01-15-2019 - AGENDA ITEM 06 APPROVAL AND TRANSMITTAL OF AN ADMINISTRATIVE BUDGET AND A RECOGNIZED OBLIGATION PAYMENT SCHEDULE “ROPS” PURSUANT TO HEALTH AND SAFETY CODE SECTION 34AGENDA ITEM NO. 6
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: January 15, 2019
TO: Mayor and City Council
FROM: Chris Freeland
City Manager
SUBJECT: APPROVAL AND TRANSMITTAL OF AN ADMINISTRATIVE BUDGET AND A
RECOGNIZED OBLIGATION PAYMENT SCHEDULE `BOPS" PURSUANT TO
HEALTH AND SAFETY CODE SECTION 34179.7(0)(1), FOR THE PERIOD OF JULY 1,
2019 THROUGH JUNE 30, 2020 FOR THE SUCCESSOR AGENCY TO THE FORMER
WEST COVINA REDEVELOPMENT AGENCY
RECOMMENDATION:
It is recommended that the City Council, acting as the Successor Agency to the former West Covina
Redevelopment Agency, adopt the following resolution:
RESOLUTION NO.2019-04 — A RESOLUTION OF THE SUCCESSOR AGENCY TO THE
FORMER WEST COVINA REDEVELOPMENT AGENCY APPROVING AND
AUTHORIZING THE TRANSMITTAL OF AN ADMINISTRATIVE BUDGET AND A
RECOGNIZED OBLIGATION PAYMENT SCHEDULE `BOPS" FOR THE PERIOD OF JULY
1, 2019 THROUGH JUNE 30, 2020
BACKGROUND:
In 2011, the State of California began the process to eliminate redevelopment agencies (RDA) that served as
the economic development arm of cities. Effective February 1, 2012, some 400 redevelopment agencies in
California were eliminated and replaced with Successor Agencies that were tasked to wind -down the
operations of the former RDAs.
In accordance with Health and Safety Code Section 34179.7(0)(1), the Successor Agency is required to file a
Recognized Obligation Payment Schedule "ROPS" annually in order to receive a distribution of property tax
increment dollars with which to fund the obligations of the former Redevelopment Agency. These obligations
include bond debt service payments, amounts due under existing agreements with commercial property owners,
repayment of amounts borrowed from the Housing Fund to fund property tax shifts mandated by the State, cost
of litigation to protect assets of the former Redevelopment Agency, repayment of loans to the City, and
administrative costs of the Successor Agency to wind -down the affairs of the former Redevelopment Agency.
While many of these listed items are not necessarily debt, they are considered obligations for purposes of this
mandated report and must be listed on the ROPS if they are to be funded by distributions of future tax
increment dollars. These items are not debt obligations of the City of West Covina.
DISCUSSION:
The ROPS schedule (Attachment No. 1— Exhibit A) lists all amounts that will be paid for the period of July 1,
2019 through June 30, 2020. Once the ROPS is approved by the Successor Agency and Oversight Board, it
then must be forwarded to the State Department of Finance (DOF) by February 1, 2019. DOF holds final
approval authority of the items listed on the ROPS and directs the Los Angeles County Auditor -Controller to
distribute tax increment funds to the Successor Agency. Many of the obligations listed on the ROPS are
estimates, i.e. variable rate debt service payments, litigation, etc.
The Successor Agency is also required to adopt an administrative budget for each annual period. Attachment
No. 1— Exhibit B to this report is the administrative budget for the Successor Agency for the period of July 1,
2019 through June 30, 2020. This budget is to be funded by the administrative allowance, which is 3% of the
enforceable obligations, after loan payments, or $250,000 annually; whichever is greater. The City will absorb
any administrative costs above this administrative allowance. These administrative costs can also be found in
the ROPS (Attachment No. 1 — Exhibit A) line item numbers 12, 19, 21, 54 and 91.
The total amount of funding requested for enforceable obligations from the Redevelopment Property Tax Trust
Fund (RPTTF) on ROPS 19-20 is $21,138,015 and includes many of the same items that have been previously
approved by DOE
LEGAL REVIEW:
The Successor Agency Counsel has reviewed and approved this staff report, resolution and the Recognized
Obligation Payment Schedule.
Prepared by: Marcie Medina, Finance Director
Additional Approval: Paulina Morales, Economic Development & Housing Manager
Fiscal Impact
FISCAL IMPACT:
The Successor Agency cannot receive or spend any funds unless the amounts are listed on a Recognized
Obligation Payment Schedule. This schedule identifies all outstanding obligations that must be satisfied before
the Agency can be dissolved. The obligations listed on this schedule will receive property tax allocations
distributed by the County of Los Angeles as their funding source.
If the Successor Agency's administrative costs exceed the administrative allowance, the excess expenditures
will be absorbed by the City.
Attachments
Attachment No. 1 Resolution No. 2019-04
Exhibit A - WC ROPS 19-20
Exhibit B - Administrative Budget ROPS 19-20
ATTACHMENT NO.1
RESOLUTION NO.2019-04
A RESOLUTION OF THE SUCCESSOR AGENCY TO THE FORMER
WEST COVINA REDEVELOPMENT AGENCY APPROVING AND
AUTHORIZING THE TRANSMITTAL OF AN ADMINISTRATIVE
BUDGET AND A RECOGNIZED OBLIGATION PAYMENT SCHEDULE
"ROPS" FOR THE PERIOD OF JULY 1, 2019 THROUGH JUNE 30, 2020
WHEREAS, pursuant to Abx 1 26, enacted on June 28, 2011, and as subsequently
amended by AB 1484, SB 341, and SB 107 ("Dissolution Act"), the Redevelopment Agency to
the City of West Covina was dissolved as of February 1, 2012, and the City of West Covina elected
to serve as the Successor Agency to the former Redevelopment Agency to the City of West Covina;
and
WHEREAS, pursuant to Health and Safety Code Section 34179(q), commencing on and
after July 1, 2018, the County of Los Angeles, where more than 40 oversight boards were created
by the Dissolution Act, shall have five consolidated oversight boards each encompassing the five
supervisorial districts;
WHEREAS, pursuant to Health and Safety Code Section 34179.7 (o) (1), requires that the
ROPS for the period from July 1, 2019 to June 30, 2020, shall be submitted after oversight board
approval to the State of California Department of Finance and the Los Angeles County Auditor -
Controller by February 1, 2019; and
WHEREAS, the West Covina City Council, acting as Successor Agency to the former
West Covina Redevelopment Agency, reserves the right to appeal any determination of the State
of California Department of Finance or other entity regarding the propriety of this resolution as
well as any future determinations; and
WHEREAS, the West Covina City Council, acting as Successor Agency to the former
West Covina Redevelopment Agency, intends to comply with the state -mandated obligations
established hereunder; and
WHEREAS, all other legal prerequisites to the adoption of this resolution have occurred.
NOW, THEREFORE, BE IT RESOLVED by the West Covina City Council, acting as
Successor Agency to the former West Covina Redevelopment Agency, as follows:
SECTION 1. The foregoing recitals are incorporated into this Resolution by this
reference, and constitute a material part of this Resolution.
SECTION 2. The Recognized Obligation Payment Schedule "ROPS" attached hereto as
Exhibit "A" is approved and the Executive Director is authorized to submit the ROPS to the
Oversight Board for approval and transmit the same to the Los Angeles County Auditor -
Controller, the California State Controller and the State of California Department of Finance in
accordance with Health and Safety Code Section 34177 subject to all reservations of rights and
contingencies set forth above.
SECTION 3. The Administrative Budget for the Successor Agency for the annual period
of July 1, 2019 — June 30, 2020, attached hereto as Exhibit `B" is approved and the Executive
Director is authorized to transmit the same to the Los Angeles County Auditor -Controller, the
California State Controller and the State of California Department of Finance in accordance with
Health and Safety Code Section 34177 subject to all reservations of rights and contingencies set
forth above.
SECTION 4. The Executive Director or designee is authorized to take all actions
necessary to implement this Resolution, including without limitation, the posting of this Resolution
and the Recognized Obligation Payment Schedule on the City's website, and any other reasonable
acts in furtherance of approval of the Recognized Obligation Payment Schedule and
Administrative Budgets.
SECTION 5. The Secretary shall certify as to the passage and adoption of this Resolution,
and it shall thereupon take effect and be in full force.
APPROVED AND ADOPTED at a regularly scheduled meeting held on this 15`h day of
January, 2019.
Lloyd Johnson
Chairman
APPROVED AS TO FORM: ATTEST:
Scott E. Porter
City Attorney
Nickolas S. Lewis
Secretary
EXHIBIT B
SUCCESSOR AGENCY TO THE FORMER WEST COVINA REDEVELOPMENT AGENCY
ADMINISTRATIVE BUDGET
July 1, 2019 to June 30, 2020
Annual Amount July - Dec 2019 Jan - June 2020
Salaries & Benefits $ 190,000 $ 95,000 $ 95,000
Maintenance & Operations
Consultants
37,100
21,050
16,050
Legal Fees
40,000
20,000
20,000
Phone
2,000
1,000
1,000
Cell Phone
1,000
500
500
Supplies
7,300
3,650
3,650
Meetings
5,000
2,500
2,500
Overhead
52,600
26,300
26,300
Liability Insurance
5,000
2,500
2,500
Subtotal
150,000
77,500
72,500
Total Budget $ 340,000 $ 172,500 $ 167,500