012, the Department of Finance requested that the July 2012 through December 2012 ROPS be adopted and submitted to the Department of Finance and the County by May 11, 2012 so that the County has appropriate time to calculate the payment of property taxes due in June. AGENDA ITEM 3 Page 1 Approval of ROPS for July through December 2012 May 8, 2012 Page 2 On April 27, 2012, the Director of Administrative Services received a letter from the Department of Finance indicating that the Department determined the administrative cost budget for fiscal 2012 to exceed that permitted by statute and denying the excess administrative costs as enforceable obligations on the First Amended ROPS for January through June 2012. Staff has been unable to recalculate the real property tax trust fund monies used by DOF for fiscal 2012 to calculate the Successor Agency's administrative budget. When responding to DOF's letter, staff will request clarification as to how the total real property tax funds for fiscal 2012 were calculated. Additionally, DOF's approach differs from guidance previously published by the League of California Cities, which was followed in the initial preparation of the ROPS. For example, staff believes DOF has mischaracterized certain project costs as administrative costs. These include certain legal fees and financial consultant and audit fees required for implementation of specific agreements and bond disclosure compliance. Nonetheless, staff agrees that some of the fees previously reflected as project costs on page 1 of the ROPS can appropriately be argued to be administrative in nature. A ROPS for the period July 2012 through December 2012 has been prepared and is submitted to the Oversight Board for approval. The July — December ROPS will also be considered for adoption by the Successor Agency at its May 8, 2012 regular meeting. Upon adoption, the ROPS will be submitted to the Department of Finance, County of Riverside and State Auditor - Controller's Office. It will also be posted on the City's website. The ROPS for July through December 2012 has been prepared with reduced amounts of project related legal fees on page 1 of the ROPS and revised descriptions for other project costs. The legal fees remaining are required for ongoing compliance with bond requirements, continuing administration of the Summerly DDA and the Stadium Agreement. A response to DOF will be submitted with the July through December ROPS in an effort to address DOF's comments. Once DOF's concerns are resolved, it is likely that the Initial ROPS covering January - June 2012 will require amendment and, possibly, that the July - December ROPS presented for consideration today may also need to be amended. Recommendation: Approve Resolution No. OB -2012- 008 approving the Recognized Obligation Payment Schedule of the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore for the Period of July 2012 Through December 2012 subject to adoption by the Successor Agency. AGENDA ITEM 3 Page 2 Approval of ROPS for July through December 2012 May 8, 2012 Page 3 Prepared and approved by: Barbara Leibold, City Attorney /Successor Agency Counsel Attachments: Resolution No. OB- 2012 -008 — A Resolution of the Oversight Board to the Successor Agency of the Redevelopment Agency of the City Of Lake Elsinore Approving the Recognized Obligation Payment Schedule (ROPS) for the Period of July 2012 Through December 2012 Subject to Adoption by the Successor Agency Recognized Obligation Payment Schedule (ROPS) for the Period of July 2012 Through December 2012 AGENDA ITEM 3 Page 3 RESOLUTION NO. OB- 2012 -008 A RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE APPROVING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) FOR THE PERIOD OF JULY 2012 THROUGH DECEMBER 2012 SUBJECT TO ADOPTION BY THE SUCCESSOR AGENCY WHEREAS, the Oversight Board to the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore ( "Oversight Board ") has been established to direct the Successor Agency to take certain actions to wind down the affairs of the former Redevelopment Agency of the City of Lake Elsinore in accordance with the California Health and Safety Code; and WHEREAS, Health and Safety Code Section 34169 requires the Successor Agency to prepare and adopt a "Recognized Obligation Payment Schedule" that lists all obligations of the former redevelopment agency that are enforceable within the meaning of subdivision (d) of Section 34167 for six month periods including July 2012 through December 2012; and WHEREAS, on April 10, 2012, the Oversight Board and the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore approved a First Amended Recognized Obligation Payment Schedule for the period of January 2012 through June 2012; and WHEREAS, the Riverside County Auditor - Controller's Office requested that the Successor Agency submit a draft Recognized Obligation Payment Schedule for the period of July 2012 through December 2012 by May 11, 2012; and WHEREAS, subsequent to this meeting on May 8, 2012, it is anticipated that the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore will adopt the Recognized Obligation Payment Schedule for the period of July 2012 through December 2012; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The Recitals set forth above are true and correct and incorporated herein by reference. SECTION 2. In order to enable the Successor Agency to comply with AB X1 26, and based on the Recitals set forth above, the Oversight Board hereby approves the Schedule attached hereto as Exhibit A as the Recognized Obligation Payment Schedule AGENDA ITEM 3 Page 4 OVERSIGHT BOARD RESOLUTION NO. OB 2012 -008 Page 3 for July 2012 through December 2012, subject to the adoption thereof by the Successor Agency. Pursuant to Health & Safety Code Section 34173, the Successor Agency's liability, including, but not limited to, its liability for the obligations on the attached schedule is limited to the total sum of property tax revenues it receives pursuant to Part 1.85 of AB X1 26. SECTION 3. The Oversight Board hereby establishes the Recognized Obligation Payment Schedule (ROPS), pursuant to Health & Safety Code Section 34180(g), for the period of July 2012 through December 2012, as the Recognized Obligation Payment Schedule. SECTION 4. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this resolution are severable. The Oversight Board hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. SECTION 5. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED at a regular meeting of the Oversight Board of the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore, held this 8th day of May, 2012. Brian Tisdale, Chairperson Oversight Board to the Successor Agency of the Redevelopment Agency of the City of Lake Elsinore ATTEST: Virginia J. Bloom Oversight Board Secretary AGENDA ITEM 3 Page 5