OVERSIGHT BOARD TO THE SUCCESSOR AGENCY TO THE STANISLAUS COUNTY REDEVELOPMENT AGENCY STAFF REPORT

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1 August 9, 2012 Item No. VII-B OVERSIGHT BOARD TO THE SUCCESSOR AGENCY TO THE STANISLAUS COUNTY REDEVELOPMENT AGENCY STAFF REPORT SUBJECT: Approval of Recognized Obligation Payment Schedule (ROPS) for January to June RECOMMENDATION: 1. Approve the Recognized Obligation Payment Schedule (ROPS) for January to June Approve the attached Draft Resolution approving the ROPS for January to June Authorize the Chair of the Oversight Board to sign the ROPS for January to June Direct the Department of Planning and Community Development to take all actions required under law including, but not limited to, forwarding the approved ROPS to the Stanislaus County Auditor-Controller, California Department of Finance, and California State Controller s Office. DISCUSSION: The Redevelopment Agency Dissolution Act (the Dissolution Act ) (ABx1 26) requires that an oversight board approve the Recognized Obligation Payment Schedule (ROPS) prepared by the successor agency before it can be transmitted to the Stanislaus County Auditor-Controller, California Department of Finance and the State Controller s Office. A ROPS lists all of the enforceable obligations of the former redevelopment agency and, commencing on May 1, 2012, only those payments listed on the ROPS may be made by the Successor Agency. After May 1, 2012, the Successor Agency will only receive a distribution of property tax funding (deposited into a Redevelopment Property Tax Trust Fund (RPTTF)) equal to the amount needed to make the payments listed on the ROPS. The first two ROPS covering January to June 2012, and July to December 2012, were required to be submitted to the County s Auditor-Controller, California State Controller s Office and California Department of Finance by April 15, 2012, and May 15, 2012 (respectively). The Oversight Board (OB) of the Successor Agency of the Stanislaus County Redevelopment Agency (Agency) approved the first two ROPS on April 12, 2012, and both ROPS were submitted to the appropriate agencies on April 13, 2012.

2 Oversight Board Meeting Item No. VII-B August 9, 2012 Page 2 The DOF responded to the ROPS submittal on April 26, 2012, (See Attachment 1) and determined that the following two items reflected on the ROPS were not enforceable obligations: Public Works Infrastructure Agreement Housing Set Aside Fund LMI Housing Fund/1991 CRLA Agreement In response to the DOF s determination, Agency staff contacted the DOF and provided information to clarify the obligations via and phone; however, the DOF never formally responded to the clarifications provided by staff. Since the first DOF response did not clearly state if it was in response to both submitted ROPS and no formal response to the clarification provided by staff had been received, Agency staff re-submitted the July to December 2012 ROPS on May 14, The DOF responded to both ROPS on May 25, 2012, with a determination that the same two items, as identified in the April 26, 2012, DOF letter, were not enforceable obligations (See Attachment 2). The stated reasons for the determination remained the same. Sections 34167(d) and 34171(d)(1) of the Dissolution Act define "Enforceable Obligations" to include: bonds, including the required debt service, reserve set-asides, and other required payments under the indenture; loans legally required to be repaid pursuant to a payment schedule with mandatory repayment terms; payments required by the Federal government, pre-existing obligations to the State or obligations imposed by State law, or payments required in connection with the agency's employees (e.g., pension payments, etc.); judgments, court approved settlements, or binding arbitration decisions that bind the agency; legally binding and enforceable agreements or contracts; and contracts or agreements necessary for the continued administration or operation of the agency, including agreements to purchase or rent office space, equipment, and supplies. On July 3, 2012, Successor Agency staff presented the Oversight Board with amended ROPS for both January to June 2012 and July to December The approved amended ROPS were submitted to the DOF on July 6, 2012, along with a formal letter requesting that DOF reconsider its determination regarding the two agreements, and find them to be enforceable obligations (See Attachments 3 and 4). On July 12, 2012, the DOF notified all success agencies that they would no longer be accepting revised ROPS or requests to reconsider denied items and that all request to reconsider denied or disputed ROPS items will be addressed in their January to June 2013 ROPS review. On July 17, 2012, the California Rural Legal Assistance (CRLA) submitted a letter to the DOF in support of the Successor Agency s request for reconsideration. (See Attachment 5) The DOF has indicated that they will consider CRLA s letter and supporting documentation as part of the January to June 2013 ROPS review.

3 Oversight Board Meeting Item No. VII-B August 9, 2012 Page 3 The proposed January to June 2013 ROPS (Attachment 6) is in a new format as required by the DOF. The new form includes the following changes: Agencies must report actual amounts paid from Redevelopment Property Tax Trust Fund (RPTTF) from previous period (January to June 2012). Agencies must report anticipated RPTTF funding for the current period (January to June 2013) All enforceable obligations must now be listed on one form regardless of funding source or project area. Agencies are no longer required to report monthly enforceable obligation estimates. Instead only the six-month estimated amounts are required. Funding source columns have been designated. A column for contract/agreement termination date has been added. A Notes form is now available for agencies to provide additional and necessary information relating to the enforceable obligations listed on the ROPS. This form is optional and should be sued at the agency s discretion. Success Agency staff has incorporated the following amendments approved by the Oversight Board on July 3 rd into the new ROPS form: The project name relating to the 1991 CRLA Agreement has been revised from Housing Set Aside Fund to 1991 CRLA Agreement and the description has been revised LMI Housing Fund/1991 CRLA Agreement to Affordable housing programs. These revisions address the DOF s mistaken understanding that the CRLA agreement is a continuation of the California Redevelopment Law s 20- percent Housing Set-Aside, which ended with the passing of the Dissolution Act. Notes relating to the Public Works Agreement, has been revised to reflect the replacement of tax increment with property tax revenue in accordance with ABx1 26 and to replace reference to the former Redevelopment Agency with Project No. 1. The language indicating that collected funds have not been expended under the agreement has been removed since expenditure status has no relevance to the determination of an enforceable obligation under ABx1 26. Notes relating to the 1991 CRLA Agreement, has been revised to replace the term tax increment with property tax revenue in accordance with ABx1 26 and to replace the reference to the former Redevelopment Agency with Project No. 1. As amended on July 27, 2012, with the passage of Assembly Bill (AB) 1484 (the Redevelopment Dissolution/Unwind Trailer Bill ), the proposed ROPS must be submitted to the DOF no later than September 4, 2012, (September 1, 2012, the submittal date specified in statute, falls on a Saturday and the next business day, September 3, 2012, is the Labor Day Holiday) and the DOF now has five (5) days to request a review and forty-five (45) days to review the ROPS (previously they had only three (3) and ten (10) days respectively). Upon the DOF s determination, the Successor

4 Oversight Board Meeting Item No. VII-B August 9, 2012 Page 4 Agency now has five (5) days to request additional review by the DOF and an opportunity to meet and confer on disputed items. The DOF is required to notify the Successor Agency and County Auditor-Controller of its review by December 18, Submittal of the approved January to June 2013 ROPS will include resubmittal of the Successor Agency s July 6, 2012, response letter to the DOF and CRLA s July 17, 2012, letter of support to the DOF. Successor Agency staff is prepared to request additional review and to meet and confer with the DOF; however, if the DOF still does not determine the two agreements in question to be enforceable obligations following the opportunity to meet and confer, the Successor Agency s only options, at that time, will be: 1) a legal challenge to the DOF s determination; and/or, 2) continued support for further efforts to amend the Dissolution Act. ATTACHMENTS: 1. April 26, 2012, California State Department of Finance (DOF) ROPS Approval Letter 2. May 25, 2012, DOF ROPS Approval Letter 3. July 3, 2012, Oversight Board Approved Amended Recognized Obligation Payment Schedule (ROPS) for January to June 2012 and July to December July 6, 2012, Successor Agency Response Letter to the DOF May 25, 2012, Approval Letter (without attachments) 5. July 17, 2012, letter from the California Rural Legal Assistance to the DOF 6. Proposed ROPS for January to June Draft Resolution No i:\rda\successor agency\oversight board\meetings\august 9, 2012\january to june, 2013 rops\ _staff report_third rops final version.doc

30 SUMMARY OF RECOGNIZED OBLIGATION PAYMENT SCHEDULE Filed for the January 1, 2013 to June 30, 2013 Period Name of Successor Agency: Stanislaus County Successor Agency Total Outstanding Debt or Obligation Outstanding Debt or Obligation $ 64,012,975 Current Period Outstanding Debt or Obligation A Available Revenues Other Than Anticipated RPTTF Funding 0 B Enforceable Obligations Funded with RPTTF C Administrative Allowance Funded with RPTTF D Total RPTTF Funded (B + C = D) Total Current Period Outstanding Debt or Obligation (A + B + C = E) Should be same amount as ROPS form six-month total $ 553,032 E Enter Total Six-Month Anticipated RPTTF Funding 553,032 F Variance (D - E = F) Maximum RPTTF Allowable should not exceed Total Anticipated RPTTF Funding $ - Prior Period (January 1, 2012 through June 30, 2012) Estimated vs. Actual Payments (as required in HSC section (a)) G Enter Estimated Obligations Funded by RPTTF (Should be the same amount as RPTTF approved by Finance, including admin allowance) 647,526 H Enter Actual Obligations Paid with RPTTF 506,180 I Enter Actual Administrative Expenses Paid with RPTTF 112,134 J Adjustment to Redevelopment Obligation Retirement Fund (G - (H + I) = J) K Adjustment to RPTTF $ 523, Certification of Oversight Board Chairman: Pursuant to Section 34177(m) of the Health and Safety code, Name Title I hereby certify that the above is a true and accurate Recognized Obligation Payment Schedule for the above named agency. Signature Date

31 Name of Successor Agency: Stanislaus County County: Stanislaus County Oversight Board Approval Date: August 9, 2012 RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS III) January 1, 2013 through June 30, 2013 Item # Project Name / Debt Obligation Grand Total Contract/Agreement Execution Date Total Funding Source Outstanding Total Due During Contract/Agreement Termination Date Payee Description/Project Scope Project Area Debt or Obligation Fiscal Year LMIHF Bond Proceeds Reserve Balance Admin Allowance RPTTF Other Six-Month Total $ 64,012,975 $ 1,836,504 $ - $ - $ - $ 138,500 $ 414,532 $ - $ 553,032 1 Salida Storm Drain Loan 8/19/2003 8/1/2041 USDA-Rural Development Loan for public infrastructure No. 1 7,036, , ,699 85,699 2 Keyes Tax Allocation Bond 12/8/2005 8/1/2036 Bank of New York Loan for public infrastructure No. 1 21,345, ,163, , ,833 3 Bret Harte Sewer Loan 4/12/ /12/2015 CA Water Quality Control BoardLoan for public infrastructure No , , Cal HFA 4/12/2005 4/1/2015 CA Housing Finance Agency Down Payment Assistance - LMI No , Employee Retirement Obligation 12/2008 3/2012 Stanislaus County Staff Retirement Expenses No Keyes Bond Administration 12/8/2005 8/1/2036 Bank of New York Annual Bond Administration No. 1 36, , Keyes Bond Arbitrage 12/8/2005 8/1/2036 Bank of New York 5 year Bond Arbitrage No. 1 20, Housing Rehabilitation 10/1/2010 See Notes Housing Authority Housing rehabilitation program contract No CLRA Agreement 11/5/1991 6/25/2042 Successor Housing Agency Affordable housing programs No. 1 7,544, See Notes See Notes - 10 Public Works Infrast. Agreement 6/20/2011 6/25/2042 Stan. County Public Works Public infrastructure projects No. 1 26,596, See Notes See Notes - 11 Administrative allowance NA NA Stanislaus County Successor Agency administration No , , , ,

32 Name of Successor Agency: County: Stanislaus County Stanislaus County RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS III) -- Notes (Optional) January 1, 2013 through June 30, 2013 Item # Notes/Comments 5 The Employee Retirement Obligation has been paid-off. 8 The Housing Rehabilitation obligation has been paid-off. The "Contract/Agreement Termination Date" was until project complete or all funds expended. The 1991 CRLA Agreement was determined by Department of Finance (DOF) on April 26, 2012 and May 25, 2012 not to be an enforceable obligation. Amended ROPS and support information to clarify that this item is an enforceable obligation were provided to the DOF by the Successor Agency on July 6, 2012 and resubmitted to the DOF with this January to June, 2013 ROPS. "Total Due During Fiscal Year " is 5% of the Gross Property Tax Revenue, in accordance with ABx1 26, that is generated by Project No The Public Works Infrastructure Agreement was determined by Department of Finance (DOF) on April 26, 2012 and May 25, 2012 not to be an enforceable obligation. Amended ROPS and support information to clarify that this item is an enforceable obligation were provided to the DOF by the Successor Agency on July 6, 2012 and resubmitted to the DOF with this January to June, 2013 ROPS. "Total Due During Fiscal Year " is the actual net Fiscal Year Gross Property Tax Revenue, in accordance with ABx1 26, that is generated by Project No "Total Outstanding Debt or Obligation" for this line item reflects only the current Fiscal Year total and will be updated annually.

33 Name of Successor Agency: County: Stanislaus County Stanislaus County Pursuant to Health and Safety Code section (a) PRIOR PERIOD ESTIMATED OBLIGATIONS vs. ACTUAL PAYMENTS RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS I) January 1, 2012 through June 30, 2012 LMIHF Bond Proceeds Reserve Balance Admin Allowance RPTTF Other Page/Form Line Project Name / Debt Obligation Payee Description/Project Scope Project Area Estimate Actual Estimate Actual Estimate Actual Estimate Actual Estimate Actual Estimate Actual Grand Total $ - $ - $ - $ - $ - $ - $ - $ - $ 647,526 $ 618,314 $ - $ Salida Storm Drain Loan USDA-Rural Development Loan for public infrastructure project No. 1 86,488 $ 86, Keyes Tax Allocation Bond Bank of New York Loan for public infrastructure project No ,970 $ 339, Bret Harte Sewer Loan CA Water Quality Control BdLoan for public infrastructure project No. 1 - $ Cal HFA CA Housing Finance AgencDown payment assistance - LMI No Employee Retirement Obligation Stanislaus County Staff retirement expense No. 1 30,761 30, Keyes Bond Administration Bank of New York Annual bond administration No. 1 1,600 1, Keyes Bond Arbitrage Bank of New York 5 year bond arbitrage No Housing Rehabilitation Housing Authority Housing rehabilitation program contract No. 1 47,361 47, Housing Set Aside Fund Successor Housing Agy LMI Housing Fund/1991 CRLA Contract No Public Works Infrast. Agreement Stanislaus Co. Public Wk Public infrastructure projects No Administrative Allowance Stanislaus County Administration No , ,134

34 OVERSIGHT BOARD TO THE SUCCESSOR AGENCY TO THE STANISLAUS COUNTY REDEVELOPMENT AGENCY RESOLUTION NO DATE: August 9, 2012 SUBJECT: Approval of a Recognized Obligation Payment Schedule (ROPS) for January to June On the motion of, seconded by, and approved by the following vote: Ayes: Noes: Absent: Abstained: THE FOLLOWING RESOLUTION WAS ADOPTED: WHEREAS, on February 1, 2012, the Stanislaus County Redevelopment Agency was dissolved pursuant to the Redevelopment Agency Dissolution Act (ABx1 26), enacted by the State Legislature, and signed by the Governor, as part of the Fiscal Year State budget bill, and subsequently modified by the State Supreme Court; and WHEREAS, pursuant to section of ABx1 26, the County of Stanislaus assumed the role of the successor agency to the former Stanislaus County Redevelopment Agency ( Successor Agency ), and is responsible for winding down the activities of the former Redevelopment Agency; and WHEREAS, ABx1 26 requires the Successor Agency to prepare a Recognized Obligation Payment Schedule (ROPS) for each six month period and submit it to the Oversight Board for approval; and WHEREAS, the ROPS for the period of January 1, 2013, through June 30, 2013, has been considered by the Oversight Board at a public meeting; NOW, THEREFORE, BE IT RESOLVED that this Oversight Board: 1. Hereby adopts the proposed ROPS for January 1, 2013, through June 30, This resolution shall take effect from and after the date of its passage and adoption, August 9, 2012.

35 Stanislaus County RDA Oversight Board Resolution No August 9, 2012 Page 2 to: BE IT FURTHER RESOLVED that this Oversight Board directs Successor Agency staff 1. Take all actions required by the Redevelopment Agency Dissolution Act (ABx1 26), including but not limited to, forwarding the approved ROPS to the Stanislaus County Auditor-Controller, the California Department of Finance, and the California State Controller s Office. 2. Resubmit the Successor Agency s letter, dated July 6, 2012, requesting that the Department of Finance reconsider its determination that the Public Works Infrastructure Agreement and 1991 CRLA Agreement are not enforceable obligations. 3. Request additional review, and to meet and confer with the Department of Finance, should the Department of Finance find, again, that the Public Works Infrastructure Agreement and 1991 CRLA Agreement are not enforceable obligations. ATTEST: APPROVED AS TO FORM: Brenda McCormick Oversight Board Clerk Thomas Boze Deputy County Counsel

Successor Agency Contact Information. 110 E. Main Street, Los Gatos Contact Phone Number: Contact Address:

Successor Agency Contact Information Name of Successor Agency: County: Santa Clara Primary Contact Name: Stephen Conway Primary Contact Title: Director of Finance/Admin Services Address 110 E. Main Street,