11-18-2014 - Successor Agency Treasurers Report for the Quarte - Item SA2 (2).pdfCity of West Covina
Memorandum
AGENDA
ITEM NO. SA2
DATE November 18, 2014
TO: Chair and Board Members of the Successor Agency
FROM: Christopher J. Chung
Executive Director
BY: Dennis Swink
Interim Director of Finance
SUBJECT: SUCCESSOR AGENCY TREASURER'S REPORT FOR THE QUARTER
ENDED NOVEMBER 30, 2014
RECOMMENDATION:
It is recommended the City Council, acting as the Successor Agency to the West Covina
Redevelopment Agency, receive and file this report.
DISCUSSION:
The Investment Policy of the City of West Covina also applies to the Successor Agency to the
West Covina Redevelopment Agency. In accordance with Section XVI of the City of West
Covina Fiscal Year 2014-15 Statement of Investment Policy, a Treasurer's Report for the quarter
ended November 30, 2014 is hereby submitted to the Successor Agency. It also includes cash
held by trustees for all bond issues and cash in the various Successor Agency bank accounts, as
well as reporting on compliance with the City's Investment Policy and providing a statement of
the ability to meet budgeted expenditure needs for the following six months.
The November 30, 2014 Report .shows the Agency's portfolio decreased by $1,696,656.32 from
$9,209,321 on June 30, 2014, to $7,746,155 on November 30, 2014. The Agency's surplus funds
are in investment pools with the State of California Local Agency Investment Pool (LAIF) and
the Los Angeles County Investment Pool (LACIP). These funds' are completely liquid, as the
City can withdraw them at any time. Approximately 98% of the portfolio is on deposit in LACIP
and the remaining small amount of available cash is on deposit in the checking account and
LAIF.
The Bond Detail Report includes Fiscal Agent investments of Successor Agency cash which is
being held to service various issues of bonded debt.
Prepared by: Reviewed by:
1414-446
Michelle Mansour Dennis Swink
Management Analyst II Interim Director of Finance
Reviewed and Approved by:
Mike Lee
Assistant City Manager/Community Development
Commission Director
Michelle Mansour, Management Analyst II Colleen B. Rozatti, City Treasurer SUBMITTED BY: Dennis Swink, Interim Finance Director TYPES OF DEPOSITS: June 30 DEPOSITS WITHDRAWALS Sept 30 CHECKING ACCOUNTS WELLS FARGO GENERAL CHECKING $ 233,490.67 1,653,614.00 1,717,983.70 169,120.97 SUB-TOTAL $ 233,490.67 $ 1,653,614.00 1,717,983.70 169,120.97 OTHER INVESTMENTS: - LOCAL AGENCY INVESTMENT FUND (LAIF) $ 2,035.89 $ 1.12 $ 2,037.01 LOS ANGELES COUNTY POOL (LACIP) 9,207,284.93 8,826.26 1,641,114.00 7,574,997.19 SUB-TOTAL $ 9,209,320.82 $ 8,827.38 1,641,114.00 7,577,034.20 TOTAL $ 9,442,811.49 1,662,441.38 3,359,097.70 7,746,155.17 It has been verified that this investment portfolio is in conformity with the City of West Covina's investment policy which was approved by the City Council on November 18, 2014. The investment portfolio provides sufficient cash flow liquidity to meet estimated expenditures for the next month. The Successor Agency submitted the recognized obligation payment schedule (ROPS) for July to December 2014 to the State Department of Finance. In July 2014, the Successor Agency received funds from the DOF-approved ROPS for the July to December 2014 period which will provide sufficient cash flow liquidity to meet estimated expenditures from July to December 2014. This repqrt is accurate with respect to all information received as of November 12, 2014. EARNED INTEREST YIELD THIS PERIOD: 0.78% SIX-MONTH TREASURY BILL YIELD: 0.03% PREPARED BY: APPROVED BY:
WEST COVINA SUCCESSOR AGENCY BOND DETAIL REPORT September 30, 2014 Description of Bond Type of Bond Type of Investment Description of Issuer Maturity Date Original Cost Shares/Face Amount Market Value Rate 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1998 Housing Set-Aside Bonds Series A, B 1999 Tax Allocation Bonds 1999 Tax Allocation Bonds 1999 Tax Allocation Bonds 1999 Tax Allocation Bonds 1999 Tax Allocation Bonds 1999 Tax Allocation Bonds 1999 Tax Allocation Bonds Bond Bond Interest Series A Interest Series A Interest Series B Interest Series B Reserve Series A Reserve Series A Reserve Series A Reserve Series B Reserve Series B Reserve Series B Project Fund Series B Project Fund Series B Principal Account Principal Account Revenue Fund Revenue Fund Revenue Fund Purchase Fund Purchase Fund LJC Fund LJC Fund First American Treas Oblig Cl d Corp Trust Cash First American Treas Oblig Cl d Corp Trust Cash First American Treas Oblig Cl d Corp Trust Cash First American Tress Oblig Cl d Corp Trust FHLB Cash First American Tress Oblig Cl d Corp Trust F L B Cash First American Treas Oblig Cl d Corp Trust Cash First American Treas Oblig CI d Corp Trust Cash First American Treas Oblig Cl d Corp Trust Cash First American Treas Oblig Cl d Corp Trust Cash Direct Pay LOC #NZS668499 Cash First American Funds, Inc. First American Funds, Inc. First American Funds, Inc. First American Funds, Inc. U.S. Tress & Agency First American Funds, Inc. U.S. Treas & Agency First American Funds, Inc. First American Funds, Inc. First American Funds, Inc. First American Funds, Inc. Open 0.03 0.00 0.03 Open 0.00 0.00 0.00 Open 0.00 0.00 0.00 Open 0.00 343,774.90 0.00 343,774.90 Open Open 0.00 101,411.00 0.00 101,411.00 114,680.87 0.00 114,680.87 Open 194.59 0.00 194.59 Ending Balances 560,061.39 Open 519.61 0.00 0.00 519.61 0.00 Open 0.03 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 4,290.00 340,000.00 0.00 344,290.00 1,650.00 100,000.00 0.00 101,650.00 114,680.87 0.00 114,680.87 194.59 0.00 194.59 560,815.49 0.00 0.00 0.00 ZITO ' 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 344,290.00 1.410 0.00 344,290.00 0.00 101,650.00 1.410 0.00 101,650.00 114,680.87 0.00 114,680.87 194.59 0.00 194.59 560,815.49 519.61 0.00 0.00 b19.61 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Wells Fargo Bank, NA Open 0.00 0.00 0.00 Ending Balances 519.61 0.00 519.61 Page 1 of 3
First American Treas Oblig Cl d Corp Trust Cash First American Trees Oblig Cl d Corp Trust Cash First American Government Obligation Fd CL D H LB Cash First American Funds, Inc. First American Funds, Inc. First American Funds, Inc. U.S. Tress & Agency WEST COVINA SUCCESSOR AGENCY BOND DETAIL REPORT September 30, 2014 Description of Bond Type of Bond Type of Investment Description of Issuer Maturity Date Original Cost Shares/Face Amount Market Value Rate 2001 RDA Housing Set-Aside T/A Rev Bonds 2001 RDA Housing Set-Aside T/A Rev Bonds Special Fund Special Fund First American Treas Oblig Cl d Corp Trust Cash First American Funds, Inc. First American Funds, Inc. First American Funds, Inc. U.S. Treas & Agency Open 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2001 RDA Housing Set-Aside T/A Rev Bonds 2001 RDA Housing Set-Aside T/A Rev Bonds Interest Account Interest Account First American Trees Oblig Cl d Corp Trust Cash Open 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2001 RDA Housing Set-Aside T/A Rev Bonds 2001 RDA Housing Set-Aside T/A Rev Bonds 2001 RDA Housing Set-Aside T/A Rev Bonds Reserve Account Reserve Account Reserve Account First American Trees Oblig Cl d Corp Trust FNMA DISCOUNT NOTE Cash Open 336.88 779,100.62 0.00 779,437.50 336.88 800,000.00 0.00 800,336.88 336.88 799,896.00 0.00 800,232.88 5.270 2001 RDA Housing Set-Aside T/A Rev Bonds Project Fund 2001 RDA Housing Set-Aside T/A Rev Bonds Project Fund 2002 RDA T/A Revenue Refunding Bonds Special Fund 2002 RDA T/A Revenue Refunding Bonds Special Fund 2002 RDA T/A Revenue Refunding Bonds Special Fund 2002 RDA T/A Revenue Refunding Bonds Reserve Fund 2002 RDA T/A Revenue Refunding Bonds Reserve Fund 2002 RDA T/A Revenue Refunding Bonds Reserve Fund *Market valuations have been provided by U.S. Bank Corporate Trust Services Open Ending Balances Open Open Ending Balances GRAND TOTALS 50.43 50.43 50.43 0.00 0.00 0.00 50.43 50.43 50.43 779,487.93 800,387.31 800,283.31 10.19 10.19 10.19 0.00 0.00 0.00 0.00 0.00 0.00 10.19 10.19 10.19 0.00 6,532.50 0.00 996,532.50 990,000.00 996,532.50 0.00 0.00 0.00 996,532.50 996,532.50 996,532.50 996,542.69 996,542.69 996,542.69 2,336,611.62 2,357,745.49 2,358,161.10 0 1.410 Page 2 of 3
City of West Covina
Memorandum
AGENDA
TO: Chair and Board Members of the Successor Agency ITEM NO. SA3
FROM: Christopher J. Chung
Executive Director
DATE November 18, 2014
BY: Kimberly Hall Barlow .
Successor Agency Counsel
SUBJECT: LOAN AGREEMENT CONCERNING LITIGATION FEES INCURRED
FOR THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE
(ROPS) PERIODS OF JANUARY 2013 TO JUNE 2013, JUNE 2013 TO
DECEMBER 2013, AND JANUARY 2014 TO TUNE 2014 WHICH
EXCEEDED THE LITIGATION COST ESTIMATES FOR THOSE SAME
PERIODS, BUT MISCHARACTERIZED UNDER THE
ADMINISTRATIVE COST ALLOWANCE
RECOMMENDATION:
It is recommended that the City Council, acting as the Successor Agency to the West Covina
Redevelopment Agency, approve the Loan Agreement concerning Litigation Fees incurred For the
ROPS periods of January 2013 to June 2013, June 2013 to December 2013, and January 2014 to
June 2014 which exceeded the litigation cost estimates for those same periods, but
mischaracterized under the administrative cost allowance.
DISCUSSION:
The former-West Covina Redevelopment Agency was dissolved pursuant to State law on
February 1, 2012. In the wake of this dissolution, the City elected to perform the functions of the
"Successor Agency" to the former-West Covina Redevelopment Agency as permitted by the
redevelopment dissolution statutes. Because the City elected to perform such functions, Health &
Safety Code section 34173(h) permits the City to loan funds to the Successor Agency for the
purpose covering the Successor Agency's "administrative costs, enforceable obligations, or
project-related expenses at the city's discretion."
Additionally, Part 1.85 of the California Health & Safety Code, the Successor Agency is
permitted to engage in activities, including litigation, for the purpose of protecting its assets and
liabilities -for the purpose of ensuring that the taxing entities receiving maximum benefit from the
wind down of the former-West Covina Redevelopment Agency's affairs. In pursuit of those
activities for the purpose of protecting its assets and liabilities to ensure that the taxing entities
receive maximum benefit from the wind down of the former-West Covina Redevelopment
Agency's affairs, the Successor Agency was required to engage in litigation to protect such
assets.
As part of the Recognized Obligation Payment Schedule process, the Successor Agency, in
engaging in such litigation, provided estimates for its litigation costs on its Recognized
Obligation Payment Schedules ("ROPS") for the periods January 2013 to June 2013, June 2013
to December 2013, and January 2014 to June 2014. However, such estimates for litigation costs
were not sufficient to cover the actual costs of litigation occurring during the ROPS periods
mentioned above. Additionally, certain litigation costs for the ROPS periods mentioned above
were inadvertently mischaracterized as part of the Successor Agency's administrative cost
allowance provided under Health & Safety Code section 34171(b) and the abovementioned
estimates for litigation costs were not sufficient to cover the actual costs of litigation occurring
during the abovementioned ROPS periods.
Thus, in order to continue to protect the assets of the Agency during the ROPS periods
mentioned above to the benefit of the Successor Agency's taxing entities, the City loaned the
Successor Agency. funds in the amount 0.$4,8,413 to pp such liitigationi.costs discussa abovte
as authorized under Health & Safety Code section 34173(h).
0-f110 The purpose of the attached Loan Agreement is . to .formalize -t1:1.il1oan1 authorized under- the
authority of Health & Safety Code section 34173(h) such that the City can be repaid for the costs
it incurred on behalf of the Successor Agency in performing snd,assOinglA the, performance, of , 4
the Successor Agency's obligations under the 1edevelopweilt r dissoA0Stattites ;.
The Loan Agreement covprs the litigatip posts incuTred by the qtyon bel3.9.11; of thel Smessor
Agency during the ROPS . periods of Japit-qw 2013 tck Awn, Juwo 1 300.1, pecembef 2013,
and January 2014 to June 201,4. 1, 15(!it'l
e I If approved by the City Council and Successor Agency oar, this rLoan Agreement must then be
approved by the Oversight Board, and then the California Department of,Fiipncp.
FISCAL IMPACT:
The City Attorney and Successor Agency Counsel have prepared the proposed cooperation
agreement and this report.
,
Prepared by:
Approved via Email
Kimberly Han Barlow
Successor Agency Counsel
Reviewed and Approved by:
Mike Lee
Assistant City Manager/Community
Development Commission Director
Attachment No. 1 — Loan Agreement
City of West Covina
Menzorandzan
AGENDA
TO: Chair and Board Members of the Successor Agency ITEM NO. SA3
FROM: Christopher J. Chung DATE November 18, 2014
Executive Director
BY: Kimberly Hall Barlow
Successor Agency Counsel
SUBJECT: LOAN AGREEMENT CONCERNING LITIGATION FEES INCURRED FOR
THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS)
PERIODS OF JANUARY 2013 TO JUNE 2013, JUNE 2013 TO DECEMBER
2013, AND JANUARY 2014 TO JUNE 2014 WHICH EXCEEDED THE
LITIGATION COST ESTIMATES FOR HOSE SAME PERIODS, BUT
MISCHARACTERIZED UNDER THE ADMINISTRATIVE COST
ALLOWANCE
RECOMMENDATION:
It is recommended that the City Council, acting as the Suepessor Agency to the West Covina
Redevelopment Agency, approve the Loan Agreement concerning Litigation Fees incurred For the
ROPS periods Of January 2013 to June 2013, June 2013 to D !ecember 2013, and January 2014 to
June 2014 which exceeded the litigation cost estimates for those 'same periods, but
mischaracterized under the administrative cost allowance. I
DISCUSSION:
The former-West Covina Redevelopment Agency was dislsolved pursuant to State law on
February 1, 2012. In the wake of this dissolution, the City elected to perform the functions of the
"Successor Agency" to the former-West Covina Redevelopment Agency as permitted by the
redevelopment dissolution statutes. Because the City elected to perform such functions, Health &
Safety Code section 34173(h) permits the City to loan funds to the Successor Agency for the
purpose covering the Successor Agency's "administrative 'costs, enforceable obligations, or
project-related expenses at the city's discretion."
Additionally, Part 1.85 of the California Health & Safet31 Code, the Successor Agency is
permitted to engage in activities, including litigation, for the purpose of protecting its assets and
liabilities for the purpose of ensuring that the taxing entities receiving maximum benefit from the
wind down of the former-West Covina Redevelopment Agency's affairs. In pursuit of those
activities for the purpose of protecting its assets and liabilities to ensure that the taxing entities
receive maximum benefit from the wind down of the former-West 'Covina Redevelopment
Agency's affairs, the Successor Agency was required to elgage in litigation to protect such
assets.
As part of the Recognized Obligation Payment Schedule process, the Successor Agency, in
engaging in such litigation, provided estimates for its lidgation costs on its Recognized
Obligation Payment Schedules ("ROPS") for the periods Janitary 2013 to June 2013, June 2013
to December 2013, and January 2014 to June 2014. However, such estimates for litigation costs
were not sufficient to cover the actual costs of litigation o6curring during the ROPS periods
mentioned above. Additionally, certain litigation costs for the ROPS periods mentioned above
were inadvertently mischaracterized as part of the Succelor Agency's administrative cost
allowance provided under Health & Safety Code section 14171(b) and the abovementioned
estimates for litigation costs were not sufficient to cover the 'actual costs of litigation occurring
during the abovementioned ROPS periods.
Thus, in order to continue to p Irotect the assets of the Agency during the ROPS periods tmentioned above to the benefit o the Successor Agency's taxing 'entities, the City loaned the
Successor Agency ftands in the anaount of $48,413 to cover such litigation costs discussed above
as authorized under Health & Safety Codef,section 34173(h),
The purpose of the attached Lo au Agreement is to formalize the loan AtahoEized tuldW the
authority of Health & Safety Code section 34173(h) such that the tOit0 can be,xepOid- for the costs
it incurred on behalf of the Succeqsor Agency in performing and assiAting in the performance of
the Successor Agency's obligation under the redevelopmeKdissphttiOn statutes,
)•=, The Loan Agreement covers the litigation costs incurred by the City on behalf of the Successor
Agency during • the ROPS'peripds oft Januaryi.i2013 to.Jurte 2013 ,; • No 2013 to .vecernuot 2013,,
and January 2014 to June 2014: •
If approved by the City Council awl Successor Agency Bpar,d, this Loan Agreement must then be
approved by the Oversight Board, and then the CalifornialDepartmenttif Finance.
FISCAL IMPACT:
The City Attorney and SuccessoF Agendy Counsel have prepared the proposed cooperation
agreement and this report.
Prepared by:
Approved via Email
Kimberly Hall Barlow
Successor Agency Counsel
Reviewed and Approved by:
Nip
Mike Lee
Assistant City Manager/Community
Development Conunissioii Directoil
Attachment No. 1 — Loan Agreement
if? Jia''
'61 '
Attachment 1
LOAN AGREEMENT
BETWEEN THE CITY OF WEST COVINA
AND
THE SUCCESSOR AGENT(
TO THE WEST COVINA REDEVELOPMENT AGENCY
FOR LITIGATION FEES WHICH WERE MISCHARACTERIZED AS
PART OF ADMINISTRATIVE COST Ak_LOWANCE
THIS AGREEMENT ("Agreement") is made this day
between the City of West Covina, a Municipal Corporation o
and Successor Agency to the West Covina Redevelopment
RECITALS
of , 2014, by and
the State of California (the "City');
\gency ("Agency"), a public entity.
WHEREAS, in June of 2011, the California State Legislature enacted legislation which resulted
in the dissolution of all redevelopment agencies in the State pf California, including the West
Covina Redevelopment Agency, on February 1,2012 ("Dissqlution Law");
WHEREAS, Dissolution Law created successor agencies foil the purpose of winding down the
affairs of the dissolved redevelopment agencies;
WHEREAS, the City elected to perform the functions of the Successor Agency to the West
Covina Redevelopment Agency;
WHEREAS, the Agency and the City are distinct legal goverhmental entities pursuant to Health
& Safety Code section 34173(g);
WHEREAS, pursuant to Part 1.85 of the California Health & Safety Code, the Agency is
permitted to engage in activities, including litigation, for the purpose of protecting its assets and
liabilities for the purpose of ensuring that the taxing entities receiving maximum benefit from
the wind down of the former-West Covina Redevelopment Agency's affairs;
1- WHEREAS, in pursuit of those activities for the purpose of p otecting its assets and liabilities to
ensure that the taxing entities receive maximum benefit from the wind down of the former-West
Covina Redevelopment Agency's affairs, the Agency was required to engage in litigation to
protect such assets;
WHEREAS, the Agency, in engaging in litigation, provided eStimates for its litigation costs on
its Recognized Obligation Payment Schedules ("ROPS") for the periods January 2013 to June
2013, June 2013 to December 2013, and January 2014 to J6ne 2014;
WHEREAS, certain litigation costs for the ROPS periods meitioned above were inadvertently
mischaracterized as part of the Agency's administrative cost allowance provided under Health
& Safety Code section 34171(b) and the abovementioned estimates for litigation costs were
not sufficient to cover the actual costs of litigation occurring during the abovementioned ROPS
periods;
WHEREAS, in order to continue to protect the assets of the Agency during the
abovementioned ROPS periods to the benefit of the AgOtr,icy's taxing entities, the City loaned
'j the Agency funds in the amounts: o $48;4440, payalAttolAlyarez4Glasman in the case of
City of West Covina vs. Matosanto , to cover those litigation cost S rnischaracterized and
discussed above pursuant to Health & SatetkCodesegory77,84173(h) ("Loan");
WHEREAS, the parties npw desire to : memorialize ;Thertoarils,uch that the City may be
reimbursed for such litigation costs incurred.
NOW, THEREFORE, for and in cempideration of the mutual cov,enants , herein contained the
parties agree as follows:
1. Recitals
The recitals set forth above Ore true and correct and incorporated herein by this
reference.
2. Loan and Repayment.
Amount Outstanding,. Subject to the terms and conditions of this,
Agreernent, Ag'ency agrees and promises to,j4ayit6ei City in the,:arOUnt of
$48,413.00.
Recognized Obligation Payment Schedule. 4gqncy has listed.the ilAan on
its Recognized Obligation Payment Schedule ("ROPS") 14-15B (covering
period January 2015 to June 201,5)„a in,d,ishallqpp1ntiriue to list n on
its future ROPS as an enforceable obligatiorOntikthe Loan has-Aepn n fully,
repaid.
Payment. Agency shall ; pay City them aounts,due onI the Loan, irrinlecliately
upon allocation of funds to Agency pursuant to the RecognizedO,Pligation
Payment Schedule process under the California .Health 8,t ,Safety.C.Cide.
3. General Terms. •
Books and Accounts. The Agency will keep or cause to be kept prOper
books of record and accounts showing the use of the Loan funds, than
repayments and anyl amount outstarid,ing. p ie, il
' Cr; ,•,' - 1,, Default The City understands and ag irees thaffitile,Agency's alpiility;V: repay the Loan depends' upon the California pepartthent of FinancOS
approval of the Loan,as,,an enforceaple,obligatiOn-ionA,gency's rrO\012:1 1
ROPS. ,Notwithstanding t.Ihe foregoing„the failLiVeiof Agency tos-re'aj'i:!.the , ,!E
Loan Will result in a default of the ems of thiS, A'greement
Severability. If any section, paragraph, sentence, clause, or phrase of this
Loan Agreement is found for any reason to be illegal, invalid or
2
(a)
(b)
(c)
(a)
(b)
(c)
unenforceable, the remaining terms of the Loan Agreement will continue in
the same force or effect.
(d) Amendment. This Agreement may be ariended at any time in writing,
signed by both parties and with Agency's Oversight Board's approval.
IN WITNESS WHEREOF, the parties hereto hav caused this Agreement to be
executed as of the day and year first above written.
SUCCESSOR AGENCY TO THE WEST CITY OF WEST COVINA
COVINA REDEVELOPMENT AGENCY
Chris Chung
Executive Director
APPROVED AS TO FORM:
Chris Churiig
City Manager.
1
APPROVED AS TO FORM:
Kimberly Hall Barlow
Successor Agency Counsel
Kimberly Flail Barlow
City Attorney
ATTEST: ATTEST:
Sue Rush, Agency Secretary Sue Rush, City Clerk