HomeMy WebLinkAboutItem No. SA3REPORT TO CITY COUNCIL
OF THE CITY OF LAKE ELSINORE, AS SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: THOMAS P. EVANS, INTERIM CITY MANAGER
DATE: AUGUST 28, 2012
SUBJECT: ADOPTION BY THE CITY OF LAKE ELSINORE, AS SUCCESSOR
AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE OF RECOGNIZED OBLIGATION PAYMENT
SCHEDULE (ROPS) FOR JANUARY 2013 — JUNE 2013
Recommendation
It is recommended that the City Council acting as the Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore adopt the Recognized Obligation
Payment Schedule (ROPS) for January 2013 through June 2013 and authorize the
Interim City Manager, or his designee, to take all necessary actions with respect
thereto on behalf of the Successor Agency.
Discussion
On April 10, 2012 the Oversight Board ( "OB ") approved the Recognized Obligation
Payment Schedule ( "ROPS ") adopted by the Successor Agency on February 28,
2012 for expenditures of the Successor Agency of the Redevelopment Agency of the
City of Lake Elsinore ( "Successor Agency ") from January 1, 2012 to June 30, 2012.
On that same day, the Successor Agency adopted and the OB approved a First
Amended ROPS dated April 10, 2012.
As required by Assembly Bill x1 26 ( "ABx1 26 "), the First Amended ROPS was
submitted to the State Department of Finance ( "DOF ") and the County Auditor
Controller ( "CAC ") by April 15, 2012. On April 19, 2012, the Director of
Administrative Services received an email from the Department of Finance (DOF)
indicating it was reviewing certain items listed on the Successor Agency's
Recognized Obligation Payment Schedule (ROPS), as approved by the OB on April
10, 2012.
AGENDA ITEM NO. SA3
Page 1 of 9
Approval of ROPS
August 28, 2012
Page 2
On April 27, 2012, the Director of Administrative Services received a letter from the
Department of Finance indicating that DOF 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.
On May 8, 2012, the Oversight Board approved the ROPS for July through
December 2012 with reduced amounts of project related legal fees on page 1 of the
ROPS and revised descriptions for other project costs. A response was submitted to
DOF on May 9, 2012 with the July through December ROPS in an effort to address
DOF's comments.
On May 17, 2012, after a telephone discussion with DOF, the Director of
Administrative Services submitted hand - written changes on the ROPS for January
through June 2012. The transmittal indicated that the changes had not been
approved by the Successor Agency or the OB. The change requested by DOF
clarified that certain payments due to the Riverside County Flood Control are not to
be made from current or future receipts of Real Property Tax Trust Fund monies.
The Director of Administrative Services received a letter from DOF dated May 24,
2012 approving the ROPS for January through June 2012 submitted with hand-
written changes and the ROPS for July through December 2012. On June 12, 2012
the Successor Agency and Oversight Board approved a Second Amended ROPS for
January through June 2012 incorporating those handwritten changes previously
approved by DOF, as well as a First Amended ROPS for July through December
2012 which corrected earlier mathematical errors.
On June 27, 2012, the Legislature passed and the Governor signed AB 1484, a fiscal
2012 -13 budget trailer bill. AB 1484 makes technical and substantive amendments
to ABx1 26 and took immediate effect upon signature by the Governor.
AB 1484 requires that the January 1 — June 30, 2013 ROPS must be submitted to
DOF and the State Controller's office, after approval by the Oversight Board, no later
than September 4, 2012 (September 1, 2012, the submittal date specified in statute,
falls on a Saturday and the next business day, September 3, 2012, is the Labor Day
Holiday). The DOF now has five (5) days to request a review and forty -five (45) days
to review the ROPS (previously it had three (3) and ten (10) days, respectively). If the
ROPS is not submitted in the required timeframe, the host city is subject to a $10,000
fine for every day the ROPS is late and the administrative cost allowance for the
successor agency is reduced by 25 %.
Page 2 of 9
Approval of ROPS
August 28, 2012
Page 3
Changes to the ROPS
The attached ROPS varies in form from earlier ROPS. The proposed January to June
2013 ROPS is in a new format as required by the DOF. The new form includes the
following changes:
• Agencies must report actual amounts paid from Redevelopment
Property Tax Trust Fund ( RPTTF) from the previous period (January to
June 2012).
• Agencies must report anticipated RPTTF funding for the current period
(January to June 2013).
• All enforceable obligations must now be listed on one form regardless
of funding source or project area.
• Agencies are no longer required to report monthly enforceable
obligation estimates; only the six -month estimated amounts are
required.
• Funding source columns have been designated.
• A column for contract/agreement termination date has been added.
• A "Notes" form is now available for agencies to provide additional and
necessary information relating to the enforceable obligations listed on
the ROPS.
Additionally, the attached ROPS varies from earlier ROPS because of changes in the
Stadium agreements, which have been incorporated into the attached ROPS.
Effective December 31, 2012, the existing stadium tenant, Diamond Stadium Group,
has exercised its right to terminate the Stadium Agreement referenced in line 16 of
page 1 of the ROPS. The Stadium Agreement required that certain other
agreements entered into before the date of the Stadium Agreement be tolled during
the term of the Stadium Agreement. Those agreements (the Stadium License
Agreement, Stadium Maintenance Agreement and Stadium Concession Agreement —
collectively the "New Stadium Agreements ") spring back into operation by their terms
upon the expiration or earlier termination of the Stadium Agreement. The New
Stadium Agreements are listed in lines 29, 30, and 31 of page 1 of the ROPS. In
addition, the Agency will incur additional costs to operate and maintain the stadium
as a result of the termination of the Stadium Agreement, such as utilities, materials,
grounds maintenance, staff and stadium administration. The ongoing operation and
maintenance of the Stadium is necessary for the Agency to fulfill its obligations under
the New Stadium Agreements. The estimated additional Agency costs (in excess of
the costs covered by revenue generated by the New Stadium Agreements) to
operate and maintain the stadium of $250,476 for the six months ended June 13,
2013 are listed on line 32 of the ROPS.
The new Stadium License Agreement requires that the licensee pay a license fee to
the Agency for its use of the stadium for baseball games and certain other events
Page 3 of 9
Approval of ROPS
August 28, 2012
Page 4
(estimated revenue for the six months ended June 30, 2013 of $235,474, the total of
lines 29, 30 and 32 of $69,099, $109,929, and $56,446, respectively, listed in the
"Other Funding Source" column), and the new Stadium Concession Agreement
requires payment to the Agency of a percentage of concession revenue (estimated
revenue for the six months ended June 30, 2013 of $17,000, listed on line 31 in the
"Other Funding Source" column). The ROPS requires the Agency to use the
proceeds of such fees to pay certain costs associated with the Stadium, and,
accordingly, the income is used to pay the costs listed in the "Other Funding Source"
column on page 1 of the ROPS. The costs to operate and maintain the stadium in
excess of the fee income ($250,476 for the six months ended June 30, 2013) are
reflected in the column entitled "Funding Source — RPTTF."
On line 32 of page 1 of the ROPS, the amount of $2,085,374 in the column entitled
"Total Outstanding Debt or Obligation," the Agency has estimated such amount
through 2016 based on 2% annual increases through 2016. The actual costs will
vary based on how long the Agency owns the stadium, how much costs to operate
and regularly maintain the stadium increase or decrease over time, and what kind of
capital outlay is required over time to maintain the stadium in its current condition.
Capital expenses over time could be substantial and cannot be estimated at this time.
The City Director of Administrative Services and the Interim City Manager have
prepared detailed estimates of future costs to operate and maintain the stadium
based on the New Stadium Agreements and actual costs to operate and maintain the
stadium provided by Diamond Stadium Group. The total cost estimate of $2,085,374
in excess of the revenue anticipated to be generated by the New Stadium
Agreements is included in the ROPS through 2016. Given the uncertainties of the
Property Management Plan required by AB 1484 in 2013, it is uncertain how long the
Successor Agency will own the Stadium.
Prepared By: Barbara Leibold, City Attorney
James Riley, Director Administrative Services
Approved By: Thomas P. Evans, Interim City Manage I'
Attachments:
1) Recognized Obligation Payment Schedule of the Successor Agency of the
Redevelopment Agency of the City of Lake Elsinore for the period of January
2013 through June 2013
Page 4 of 9
Successor Agency Contact Information
Page 5 of 9
Successor Agency of the City of Lake
Name of Successor Agency:
Elsinore
County:
Riverside County
Primary Contact Name:
James Riley
Primary Contact Title:
Director of Administrative Services
Address
City of Lake Elsinore
Contact Phone Number:
951 - 674 -3124
Contact E -Mail Address:
inlet'- @lake- elsinore.org
Secondary Contact Name:
Secondary Contact Title:
Secondary Contact Phone Number:
Secondary Contact E -Mail Address:
Page 5 of 9
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