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HomeMy WebLinkAbout SA_FULL PACKET_2012-08-20 MINUTES OF THE SPECIAL MEETING OF THE SUCCESSOR AGENCY OF THE CITY OF SANTA ANA, CALIFORNIA JULY 2, 2012 CALLED TO ORDER COUNCIL CHAMBER 22 CIVIC CENTER PLAZA SANTAANA, CA 9:01 P.M. ATTENDANCE MEMBERS Present: MIGUEL PULIDO, Mayor CLAUDIA ALVAREZ, Mayor Pro Tern P. DAVID BENAVIDES MICHELE MARTINEZ VINCENT F. SARMIENTO SAL TINAJERO MEMBERS Absent: CARLOS BUSTAMANTE STAFF Present: PAUL M. WALTERS, Interim City Manager SONIA R. CARVALHO, City Attorney MARIA D. HUIZAR, Clerk of the Council PUBLIC COMMENTS None CONSENT CALENDAR ITEM 1. REGULAR MEETING MINUTES OF MAY 7, 2012. MOTION: Approve Minutes. MOTION: Sarmiento SECOND: Martinez VOTE: AYES: Alvarez, Benavides, Martinez, Pulido, Sarmiento, Tinajero (6) NOES: None (0) ABSTAIN: None (0) SUCCESSOR AGENCY MINUTES 1 JULY 2, 2012 1-1 ABSENT: Bustamante (1) **END OF CONSENT CALENDAR** BUSINESS CALENDAR ITEMS 2. ADOPT A RESOLUTION AFFIRMING SUCCESSOR AGENCY PROPERTY INVENTORY AND ITS DESIGNATIONS; AND IMPLEMENTING OTHER ASSOCIATED ACTIONS AS DIRECTED BY THE OVERSIGHT BOARD MOTION: Adopt a resolution. SA RESOLUTION - 2012-XXX - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ACTING AS SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY AFFIRMING THE SUCCESSOR AGENCY INVENTORY OF PROPERTY AND THE DESIGNATIONS OF THOSE PROPERTIES AS ADOPTED BY THE OVERSIGHT BOARD AND IMPLEMENTING OTHER ASSOCIATED ACTIONS WITH REGARD TO SUCH PROPERTIES AS DIRECTED BY THE OVERSIGHT BOARD MOTION: Martinez SECOND: Alvarez VOTE: AYES: Alvarez, Benavides, Martinez Pulido Sarmiento Tinajero (6) NOES: None (0) ABSTAIN: None (0) ABSENT: Bustamante (1) COMMENTS 3. CITY COUNCIL ACTING AS GOVERNING BODY OF THE SUCCESSOR AGENCY COMMENTS - None ADJOURNED - 9:02 P.M. Maria D. Huizar, Clerk of the Council SUCCESSOR AGENCY MINUTES 2 JULY 2, 2012 1-2 REQUEST FOR SUCCESSOR AGENCY ACTION MEETING DATE: CLERK OF THE COUNCIL USE ONLY: AUGUST 20, 2012 APPROVED TITLE: AB 1484 TRUE UP PROCESS ? As Recommended ? As Amended ? Implementing Resolution ? Other CONTINUED TO _c ! L Cam, FILE NUMBER CITY MANAGER RECOMMENDED ACTION Receive and file. DISCUSSION On August 2, 2012, the City of Santa Ana acting as Successor Agency responded to the Orange County Auditor-Controller's Office for a demand for payment in the amount of $1,160,097, and complied with such request, stating our disagreement with the calculation. The Department of Finance (DOF) considers the property tax increment revenues received by the former redevelopment agencies from July 2011 through January 2012 as part of the Redevelopment Property Tax Trust Fund (RPTTF) that can be distributed to various taxing entities. However, the RPTTF did not exist until February 1, 2012; the effective date of AB 1x 26. DOF's calculation does not factor in the possibility that former redevelopment agencies may have needed to utilize the tax increment revenues received during July 2011 through January 2012 to make enforceable obligation payments due during the same period. In addition, the Successor Agency is involved in pending litigation regarding various agreements included on the Recognized Obligation Payment Schedules (ROPS) that DOF has disallowed as enforceable obligations. The Successor Agency is still disputing DOF's decision, but has been unsuccessful in engaging DOF in further dialogue to remedy the problem. Therefore, the amounts approved by DOF on both the January to June 2012 and July to December 2012 ROPS are not reflective of the true obligation amounts for each respective period. If the correct ROPS amounts are used in the AB 1484 "True Up" process calculation, the County would have not needed to demand the return of any prior tax increment revenues from the Successor Agency. 2-1 AB 1484 True Up Process August 20, 2012 Page 2 Pursuant to the attached letter to the County Auditor-Controller dated August 2, 2012, the Successor Agency reserved the right to pursue all available legal remedies in opposition to any wrongful demand for payment that may be made by the County Auditor to the Successor Agency pursuant to the true-up process in Section 34183.5(b)(2)(A). Nancy T. ards Interim Exe utive Director Community Development Agency NTE/kg Exhibit 1. Copy of Correspondence to OC Auditor-Controller 2-2 i I MAYOR CITY MANAGER Miguel A. Pulido Paul M. Walters MAYOR PRO TEM CITY ATTORNEY Claudia C. Alvarez Sonia R. Carvalho COUNCILMEMBERS CLERK OF THE COUNCIL P. David Benavides Maria D. Huizar Carlos Bustamante - Michele Martinez Vincent Sarmiento Sal Tinaje ro CITY OF SANTA ANA 20 CIVIC CENTER PLAZA • P.O. BOX 1988 SANTA ANA, CALIFORNIA 92702 Via Hand-Delivery August 2, 2012 Jan E. Grimes Chief Deputy Auditor-Controller Orange County Auditor-Controller 12 Civic Center Plaza, Room 200 Santa Ana, CA 92702-0567 RE: AB 1484 DEMAND FOR PAYMENT I Dear Ms. Grimes: i, The City of Santa Ana acting as Successor Agency to the former Community Redevelopment Agency ("Successor Agency") is in receipt of correspondence dated July 27, 2012 demanding payment in the amount of One Million One Hundred Sixty Thousand and Ninety-Seven Dollars ($1,160,097.00) by August 3, 2012. The Successor Agency has enclosed a check in the requested amount, but hereby asserts its disagreement with the calculation and submits this check under protest. The Department of Finance (DOF) considers the property tax increment revenues received by the former redevelopment agencies from July 2011 through January 2012 as part of the Redevelopment Property Tax Trust Fund (RPTTF) that can be distributed to various taxing entities. However, the RPTTF did not exist until February 1, 2012; the effective date of AB lx 26. In addition, Y ~ DOF s calculation does not factor in the possibility that former redevelopment agencies may have needed to utilize the tax increment revenues received during July 2011 through January 2012 to make enforceable obligation payments due during the same period. In addition, the Successor Agency is involved in current and pending litigation regarding various agreements included on the Recognized Obligation Payment Schedules (ROPS) that DOF has disallowed as enforceable obligations. The Successor Agency is still disputing DOF's decision, but has been unsuccessful in engaging DOF in further dialogue to remedy the problem. Therefore, the amounts approved by DOF on both the January - June 2012 and July - December 2012 ROPS are not reflective of the true obligation amounts for each respective period. If the correct ROPS amounts are used in the AB 1484 "True Up" process calculation, the County would have no need to demand the return of any prior tax increment revenues from the Successor Agency. EXHIBIT 1 2-3 County Auditor-Controller August 2, 2012 Page 2 I The Successor Agency reserves the right to pursue all available legal remedies in opposition to any wrongful demand for payment that may be made by the County Auditor to the Successor Agency I pursuant to the true-up process in Section 34183.5(b)(2)(A). If you have any questions regarding this matter, please do not hesitate to contact Nancy Edwards at (714) 647-5360 or Francisco Gutierrez at (714) 647-5420. Sincerely, I PAUL M. WALTERS City Manager I i cc: Nancy T. Edwards, Interim Executive Director, Community Development Agency Francisco Gutierrez, Executive Director of Finance & Management Services Sonia Carvalho, City Attorney Frank Davies, Manager, County Auditor-Controller Property Tax Unit I I I i 2-4 REQUEST FOR SUCCESSOR AGENCY =gym, ACTION MEETING DATE: CLERK OF THE COUNCIL USE ONLY: AUGUST 20, 2012 TITLE: APPROVED ? As Recommended RESOLUTION - RECOGNIZED OBLIGATION ? As Amended El Imp Othermenting Resolution PAYMENT SCHEDULE (ROPS) AND ? ADMINISTRATIVE BUDGET FOR THE PERIOD OF JANUARY 1, 2013 THROUGH JUNE 30, 2013 CONTINUED TO FILE NUMBER CITY MANAGER RECOMMENDED ACTION It is recommended that the City Council acting as the Successor Agency to the former Agency: 1. Adopt a Resolution approving the Third Recognized Obligation Payment Schedule ("ROPS") and Successor Agency Administrative Budget ("Budget") for the period of January 1, 2013 through June 30, 2013 and certain other actions pursuant to Part 1.85 of Division 24 of the California Health & Safety Code ("Dissolution Act"). 2. Direct the City Manager and/or Director of Finance or their designees, as delegated officials of the Successor Agency, to make or accept any augmentation, modification, additions, or revisions to the ROPS and/or Administrative Budget as the City Manager and/or Director of Finance or their designees may deem necessary and appropriate in their reasonable discretion, based on review by and comments received from the Oversight Board, the State Department of Finance (DOF), or the County of Orange's selected independent auditor, as applicable. DISCUSSION Pursuant to the Dissolution Act, the City Council on January 9, 2012, elected for the City to act as the "Successor Agency" to the dissolved Community Redevelopment Agency ("Agency") and selected the Housing Authority of the City of Santa Ana to act as "Successor Housing Agency" to the dissolved Agency. On February 1, 2012, pursuant to the Dissolution Act and the California Supreme Court's decision in California Redevelopment Association v. Matosantos, Case No. S194861, the Agency was dissolved and the City began to serve as the "Successor Agency." The City Council serves as the governing body of the Successor Agency under the Dissolution Act as recently amended by AB 1484, to administer the enforceable obligations of the Agency 3-1 Third ROPS and Administrative Budget August 20, 2012 Page 2 and otherwise unwind the Agency's affairs. Many actions of the Successor Agency are subject to the review and approval by a seven-member Oversight Board. The first and second ROPS and associated administrative budgets were approved by the Successor Agency on April 2, 2012 and May 7, 2012, respectively, and subsequently by the Oversight Board on April 10, 2012 and May 8, 2012, respectively. The documents were made available to the appropriate entities (the State Controller's Office, DOF, and County-Auditor Controller as required by law. The DOF approved both ROPS on May 24, 2012; however, several items deemed enforceable obligations by the Successor Agency and Oversight Board were disapproved by DOF, which the Agency is disputing. To date, the DOF and Agency have not reached a resolution on these matters. Additionally, there is pending litigation (Gerald Peebler, et al., v. State of California Department of Finance, et al., Case No. 34-2012-80001172) regarding the South Main Settlement Agreement, one of the enforceable obligations on the prior ROPS which was approved by the Successor Agency and Oversight Board, but denied by DOF. On July 12, 2012, DOF sent a letter to all redevelopment agencies stating that no further revised ROPS for periods prior to January 1, 2013 would be accepted and no further requests for reconsideration of such prior ROPS items would be considered. However, based on the DOF instructions for the third ROPS, the DOF is allowing the Agency/Oversight Board to include previously disputed items to be listed in the "Notes" section of the ROPS form provided by DOF. The ROPS (Exhibit A of Exhibit 1) and Budget (Exhibit B of Exhibit 1) for the January 1, 2013 through June 30, 2013 period is now being presented for Successor Agency approval. Following action by the Successor Agency, the ROPS and Budget will be forwarded to the Oversight Board, DOF, County and other appropriate entities as required by AB 1484. The Oversight Board will consider the ROPS and Budget at a special meeting anticipated to be held August 28, 2012. Pursuant to AB 1484 and DOF directive, the approved ROPS must be submitted to the DOF no later than September 4, 2012, or the Successor Agency/City will be subject to severe financial penalties. FISCAL IMPACT The Successor Agency is limited to making only payments listed on the approved ROPS for each six month period and the administrative expenditures of the Successor Agency are limited to items listed in the approved Administrative Budget for each six month period. California Health and Safety Code Section 34173(e) stipulates that "the liability of any successor agency, acting pursuant to the powers granted under the act adding this part, shall be limited to the extent of the total sum of property tax revenues it receives pursuant to this part and the value of assets transferred to it as a successor agency for a dissolved redevelopment agency." Thus, the City's obligations as Successor Agency are limited by the amount of property taxes and the value of assets it receives in its role as the Successor Agency. Despite this language, the Dissolution Act (as amended by AB 1484) also provides for the withholding and diversion of sales tax and property tax revenues otherwise due to the City in order to recover certain expenditures deemed to have been improperly made by the former Agency; however this offset is inapplicable to the present recommended actions. 3-2 Third ROPS and Administrative Budget August 20, 2012 Page 3 4t aln W, c Nancy T. E ards Interim Exe tive Director Community Development Agency NTE/SG/kg Exhibits: 1. ROPS & Administrative Budget Resolution 3-3 3-4 8/15/12 LES SUCCESSOR AGENCY RESOLUTION NO. 2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ACTING AS SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY APPROVING THE THIRD RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) AND ADOPTING AND APPROVING THE SUCCESSOR AGENCY'S ADMINISTRATIVE BUDGET FOR THE PERIOD OF JANUARY 1, 2013 THROUGH JUNE 30, 2013 PURSUANT TO HEALTH AND SAFETY CODE SECTIONS 34177(1)(1) AND 34177(m), AND CERTAIN OTHER ACTIONS PURSUANT TO PART 1.85 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE ("DISSOLUTION ACT") BE IT RESOLVED BY THE MEMBERS OF THE SUCCESSOR AGENCY OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1. The City Council of Santa Ana, acting as Successor Agency to the former Agency, hereby finds, determines and declares as follows: A. Pursuant to the Dissolution Act, on January 9, 2012, pursuant to section 34173 of the California Health & Safety Code, the City of Santa Ana ("City") elected to serve as the Successor Agency for the dissolved Community Redevelopment Agency ("Agency") of the City of Santa Ana and selected the Housing Authority of the City of Santa Ana to act as "Successor Housing Agency". B. The City Council serves as the governing body of the Successor Agency under the Dissolution Act, as recently amended by AB 1484, to administer the enforceable obligations of the Agency and otherwise unwind the Agency's affairs. Many actions of the Successor Agency are subject to the review and approval of a seven member Oversight Board. C. The first and second ROPS and associated administrative budgets were approved by the Successor Agency on April 2, 2012 and May 7, 2012, respectively, and subsequently by the Oversight Board on April 10, 2012 and May 8, 2012, respectively. The documents were made available to the appropriate entities [State Controller's Office, State Department of Finance (DOF), and County-Auditor Controller] as required by law. The DOF approved both ROPS on May 24, 2012, however, several items deemed enforceable obligations by the Successor Agency and Oversight Board were disapproved by DOF, which disapproval was and is disputed by the Agency. To date, the DOF and Agency have not reached a resolution of these matters. D. Additionally, there is pending litigation (Gerald Peebler, et al., v. State of California Department of Finance, et al., Case No. 34-2012-80001172), regarding the South Main Settlement Agreement, one of the enforceable obligations on the prior ROPS which was approved by the Successor Agency and Oversight Board, but denied by DOF. 1 3-5 8/15/12 LES E. On July 12, 2012, DOF sent a letter to all redevelopment agencies stating that no further revised ROPS for periods prior to January 1, 2013 would be accepted and no further requests for reconsideration of such prior ROPS (or items on such ROPS) would be considered. F. The ROPS (Exhibit A of Exhibit 1) and Budget (Exhibit B of Exhibit 1) for the January 1, 2013 through June 30, 2013 period is now being presented for Successor Agency approval. Based on the DOF instructions for the third ROPS, the DOF is allowing the Agency/Oversight Board to include previously disputed items on this third ROPS. These disputed items are included as directed in the "Notes" section of the form provided by DOF. G. Following action by the Successor Agency, the ROPS and Budget will be forwarded to the Oversight Board, DOF, County and other appropriate entities as required by AB 1484. The Oversight Board will consider the ROPS and Budget at a special meeting anticipated to be held August 28, 2012. H. Pursuant to AB 1484 and DOF directive, the approved ROPS must be submitted to the DOF no later than September 4, 2012, or the Successor Agency/City will be subject to severe financial penalties. I. Health and Safety Code Section 34173(e) provides that "the liability of any successor agency, acting pursuant to the powers granted under the act adding this part, shall be limited to the extent of the total sum of property tax revenues it receives pursuant to this part and the value of assets transferred to it as a successor agency for a dissolved redevelopment agency." Thus, the City's obligations as Successor Agency are limited by the amount of property taxes and the value of assets it receives in its role as the Successor Agency. Despite this language, the Dissolution Act (as amended by AB 1484) also provides for the withholding and diversion of sales tax and property tax revenues otherwise due to the City in order to recover certain expenditures deemed to have been improperly made by the former Agency; however this offset is inapplicable to the present actions. Section 2. The attached Recognized Obligation Payment Schedule (Exhibit A), which is hereby approved by the Successor Agency, establishes those obligations which the Community Redevelopment Agency of the City of Santa Ana has binding commitments that it has entered into and includes legal commitments that it is obligated to perform from January 1, 2013 through June 30, 2013, in order to meet the pre-existing commitments of contracts and obligations that were established prior to the effective date of the Dissolution Act. Such approval is conditional upon approval of the Oversight Board. Section 3. Pursuant to the Dissolution Act, the Successor Agency approves the proposed Administrative Budget, attached hereto as Exhibit B and incorporated by this reference. Such approval is conditional upon approval of the Oversight Board. Following action by the Successor Agency, the ROPS and Budget will be forwarded to the Oversight Board, DOF, County and other appropriate entities as required by AB 1484. 2 3-6 8/15/12 LES Section 4. The City Manager, or his/her designee ("City Manager"), is directed to file the Recognized Obligation Payment Schedule and the Administrative Budget in the manner required by law. Section 5. The City Manager and/or the Director of Finance, or their respective designees, as delegated officials of the City acting as Successor Agency, are authorized to make any augmentations, modifications, additions, or revisions as may be necessary to the ROPS or Administrative Budget, and as may be amended from time to time, based upon review by the State Department of Finance or the independent auditor selected by the County of Orange. Section 6. This Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of )2012. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney I By: Lisa E. Storck Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATION OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2012- to be the original resolution adopted by the City Council acting as the Successor Agency on August , 2012. Date: Maria D. 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N E 1 E z U LE 3-14 ¢ a a0 = o w E Hill 11 a G E a` 3 a E m ~ a° E w a m z N 2 ~ E w y - \ m a ~ h 7 J N - m / e o U C r ~ ~ a x o a` a , U O w t u4 / W C 0 F N / A O _ _ y Q J _ / q ~ N 'n O Z i a' a U ,w 2w K - a a` a E ~ E ~ - aE Nq~> E i FE M\?~ m Oa ~a¢rcaW F mE"~ o NaE a m o ym vn~8 S o mm oQoE ~ o sE sa„ ~~m o~Bsm ~9d e d E~ >J ° >u >y >"LL~~ Ey o ~ advd a y d v v U 0 $m ~@ xx= u8 i 80 & 08888$9`oe`o~'8or°` ° s8~~~ > gyYY S >u8i ggm >°Sgg v~8 FE Ay ~.~E£o 0 5~ o~ b= b .g a~~to ~m tK m Ay A~E YE E 9 -3 1 e m Ti O E IEU .0-1 gi V,i 8i N € r Z U 3- 5 EXHIBIT B CITY OF SANTA ANA, ACTING AS SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA PROPOSED ADMINISTRATIVE BUDGET FOR JANUARY 1, 2013 - JUNE 30, 2013 Estimated Successor Agency Amounts Staff Support (EOPS, ROPS, Admin Budget, Records Management, etc.) 1 $ 236,041 Brown Act requirements (agendas, minutes, etc.) 1 14,200 Supplies, printing, telephones, misc. items _ 19,210 Consultants (legal, financial, etc.) 272,750 Subtotal $ 542,200 Oversight Board Staff Support (research, reporting, etc.) 56,780 Brown Act requirements (agendas, minutes, etc.) 6,555 Supplies, printing, misc. items 41803 4 Subtotal $ 68,138 Delivery Charges $ 183 Building Rental 6 ,545 Rental City Equipmen ' 778 Computer Services Chap\e`'; rj 70 IS Strategic Plan 2,708 Insurance Charges 4,480 Subtotal $ 14,763 Share of City's Cost Allocation Plan Indirect Costs $ 19,082 Subtotal $ 19,082 TOTAL ESTIMATED AMOUNT 7$ 644,182 The estimated amount of the Administrative Budget for the six month period covering January through June 2013 is to be paid from property tax revenues deposited in the Redevelopment Property Tax Trust Fund. This budget may be augmented, modified, added to, or revised as authorized under the resolution. 1 Includes salaries, wages, and all fringe benefits offered by the City to employees. 3-16