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Home My WebLink About 4 - JOINT - RESO - 2011 BONDSREQUEST FOR COUNCIL / SUCCESSOR AGENCY ACTION CITY COUNCIL MEETING DATE: OCTOBER 4, 2016 TITLE: RESOLUTION APPROVING A PLAN FOR SPENDING EXCESS 2011 SERIES A TAX ALLOCATION BONDS AND AUTHORIZING A BOND PROCEEDS EXPENDITURE AGREEMENT; APPROPRIATION ADJUSTMENT TO TRANSFER 2011 SERIES A BOND PROCEEDS TO THE CITY (STRATEGIC PLAN NOS. 4, 1 & 6, 1G) `�a 4, /In;r/ CITY MANA R RECOMMENDED ACTION CITY COUNCIL ACTION CLERK OF COUNCIL USE ONLY: IG1�:Zi��l ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2 "d Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution approving a plan for spending excess tax allocation bond proceeds from the 2011 Series A Tax Allocation Bonds, authorizing a bond proceeds expenditure agreement with the Successor Agency, and making certain findings in connection therewith. Authorize the City Manager and the Clerk of the Council to execute the Bond Proceeds Expenditure Agreement with the Successor Agency to the former Community Redevelopment Agency to receive current excess bond proceeds in the amount of $260,695 and any future excess bond proceeds, and to expend the funds for capital improvements, subject to non - substantive changes approved by the City Manager and City Attorney. Approve an appropriation adjustment recognizing $260,695 in the Successor Agency's 2011 Series A Bonds prior year carry forward account (no. 65418002 - 50001) and appropriating same to the expenditure account (no. 65418020 - 69142); approve an appropriation adjustment recognizing $260,695 in the Parking Fund in revenue account (no. 02710002- 59899) and appropriating same to expenditure account (no. 02710132- 66200). SUCCESSOR AGENCY ACTION Adopt a resolution approving a plan for spending excess tax allocation bond proceeds from the 2011 Series A Tax Allocation Bonds, authorizing a bond proceeds expenditure 4 -1 Resolution, Agreement, and Appropriation Adjustment — Tax Allocation Bonds, 2011 Series A October 4, 2016 Page 2 agreement with the City of Santa Ana, directing the transfer of funds to the City, and making certain findings in connection therewith. 2. Authorize the City Manager and the Clerk of the Council to execute the Bond Proceeds Expenditure Agreement with the City of Santa Ana to transfer current excess bond proceeds in the amount of $260,695 and any future excess bond proceeds to the City for capital improvements, subject to non - substantive changes approved by the City Manager and City Attorney. DISCUSSION Pursuant to Part 1.85 of Division 24 of the California Health & Safety Code ( "Dissolution Law "), the City Council on January 9, 2012, elected for the City to act as the "Successor Agency" to the dissolved Community Redevelopment Agency ( "Agency "). On February 1, 2012, in accordance with the Dissolution Law 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 Law as amended by AB 1484, AB 471, and SIB 107, to administer the enforceable obligations of the Agency and otherwise unwind the Agency's affairs. All actions of the Successor Agency are subject to the review and approval by the Oversight Board. The Agency previously issued its Merged Project Area, Tax Allocation Bonds, 2011 Series A, in the amount of $66,790,000 to: (1) defease the Santa Ana Financing Authority's Refunding Revenues Bonds Series A, B, C, and D, and (2) finance redevelopment activities related to the Merged Project area including certain public parking and infrastructure improvements. Of the original $66.79 million, $6.1 million was new bond proceeds for the public improvements. In 2011, the Agency, through a cooperative agreement with the City, took steps to begin the design phase of the improvements to the public parking structures in the downtown area. However, the Dissolution Law prohibited the Agency from creating new debts and incurring any new obligations. Therefore, bond proceeds in the amount of $6,092,482.68 are currently remaining as of August 31, 2016. Health and Safety Code Section 34191.4(c) allows a successor agency that has received a finding of completion to use bond proceeds from bonds issued prior to January 1, 2011, as well as a limited portion of bond proceeds from bonds issued on or after January 1, 2011 for the purposes for which the bonds were sold. The Successor Agency received its Finding of Completion on November 26, 2014, and accordingly it now has authority to expend five percent of the bond proceeds ($260,695) in a manner consistent with the original bond covenants. In order to accomplish this, the Successor Agency included this amount on the Recognized Obligation Payment Schedule (ROPS) 16 -17 and planned to expend via transfer of funds to the City, as allowed by the Dissolution Law. On May 17, 2016, the State Department of Finance (DOF) pre- authorized the transfer of $260,695 of 4 -2 Resolution, Agreement, and Appropriation Adjustment — Tax Allocation Bonds, 2011 Series A October 4, 2016 Page 3 the 2011 Series A bond proceeds to the City, pending final review of the bond expenditure agreement between the City and the Successor Agency approved by the Oversight Board. Upon the City Council and Successor Agency Board's approval of the recommended actions, the bond proceeds expenditure agreement will be submitted to the Oversight Board for approval on October 11, 2016. The City plans to expend the bond proceeds to construct public parking and infrastructure improvements within the former Agency's Merged Project Area, in compliance with the bond covenants (Exhibit B of Exhibits 1 & 2). STRATEGIC PLAN ALIGNMENT Approval of this item assists the City in meeting Goal #4 — City Financial Stability, Objective #1 (Maintain a stable, efficient and transparent financial environment); Goal #6 — Community Facilities & Infrastructure, Objective #1 (Establish and maintain a Community Investment Plan for all City assets), Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment and Deferred Maintenance Plans (e.g. transit vision, street car, fixed guideway project, SARTC master plan, Bristol Street widening, neighborhood streets, traffic improvements, park facilities, sport fields, soccer fields, senior centers, bike master plan, etc.). FISCAL IMPACT Approval of the appropriation adjustment will recognize $260,695 in the Successor Agency's 2011 Series A Bonds prior year carry forward account (no. 65418002- 50001) and appropriate same to the expenditure account (no. 65418020 - 69142). The appropriation adjustment will also recognize $260,695 in the Parking Fund in revenue account (no. 02710002 - 59899) and appropriate same to expenditure account (no. 02710132 - 66200) for anticipated expenditure in FY 2016 -17. Robert Cortez Deputy City Manager City Manager's Office SG /sb APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance and Management Services Agency Exhibits: 1. City Council Resolution (with Bond Spending Plan) 2. Successor Agency Resolution (with Bond Spending Plan) 3. Bond Proceeds Expenditure Agreement 4 -3 4 -4 JOINT SESSIONS OF THE SUCCESSOR AGENCY AND THE CITY COUNCIL For exhibits 1, 2 and 3 related to Item SA -4, please see Item 80B of the City Council agenda. M HP