HomeMy WebLinkAboutItem No. 07 Loan Agreement Admin Costs ROPS 19-20BText File
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
www.lake-elsinore.org
File Number: ID# 19-441
Agenda Date: 1/14/2020 Status: Approval FinalVersion: 1
File Type: Council Consent
Calendar
In Control: City Council / Successor Agency
Agenda Number: 7)
Page 1 City of Lake Elsinore Printed on 1/9/2020
JOINT REPORT TO CITY COUNCIL AND SUCCESSOR AGENCY
To: Honorable Mayor/Chair and City Council/Successor Agency
Members
From: Grant Yates, City Manager/Executive Director
Prepared by: Barbara Leibold, Agency Counsel
Date: January 14, 2020
Subject: Loan Agreement For Administrative Costs For the Period January 1,
2020 – June 30, 2020 (ROPS 19-20B) between the City of Lake
Elsinore and the Successor Agency of the Redevelopment Agency
of the City of Lake Elsinore
Recommendation
City Council Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, APPROVING A LOAN AGREEMENT FOR
ADMINISTRATIVE COSTS FOR THE PERIOD JANUARY 1, 2020 – JUNE 30, 2020
(ROPS 19-20B) BETWEEN THE CITY AND SUCCESSOR AGENCY UNDER
HEALTH & SAFETY CODE SECTION 34173(H)
SUCCESSOR AGENCY ADOPT A RESOLUTION OF THE SUCCESSOR AGENCY OF
THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, CALIFORNIA,
APPROVING A LOAN AGREEMENT FOR ADMINISTRATIVE COSTS FOR THE
PERIOD JANUARY 1, 2020 – JUNE 30, 2020 (ROPS 19-20B) BETWEEN THE
CITY AND SUCCESSOR AGENCY UNDER HEALTH & SAFETY CODE
SECTION 34173(h)
Background
As part of the dissolution of the former Redevelopment Agency, Health and Safety Code
Section 34177 (added by AB 1X 26, as amended to date) requires the Successor
Agency to 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 twelve month period of each fiscal year.
Each ROPS is a budgetary document upon which the County auditor-controller
distributes what was formally called tax increment to the Successor Agency in order to
allow it to pay approved enforceable obligations and administrative costs. In short, the
auditor-controller deposits what would previously have been deemed tax increment into
a new account, the Redevelopment Property Tax Fund (“RPTTF”). Any RPTTF dollars
not required to pay enforceable obligations and approved administrative costs are
Loan Agreement Administrative Shortfall
January 14, 2020
Page 2 of 2
distributed by the auditor-controller to the affected taxing entities in proportion to their
respective share of property taxes.
The Successor Agency previously adopted its ROPS 19-20B covering the period of
January 1, 2020 through June 30, 2020 which was subsequently approved by the
Riverside Countywide Oversight Board and the California Department of Finance (DOF).
The DOF approved ROPS 19-20B identified $8,813,557 in obligations to be paid from
the RPTTF. However, the Riverside County Auditor-Controller’s office notified the
Successor Agency that is will receive $8,492,986.70 in RPTTF funds for the ROPS 19-
208B cycle, thus creating a $146,540 administrative cost shortfall and a $174,030.36
shortfall in enforceable obligations. The entire funding shortfall should be covered by an
adjustment in the repayment of the Housing Fund Loan (ROPS Item #20) which by its
terms is to be paid from available RPTTF after payment of all other enforceable
obligations, including administrative costs. However, in the event the reduction in the
repayment of the Housing Fund Loan is insufficient for the Successor Agency to pay its
administrative costs set forth in ROPS 19-20B, the City may loan funds to the Successor
Agency for this purpose. Recapture of the shortfall in administrative costs requires the
Successor Agency adopt a resolution requesting RPTTF to reimburse the City for the
payment of the unfunded administrative allowance.
Discussion
Health & Safety Code Section 34173(h) of the Dissolution Act allows City – Successor
Agency loans for the payment of administrative costs when RPTTF and immediately
available funds on deposit in the Successor Agency’s Redevelopment Obligation
Retirement Fund are not sufficient. In order to meet the Successor Agency
administrative costs, the city is able to advance funds to the Successor Agency in the
form of a loan in the amount of the $146,540 administrative shortfall. The attached loan
agreement establishes the terms of the loan subject to approval by the Riverside
Countywide Oversight Board and subsequent approval by DOF. The loan accrues
interest at LAIF and repayment of both principal and interest are included in the ROPS
20-21 as Line Item 35.
Fiscal Impact
Approval of this Loan Agreement in the principal amount of $146,540 and the
subsequent approval by the DOF will ensure that the Successor Agency can fully meet
all obligations contained in ROPS 19-20B. It also ensures that the Successor Agency will
be entitled to future distributions from the RPTTF in order to fully repay both principal
and interest of this loan.
Exhibits
A - City Council Resolution
B - Successor Agency Resolution
C - Loan Agreement
RESOLUTION NO. 2020-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE APPROVING A LOAN AGREEMENT FOR
ADMINISTRATIVE COSTS FOR THE PERIOD JANUARY 1, 2020 –
JUNE 30, 2020 (ROPS 19-20B) BETWEEN THE CITY AND
SUCCESSOR AGENCY UNDER HEALTH & SAFETY CODE
SECTION 34173(h)
WHEREAS, in accord with the provisions of the California Community
Redevelopment Law (Health and Safety Code Section 33000, et seq. (“CRL”), the City
Council of the City of Lake Elsinore (“City”) previously established the Redevelopment
Agency of the City of Lake Elsinore, a public body, corporate and politic (“Agency”) to
carry out the purposes of and exercise the powers granted to community redevelop ment
agencies under the CRL;
WHEREAS, on February 1, 2012, the Agency was dissolved pursuant to
Assembly Bill 1X26 (Stats. 2011, 1st Ex. Sess., Ch. 5) (“AB 26”), and its rights, powers,
duties and obligations were transferred to a “successor agency” (as defined by CRL
Section 34171(j) and Section 34173);
WHEREAS, the City Council elected to act as the Agency’s successor agency
(“Successor Agency”) under CRL Section 34173;
WHEREAS, with the Oversight Board’s approval, CRL section 34173(h) permits
the City to loan the Successor Agency funds to pay the Successor Agency’s
administrative costs, enforceable obligations, and project-related expenses;
WHEREAS, the Successor Agency received an insufficient distribution from the
Redevelopment Property Tax Trust Fund (established pursuant to CRL Section 34170.5
and administered by the County Auditor-Controller in accord with CRL Sections 34182
and 34183) maintained by the Riverside County Auditor -Controller (“RPTTF”) to fully
fund Oversight Board and California Department of Finance (“DOF”) approved
enforceable obligations, administrative costs, and project related expenses identified on
its Recognized Obligation Payment Schedule for the period of January 1, 2020 through
June 30, 2020 (“ROPS 19-20B”);
WHEREAS, the City and the Successor Agency have prepared a Loan
Agreement (attached hereto as Exhibit A) providing for a loan from the City to the
Successor Agency in the amount of One Hundred Forty-Six Thousand Five Hundred
Forty Dollars ($146,540); and
WHEREAS, the Successor Agency has transmitted the Loan Agreement
electronically to the County Administrative Officer, County Auditor-Controller, and the
State Department of Finance.
CITY COUNCIL RESOLUTION NO. 2020___
Page 2
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. In accord with CRL Section 34173(h), the City Council approves
the Loan Agreement, in the form attached as Exhibit A.
SECTION 2. This Resolution shall take effect from and after the date of its
passage and adoption in accordance with, and subject to, all applicable requirements of
the Health & Safety Code.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, held this 14thrd day of January, 2020.
Brian Tisdale, Mayor
ATTEST:
Candice Alvarez, MMC, City Clerk
EXHIBIT A
Loan Agreement
RESOLUTION NO. SA-2020-___
A RESOLUTION OF THE SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
APPROVING A LOAN AGREEMENT FOR ADMINISTRATIVE
COSTS FOR THE PERIOD JANUARY 1, 2020 – JUNE 30, 2020
(ROPS 19-20B) BETWEEN THE CITY AND SUCCESSOR
AGENCY UNDER HEALTH & SAFETY CODE SECTION 34173(h)
WHEREAS, in accord with the provisions of the California Community
Redevelopment Law (Health and Safety Code Section 33000, et seq. (“CRL”), the City
Council of the City of Lake Elsinore (“City”) previously established the Redevelopment
Agency of the City of Lake Elsinore, a public body, corporate and politic (“Agency”) to
carry out the purposes of and exercise the powers granted to community redevelop ment
agencies under the CRL;
WHEREAS, on February 1, 2012, the Agency was dissolved pursuant to
Assembly Bill 1X26 (Stats. 2011, 1st Ex. Sess., Ch. 5) (“AB 26”), and its rights, powers,
duties and obligations were transferred to a “successor agency” (as defined by CRL
Section 34171(j) and Section 34173);
WHEREAS, the City Council elected to act as the Agency’s successor agency
(“Successor Agency”) under CRL Section 34173;
WHEREAS, with the Oversight Board’s approval, CRL section 34173(h) permits
the City to loan the Successor Agency funds to pay th e Successor Agency’s
administrative costs, enforceable obligations, and project-related expenses;
WHEREAS, the Successor Agency received an insufficient distribution from the
Redevelopment Property Tax Trust Fund (established pursuant to CRL Section 34170 .5
and administered by the County Auditor-Controller in accord with CRL Sections 34182
and 34183) maintained by the Riverside County Auditor -Controller (“RPTTF”) to fully
fund Oversight Board and California Department of Finance (“DOF”) approved
enforceable obligations, administrative costs, and project related expenses identified on
its Recognized Obligation Payment Schedule for the period of January 1, 2020 through
June 30, 2020 (“ROPS 19-20B”);
WHEREAS, the City and the Successor Agency have prepared a Loan
Agreement (attached hereto as Exhibit A) providing for a loan from the City to the
Successor Agency in the amount of One Hundred Forty-Six Thousand Five Hundred
Forty Dollars ($146,540); and
WHEREAS, the Successor Agency has transmitted the Loan Agre ement
electronically to the County Administrative Officer, County Auditor-Controller, and the
State Department of Finance.
SUCCESSOR AGENCY RESOLUTION NO. SA 2020-___
Page 2
NOW, THEREFORE, THE SUCCESSOR AGENCY OF THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, DOES HEREBY
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. In accord with CRL Section 34173(h), the Successor Agency
Board approves the Loan Agreement, in the form attached as Exhibit A.
SECTION 2. The Successor Agency directs the Executive Director to (a)
transmit the Loan Agreement to the Oversight Board for approval and, upon approval
transmit the Oversight Board Resolution and the Loan Agreement to the County
Auditor-Controller, the State Controller’s Office, and the State Department of Finance,
or alternatively, to provide notice of the Oversight Board’s approval to those entities,
together with City’s website address, and (b) post the Loan Agreement to the City’s
website.
SECTION 3. This Resolution shall take effect from and after the date of its
passage and adoption in accordance with, and subject to, all applicable requirements of
the Health & Safety Code.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Successor
Agency of the Redevelopment Agency of the City of Lake Elsinore, held this 14th day of
January, 2020.
Brian Tisdale, Chair
Successor Agency of the
Redevelopment Agency of the City
of Lake Elsinore
ATTEST:
Candice Alvarez, MMC, Secretary
EXHIBIT A
Loan Agreement
1
LOAN AGREEMENT FOR ADMINISTRATIVE COSTS
(FOR THE PERIOD JANUARY 1, 2020 – JUNE 30, 2020, ROPS 19-20B)
This Loan Agreement for Administrative Costs (for the Period January 1, 2020 –
June 30, 2020, ROPS 20-21B) (“Agreement”) is dated for identification purposes as of January
14, 2020. This Agreement is entered into between the City of Lake Elsinore, a California general
law city and municipal corporation (“City”) and the Successor Agency of the Redevelopment
Agency of the City of Lake Elsinore, formed and existing in accord with Section 34173 of the
California Community Redevelopment Law (“CRL”) (Health & Safety Code Section 33000, et
seq.) (“Successor Agency”).
RECITALS
Whereas, under the provisions of the CRL, the City Council of the City of Lake
Elsinore previously established the Redevelopment Agency of the City of Lake Elsinore, a
public body, corporate and politic (“Agency”), to carry out the purposes of and exercise the
powers granted to community redevelopment agencies under the CRL;
Whereas, on February 1, 2012, the Agency was dissolved by operation of Assembly Bill
1X26 (Stats. 2011, 1st Ex. Sess., Ch. 5) (“AB 26”), and its rights, powers, duties and obligations
were transferred to a “successor agency” (as defined in CRL Section 34171(j) and Section
34173);
Whereas, as provided by AB 26, the City Council took official action electing to become
the Agency’s successor agency (“Successor Agency”) under CRL Section 34173;
Whereas, on or about June 27, 2012, the provisions of Assembly Bill 1484 (“AB 1484”)
became law. AB 1484 modified the CRL and AB 26 in various ways. As used herein, the term
“CRL” means Health & Safety Code Section 33000, et seq., as modified by AB 26 and AB 1484.
Specific terms used and not otherwise defined in this Agreement will have the meanings given
to those terms in the CRL;
Whereas CRL Section 34173(h) permits the City, as the former Agency’s creating
authority, to loan or grant funds to the Successor Agency to pay for enforceable obligations,
administrative costs, and project-related expenses;
Whereas, the Successor Agency received an insufficient distribution from the
Redevelopment Property Tax Trust Fund (established pursuant to CRL Section 34170.5 and
administered by the County Auditor-Controller in accord with CRL Sections 34182 and 34183)
maintained by the Riverside County Auditor-Controller (“RPTTF”) to fully fund administrative
costs identified on its Recognized Obligation Payment Schedule for the period of January 1,
2020 through June 30, 2020 as approved by the Riverside Countywide Oversight Board and
DOF (“ROPS 19-20B”);
Whereas, the ROPS 19-20B approved by the Riverside Countywide Oversight Board
and DOF included an allocation of RPTTF for repayment of the Housing Fund Loan (ROPS
Item #20) with the notation that in the event RPTTF revenues are lower than anticipated, the
payment to the Housing Fund would be adjusted accordingly in order to first satisfy all other
obligations consistent with the terms of the Housing Fund Loan;
2
Whereas, Successor Agency has requested that the City loan it the principal sum of
One Hundred Forty-Six Thousand Five Hundred Forty Dollars ($146,540) (“Loan”) in the
event the reduction in the repayment of the Housing Fund Loan (ROPS Item #20) is
insufficient to pay its administrative costs set forth in the ROPS 19-20B; and
Whereas, the City is willing to make the Loan under the authority of CRL Section
34173(h) on the terms set forth in this Agreement and to the extent such funds are necessary
so that the Successor Agency may pay such administrative costs.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals and the terms
contained herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties do hereby agree as follows:
1. Effective Date. This Agreement will not become effective until the date
(“Effective Date”) all of the following have occurred:
(a) This Agreement has been approved by the City Council as the City’s
governing body and by the Successor Agency and has been executed by
the City’s and the Successor Agency’s authorized officials.
(b) This Agreement has been approved by the Oversight Board to the
Successor Agency formed in accord with CRL Section 34179.
2. Loan Agreement. The City agrees to disburse the Loan to the Successor
Agency upon the Successor Agency’s request in the event the reduction in the repayment of
the Housing Fund Loan (ROPS Item #20) is insufficient to pay its administrative costs set forth
in the ROPS 19-20B. The Loan will be disbursed to the Successor Agency to be held in its
accounts and may be used to pay any of the Successor Agency’s administrative costs set forth
in the ROPS 19-20B.
3. Interest and Repayment Terms. All disbursed and outstanding Loan amounts
will accrue interest at the rate earned by funds deposited by the City into the Local Agency
Investment Fund, as it may be adjusted from time-to-time (“LAIF Rate”), from the date of
disbursement until fully repaid.
4. Use of the Loan. The Successor Agency shall utilize the proceeds of the Loan
to pay for the administrative expenses of the Successor Agency in light of the fact that the
monies received by the Successor Agency as of January 1, 2020 as the remittance from the
Redevelopment Property Tax Trust Fund are not estimated to be sufficient when added to
other available funds of the Successor Agency, to fully pay for administrative costs of the
Successor Agency for the period January 1, 2020 through June 30, 2020.
5. Source of Repayment of the Loan. The Loan shall be repaid by the Successor
Agency from revenues available to the Successor Agency.
3
6. Inclusion on Recognized Obligation Payment Schedule.
(a) The Successor Agency will identify this Agreement as an enforceable
obligation under CRL 34173(h) on the Recognized Obligation Payment Schedule to be
submitted by the Successor Agency to the Department of Finance for the period covering July
1, 2020 through June 30, 2021 (“ROPS 20-21”). The Successor Agency will request an
allocation of property taxes from the “RPTTF on the ROPS 20-21 and each subsequent
Recognized Obligation Payment Schedule (“ROPS”) covering any fiscal period in which the
Successor Agency has a Loan repayment obligation under this Agreement. If, for any reason
whatsoever, the Successor Agency does not receive sufficient allocations of property taxes
from the RPTTF so as to fully repay the Loan and accrued interest, the Successor Agency will
continue to make allocation requests on all subsequent ROPS until the Loan and all accrued
interest has been fully repaid. The amount of each allocation request will be equal to the sum
of the Successor Agency’s repayment obligation arising during the period covered by the
ROPS plus the remaining balance (if any) of any repayment due during a prior ROPS period
which was not fully paid.
(b) The Successor Agency will prepare each ROPS as required by the
CRL and submit it to the Oversight Board and such other governmental agencies as the CRL
may require from time-to-time. The Successor Agency will take all other actions as required by
the CRL or other applicable authority to ensure that the Successor Agency receives an
allocation of taxes from RPTTF in the amounts necessary to satisfy the Successor Agency’s
payment obligations under this Agreement.
7. Amendment or Modification. This Agreement and the Successor Agency’s
obligations under it may be amended or modified only in the following ways:
(a) By the mutual written agreement of the City and the Successor Agency,
following all notices, hearings and approvals required by then-applicable provisions of the CRL
and other legal authority.
(b) As required to conform to future changes in the CRL, other applicable
legal authority, or pursuant to an order or judgment of a court of competent jurisdiction.
8. No Other Successor Agency Income or Assets Subject to Repayment
Obligation. No funds or other assets of the Successor Agency other than property tax
allocations from the RPTTF may be used for the repayment of the Successor Agency’s
obligations under this Agreement.
9. Remedies for Breach. If the Successor Agency fails for any reason whatsoever
to fulfill its obligations under this Agreement, the City may, without notice or demand,
accelerate all payments to become due under this Agreement and declare the entirety of the
unpaid Loan principal and accrued interest immediately due and payable.
4
SIGNATURE PAGE TO
LOAN AGREEMENT FOR ADMINISTRATIVE COSTS
(FOR THE PERIOD JANUARY 1, 2020 – JUNE 30, 2020, ROPS 19-20B)
ATTEST:
By:
Candice Alvarez, MMC City Clerk
CITY
City of Lake Elsinore, a California municipal
corporation
By:
Name: Brian Tisdale
Title: Mayor
ATTEST:
SUCCESSOR AGENCY SECRETARY
By:
Candice Alvarez, MMC, Agency
Secretary
APPROVED AS TO FORM:
By:
Barbara Leibold, City Attorney/
Successor Agency Counsel
SUCCESSOR AGENCY
The Successor Agency to the
Redevelopment Agency of the City of Lake
Elsinore, a public entity created and existing
under the authority of CRL Section 34173
By:
Name: Brian Tisdale
Title: Chair