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HomeMy WebLinkAbout4 - RESO - ESTABLISH REPAYMENT SCHEDULEREQUEST FOR - SUCCESSOR AGENCY t ACTION MEETING DATE: FEBRUARY 19, 2013 TITLE: RESOLUTIONS - ESTABLISHMENT OF REPAYMENT SCHEDULES FOR SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND AND EDUCATIONAL REVENUE AUGMENTATION FUND LOANS CLERK OF THE COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Implementing Resolution ? Other 0- e_,- 4- - ? CITY MANAGER RECOMMENDED ACTION CONTINUED TO FILE NUMBER Adopt a resolution establishing a schedule to repay the Low and Moderate Income Housing Fund for the Supplemental Educational Revenue Augmentation Fund and Educational Revenue Augmentation Fund loans; 2. Adopt a resolution establishing a schedule to repay the South Main Corridor Fund for the Supplemental Educational Revenue Augmentation Fund loan. DISCUSSION The Successor Agency and Oversight Board previously recognized and approved the existing Supplemental Education Revenue Augmentation Fund (SERAF) and Education Revenue Augmentation Fund (ERAF) loans as part of the Recognized Obligations Payment Schedules (ROPS). As required by the Dissolution Act [HSC Sections 34180(a) and 34171(d)(1)], and pursuant to the December 18, 2012 ROPS Determination Letter received from the State Department of Finance (DOF), the Oversight Board must also establish and approve repayment schedules or other mandatory loan terms. As permitted by law, the Santa Ana Redevelopment Agency borrowed funds for the required SERAF payment in May 2010 (Exhibit 1), and for the ERAF payment in May 2006 (Exhibit 2). Funds for the 2010 SERAF payment were taken from the Agency's Low and Moderate Income Housing Fund (LMIHF) in the amount of $3,679,546 and were required to be repaid in five years. The remaining balance of $6,302,827, was borrowed from the South Main Commercial fund. Funds in the amount of $3,330,894.37 for the 2006 ERAF payment were borrowed from the LMIHF and required to be repaid 4-1 Resolutions SERAF & ERAF Repayment February 19, 2013 Page 2 in 10 years. The balance currently owed to the LMIHF is $5,568,314, while that owed to the South Main Corridor fund is $6 million. The Dissolution Act as ametnded by AB 1484, suspended repayments of the SERAF and ERAF loans to the LMIHF until the ROPS 4, 13-14A, period. The maximum repayment amount authorized each fiscal year to the LMIHF is based on the amount distributed to taxing entities and capped by a formula, thus any repayment schedule will inherently provide estimated amounts. The repayment of the SERAF South Main Commercial Corridor loan is still under dispute with the DOF; however, they have indicated that the Oversight Board needs to approve a repayment schedule. Resolutions incorporating the updated repayment schedules for the LMIHF and South Main Corridor fund are attached as Exhibit 3 and 4, and will be considered by the Oversight Board at its meeting on February 19, 2013. 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. and there are various lawsuits, including one filed by the League of California Cities, that are challenging the constitutionality of the sales and property tax off-set penalties to cities. `lail I W-8 Nancy T. E ards Interim Exe tive Director Community Development Agency NTE/SG/kg Exhibits 1. CRA Resolution 2010-001 2. CRA Resolution 2006-005 3. Resolution - LMIHF 4. Resolution - South Main Corridor 4-2 4/26110 les RESOLUTION NO. CRA 2010-001 A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA MAKING THE FINDING THAT THE AGENCY MUST TRANSFER FUNDS IN ORDER TO MAKE THE 2009-2010 PAYMENT TO THE SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND BE IT RESOLVED BY THE MEMBERS OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1. The Community Redevelopment Agency of the City of Santa Ana hereby finds, determines and declares as follows: A. As a result of Assembly Bill 26 (4th Executive Session)("ABx4-26") implementing the Callifornia State Budget for fiscal year 2009-2010, the Community Redevelopment Agency ("Agency") is required to make a $17,889,256 payment to the County Supplemental Educational Revenue Augmentation Fund ("SERAF") by May 10, 2010. B. The legislation allows the Agency to borrow the amount required to be allocated to the Low and Moderate Income Housing Fund during fiscal year 2009-2010 in order to make this payment. 'The funds may be borrowed for up to five years. C. As a condition of borrowing from the Low and Moderate Income Housing Fund pursuant to Health & Safety Code § 33690, the Agency must make a finding that there are insufficient other moneys to remit the required SERAF payment. D. The legislation allows the Agency to use any funds that are legally available and not legally obligated for other uses in order to make the allocation of SERAF funds. The Agency will advance funds in the amount of $6,302,827 from the South Main Commercial Corridor Fund in order to make the required SERAF payment. D. As a condition of transferring from the South Main Commercial Corridor Fund pursuant to Health & Safety Code § 33690, the Agency must make a finding that there are insufficient other moneys to remit the required SERAF payment. E. The legislation implementing the State's fiscal year 2009-2010 budget also authorized the County Auditor/Controller to withhold property tax revenue from the City's general fund to the extent that the $17,889,256 payment is not made by the Agency by May 10, 2010. F. The allocation obligations shall be an indebtedness of the individual project areas within the! Merged Project Area which have time limits which still allow them to incur debt. EXHIBIT 1 Resolution No. CRA 2010-001 Page 1 of 2 4-3 Section 2. The Agency hereby finds that transferring $3,679,546 from the Low and Moderate Income Housing funds and $6,302,827 from the South Main Commercial Corridor funds is necessary due to the insufficiency of other revenue sources. Section 3. The Executive Director of the Agency is hereby authorized to take all necessary actions and to sign all documents and instruments necessary to make the $17,889,256 payment to the County Auditor for deposit into the Supplemental Educational Revenue Augmentation Fund on or before May 10, 2010. Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this 3rd day, of May, 2010. APPROVED AS TO FORM: Joseph W. Fletcher, General Counsel By: Lisa E. Storck Assistant General Counsel AYES: NOES: ABSTAIN: NOT PRESENT Boardmembers: Boardmembers: Boardmembers: Boardmembers Chair Alvarez Benavides Bustamante Martinez Pulido. Sarmiento Tinaiero M None 0 None (0) None 0 CERTIFICATION OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Secretary of the Agency, do hereby attest to and certify the attached Resolution No. CRA 2010-001 to be the original resolution adopted by the Community Redevelopment Agency of the City of Santa Ana on May 3, 2010 Date: Resolution No. CRA 2010-001 Page 2 of 2 C ecetary of SCommunity I pment Agency ity Ana 4-4 RESOLUTION NO. CRA 2006-005 4!24!06 les A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA MAKING THE FINDING THAT THE AGENCY MUST BORROW HOUSING SET ASIDE FUNDS IN ORDER TO MAKE THE 2005-2006 PAYMENT TO THE EDUCATIONAL REVENUE AUGMENTATION FUND BE IT RESOLVED BY THE MEMBERS OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1. The Community Redevelopment Agency of the City of Santa Ana hereby finds, determines and declares as follows: A. As a result of Senate Bill 1096 (SB 1096) implementing the California State Budget for fiscal year 2004-2005, the Community Redevelopment Agency ("Agency") is required to make a $3,330,894.37 payment to the County Educational Revenue Augmentation Fund ("ERAF") by May 10, 2006. B. The legislation allows the Agency to borrow up to fifty percent of the amount required to be allocated to the Low and Moderate Income Housing Fund during fiscal year 2005-2006 in order to make this payment. The funds may be borrowed for up to ten years. 1%r C. As a condition of borrowing from the Low and Moderate Income Housing Fund pursuant to Health & Safety Code § 33681.12, the Agency must make a finding that there are insufficient other moneys to remit the required ERAF payment. D. The legislation implementing the State's fiscal year 2004-2005 budget also authorized the County Auditor/Controller to withhold property tax revenue from the City's general fund to the extent that the $3,330,894.37 payment is not made by the Agency by May 10, 2006. Section 2. The Agency hereby finds that borrowing $3,330,894.37 from the Low and Moderate Income Housing funds is necessary due to the insufficiency of other revenue sources. Section 3. The Executive Director of the Agency is hereby authorized to take all necessary actions and to sign all documents and instruments necessary to make the $3,330,894.37 payment to the County Auditor for deposit into the Educational Revenue Augmentation Fund on or before May 10, 2006. Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. 1%W EXHIBIT 2 4-5 Resolution No. CRA 2006-005 Page 1 of 2 ADOPTED this 1st day of May, 2006. Ifto APPROVED AS TO FORM: Joseph W. Fletcher, General Counsel B Llsa E. Storck Assistant General Counsel AYES NOES ABSTAIN: Chair Boardmembers: Alvarez Bist Bustamante Christy. Garcia PuliA- Solorio 6) Boardmembers: Boardmembers: None (0) None (0) None 0 NOT PRESENT. Boardmembers: Iwo CERTIFICATION OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Secretary of the Agency, do hereby attest to attached Resolution No. CRA 2006-40 to be the original resolution Community Redevelopment Agency of the City of Santa Ana on Mav 1.2t Date: _ ?_ f ratricia E. Healy Secretary and certify the adopted by the Iwo Resolution No. CRA 2006-005 Page 2 of 2 4-6 REVISED 2/14/13 LES SUCCESSOR AGENCY RESOLUTION NO. 2013- A RESOLUTION OF THE CITY COUNCIL ACTING AS SUCCESSOR AGENCY OF THE SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA ESTABLISHING A SCHEDULE TO REPAY THE LOW AND MODERATE INCOME HOUSING FUND FOR FUNDS ADVANCED FOR EDUCATIONAL REVENUE AUGMENTATION FUND PAYMENT AND SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND PAYMENT 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, AS FOLLOWS: Section 1. The City Council of Santa Ana, acting as Successor Agency, conclusively 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 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 of the Successor Agency to the former Community Redevelopment Agency of the City of Santa Ana ("Oversight Board"). C. The Oversight Board has been established to direct the Successor Agency to take certain actions to wind down the affairs of the former Agency in accordance with the California Health & Safety Code. D. As permitted by law, the former Agency borrowed funds from its Low and Moderate Income Housing Fund ("LMIHF") in order to make its Educational Revenue Augmentation Fund ("ERAF") payment to the State in May 2006. Funds in the amount of $3,330,894.37 were borrowed from the LMIHF and required to be repaid in ten (10) years. E. Funds were borrowed from the LMIHF pursuant to California Health & Safety Code sections 33690 and 33690.5 in order for the former Agency to make its Supplemental Educational Revenue Augmentation Fund ("SERAF") payment to the State in May 2010. Funds borrowed in the amount of $3,679,546 from the LMIHF were required to be repaid in five (5) years. Other funds were borrowed from a separate Agency fund in order to pay the balance to the State. Exhibit 3 4-7 2/14/13 LES F. The amount currently owed to the LMIHF is $5,568,314. G. Health & Safety Code sections 34180 (a) and 34171(d)(1)(G) provide that the repayment of this loan from the LMIHF must be approved by the Successor Agency, after approval of the Oversight Board, and the Oversight Board must establish and approve repayment schedules or other mandatory loan terms. Additionally, funds are to be repaid to the LMIHF in the manner prescribed in HSC Section 34176(e)(6)(B). H. The Successor Agency and Oversight Board previously recognized and approved the existing Supplemental Education Revenue Augmentation Fund (SERAF) and Education Revenue Augmentation Fund (ERAF) loans as part of the Recognized Obligations Payment Schedules (ROPS); and are concurrently considering the subject loans as part of ROPS 13-14A. Section 2. The Successor Agency hereby resolves and orders that the amount loaned by the former Community Redevelopment Agency of the City of Santa Ana from the Low and Moderate Income Housing Fund be repaid to the Successor Housing Agency per the attached repayment schedule, attached hereto as Exhibit A and incorporated herein by this reference, and be included on future Recognized Obligation Payment Schedules. Section 3. The Clerk of the Council shall certify to the adoption of this Resolution. 2 4-8 2/14/13 LES ADOPTED this day of 2013. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney 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. 2013- to be the original resolution adopted by the City Council acting as the Successor Agency on February, 2013. Date: Maria D. Huizar, Clerk of the Council 3 4-9 EXHIBIT A CITY OF SANTA ANA, ACTING AS SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA Educational Revenue Augmentation Fund (ERAF) / Supplemental Revenue Augmentation Fund (SERAF) Loan Repayment Schedule Funds Borrowed From: Former Low and Moderate Income Housing Fund Outstanding Balance Due as of 6130112: $ 5,568,314 Payment Date June 30, 2013 December 31, 2013 June 30, 2014 December 31, 2014 June 30, 2015 December 31, 2015 June 30, 2016 Total 1,000,000 1,000,000 1,000,000 1,000,000 784,157 784,157 $ 5,568,314 5,568,314 4,568,314 3,568,314 2,568,314 1,568,314 784,157 * Note: Health & Safety Code § 34176, subd. (e)(6)(B) specifies the loan repayment calculations, which is based on factors not yet determined. Therefore, these repayment amounts are inherently only estimates and are subject to change. 4-10 REVISED 2/14/13 LES SUCCESSOR AGENCY RESOLUTION NO. 2013- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ACTING AS SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA ESTABLISHING A SCHEDULE TO REPAY FUNDS ADVANCED FROM THE SOUTH MAIN CORRIDOR FUND FOR SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND LOAN 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, conclusively 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 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 of the Successor Agency to the former Community Redevelopment Agency of the City of Santa Ana ("Oversight Board"). C. The Oversight Board has been established to direct the Successor Agency to take certain actions to wind down the affairs of the former Agency in accordance with the California Health & Safety Code. D. In order for the former Agency to make its Supplemental Educational Revenue Augmentation Fund ("SERAF") payment to the State in May 2010, the Agency borrowed funds in the amount of $6,302,827 from the South Main Commercial Corridor Fund. Other funds were borrowed from the Agency's Low and Moderate Income Housing fund in order to pay the balance to the State. The amount currently owed to the South Main Commercial Corridor Fund is $6,000,000. E. The repayment of this loan and use of the proceeds is under dispute with the State Department of Finance, however they have indicated that the Oversight Board needs to approve the repayment schedule. As required by the Dissolution Act [HSC Sections 34180(a) and 34171(d)(1)], and pursuant to the December 18, 2012 ROPS Determination Letter received from the State Department of Finance (DOF), the Oversight Board must establish and approve repayment schedules or other mandatory Exhibit 4 4-11 2/14/13 LES loan terms. Successor Agency action is required to follow Oversight Board action pursuant to Section 34180. F. The Successor Agency and Oversight Board previously recognized and approved the existing Supplemental Education Revenue Augmentation Fund (SERAF) and Education Revenue Augmentation Fund (ERAF) loans as part of the Recognized Obligations Payment Schedules (ROPS); and are concurrently considering the subject loans as part of ROPS 13-14A. Section 2. The Successor Agency hereby resolves and orders that the amount loaned by the former Community Redevelopment Agency of the City of Santa Ana from the South Main Commercial Corridor Fund be repaid to the Successor Agency for utilization for public improvements within a specified area as prescribed in the Stipulated Judgment dated March 2, 1984 for the South Main Street Redevelopment Project [Peebler et al. v. City of Santa Ana, Orange County Superior Court (1982) Case No. 38 58 59)] per the attached repayment schedule, attached hereto as Exhibit A and incorporated herein by this reference, and be included on future Recognized Obligation Payment Schedules. Section 3. The Clerk of the Council shall certify to the adoption of this Resolution ADOPTED this day of , 2013. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Lisa E. Storck Assistant City Attorney AYES: NOES: Councilmembers: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATION OF ATTESTATION AND ORIGINALITY 4-12 2/14/13 LES I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2013- to be the original resolution adopted by the City Council acting as the Successor Agency on February, 2013. Date: Maria D. Huizar, Clerk of the Council 3 4-13 EXHIBIT A CITY OF SANTA ANA, ACTING AS SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA Supplemental Revenue Augmentation Fund (SERAF) Loan Repayment Schedule Funds Borrowed From: South Main Commercial Corridor Fund Outstanding Balance Due as of 6130112: $ 6,000,000 Payment Date Repayment Amount June 30, 2013 $ - December 31, 2013 500,000 June 30, 2014 500,000 December 31, 2014 500,000 June 30, 2015 500,000 December 31, 2015 500,000 June 30, 2016 500,000 December 31, 2016 500,000 June 30, 2017 500,000 December 31, 2017 500,000 June 30, 2018 500,000 December 31, 2018 500,000 June 30, 2019 500,000 Total $ 6,000,000 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 4-14