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Home My WebLink About2013-01-15 e-packetP.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM, -1-OPFLOOR 100 GRAND AVFNUE TUESDAY, JANUARY 15, 2013 2:00 p.m. NO'FICE IS HEREBY GIVEN, pursuant to Section 54956 ol'the Government Code of, (Ile State of California, die, Oversight Board for the Successor Agency to the City of'South Sail franc ISCO Redevc1opi-lient, Agency will hold a Special Meeting on'l'ucsda.y, [Ile 15di day o1january, 2013, at 2-00 p.in., in the Large Conference Room, 'lop Floor at. City Hall, 400 Grai-id Avenue, South Sail Francisco, California. In accordance with California Government. ("ode Section 54957.5, any writing or (10CLIMCIII that is a public record, relates to all open session agenda itein, ai-ad is distributed less than 72 hours prior to a regular meeting; will be inadc available 16r public inspection in dic City Clerk's Office located at C111, Hall, 11, however, the document or writing is not distributed until dic regular nlectiug to whicli it, relates, then (lie document or writing will be made available to the public at the location of' the meeting, as listed oil this agenda. 'I'lic address of' City Hall is 400 Grand Avenue, Solid-I Sail Francisco, California 94080. In compliance with Americans with Disabilities Act, if you need special assistance to participate III tills meeting, please contact the South Sail Francisco, City Clerk's Office at (6 a0) 877-8518. Notification 48 hours in advance of' d-ic meeting will enable the City to make reasonable arrangcnients to ensure accessibility to this inceting. Chairperson: Neil CLIflen Selected by: Largest Special District of the type in MR. Code Section 34188 Vice Chair: Denise Porterfield Selected b : San Mateo County Superintendent of Schools Deputy Superintendent, Fiscal and Operational Services San Mateo County Office of Education Alternate: Patti Emsberger Assistant Superintendent, Business Services South San Francisco Unified School District Board Members: MarkAddiego Councilmember, City of South San Francisco Alternate: Barry Nagel City Manager, City of South. San Francisco Gerry Beaudin Principal Plaimer, City of South San Francisco Selected by: Mayor of the City of South San Francisco Mayor of the City of South San Francisco Barbara Christensen Chancellor of California Community College Director of Community/Government Relations, San Mateo County Community College District Reyna Farrales Deputy County Manager, San Mateo County Paul Scannell Counsel Craig Labadie San Mateo County Board of Supervisors San Mateo County Board of Supervisors (Public Member) Advisory: Marty Van Duyn — Assistant City Manager, City of South San Francisco Jim Steele -- Finance Director, City of South San Francisco Steve Mattas - City Attorney, City of South San Francisco Krista Martinelli — City Clerk, City of South San Francisco Armando Sanchez — Redevelopment Consultant, City of South San Francisco PLEDGE OF ALLEGIANCE 0WRSIGHTBOARD RF,(;TJIAR MEFAING JANUARY 15, 2013 AGENDA PAGE, 2 AGENDA REVIEW PUBLIC COMMENTS Comments from members of the public on items not on this meeting agenda. The Chair may set time limit for speakers. Since these topics are non-agenda items, the Board may briefly respond to statements made or questions posed as allowed by the Brown Act (Government Code Section 54954.2). However, the Board may refer items to staff 1:'or attention, or have a matter placed on a future agenda for a more comprehensive action report. MATTERS FOR CONSIDERATION Presentation of Due Diligence Review (DDR)- Non- Housing Funds available for distribution to taxing entities. 2. Loan agreements between the City of South San Francisco and the Successor Agency to the Redevelopment Agency of South San Francisco for payment of several enforceable obligations. a. Resolution of the Successor Agency to the Redevelopment Agency of the City of South San Francisco approving a Loan Agreement in the amount of $210,635.50 with the City of South San Francisco to allow the Successor Agency to make payments related to a settlement agreement for a claim that had been on prior to recognized obligations payment schedules. b. Resolution of the Successor Agency to the Redevelopment Agency of the City of South San Francisco approving a Loan Agreement in the amount of $27,937.50 with the City of South San Francisco to allow the Successor Agency to make a recognized obligation payment for debt service bonds issued by the former Redevelopment Agency. c. Resolution of the Successor Agency to the Redevelopment Agency of the City of South San Francisco approving a. Loan Agreement in the amount of $74,160.71 with the City of South San Francisco to allow the Successor Agency to make payments for several non-housing recognized obligation payment expenses incurred but not Invoiced until after June 30, 2012. OVE,RSIGMTBOARD RLGULAR MEETING JANUARY 15, 201A3 AGENDA PAGE, 3 3. Future Agenda Items. a) Property Disposition Plan. b) Review of Former Redevelopment (RDA) Employee Staffing, and Next Steps for Calculating RDA Share of Unfunded Retirement and Retiree Health Liabilities. c) RODS and Administrative Budget for the July I to December 31, 2013 time period. ADJOURNMENT City Clerk OVERSIGHTBOARD REGUAR MEETING JAM JARY 15, 2013 AGENDA PAGE 4 z DATE: January 15, 2013 TO: Members of the Oversight Board FROM: Jim Steele, Finance Director iff SUBJECT, TRANSMITTAL OF REDEVELOPMENT SUCCESSOR AGENCY NON-HOUSING FUNDS DUE DILIGENCE REVIEW OF CASH AND CASH EQUIVALENTS AVAILABLE FOR DISBURSEMENT TO TAXING ENTITIES It is recommended that the Oversight Board review the attached Redevelopment Successor Agency Non-Housing Funds Due Diligence Review. Staff will present this report at the January 15 meeting, and after a minimum five working day public comment period, the Board will be asked to formally certify this Review via Resolution at the January 23 Special Meeting. Assembly Bill 1484 (AB 1484) lays out procedures for the verification of available fund balances from the former Redevelopment Agencies in California, and further lays out a process for those funds' review by a licensed accountant to determine the unobligated balance available from Successor Agency non- Housing dollars for distribution to taxing agencies. (The Housing Fund dollars have already been distributed under an earlier process). On January 10, 2013, staff transmitted the attached Non-Housing Funds Due Diligence Review (DDR) to the State Department of Finance and the County Auditor Controller as required under AB 1484, with an electronic copy to the Oversight Board. Staff had contracted with the firm of Badawi and Associates Certified Public Accountants to complete the DDR, which is attached. The following is a summary of the results. Exhibit 9 (the last page) of the DDR identifies the total assets held by the Successor Agency as of June 30, 2012, and shows no dollars to be distributed to taxing entities. The Oversight Board may recall that it has approved (in BOPS 1) setting aside any surplus cash towards the purpose of calling the 2006 RDA Bonds at their first call date on 911/16, up to a not to exceed $60 million. (This DDR results in an additional surplus of $4,27 million able to be set aside in the bond escrow account, for a new total of approximately $54.5 million set aside). A summary of Exhibit 9 follows. Staff Report Subject: Non-Housing Funds Due Diligence Review Page 2 Total Assets as of 6/30/12 Less Legally Restricted Assets Less Physical Assets (not cash equivalents) Less balances for enforceable obligations Less balances needed to satisfy 2012-13 ROPS Rounding Amount available to remit to County for distribution to taxing entitites: $000's $ 142,789 $ (5,460) $(62,482) $(65,600) $ (9,246) $ (1) Staff also wishes to call attention to the other highlights of the DDR: Item 2C, Page 3: City owned Land valued at $8.76 million to be transferred to Successor Agency The following supplements the information provided by the Auditor in Section 2(C). In summary, pursuant to a Purchase and Sale Agreement and an Owner Participation Agreement entered into in March 2011, the former Agency paid for acquisition of property in the Downtown Central Redevelopment Area. Specifically, on March 9, 2011, pursuant to Health and Safety Code sections 33205, 33220 and 33437, which were then and are still in effect, the City of South San Francisco and the former South San Francisco Redevelopment Agency approved an Owner Participation Agreement (OPA) and the City of South San Francisco, the former Redevelopment Agency and the Gonzalez Family Trust approved a Purchase and Sale Agreement (PSA) pursuant to which the City received title to six parcels of land (hereafter "Property") from the Gonzalez Family Trust and the former Redevelopment Agency agreed to fund the purchase in exchange for the City's agreement that the City "(i) shall not use or develop the Property [in a manner] that violates the requirements of the [Downtown Central] Redevelopment Plan, (ii) shall not enter into any agreement regarding the sale, rental, management, repair, improvement, or any other matter affecting the Property that would be inconsistent with the Redevelopment Plan and the Implementation Plan without the prior written consent of the Agency...". The Auditor has recognized the Purchase and Sale Agreement as an enforceable obligation. The auditor is recommending, however that notwithstanding the existence of an enforceable obligation related to the transfer of funds, the Successor Agency should request that the City convey the former Gonzalez properties to the Successor Agency for disposition by the Successor Agency. Staff accepts the auditors finding as consistent with AB 1484, Staff Report Subject: Non-Housing Funds Due Diligence Review Page 3 Management Response to Item 8 (Page 6) The auditor pointed out that the funds set aside in the bond escrow account were not memorialized into a formal Trust agreement until September 2012, which is after the June 30, 2012 time period of this DDR. Staff included a response to make clear that regardless of when the formal trust was finalized, the dollars were correctly set aside as of June 30, 2012 for purposes of calling the 2006 RDA Bonds, as approved in RODS I by both the Oversight Board and the State. Management Response to Item 8 (Page 7) Similar to the bond escrow account management response, staff pointed out that the $6.0 million was set aside per ROPE I for the Oyster Point Ventures Disposition and Development Agreement (DDA). Since that time, a formal escrow account agreement has been executed with Bank of New York and funds will be disbursed from the Successor Agency to Bank of New York after the DDR is approved by the Oversight Board. By: Approve Jim 6ke Marty Van Duyn d Finance Director Assistant City Manage and Director of Economic and Community Development Attachment: DDR JS/MVD/js Cl*ty rrr r/ p r� Y' re a� Redevelopment it rOl�w "�a �iieiio „� °io �� iirco� ,,,� %�. � �� „�.✓!` �..,. „r�., �G/ /��r0� rn�� i� /rr ii�eP �i ;j M,!jj Independent Accountants" Report on Applyin,&j Agreed-Upon Procedures f Aggregate Remaining Funds of the RDA Successor Agency California Asse lr Bill o 1484 84 CERTIFIED PUBLIC ACCOUKI < BADAWI &ASSOCIATES CERTIFIED PUBI.ICACCOJNTANTS INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED -UPON PROCEDURES ON THE AGGREGATE REMAINING FUNDS OF THE RDA SUCCESSOR AGENCY IN ACCORDANCE WITH CALIFORNIA ASSEMBLY BILL NO. 1484 To the Oversight Board of the City of South San Francisco Redevelopment Agency's Successor Agency South San Francisco, California We have performed the procedures enumerated below, which were agreed to by the City of South San Francisco Redevelopment Agency's Successor Agency (Successor Agency), solely to assist you in meeting the requirement of the due diligence review of the aggregate remaining funds of the Successor Agency, as required by the California Assembly Bill No, 1484. The Successor Agency's management is responsible for all schedules and exhibits prepared for this due diligence review. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in the report. Consequently, we make no representation regarding the sufficiency of the procedures described below, either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our results are described below: 1. Obtain from the Successor Agency a listing of all assets that were transferred from the former redevelopment agency to the Successor Agency on February 1, 2012. Agree the amounts on this listing to account balances established in the accounting records of the Successor Agency. Identify in the Agreed-Upon Procedures (AUP) report the amount of the assets transferred to the Successor Agency as of that date. See Exhibit 1. Results: No exceptions were noted as a result of our procedures. 2. If the State Controller's Office has completed its review of transfers required under both Sections 34167.5 and 34178.8 and issued its report regarding such review, attach a copy of that report as an exhibit to the AUP report. The State Controller's Office review has not occurred, therefore we will perform the following procedures: A. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the former redevelopment agency to the city, county, or city and county that formed the redevelopment agency for the period from January 1, 2011 through January 31, 2012. For each transfer, determine that the Successor Agency described the purpose of the transfer and described in what sense the transfer was required by one of the Agency's enforceable obligations or other legal requirements. See Exhibit 2 for listing of transfers. Address: 1 s O &aid kcnue 56te 95� Da%la,ul, "1.4612 - Phone; 510,768,825, - Fax: To the Oversight Board of the City of South San Francisco Redevelopment Agency's Successor Agency South San Francisco, California Page 3 B. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Successor Agency to the city, county, or city and county that formed the redevelopment agency for the period from February 1, 2012 through June 30, 201.2. For each transfer, determine that the Successor Agency described the purpose of the transfer and described in what sense the transfer was required by one of the Agency's enforceable obligations or other legal requirements, C. For each transfer, obtain the legal document that formed the basis for the enforceable obligation that required any transfer. Results: Accountant reviewed the transfers and noted that a transfer was made to the City in the amount of $8,762,821 for the acquisition of real properties pursuant to a Purchase and Sale Agreement by and amongst the Gonzales Family Trust, the City of South San Francisco and the Redevelopment Agency of South San Francisco. The Purchase and Sale Agreement was dated June 23, 2011, and the former RDA expended the acquisition funds. Pursuant to the Section 3 of the Purchase and Sale Agreement, an enforceable obligation, the City of South San Francisco received title to the properties via escrow on September 2, 2011. Notwithstanding the existence of an enforceable obligation related to the transfer of funds, the Successor Agency should request that the City convey the former Gonzalez properties to the Successor Agency for disposition by the Successor Agency, See Exhibit 2. 3. If the State Controller's Office has completed its review of transfers required under both Section-, 34167.5 and 34178.8 and issued its report regarding such review, attach a copy of that report as an exhibit to the AUP report. The State Controller's Office review has not occurred, therefore we will perform the following procedures: A. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the former redevelopment agency to any other public agency or to private parties for the period from January 1, 2011 through January 31, 2012. For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency's enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. B, Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Successor Agency to any other public agency or private parties for the period from February 1, 2012 through June 30, 2012. For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency's enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. C. For each transfer, obtain the legal document that formed the basis for the enforceable obligation that required any transfer. Note in the AUP report the absence of any such legal document or the absence of language in the document that required the transfer. Results: Procedures not applicable. There were no transfers made to public agencies or to private parties. To the Oversight Board of the City of South San Francisco Redevelopment Agency's Successor Agency South San Francisco, California Page 4 4. Perform the following procedures: A. Obtain from the Successor Agency a summary of the financial transactions of the Redevelopment Agency and the Successor Agency for the following fiscal periods: June 30, 2010; June 30, 2011, January 31, 2012 and June 30, 2012, B. Ascertain that for each period presented, the total of revenues, expenditures, and transfers accounts fully for the changes in equity from the previous fiscal period by comparing to the Successor Agency's accounting records. C. Compare amounts in the schedule relevant to the fiscal year ended June 30, 2010 to the state controller's report filed for the Redevelopment Agency for that period, D. Compare amounts in the schedule for the fiscal year ended June 30, 2011 to the audited Basic Financial Statements, and the schedules for other fiscal periods presented to account balances on the general ledger Reports. Results: No exceptions were noted as a result of our procedures. See Exhibit 3. 5. Obtain from the Successor Agency a listing of all assets of the Aggregate Remaining RDA Funds as of June 30, 2012 for the report that is due December 15,, 2012. For the Aggregate Remaining RDA Funds, the schedule attached as an exhibit will include only those assets of the Aggregate Remaining RDA Funds that were held by the Successor Agency as of June 30, 2012. Agree the assets so listed to recorded balances reflected in the accounting records of the Successor Agency. See Exhibit 4 for the listing. Results: No exceptions were noted as a result of our procedures. 6. Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that are restricted for the following purposes: A. Unspent bond proceeds: i. Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less eligible project expenditures, amounts set aside for debt service payments, etc.) ii. Trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation. iii. Obtain from the Successor Agency a copy of the legal document that sets forth the restriction pertaining to these balances. B. Grant proceeds and program income that are restricted by third parties: i. Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less eligible project expenditures). ii. Trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation. To the Oversight Board of the City of South San Francisco Redevelopment Agency's Successor Agency South San Francisco, California Page 5 iv. Obtain from the Successor Agency a copy of the grant agreement that sets forth the restriction pertaining to these balances, and verify the existence of language restricting the use of the balances. C. Other assets considered to be legally restricted: i. Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less eligible project expenditures), ii. Trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation. iii. Obtain from the Successor Agency a copy of the legal document that sets forth the restriction pertaining to these balances, and verify the existence of language restricting the use of the balances. Results: No exceptions were noted as a result of procedure 6A and 6C. Procedures were not performed for 6B because there were no applicable asset balances that were restricted, D. Attach the above mentioned Successor Agency prepared schedule(s) as an exhibit to the AUP report, For each restriction identified on these schedules, we indicate in the report the period of time for which the restrictions are in effect. If the restrictions are in effect until the related assets are expended for their intended purpose, this is indicated in the report. Results: See Exhibit 5. 7. Perform the following procedures: A. Obtain from the Successor Agency a listing of assets as of June 30, 2012 that are not liquid or otherwise available for distribution (such as capital assets, land held for resale, long-term receivables, etc,) and ascertain if the values are listed at either purchase cost (based on book value reflected in the accounting records of the Successor Agency) or market value as recently estimated by the Successor Agency. B. If the assets listed at 7(A) are listed at purchase cost, trace the amounts to a previously audited financial statement (or to the accounting records of the Successor Agency) and note any differences. C. For any differences noted in 7(B), inspect evidence of disposal of the asset and ascertain that the proceeds were deposited into the Successor Agency trust fund. If the differences are due to additions (this generally is not expected to occur), inspect the supporting documentation and note the circumstances. D. If the assets listed at 7(A) are listed at recently estimated market value, inspect the evidence (if any) supporting the value and note the methodology used. If no evidence is available to support the value and/or methodology, note the lack of evidence. To the Oversight Board of the City of South San Francisco Redevelopment Agency's Successor Agency South San Francisco, California Page 6 Results: No exception noted to procedures 7A and 7B. No procedures were performed for procedures 7C and 7D because there was no difference noted in procedure 7(B) and assets listed at 7(A) are listed at purchase costs. See Exhibit 6. 8. Perform the following procedures: A. If the Successor Agency believes that asset balances need to be retained to satisfy enforceable obligations, obtain from the Successor Agency an itemized schedule of asset balances (resources) as of June 30, 2012 that are dedicated or restricted for the funding of enforceable obligations and perform the following procedures. The schedule should identify the amount dedicated or restricted, the nature of the dedication or restriction, the specific enforceable obligation to which the dedication or restriction relates, and the language in the legal document that is associated with the enforceable obligation that specifics the dedication of existing asset balances toward payment of that obligation. Compare all information on the schedule to the legal documents that form the basis for the dedication or restriction of the resource balance in question. ii. Compare all current balances to the amounts reported in the accounting records of the Successor Agency or to an alternative computation. iii. Compare the specified enforceable obligations to those that were included in the final Recognized Obligation Payment Schedule approved by the California Department of Finance. iv. Attach as an exhibit to the report the listing obtained from the Successor Agency. Identify in the report any listed balances for which the Successor Agency was unable to provide appropriate restricting language in the legal document associated with the enforceable obligation. Results: Management believes there are dedicated or restricted assets that need to be retained to satisfy enforceable obligations. Accountant noted that one obligation, ROPE Item #59, for $1,575.91 of the $10,803.41, did not have legal agreements however Accountant reviewed the invoices related to these expenditures. These items were included on RODS I which was approved by the Department of Finance to be financed with the reserves held by the Successor Agency. These items were accrued due to timing of invoices. See Exhibit 7. Accountant also noted that RODS Item #75, funds to defease the 2006 Tax Allocation Bond reserve, the trust agreement between the Agency and the Bank of New York was created after June 30, 2012 imposing the restriction on these funds. For ROPE Item #18, these funds are dedicated to fund the Oyster Point Ventures LLC DDA, which the Agency plans to create an escrow account to reserve these funds in fiscal year 2013. See Exhibit 7. To the Oversight Board of the City of South San Francisco Redevelopment Agency's Successor Agency South San Francisco, California Page 7 Management Response: BOPS item 75 is a set aside for a bond retirement account authorized by BOPS 1. On May 17, 2012 the Oversight Board approved, and on May 27, 2012 the State Department of Finance also approved the final BOPS 1. This item is a not to exceed maximum of $60 million to be set aside from all available Successor Agency funds as of June 30, 2012 after all other enforceable obligations had been met in an escrow account to pay off the 2006 RDA Bonds at their first call date on September 1, 2016. Note that the Oversight Board made the decision to fund this account so that all the taxing entities will all share in a total of $34 million in savings from foregone interest expenses over the remaining 19 year term of the bonds. Funds were segregated in the Successor Agency's accounts as of 6/30/12 for this bond set aside, and the formal escrow agreement with the Bank of New York was executed and funded in September 2012. The 11-12 $6 million for RODS row 18 is a reserve set aside. On May 17, 2012, the Oversight Board approved ROPS 1 and on May 27 the State DOF approved it. BOPS 1 included $6 million in FY 11-12 to set aside reserves to fund the Agency's obligation to pay for land and infrastructure improvements to facilitate the opening of a biotechnology campus. The Disposition and Development Agreement (DDA) is with Oyster Point Ventures LLC. The DDA is dated and executed on March 23, 2011. Once the project is completed, all taxing entities will benefit from a very substantial increase in property taxes from this development. The Oversight Board also approved a funding plan of $3.0 million per FOPS period, or $6 million annually, to have funds set aside in reserve to pay for the Agency's obligation for this item. The reserve is estimated to be fully funded by the end of FY 15-16 and the work associated with the infrastructure improvements is anticipated to occur sometime after that. B. If the Successor Agency believes that future revenues together with balances dedicated or restricted to an enforceable obligation are insufficient to fund future obligation payments and thus retention of current balances is required, obtain from the Successor Agency a schedule of approved enforceable obligations that includes a projection of the annual spending requirements to satisfy each obligation and a projection of the annual revenues available to fund those requirements and perform the following procedures: i. Compare the enforceable obligations to those that were approved by the California Department of Finance. Procedures to accomplish this may include reviewing the letter from the California Department of Finance approving the Recognized Enforceable Obligation Payment Schedules for the six month period from January 1, 2012 through June 30, 2012 and for the six month period from July 1, 2012 through December 31, 2012. ii. Compare the forecasted annual spending requirements to the legal document supporting each enforceable obligation. a. Obtain from the Successor Agency its assumptions relating to the forecasted annual spending requirements and disclose in the report major assumptions associated with the projections. HL For the forecasted annual revenue: a. Obtain from the Successor Agency its assumptions for the forecasted annual revenues and disclose in the report major assumptions associated with the projections, Results: Management has represented to us that they believe restricted and dedicated assets and projected revenues, will be sufficient to fund enforceable obligations. Management has demonstrated this in Exhibit 7. To the Oversight Board of the City of South San Francisco Redevelopment Agency's Successor Agency South San Francisco, California Page 8 C. If the Successor Agency believes that projected property tax revenues and other general purpose revenues to be received by the Successor Agency are insufficient to pay bond debt service payments (considering both the timing and amount- of the related cash flows), obtain from the Successor Agency a schedule demonstrating this insufficiency and apply the following procedures to the information reflected in that schedule. Compare the timing and amounts of bond debt service payments to the related bond debt service schedules in the bond agreement. ii. Obtain the assumptions for the forecasted property tax revenues and disclosed major assumptions associated with the projections. iii. Obtain the assumptions for the forecasted other general purpose revenues and disclosed major assumptions associated with the projections. Results: Management has represented that future property tax revenues will be sufficient to pay bond debt service payments. See Exhibit 7. D. If procedures A, B, or C were performed, calculate the amount of current unrestricted balances necessary for retention in order to meet the enforceable obligations by performing the following procedures. i. Combine the amount of identified current dedicated or restricted balances and the amount of forecasted annual revenues to arrive at the amount of total resources available to fund enforceable obligations. ii. Reduce the amount of total resources available by the amount forecasted for the annual spending requirements. A negative result indicates the amount of current unrestricted balances that needs to be retained. iii. Include the calculation in the AUP report. Results: No exceptions were noted as a result of our procedures. See Exhibit 7. 9. If the Successor Agency believes that cash balances as of June 30, 2012 need to be retained to satisfy obligations on the Recognized Obligation Payment Schedule (ROPS) for the period of July 1, 2012 through June 30, 2013, obtain a copy of the final BOPS for the period of July 1, 2012 through December 31, 2012 and a copy of the final BOPS for the period January 1, 2013 through June 30, 2013, For each obligation listed on the BOPS, verify the Successor Agency added columns identifying (1) any dollar amounts of existing cash that are needed to satisfy that obligation and (2) the Successor Agency's explanation as to why the Successor Agency believes that such balances are needed to satisfy the obligation. Results: Management has represented to us that they believe the cash balance as of June 30, 2012 do need to be retained to satisfy obligations on the Recognized Obligation Payment Schedule (ROPE) for the period of July 1, 2012 through June 30, 2013. No exceptions were noted as a result of our procedures. See Exhibit 8. To the Oversight Board of the City of South San Francisco Redevelopment Agency's Successor Agency South San Francisco, California Page 9 10, Obtain a schedule detailing the computation of the Balance Available for Allocation to Affected Taxing Entities, Amounts included in the calculation have been agreed to the results of the procedures performed in each section above. The schedule included a deduction to recognize amounts already paid to the County Auditor - Controller on July 12, 2012 as directed by the California Department of Finance. The amount of this deduction presented has been agreed to evidence of payment. Schedule was attached as Exhibit '9. Results: No exceptions were noted as a result of our procedures. 11. Obtain a representation letter from Successor Agency management acknowledging their responsibility for the data provided to us and the data presented in the report or in any attachments to the report. Determine that management representations included an acknowledgment that management is not aware of any transfers (as defined by Section 34179.5) from either the former redevelopment agency or the Successor Agency to other parties for the period from January 1, 2011 through June 30, 2012 that have not been properly identified in the AUP report and its related exhibits. Results: Management provided a representation letter on January 9, 2013. We were not engaged to and did not conduct an examination, the objective of which would be the expression of an opinion on the accompanying schedules attached to this report. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the State of California Department of Finance, the Successor Agency Oversight Board and management of the Successor Agency and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Badawi and Associates Certified Public Accountants Oakland, California January 9, 2013 City of South San Francisco Redevelopment Agency's Successor Agency Exhibit I- Listing of All Assets Transferred From the Fortner Redevelopment Agency (Aggregate Remaining RDA Funds) to the Successor Agency on February 1, 2012 Asset Cash Fund 861 Cash Fund 610 [1) Cash Premium /Discowit Amort Cash Unrealized Gains/Losses Cash with Fiscal Agent Real Property Personal Property Net Loans Receivable Advances Other Receivables Account in Fund 861 11101 11101 11116 11117 11110 16101,16201,16921 16400,16401,16402,1650f), 16941,16940,16942,16950 11230,11231,11209 11260 11208,11210 Amount 63,888,743 77,279 (761,189) 1,023,740 11,643,539 47,360,817 36,220 804,456 14,678,821 424,090 Total All Assets $ 139,176,517 ti cn bf) bf) bt bt, bl) doz rr� > np r. z co cu M F- Q, —0 w air w bla 0 Uo N lb a, Ln b �O m N w ti,o %D C, M 00 C6 Lri q CT cl 4 e 06 "a 7� N 00 N x g C;� n Ln .o M cn M a) w w w Ln r4 C) 75 E FO C14 00 C] C7 0 h. t� N N I'm, c7��, m r%l Ln a, O� r4 "1' 9 10 m m 0 = -A 1 -1 1- Ll I I la I I = �o r� " M �a �o C3, 0, 0� C, co m 0, 0, CJ - 1- rl 5 :o r_- C; 0 CD 0 c 0 C:� C� = cD C5 Z) 5 C) O H ova Cpl C4 rql OU u zz s, .4 w C-4 Q -5 0 — b.0 a 6x :421 MCI CD rq 0 U r. U) ol 'I'll Iu >, w3) -< lu o o QO aj Ln 0 >21 ro o 0 V) o o E A 6 w 4 -cl u 0 x XW Q. V) -!� City of South San Francisco Redevelopment Agency's Successor Agency Exhibit 3-Summ of the Financial Transactions of the Redeyelo meat Agency and the Successor A en - A e ate Reinaining RDA funds Assets (modified accrual basis) Cash and Investments Receivables: Accounts Accrued interest Loans Receivable Other Restricted cash and investments Cash with fiscal agent Cash Unrealized Gain /premium /discount Advance to City Redevelopment Agency Redevelopment Agency Redevelopment Agency Successor Agency 12 Months Ended 12 Months Ended 7 Months Ended 5 Months Ended June 30, 2010 June 30, 2011 January 31, 2012 June 30, 20:12 $ 48,998,469 $ 4,983,943 $ 63,966,023 $ 75,035,193 Total Assets $ Liabilities (modified accrual basis) 44,488 50,413 - $ 309,721 166,229 424,090 291 „4Q5 873;885 1,651,536 804,456 704,822 - - - 5,367 29,925,974 13,196,692 - - - - 10,882,351 51447,919 - 1,023,740 (176,618) 18;706°362 14,690,839 14,678,821 14,120,927 98,858,899 $ 34,739,652 $ 91,779,480 $ 95,429,016 Accounts payable $ 6,283,102 $ 6,730,106 $ 11,389 $ 74,161 Deposits 500 500 - - Deferred revenue 500,.,000 Other Payable - 53,203 - Accrued Expenses - - 65,890 - Total liabilities 6,783,602 6,783,809 77,279 74,161 Equity [11121 92,075,297 27,955,843 91,702,201 95,354,855 Total Liabilities and Equity $ 98,858,899 $ 34,739,652 $ 91,779,480 $ 95,429,016 Total Revenues $ 39,870,737 $ 39,938,349 $ 20,059,532 $ 6,076;812 Total Expenditures 31,365,065 21,869,249 5,908,671 2„303,738 Total. Net Transfers (See detail next page) (8,101,,386) (73,396,227) 49,595,498 (170,420) Adjustments to Fund balance [11 [21 (8,792,327) 50,000 Extraordinary Item - - 91,702,201 Net change in equity 404,286 (64,119,454) 63,746,358 95,354,855 Beginning Equity: 91,671,011 92,075,297 27,955,843 - Ending F,quity. $ 92,075,297 $ 27,955,843 $ 91,702,201 $ 95,354,855 ither information (show year end balances for all four periods presented); Capital assets as of end of year $ 39,111,513 $ 692,708 $ 47,397,037 $ 47,359,862 Lang -term debt as of end of year $ 71,953,000 $ 70,306,000 $ 68,759,000 $ 68,594,00( Pollution Remediation Liability $ 537,000 $ 537,000 $ 537,000 $ 537,00/ [1] Fund balance was reduced by $8,792,327.28 as of ;3/10/2011. City Council forgave the advance from RDA to the Parking Fund for construction of the Downtown Parking Garage. (This Parking Garage was in the former Downtown RDA Project Area). [21 loan adjustment between New City Housing Fund and Successor Agency Fund to repay the Successor Agency Fund. City of South San Francisco, Redevelopment Agency's Successor Agency Exhibit 4- Listing of All Assets of the Aggregate Remaining RDA Funds as of June 30, 2012 Asset Account in Fund 861 Amount Cash 11101 $ 75,035,193 Cash Premium /Discount Amort 11116 (1,146,542) Cash Unrealized Gains/Losses 11.117 969,924 Cash with Fiscal Agent 11.110 5,447,919 Subtotal Cash/Cash Equivalents $ 80,306,493 Real Property 16101,16201,16921 $ 47,331,840 1,6400,16401,16402,16500, Personal Property 16941,16940,16942,16950 28,023 Net Loans Receivable 11230,11231,11209 704,822 Advances 11260 14,120,927 Accounts Receivable 5,367 Other Receivables 11208,11210 291,405 Subtotal Non-Liquid Assets $ 62,482,385 Total All Assets $ 142,788,878 rli bt to �a o ro Ln cra o ni O 2 cu Ell E ns G. in 1 Rt CS d C� -8 Cn 0 0 spy R yY ut m vie Yci 'ZI �al N m 4 G. Ca 2 ,5 O E aC rd 0 u C4 a 9a rU Cj rr C, AGp ro co Ll� m oo lr� -a u o O 4 4f O W.- CJ "TZ Sa 0 - I 10 9� 10 cq lc� "'I iu�l Irp. I'll Ln Lr) 0) City of South San Francisco Redevelopment Agency's Successor Agency Exhibit 6- Listing of All Non-Liquid Assets of the Aggregate Remaining RDA Funds as of June 30, 2012 Asset Real Property Personal Property Net Loans Receivable Advances Accounts Receivable Other Receivables Total Non-Liquid Assets Account in Fund 8,61 16101,1620:1,16921 16400,16401,16402,16500, 16941,16940,16942, 16950 11230,11231,11209 11260 11208,11210 Amount $ 47,331,840 28,023 704,822 14,120,927 5,367 291,405 62,482,385 tl Ds N am an @m is aw 1, IR 7-5 7� -e E E 2 E .2 A 0 o 0 0 x 2 A 4 F, E 0 cc tl Ds N am an @m is aw 1, IR 7-5 R E A 5 22 E S. 10, tR y a I 'Ei 78 2., NUN E g EE 2 7�5 'a 2 6 6 fi 6 1% i� .1 rw ca IF IR o li E 'E E JE -6 E S E 2, 2 0 T. E I GC R E A 5 22 E S. 10, tR y a I 'Ei 78 2., NUN E g EE 2 7�5 'a 2 R R C. cri R 11: R Iq C! R C� CL 0 a! C� Ci C! CZ pp R go 0 0 0 0 - -- to - - - CS - - - - - - - - - - - ol 0 ui 00 c 6 10 �2 q 16 ai cli p� rT� c, 0. C� 91 l 9 0 0 a 0 0 g Is m d 0 r,� q C� C� C� Xt C� LQ E M MINI nip" IN M III Ell 2 8 iE m m E r r Z, E E I m 16 9 2 o u - E x x 0 2 Eff E 2 KO o a o 15 z ,b z 16 z -6 A ui co m ca w 0)1 A A re S. cc .0 E E E E E 0 6 0 E E' 0 0 W-0 0 I a - a 0 Lij .5 -r, p. m , --" . 7 . T a 0 .2 -2 -2 7: mo 0 0 m E 2 :E w Lo x . , I- A U-> 9 R .9 .9 1� A] Z z City of South San Francisco Redevelopment Agency's Successor Agency Exhibit 9- Summary of Balances Available for Allocation to Affected Taxing Entities for Aggregate Remaining RDA Funds Period ended June 30, 2012 SUMMARY OF BALANCES AVAILABLE FOR ALLOCA71ON TO AFFECTED TAXING ENTITIES Total amount of assets held by the successor agency as of June 30, 2012 (procedure 5) 142,788,879 Add the amount of any assets transferred to the city or other parties for which an enforceable obligation with a third party requiring such transfer and obligating the use of the transferred assets did not exist (procedures 2 and 3) Less assets legally restricted for uses specified by debt (5,459,958) covenants, grant restrictions, or restrictions imposed by other governments (procedure 6) Less assets that are not cash or cash equivalents (e.g., physical assets) - (procedure 7) (62,482,385) Less balances that are legally restricted for the funding of an enforceable obligation (net of projected annual revenues available to fund those obligations) - (procedure 8) (65,,600,399) Less balances needed to satisfy BOPS for the 2012-13 fiscal year (procedure 9) (9,246,137) Less the amount of payments made on July 12, 2012 to the County Auditor - Controller as directed by the California Department of Finance Amount to be remitted to county for disbursement to taxing entities DATE: January 15, 2013 TO: Members of the Oversight Board FROM: Jim Steele, Director of Finance SUBJECT: LOAN AGREEMENTS BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF SOUTH SAN FRANCISCO FOR PAYMENT OF SEVERAL ENFORCEABLE OBLIGATIONS RECOMMENDATION It is recommended that the Oversight Board approve the attached resolutions which approve three loan agreements, in the total amount of $312,733,71, between the City and the Successor Agency to the Redevelopment Agency of South San Francisco (SA) for several enforceable obligations of the Successor Agency (SA). BACKGROUND/DISCUS SION The Oversight Board and the Successor Agency (SA) have each approved several enforceable obligations which, due to the timing of the payments, did not coincide with the Recognized Obligations Payment Schedules (RODS) for their payments. Staff has been in discussions with the State Department of Finance (DOF), which has not been flexible about allowing payments for items which come in at a different time period than what is shown on the ROPS. The solution that the DOF has suggested is that the City should make payments for these obligations, and that the City enters into loan agreements with the Successor Agency (SA) to allow the SA to pay the City back once these items are approved on a subsequent RODS. This staff report therefore transmits three resolutions which ask the Oversight Board to approve three loan agreements between the City and the SA. The loan agreements are for the following items, totaling $312,733.71. Loan Agreement Summary Obligation on BOPS Row Amounts 1. Legal Settlement and Attorneys' Fees 2. Debt Service for 2006 RDA Bonds 3. Accounts Payable as of June 30, 2012 For Non-Housing Obligations 53 $210,635.50 5 $ 27,937.50 19, 20, 23, 26, 27, 59, 63,64,67,68 $ 74,160.71 Total $312,733.71 Each of these items is described below, and the Oversight Board resolutions have additional details on these obligations: Staff Report Subject: Draft Recognized Obligations Payment Schedule Page 2 1. Legal Settlement and Attorney Fees $210,635.50 On November 26, 2012, the Successor Agency and the City Council authorized the City Attorney to enter into a settlement agreement with Dalai Metwally Living Trust, Dalai Metwally Trustee, and Omar and Bassamat Bahnasy to resolve the lawsuit filed by the Dalai Metwally Trust and Omar and Bassamat Balmasy against the former Redevelopment Agency, the Successor Agency and the City. That claim had been listed on the Successor Agency's Recognized Obligation Schedule (ROPE) as a future expense (called "Reserves for Existing Litigation"), and was listed as the amount of the entire claim. The last ROPE (ROPE 111, for January through June 2013) showed the total amount of the claim remaining at $7.2 million. The settlement approved by the City Council and the claimant is for $150,000, and is now due. In addition, the City has had to pay attorney fees for this item up to the City's self-insurance retention cap of $100,000. After deducting the amounts already collected on prior RODS, and after deducting legal expenses incurred before the RDA dissolution, this loan agreement is to cover the settlement and the additional $60,635.50 the SA is liable for in attorney fees. 2. Debt Service for 2006 RDA Bonds $27,937.50 The debt service payment on the 2006 RDA Bonds due on August 31, 2012, was $27,937,50 higher than the amount staff had estimated on ROPS 11. Therefore, the City had to advance funds to the SA to make the full legally obligated debt service payment. 3. Accounts Payable as of June 30, 2012 for Non-Housing Obligations on ROPS $74,160.71 Several items were included on ROPE I for non-Housing obligations, for which the final invoices were not available to pay as of June 30, 2012. Therefore, the City had to advance payment to the SA to make these payments. The detail on these payables is below: ROPE � Line Project Name I Debt Obligation Payee Description] Project Scope Amount 19 Oyster Point Ventures DDA Various contractors/staff Secs. 4.5 closg/escrow; 5.2 environ indemnification; 5.3 methane monitoring 3,809.96_ 20 Oyster Point Ventures DDA Legal/Staff costs Soft project management costs 1,912M 23 Harbor District Agreement Legal/Staff costs Soft project management costs 2,822.00 26 418 Linden Housing Dev. (pM027) Brookwood Group Contracted project work 6,765.00 27 69 63 418 Linden Housing Dev. _ Maintenance of Non--Hsg Properties Administration Costs Legal/Staff costs Various contractors Various contractors/mise Soft project mans ement costs Rehab, repair, maintenance, & utilities Costs to administer Successor Agency 3.758.00 10,803.41 28,582.73 64 Administration Costs Legal/Staff costs Costs to administer Successor Agency 14,077.11 67 I-Property Disposition Costs Various contractors Initial enyir. testing, noticing, listing costs 1,200,00 1 68 JProperty Disposition Costs Legal/Staff costs Soft project management costs 430.00 Staff Report Subject: Draft Recognized Obligations Payment Schedule Page 3 The SA approved all three of the attached loan agreements on December 12, 2012. At that time, there were two additional loan agreements which have since become unnecessary given the recent approval of the Agency's Low Moderate Income Housing Fund (LMIHF) Due Diligence Review via the Meet and Confer appeal process. The Agency was allowed to retain cash to fund the accounts payable and debt service payments related to the LMIHF so the loan agreements covering those items are no longer needed. The Non-Housing Due Diligence Review is currently underway. The Agency staff is recommending retaining assets to fund both the Debt Service for the 2006 Bonds (item 2 above), and to fund the non- housing accounts payable (item 3 above). In the event the Agency is allowed to retain funds to pay for these obligations at a later date, these two loan agreements could also become unnecessary. FISCAL IMPACT: The three categories of items listed above total $312,733.71, and funds had to be advanced from the City to the SA to pay these Successor Agency obligations. If DOF approves the loan agreements, item I costs will be included on the next-submitted ROPS as enforceable obligations of the SA. Both items 2 and 3 will be included on a future RODS if the Agency is not allowed to retain sufficient funds to pay for these obligations through the Non-Housing Due Diligence Review process. Staff expects that the loans for item I will be fully repaid by August 1, 2013. CONCLUSION: The attached loan agreements obligate the SA to pay the City back for funds the City had to advance to the SA to make ROPS payments that were either different than estimated or that were expended in a different ROPS time period than where they had been listed. By: Approved:,A !� Duyn Jim eele Marty Van Duyn City Finuce Director Assistant City Manage and Director of Economic and Community Development Attachments: Resolutions Loan Agreements JS/MVI):ed i , 411 - R I i• w 1 1 .. Nal, • r . Ilk i 1 WHEREAS, pursuant to Health and Safety Code Section 34177(1), before each six -month fiscal period, the Successor Agency to a dissolved Redevelopment Agency is required to adopt a draft Recognized Obligation Payment Schedule ( "ROPS ") that lists all of the obligations that are ".`enforceable obligations" within the meaning of Health and Safety Code Section 34177; and WHEREAS, each ROPE must be approved by the Oversight Board for the Successor Agency and by the State Department of Finance in order for payment of listed obligations to be made; and WHEREAS, the timing of payment of legal settlement and associated legal fees identified and approved as enforceable obligations on RODS 1, 11, and Ill did not coincide with the payment dates listed on those RODS; and WHEREAS, therefore several enforceable obligations of the Successor Agency cannot be paid in full and/or when due; and WHEREAS, timely payment of enforceable obligations of the Successor Agency was deemed essential and could not await approval of a RAPS submitted for the next six -month fiscal period; and WHEREAS, the Successor Agency had no other source of funding to make these payments for enforceable obligations on its own; and WHEREAS, the City therefore advanced, or is willing to advance, funds for the payment of said enforceable obligations; and WHEREAS, Health and Safety Code Section 34173(h) authorizes loans between the City and the Successor Agency for the purpose of funding enforceable obligations for which there are insufficient funds in the Real Property Tax Trust Fund; and WHEREAS, Health and Safety Code Section 34173(h) further provides that a new enforceable obligation shall be created for the repayment of each such loan, provided that the receipt and use of the loan funds is reflected on a RODS approved by the Oversight Board for the Successor Agency and submitted to the State Department of Finance for its review and approval; and WHEREAS, pursuant to Health and Safety Code Section 34180(h) the Oversight Board may approve a request by the Successor Agency to enter into an agreement with the City; and WHEREAS, City and Successor Agency staff have negotiated loan agreements covering these enforceable obligations for which there are insufficient funds available for timely payment by the Successor Agency; and WHEREAS, funds are available to be loaned by the City for such purpose, and the loan agreements do not violate the City's debt limit under the California Constitution. NOW, THEREFORE, the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity, does hereby resolve as follows: The Recitals set forth above are true and correct, and are incorporated herein by reference. 2. The loan agreement in the form attached hereto is hereby approved, and the Assistant City Manager is hereby authorized to execute them on behalf of the Successor Agency and to take such other and finther action as necessary and appropriate to implement the intent of this Resolution. 3. That loan agreement, along with the supporting calculations and references to prior BOPS are attached to this Resolution and are hereby incorporated herein, are for a settlement agreement with Dalal Metwally Living Trust, Dalal Metwally Trustee, and Omar and Bassamat Bah.nasy to resolve the lawsuit filed by the halal Metwally Trust and Omar and Bassamat Bahnasy against the former Redevelopment Agency, the Successor Agency, and the City, and for associated attorneys' fees totaling $210,635.50. 4. The Successor Agency is directed to include a loan agreement, with such supporting documentation and other information as it deems necessary and appropriate, on the next ROPS to be submitted to the Oversight Board and the State Department of Finance. PASSED AND ADOPTED this 8th day of January, 2013, by the following vote: AYES: NOES. ABSENT: F.W.1 b-I Fill I I A EUM-16 City Clerk LOAN AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH 6M iff 1 -1171 We "04161 This Loan Agreement (Agreement) is entered into as of _, 2012 ("Effective Date"), by and between the City of South San Francisco, a municipal corporation ("City") and the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity ("Successor Agency"). City and the Successor Agency are hereinafter collectively referred to as the "Parties ". WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Redevelopment Agency") was established under the provisions of the Community Redevelopment Law (California Health and Safety Code § 33000 etseq.) ("CRL"); and WHEREAS, effective June 30, 2011, the Governor signed into law ABx 126 which automatically suspended redevelopment activities, and on December 29, 2011, the California State Supreme Court upheld the provisions of ABxI 26, thereby dissolving all redevelopment agencies on February 1, 2012; and WHEREAS, ABxl 26 was modified by AB 1484, effective as of July 27, 2012, which together with ABx 126 is referred to herein as the "Dissolution Law"; and WHEREAS, as a result of the dissolution of the former Redevelopment Agency, the Successor Agency is now administering the daily operations of the former Redevelopment Agency; and WHEREAS, on July 8, 2011, the City and the Successor Agency were sued in inverse condemnation in halal M. Met-wally Living Trust Dated October 27, 1998, et al. v. City cif San Francisco, Superior Court of the State of California for the County of San Mateo, Case No. CIV 506911, wherein the plaintiffs sought damages and attorneys' fees ("Litigation"); and WHEREAS, the parties thereto mediated the Litigation and reached a settlement thereof in the amount of One Hundred Fifty Thousand Dollars and No Cents ($150,000.00) ("Settlement") and the Successor Agency has associated attorneys' fees in the amount of Sixty Thousand Six Hundred Thirty Five Dollars and Fifty Cents ($60,635.50); and WHEREAS, Health and Safety Code § 34171(d)(1)(D) provides that a settlement entered by a competent court of law against a former redevelopment agency constitutes an enforceable obligation authorized for payment from the Real Property Tax Trust Fund ("RPTTF") established pursuant to the Dissolution Law; and WHEREAS, Health and Safety Code § 34171 (d)(1)(F) provides that contracts or agreements concerning litigation expenses related to settlements and judgments constitute enforceable obligations authorized for payment from the RPTTF; and WHEREAS, enforceable obligations must be listed on a Recognized Obligation Payment Schedule ("ROPS") and approved for payment by a successor agency's oversight board and the California Department of Finance ("DOF") in order for funds to be received therefor; and WHEREAS, the potential total Litigation amount was included as an obligation of the Successor Agency on the ROPE for the period July-December 2012 ("ROPS 11) in the amount of Seven Million Two Hundred Twenty Nine Thousand Seven Hundred Twenty Four Dollars and Ninety Three Cents ($7,229,724.93), identified at Line 53 thereof as "Reserve for Existing Claims"; and WHEREAS, RAPS 11 and the ROPE for the period January-June 2013 ("ROPS 111"), which have already been submitted to the DOF, did not contemplate Litigation-related expenditures during this time period and did not contemplate sufficient attorneys' fees; and WHEREAS, at present there are insufficient funds in the RPTTF to permit payment of the Settlement and the associated attorneys fees by the Successor Agency; and WHEREAS, Health and Safety Code § 34173(h) authorizes a loan between a city and the successor agency to the city's redevelopment agency for the purpose of funding enforceable obligations for which there are insufficient funds in the RP'TTF; and WHEREAS, Health and Safety Code § 34173(h) ftirther provides that a new enforceable obligation shall be created for the repayment of such a loan, provided that the receipt and use of the loan funds is reflected on a ROPE approved by the oversight board for the successor agency and submitted to the DOF for its review and approval; and WHEREAS, pursuant to Health and Safety Code § 34180(h), an oversight board may approve a request by a successor agency to enter into an agreement with a city; and WHEREAS, the City and Successor Agency wish to enter into a loan agreement in the principal amount of Two Hundred Ten Thousand Six Hundred Thirty Five Dollars and Fifty Cents ($210,635.50) ("Loan"), for the purpose of providing the Successor Agency temporary funding in order for it to pay the Settlement and associated legal fees; and WHEREAS, on December 10 and December 12, 2012, the Successor Agency and the City each respectively approved the Loan and authorized the execution of this Agreement, pursuant to Resolution No. 15-2012 and Resolution No. 99-2012, respectively; and WHEREAS, on January—, 2013, the Oversight Board for the Successor Agency approved the Successor Agency's request to enter into this Agreement, pursuant to Resolution No. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties to this Agreement agree as follows: 1.1 Loan. (a) Loan Amount. City agrees to lend to Successor Agency, and Successor Agency agrees to borrow from and repay to City, a Loan in the principal amount of not to exceed Two Hundred Ten Thousand Six Hundred Thirty Five Dollars and Fifty Cents ($210,635.50). EI (b) Maturity Date. The total outstanding Loan principal is due and payable by August 1, 2013. 1.2 PWaMent. Successor Agency may prepay the Loan, in whole or in part, at any time, without penalty or other charge. 1.3 PqMent. The outstanding principal of the Loan is due and payable on the Maturity Date. 1.4 Security for the Loan. As security for the repayment of the Loan, the Successor Agency hereby pledges certain Unrestricted Revenues (defined below) ("Pledged Revenues") that are received, accrued or held by the Successor Agency and are provided within or attributable to fiscal year 2012-13, and the principal of the Loan constitutes a first lien and charge on the Pledged Revenues, and is payable from the first moneys received by the Successor Agency from the Pledged Revenues. The term "Unrestricted Revenues" means property taxes assessed and levied by San Mateo County on behalf of the Successor Agency allocated to the Successor Agency in accordance with the Dissolution Law, together with any other income, revenue, cash receipts and any other moneys of the Successor Agency lawfully available for repayment of the Loan. ARTICLE 2 DISBURSEMENT AND ACCOUNTING; USE F FIKI)l 2.1 Disbursement. Loan proceeds may be disbursed to the Successor Agency in accordance with this Agreement upon approval of drawdown requests executed by the City Finance Director. 2.2 Use of Loan Proceeds. Successor Agency may use proceeds of the Loan exclusively for meeting the Settlement and associated legal fee obligation as described herein. 3.1 Authority. Successor Agency warrants that it has authority, and has completed (or will complete, as applicable) all proceedings and obtain all approvals necessary to execute, deliver, and perform under this Agreement and the transactions contemplated thereby. 3.2 Valid and Binding Obligations. Successor Agency warrants that, when duly executed by the Successor Agency, this Agreement shall constitute the legal, valid and binding obligations of Successor Agency enforceable in accordance with their respective terms. Successor Agency hereby waives any defense to the enforcement of the terms of this Agreement related to alleged invalidity of any provisions or conditions contained in this Agreement. 3.3 No Adverse Action. Successor Agency warrants that there is no action, suit or proceeding pending or threatened against it which might adversely affect the Successor Agency with respect to this Agreement. ARTICLE 4 SUCCESSOR AGENCY COVENANTS 4.1 Notification. Until the Loan is repaid in full, Successor Agency covenants that it will promptly notify City in writing of the occurrence of any event that might materially and adversely affect its ability to perform its obligations under this Agreement, or that constitutes, or with the giving of notice or passage of time or both would constitute, an Event of Default under this Agreement. 4.2 Legal Compliance. Successor Agency covenants that this Agreement does not violate the Constitutional debt limitation for municipal governments set forth in Article XVI, Section 18 of the California Constitution. 5.1 Indemnity. Successor Agency and City shall each defend, hold harmless and indemnify the other, its officers, employees and agents from and against all claims, liability, cost, expenses, loss or damages of any nature whatsoever, including reasonable attorneys' fees, arising out of or in any way connected with its failure to perform its covenants and obligations under this Agreement and any of its operations or activities related thereto, excluding the willful misconduct or the gross negligence of the person or entity seeking to be defended, indemnified, or held harmless. 61 Events of Default. Each of the following events will constitute an event of default ("Event of Default") under this Agreement: (a) NonpaMent. Successor Agency's failure to repay the Loan pursuant to Article I hereof. (b) Failure to Perform. Successor Agency's failure, neglect or refusal to perform any promise, agreement, covenant or obligation contained in this Agreement, after any applicable cure periods. 6.2 Declaring Default. Whenever any Event of Default has occurred, other than a failure to pay any sums due, City shall give written notice of default to Successor Agency. If the default is not cured within thirty (30) calendar days after the Date of Default (defined herein), or any extension approved in writing by City, City may enforce its rights and remedies under Section 6.3 below. Any default that has occurred shall be deemed to commence on the date that written notice of default is effective pursuant to Section 7.2 of this Agreement ("Date of Default"). In the event of a default in the payment of any installment payment when due, Successor Agency shall have ten (1 0) calendar days from the payment due date to cure such default, whether or not City gives written notice. 6.3 Remedies. Upon the occurrence of any Event of Default, City, in addition to any other remedies provided herein or by law, shall have the right, at its option without any further demand or notice, to take one or any combination of the following remedial steps: (a) declare that outstanding balance of the Loan and all other sums owing to City under this Agreement immediately due and payable, and (b) take whatever other action at law or in equity which may appear necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder. 6.4 Default Interest. Commencing on the Date of Default and continuing through the date that all indebtedness and other amounts payable under this Agreement are paid in full, interest on the Loan will accrue on the outstanding balance, at the rate equal to LAW plus one percent (I%). 0 6.5 Disclaimer. If City elects to employ any of the remedies available to it in connection with any Event of Default, City will not be liable for: (1) the payment of any expenses incurred in connection with the exercise of any remedy available to City, and (2) the performance or noDperformance of any other obligations of Successor Agency. ARTICLE 7 MISCELLANEOUS 7.1 Conflict of Interest, Interest of Employees, Agents, Consultants, Officers and Officials of City or Successor Agency. Except for approved eligible administrative or personnel costs, no employee, agent or consultant who is in a position to participate in a decision-making process or gain inside information with regard to such activities assisted under this Agreement, may obtain a personal or financial interest in or benefit from the activities assisted under this Agreement, or have an interest, direct or indirect, in any contract, subcontract or agreement with respect thereto, or in the proceeds there-under either for him/herself or for those with whom s/he has family or business ties, during his/her tenure and for one year thereafter. 72 Notices. Any notice, request or consent required pursuant to this Agreement shall be deemed given when delivered personally or three (3) business days after being deposited in the U.S. mail, addressed as follows: If to Successor Agency: Successor Agency to the Redevelopment Agency of South San Francisco P. C. Box 711 South San Francisco, CA 94083 Attention: Assistant City Manager With copy to Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco If to City: City of South San Francisco P.O. Box 711 South San Francisco, CA 94083 Attention: City Manager or to such other addresses as the Parties may designate by notice as set forth above. 73 Successors and Assigns. All of the terms of this Agreement shall apply to and be binding upon, and inure to the benefit of, the successors and permitted assigns of City and Successor Agency, respectively. 7.4 Attorneys' Fees. If any action is instituted by either Party to enforce this Agreement or to collect any sums due hereunder or pursuant to this Agreement, the prevailing party in such action shall be entitled to recover its costs and reasonable attorneys' fees as awarded by the court in that action. 7.5 Severability. If one or more provisions of this Agreement are found invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, the remaining provisions shall not in any way be affected, prejudiced, disturbed or impaired thereby, and all other provisions of this Agreement shall remain in fall force and effect. 7.6 Amendments /Entire Agreement. City and Successor Agency reserve the right to amend this Agreement by mutual consent. It is mutually understood and agreed that no amendment, FN modification, alternation or variation of the terms of this Agreement shall be valid unless in writing and signed and acknowledged and approved by both parties. This Agreement constitutes the entire agreement of the Parties and no oral understandings or agreement not incorporated herein shall be binding on either Party, 7.7 Time. Time is of the essence in the performance of the terms and conditions of this Agreement. 7.8 Governing Law. The laws of the State of California govern this Agreement: 7.9 City's Rights and Consent. No forbearance, failure or delay by City in exercising any right, power, or remedy, nor any single or partial exercise of City or any right or remedy hereunder shall preclude the further exercise of such right, power or remedy. The consent of City to any act or omission by Successor Agency may not be construed as City consent to any other or subsequent act or omission or as a waiver of the requirement to obtain City consent in any other instance. All of City's rights, powers and remedies are cumulative and shall continue in full force and effect until specifically waived in writing by the City. 7.10 Duration/Survival. This Agreement continues in full force and effect until the Loan is repaid in full. 7.11 Headings. The headings within this Agreement are for the purpose of reference only and do not limit or otherwise affect any of the terms of this Agreement. 7.12 CountgMarts, Facsimile Copies. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one and the same agreement. This Agreement is effective upon transmission by either Party to the other Party of a fully signed facsimile copy of the Agreement after the formal approval by the governing body of the Successor Agency and the City Council. In case of any conflict, the counterpart maintained by the City Council will be deemed to be determinative. IN WITNESS WHEREOF, City and the Successor Agency have executed this Agreement as of the date first above written. City of South San Francisco L-On Attest: Barry M. Nagel, City Manager Krista J. Martinelli, City Clerk Approved as to Form: Successor Agency to the Redevelopment Agency of the City of South San Francisco 0 Marty Van Duyn, Assistant City Manager Krista J. Martinelli, Secretary Steven T. Mattas, City Attorney 2010262.2 Steven T. Mattas, Agency Counsel rali I M41111 1 44 &M.11 IZI a , r I a R11011 so", MI-M 1111111111YA IN a, ION WHEREAS, pursuant to Health and Safety Code Section 34177(1), before each six-month fiscal period, the Successor Agency to a dissolved Redevelopment Agency is required to adopt a draft Recognized Obligation Payment Schedule ("ROPS") that lists all of the obligations that are "enforceable obligations" within the meaning of Health and Safety Code Section 34177; and WHEREAS, each ROPS must be approved by the Oversight Board for the Successor Agency and by the State Department of Finance in order for payment of listed obligations to be made; and WHEREAS, the timing of payment of various items identified and approved as enforceable obligations on ROPS I and 11 did not always coincide with the payment dates listed on those ROPS, or, in some cases, the amounts required for payment exceeded the amounts listed on those ROPS; and WHEREAS, therefore several enforceable obligations of the Successor Agency could not be paid in full and/or when due; and WHEREAS, timely payment of bond debt service and other enforceable obligations of the Successor Agency was deemed essential and could not await approval of a ROPS submitted for the next six-month fiscal period; and WHEREAS, the Successor Agency had no other source of funding to make these payments for enforceable obligations on its own; and WHEREAS, the City therefore advanced, or is willing to advance, funds for the payment of said enforceable obligations; and WHEREAS, Health and Safety Code Section 34173(b) authorizes loans between the City and the Successor Agency for the purpose of funding enforceable obligations for which there are insufficient funds in the Real Property Tax Trust Fund; and WHEREAS, Health and Safety Code Section 34173(h)l further provides that a new enforceable obligation shall be created for the repayment of each such loan, provided that the receipt and use of the loan funds is reflected on a ROPS approved by the Oversight Board for the Successor Agency and submitted to the State Department of Finance for its review and approval; and 10 WHEREAS, pursuant to Health and Safety Code Section 34180(h) the Oversight Board may approve a request by the Successor Agency to enter into an agreement with the City; and WHEREAS, City and Successor Agency staff have negotiated loan agreements covering those enforceable obligations for which there are insufficient funds available for timely payment by the Successor Agency; and WHEREAS, funds are available to be loaned by the City for such purpose, and the loan agreements do not violate the City's debt limit under the California Constitution. NOW, THEREFORE, the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity, does hereby resolve as follows: 1. The Recitals set forth above are true and correct, and are incorporated herein by reference. 2. The loan agreement, in the form attached hereto, is hereby approved, and the Assistant City Manager is hereby authorized to execute them on behalf of the Successor Agency and to take such other and further action as necessary and appropriate to implement the intent of this Resolution. 3. The loan agreement, along with the supporting calculations and references to prior BOPS are attached to this Resolution and are hereby incorporated herein, is for $27,937.50 to fund a bond debt service payment for the 2006 Redevelopment Bonds sold by the former Redevelopment Agency that was due on September 1, 2012. 4, The Successor Agency is directed to include this loan agreement, with such supporting documentation and other information as it deems necessary and appropriate, on the next BOPS to be submitted to the Oversight Board and the State Department of Finance. PASSED AND ADOPTED this 8th day of January, 2013, by the following vote: 0. AYES. NOES: ABSEN r 2 IF ATTEST: City Clerk LOAN AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO This Loan Agreement (Agreement) is entered into as of —, 2012 ("Effective Date"), by and between the City of South San Francisco, a municipal corporation ("City") and the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity ("Successor Agency"). City and the Successor Agency are hereinafter collectively referred to as the "Parties". IN, X4 9; F11- WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Redevelopment Agency") was established under the provisions of the Community Redevelopment Law (California Health and Safety Code § 33000 et seq.) ("CRL"); and WHEREAS, effective June 30, 2011, the Governor signed into law ABx 126 which automatically suspended redevelopment activities, and on December 29, 2011, the California State Supreme Court upheld the provisions of ABx 126, thereby dissolving all redevelopment agencies on February 1, 2012; and WHEREAS, ABx1 26 was modified by AB 1484, effective as of July 27, 2012, which together with ABx 126 is referred to herein as the "Dissolution Law"; and WHEREAS, as a result of the dissolution of the former Redevelopment Agency, the Successor Agency is now administering the daily operations of the former Redevelopment Agency; and WHEREAS, Health and Safety Code § 34171 (d)(1)(A) provides that bonds issued by a former redevelopment agency, including but not limited to the required debt service therefore, constitute an enforceable obligation authorized for payment from the Real Property Tax Trust Fund ("RPTTF") established pursuant to the Dissolution Law; and WHEREAS, enforceable obligations must be listed on a Recognized Obligation Payment Schedule ("ROPS") and approved for payment by a successor agency's oversight board and the California Department of Finance ("DOF") in order for funds to be received therefore; and WHEREAS, the Redevelopment Agency issued 2006 RDA Bonds, for which debt service payments due on August 31, 2012 were underestimated on the ROPS for the period July-December 2012 ("ROPS 11, line 4") in the amount of Twenty Seven Thousand Nine Hundred Thirty Seven Dollars and Fifty Cents ($27,937.50); and WHEREAS, the City advanced said amount in order that the Successor Agency could meet its legally-required debt service payments on August 31, 2012; and WHEREAS, at present there are insufficient funds in the RPTTF to permit repayment of the Housing Bond Debt Service by the Successor Agency; and 3 12 WHEREAS, Health and Safety Code § 34173(h) authorizes a loan between a city and the successor agency to the city's redevelopment agency for the purpose of funding enforceable obligations for which there are insufficient funds in the RPTTF; and WHEREAS, Health and Safety Code § 34173(h) further provides that a new enforceable obligation shall be created for the repayment of such a loan, provided that the receipt and use of the loan funds is reflected on a ROPS approved by the oversight board for the successor agency and submitted to the DOF for its review and approval; and WHEREAS, pursuant to Health and Safety Code § 34180(h), an oversight board may approve a request by a successor agency to enter into an agreement with a city; and WHEREAS, the City and Successor Agency wish to enter into a loan agreement in the principal amount of Twenty Seven Thousand Nine Hundred Thirty Seven Dollars and Fifty Cents ($27,937.50), for the purpose of enabling the Successor Agency to pay the 2006 RDA Bonds debt service; and WHEREAS, on December 10 and December 12, 2012, the Successor Agency and the City each respectively approved the Loan and authorized the execution of this Agreement, pursuant to Resolution No. 15-2012 and Resolution No. 99-2012, respectively; and WHEREAS, on January, 2013, the Oversight Board for the Successor Agency approved the Successor Agency's request to enter into this Agreement, pursuant to Resolution No. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties to this Agreement agree as follows: I KIMIZE 141 Z40 1.1 Loan. (a) Loan Amount. City agrees to lend to Successor Agency, and Successor Agency agrees to borrow from and repay to City, a Loan in the principal amount of not to exceed Twenty Seven Thousand Nine Hundred Thirty Seven Dollars and Fifty Cents ($27,937.50). (b) Maturity Date. The total outstanding Loan principal is due and payable by August 1, 2013, 1.2 PLepAMent. Successor Agency may prepay the Loan, in whole or in part, at any time, without penalty or other charge. 1.3 Payment. The outstanding principal of the Loan is due and payable on the Maturity Date. 1.4 Security for the Loan. As security for the repayment of the Loan, the Successor Agency hereby pledges certain Unrestricted Revenues (defined below) ("Pledged Revenues") that are received, accrued or held by the Successor Agency and are provided within or attributable to fiscal year 2012-13, and the principal of the Loan constitutes a first lien and charge on the Pledged Revenues, and is payable from the first moneys received by the Successor Agency from the Pledged Revenues. The term "Unrestricted Revenues" means property taxes assessed and levied by San Mateo County on behalf of the Successor Agency allocated to the Successor Agency in accordance with the C1 13 Dissolution Law, together with any other income, revenue, cash receipts and any other moneys of the Successor Agency lawfully available for repayment of the Loan. ARTICLE 2 DISBURSEMENT AND ACCOUNTING, USE OF FUNDS 2.1 Disbursement. Loan proceeds may be disbursed to the Successor Agency in accordance with this Agreement upon approval of drawdown requests executed by the City Finance Director. 2.2 Use of Loan Proceeds. Successor Agency may use proceeds of the Loan exclusively for meeting the 2006 RDA Bonds debt service obligation as described herein. ARTICLE 3 REPRESENTATIONS AND WARRANTIES 3.1 Authority. Successor Agency warrants that it has authority, and has completed (or will complete, as applicable) all proceedings and obtain all approvals necessary to execute, deliver, and perform under this Agreement and the transactions contemplated thereby. 3.2 Valid and Binding Obligations. Successor Agency warrants that, when duly executed by the Successor Agency, this Agreement shall constitute the legal, valid and binding obligations of Successor Agency enforceable in accordance with their respective terms, Successor Agency hereby waives any defense to the enforcement of the terms of this Agreement related to alleged invalidity of any provisions or conditions contained in this Agreement. 3.3 No Adverse Action. Successor Agency warrants that there is no action, suit or proceeding pending or threatened against it which might adversely aflect the Successor Agency with respect to this Agreement. ARTICLE 4 SUCCESSOR AGENCY COVENANTS 4.1 Notification. Until the Loan is repaid in full, Successor Agency covenants that it will promptly notify City in writing of the occurrence of any event that might materially and adversely affect its ability to perform its obligations under this Agreement, or that constitutes, or with the giving of notice or passage of time or both would constitute, an Event of Default under this Agreement. 4.2 Legal Compliance. Successor Agency covenants that this Agreement does not violate the Constitutional debt limitation for municipal governments set forth in Article XVI, Section 18 of the California Constitution. I lei Do jjj 11111011 ax P 1i 5.1 Indemnity. Successor Agency and City shall each defend, hold harmless and indemnify the other, its officers, employees and agents from and against all claims, liability, cost, expenses, loss or damages of any nature whatsoever, including reasonable attorneys' fees, arising out of or in any way connected with its failure to perform its covenants and obligations under this Agreement and any of its operations or activities related thereto, excluding the willful misconduct or the gross negligence of the person or entity seeking to be defended, indemnified, or held harmless. R 14 ARTICLE 6 da&i3� �-1 '14�1 -] 6.1 Events of Default. Each of the following events will constitute an event of default ("Event of Default") under this Agreement: (a) NoLipAMent. Successor Agency's failure to repay the Loan pursuant to Article I hereof. (b) Failure to Perform. Successor Agency's failure, neglect or refusal to perform any promise, agreement, covenant or obligation contained in this Agreement, after any applicable cure periods. 6.2 Declaring Default. Whenever any Event of Default has occurred, other than a failure to pay any sums due, City shall give written notice of default to Successor Agency. If the default is not cured within thirty (30) calendar days after the Date of Default (defined herein), or any extension approved in writing by City, City may enforce its rights and remedies under Section 6.3 below. Any default that has occurred shall be deemed to commence on the date that written notice of default is effective pursuant to Section 7.2 of this Agreement ("Date of Default"). In the event of a default in the payment of any installment payment when due, Successor Agency shall have ten (10) calendar days from the payment due date to cure such default, whether or not City gives written notice. 6.3 Remedies. Upon the occurrence of any Event of Default, City, in addition to any other remedies provided herein or by law, shall have the right, at its option without any further demand or notice, to take one or any combination of the following remedial steps: (a) declare that outstanding balance of the Loan and all other sums owing to City under this Agreement immediately due and payable, and (b) take whatever other action at law or in equity which may appear necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder. 6.4 Default Interest. Commencing on the Date of Default and continuing through the date that all indebtedness and other amounts payable under this Agreement are paid in full, interest on the Loan will accrue on the outstanding balance, at the rate equal to LAIF plus one percent (I %). 6.5 Disclaimer. If City elects to employ any of the remedies available to it in connection with any Event of Default, City will not be liable for: (1) the payment of any expenses incurred in connection with the exercise of any remedy available to City, and (2) the performance or nonperformance of any other obligations of Successor Agency. M M - M M lai-Rift 31A W.1191 M111-11 7.1 Conflict of Interest; Interest of_EMploY ties Ag tints , Consultants, Officers and Officials of City or Successor Agency. Except for approved eligible administrative or personnel costs, no employee, agent or consultant who is in a position to participate in a decision-making process or gain inside information with regard to such activities assisted under this Agreement, may obtain a personal or financial interest in or benefit fTom the activities assisted under this Agreement, or have an interest, direct or indirect, in any contract, subcontract or agreement with respect thereto, or in ro, In the proceeds there under either for him/herself or for those with whom s/he has family or business ties, during his/her tenure and for one year thereafter. 7.2 Notices. Any notice, request or consent required pursuant to this Agreement shall be deemed given when delivered personally or three (3) business days after being deposited in the U.S. mail, addressed as follows: If to Successor Agency: Successor Agency to the Redevelopment Agency of South San Francisco P. O. Box 711 South San Francisco, CA 94083 Attention: Assistant City Manager With copy to Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco If to City: City of South San Francisco P.O. Box 711 South San Francisco, CA 94083 Attention: City Manager or to such other addresses as the Patties may designate by notice as set forth above. 7.3 Successors and Assigns. All of the terms of this Agreement shall apply to and be binding upon, and inure to the benefit of, the successors and permitted assigns of City and Successor Agency, respectively. 7.4 Attorneys' Fees. If any action is instituted by either Party to enforce this Agreement or to collect any sums due hereunder or pursuant to this Agreement, the prevailing party in such action shall be entitled to recover its costs and reasonable attorneys' fees as awarded by the court in that action. 7.5 Severability. If one or more provisions, of this Agreement are found invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, the remaining provisions shall not in any way be affected, prejudiced, disturbed or impaired thereby, and all other provisions of this Agreement shall remain in full force and effect. 7.6 Amenchnents/Entire.AgLeemen. City and Successor Agency reserve the right to amend this Agreement by mutual consent. It is mutually understood and agreed that no amendment, modification, alternation or variation of the terms of this Agreement shall be valid unless in writing and signed and acknowledged and approved by both parties. This Agreement constitutes the entire agreement of the Parties and no oral understandings or agreement not incorporated herein shall be binding on either Party. 7.7 Time. Time is of the essence in the performance of the terms and conditions of this Agreement. 7.8 Governing Law. The laws of the State of California govern this Agreement. 7.9 City's Rights and Consent. No forbearance, failure or delay by City in exercising any right, power, or remedy, nor any single or partial exercise of City or any right or remedy hereunder shall preclude the further exercise of such right, power or remedy. The consent of City to any act or omission by Successor Agency may not be construed as City consent to any other or subsequent W 0 act or omission or as a waiver of the requirement to obtain City consent in any other instance. All of City's rights, powers, and remedies are cumulative and shall continue in full force and effect until specifically waived in writing by the City. 7.10 Duration/Survival. This Agreement continues in full force and effect until the Loan is repaid in full. 7.11 Headings. The headings within this Agreement are for the purpose of reference only and do not limit or otherwise affect any of the terms of this Agreement. 7.12 Counterparts, Facsimile Copies. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one and the same agreement. This Agreement is effective upon transmission by either Party to the other Party of a fully signed facsimile copy of the Agreement after the formal approval by the governing body of the Successor Agency and the City Council. In case of any conflict, the counterpart maintained by the City Council will be deemed to be determinative. IN WITNESS WHEREOF, City and the Successor Agency have executed this Agreement as of the date first above written. City of South San Francisco Successor Agency to the Redevelopment Agency of the City of South San Francisco By: By: Barry M. Nagel:, City Manager Marty Van Duyn, Assistant City Manager Attest: Krista J. Martinelli, City Clerk Approved as to Form: Steven T. Mattas, City Attorney 2012538.1 M 17 Krista J. Martinelli, Secretary Steven T. Mattas, Agency Counsel CITY OF SOUTH SAN FRANCISCO TO ALLOW THE SUCCESSOR AGENCY TO MAKE PAYMENTS FOR SEVERAL NON-HOUSING RECOGNIZED OBLIGATION PAYMENT EXPENSES INCURRED BUT NOT INVOICED UNTIL AFTER JUNE 30i, 2012 WHEREAS, pursuant to Health and Safety Code Section 34177(l), before each six-month fiscal period, the Successor Agency to a dissolved Redevelopment Agency is required to adopt a draft Recognized Obligation Payment Schedule ("ROPS") that lists all of the obligations that are "enforceable obligations" within the meaning of Health and Safety Code Section 34177; and WHEREAS, each ROPE must be approved by the Oversight Board for the Successor Agency and by the State Department of Finance in order for payment of listed obligations to be made; and WHEREAS, the timing of payment of various items identified and approved as enforceable obligations on BOPS I did not coincide with the payment dates listed on those ROPS; and WHEREAS, timely payment of enforceable obligations of the Successor Agency was deemed essential and could not await approval of a RAPS submitted for the next six-month fiscal period; and WHEREAS, the Successor Agency had no other source of funding to make these payments for enforceable obligations on its own; and WHEREAS, the City therefore advanced, or is willing to advance, funds for the payment of said enforceable obligations; and WHEREAS, Health and Safety Code Section 34173(h) authorizes loans between the City and the Successor Agency for the purpose of funding enforceable obligations for which there are insufficient funds in the Real Property Tax Trust Fund; and WHEREAS, Health and Safety Code Section 34173(h) further provides that a new enforceable obligation shall be created for the repayment of each such loan, provided that the receipt and use of the loan funds is reflected on a RAPS approved by the Oversight Board for the Successor Agency and submitted to the State Department of Finance for its review and approval; and WHEREAS, pursuant to Health and Safety Code Section 34180(h) the Oversight Board may approve a request by the Successor Agency to enter into an agreement with the City; and I it WHEREAS, City and Successor Agency staff have negotiated loan agreements covering these enforceable obligations for which there are insufficient funds available for timely payment by the Successor Agency; and WHEREAS, funds are available to be loaned by the City for such purpose, and the loan agreements do not violate the City's debt limit under the California Constitution, NOW, THEREFORE, the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity, does hereby resolve as follows: 1. The Recitals set forth above are true and correct, and are incorporated herein by reference. 2. The loan agreement, in the form attached hereto, is hereby approved, and the Assistant City Manager is hereby authorized to execute it on behalf of the Successor Agency and to take such other and further action as necessary and appropriate to implement the intent of this Resolution. 3. The loan agreement, along with the supporting calculations and references to prior ROPE are attached to this Resolution and are hereby incorporated herein, is for $74,160.71 to fund accounts payable obligations for former Redevelopment enforceable obligations incurred but not invoiced as of June 30, 2012. 4. The Successor Agency is directed to include this loan agreement, with such supporting documentation and other information as it deems necessary and appropriate, on the next BOPS to be submitted to the Oversight Board and the State Department of Finance. PASSED AND ADOPTED this 8th day of January, 2013, by the following vote: AYES: NOES: ABSENT: 2 UU, ATTEST: City Clerk LOAN AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO This Loan Agreement (Agreement) is entered into as of , 2012 ("Effective Date"), by and between the City of South San Francisco, a municipal corporation ("City") and the Successor Agency to the Redevelopment Agency of the City of South San Francisco, a public entity ("Successor Agency"). City and the Successor Agency are hereinafter collectively referred to as the "Parties". WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Redevelopment Agency") was established under the provisions of the Community Redevelopment Law (California Health and Safety Code § 33000 et seq.) ("CRL"); and WHEREAS, effective June 30, 2011, the Governor signed into law ABxI 26 which automatically suspended redevelopment activities, and on December 29, 2011, the California State Supreme Court upheld the provisions of ABx1 26, thereby dissolving all redevelopment agencies on February 1, 2012; and WHEREAS, ABx 126 was modified by AB 1484, effective as of July 27, 2012, which together with ABx 126 is referred to herein as the "Dissolution Law" "; and WHEREAS, as a result of the dissolution of the former Redevelopment Agency, the Successor Agency is now administering the daily operations of the former Redevelopment Agency; and WHEREAS, Health and Safety Code § 34171 (d)(1)(E) provides that any legally binding and enforceable contract that is not otherwise void as violating the debt limit or public policy constitutes an enforceable obligation authorized for payment from the Real Property Tax Trust Fund ("RPTTF") established pursuant to the Dissolution Law; and WHEREAS, Health and Safety Code § 3417 1 (d)(1)(F) provides that contracts or agreements necessary for the administration or operation of a successor agency constitute enforceable obligations authorized for payment from the RPTTF; and WHEREAS, enforceable obligations must be listed on a Recognized Obligation Payment Schedule ("ROPS") and approved for payment by a successor agency's oversight board and the California Department of Finance ("DOF") in order for fiords to be received therefore; and WHEREAS, ten enforceable obligations pursuant to Health and Safety Code §§ 34171(d)(1) (E) and 34171 (d)(1)(F) were listed on the RODS for the period January-June 2012 ("ROPS I") as line items 19, 20, 23, 26, 27, 59, 63, 64, 67 and 68, in the total amount of Seventy Four Thousand One Hundred Sixty Dollars and Seventy One Cents ($74,160.71) ("Non-Housing Accounts Payable"), but the work for these projects was not completed in time that the Successor Agency could be timely invoiced therefore; and 3 20 WHEREAS, accordingly, the City advanced funds for the payment of the Non-Housing Accounts Payable upon the Successor Agency's receipt of invoices therefore; and WHEREAS, at present there are insufficient funds in the RPTTF to permit repayment of the Non- Housing Accounts Payable by the Successor Agency; and WHEREAS, Health and Safety Code § 34173(h) authorizes a loan between a city and the successor agency to the city's redevelopment agency for the purpose of funding enforceable obligations for which there are insufficient funds in the RPTTF; and WHEREAS, Health and Safety Code § 34173(h) further provides that a new enforceable obligation shall be created for the repayment of such a loan, provided that the receipt and use of the loan funds is reflected on a ROPE approved by the oversight board for the successor agency and submitted to the DOF for its review and approval; and WHEREAS, pursuant to Health and Safety Code § 34180(h), an oversight board may approve a request by a successor agency to enter into an agreement with a city; and WHEREAS, the City and Successor Agency wish to enter into a loan agreement in the principal amount of Seventy Four Thousand One Hundred Sixty Dollars and Seventy One Cents ($74,160.71) for the purpose of enabling the Successor Agency to pay the Non-Housing Accounts Payable; and WHEREAS, on December 10 and December 12, 2012, the Successor Agency and the City each respectively approved the Loan and authorized the execution of this Agreement, pursuant to Resolution No. 15-2012 and Resolution No. 99-2012, respectively; and WHEREAS, on January—, 2013, the Oversight Board for the Successor Agency approved the Successor Agency's request to enter into this Agreement, pursuant to Resolution No. _. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties to this Agreement agree as follows: Sawl =1 I 0-74119N 101 111,40 1.1 Loan. (a) Loan Amount. City agrees to lend to Successor Agency, and Successor Agency agrees to borrow from and repay to City, a Loan in the principal amount of not to exceed Seventy Four Thousand One Hundred Sixty Dollars and Seventy One Cents ($74,160-71). (b) Maturity Date. The total outstanding Loan principal is due and payable by August 1, 2013. 1.2 PMqM Successor Agency may prepay the Loan, in whole or in part, at any time, without penalty or other charge. 1.3 Payment, The outstanding principal of the Loan is due and payable on the Maturity Date. 1.4 Security for the Loan. As security for the repayment of the Loan, the Successor Agency hereby pledges certain Unrestricted Revenues (defined below) ( "Pledged Revenues") that are received, accrued or held by the Successor Agency and are provided within or attributable to fiscal year 2012-13, and the principal of the Loan constitutes a first lien and charge on the Pledged rd 21 Revenues, and is payable from the first moneys received by the Successor Agency from the Pledged Revenues. The term "Unrestricted Revenues" means property taxes assessed and levied by San Mateo County on behalf of the Successor Agency allocated to the Successor Agency in accordance with the Dissolution Law, together with any other income, revenue, cash receipts and any other moneys of the Successor Agency lawfully available for repayment of the Loan. ARTICLE 2 DISBURSEMENT AND ACCOUNTING; USE OF FUNJ 2,1 Disbursement. Loan proceeds may be disbursed to the Successor Agency in accordance with this Agreement upon approval of drawdown requests executed by the City Finance Director. 2.2 Use of Loan Proceeds. Successor Agency may use proceeds of the Loan exclusively for meeting the Non-Housing Accounts Payable obligation as described herein. ARTICLE 3 REPRESENTATIONS AND WARRANTIES 3.1 Authority. Successor Agency warrants that it has authority, and has completed (or will complete, as applicable) all proceedings and obtain all approvals necessary to execute, deliver, and perform under this Agreement and the transactions contemplated thereby. 3.2 Valid and Binding Obligations. Successor Agency warrants that, when duly executed by the Successor Agency, this Agreement shall constitute the legal, valid and binding obligations of Successor Agency enforceable in accordance with their respective terms. Successor Agency hereby waives any defense to the enforcement of the terms of this Agreement related to alleged invalidity of any provisions or conditions contained in this Agreement. 3.3 No Adverse Action. Successor Agency warrants that there is no action, suit or proceeding pending or threatened against it which might adversely affect the Successor Agency with respect to this Agreement. ARTICLE 4 iUCCESSOR AGENCY COVENANTS 4.1 Notification. Until the Loan is repaid in full, Successor Agency covenants that it will promptly notify City in writing of the occurrence of any event that might materially and adversely affect its ability to perform its obligations under this Agreement, or that constitutes, or with the giving of notice or passage of time or both would constitute, an Event of Default under this Agreement. 4.2 Legal Compliance. Successor Agency covenants that this Agreement does not violate the Constitutional debt limitation for municipal governments set forth in Article XV1, Section 18 of the California Constitution. ARTICLE 5 I�Akyd"" _k44jj "'4151UM 5.1 Indemnity. Successor Agency and City shall each defend, hold harmless and indemnify the other, its officers, employees and agents from and against all claims, liability, cost, expenses, loss or damages of any nature whatsoever, including reasonable attorneys' fees, arising out of or in any way connected with its failure to perform its covenants and obligations under this Agreement and 5 22 any of its operations or activities related thereto, excluding the willful misconduct or the gross negligence of the person or entity seeking to be defended, indemnified, or held harmless. ARTICLE 6 1EFAULT AND REMEDIES 6.1 Events of Default. Each of the following events will constitute an event of default ("Event of Default") under this Agreement: (a) Nonpayment. Successor Agency's failure to repay the Loan pursuant to Article I hereof. (b) Failure to Perform. Successor Agency's failure, neglect or refusal to perform any promise, agreement, covenant or obligation contained in this Agreement, after any applicable cure periods. 6.2 Declaring Default. Whenever any Event of Default has occ=ed, other than a failure to pay any sums due, City shall give written notice of default to Successor Agency. If the default is not cured within thirty (30) calendar days after the Date of Default (defined herein), or any extension approved in writing by City, City may enforce its rights and remedies under Section 6.3 below. Any default that has occurred shall be deemed to commence on the date that written notice of default is effective pursuant to Section 7.2 of this Agreement ("Date of Default"). In the event of a default in the payment of any installment payment when due, Successor Agency shall have ten (10) calendar days from the payment due date to cure such default, whether or not City gives written notice. 6.3 Remedies. Upon the occurrence of any Event of Default, City, in addition to any other remedies provided herein or by law, shall have the right, at its option without any further demand or notice, to take one or any combination of the following remedial steps: (a) declare that outstanding balance of the Loan and all other sums owing to City under this Agreement immediately due and payable, and (b) take whatever other action at law or in equity which may appear necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder. 6.4 Default Interest. Commencing on the Date of Default and continuing through the date that all indebtedness and other amounts payable under this Agreement are paid in full, interest on the Loan will accrue on the outstanding balance, at the rate equal to LAIF plus one percent (I %). 6.5 Disclaimer. If City elects to employ any of the remedies available to it in connection with any Event of Default, City will not be liable for: (1) the payment of any expenses incurred in connection with the exercise of any remedy available to City, and (2) the performance or nonperformance of any other obligations of Successor Agency. ARTICLE 7 MISCELLANEOUS 7.1 Conflict of Interest; Interest of,Employees, Agents, Consultants Officers and Officials of City or Successor Agency. Except for approved eligible administrative or personnel costs, no employee, agent or consultant who is in a position to participate in a decision-making process or gain inside information with regard to such activities assisted under this Agreement, may obtain a on 2.3 personal or financial interest in or benefit from the activities assisted under this Agreement, or have an interest, direct or indirect, in any contract, subcontract or agreement with respect thereto, or in the proceeds there under either for him/herself or for those with whom s/he has family or business ties, during his/her tenure and for one year thereafter. 7.2 Notices. Any notice, request or consent required pursuant to this Agreement shall be deemed given when delivered personally or three (3) business days after being deposited in the U.S. mail, addressed as follows: If to Successor Agency: Successor Agency to the Redevelopment Agency of South San Francisco P. 0. Box 711 South San Francisco, CA 94083 Attention: Assistant City Manager With copy to Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco If to city: City of South San Francisco P.O. Box 711 South San Francisco, CA 94083 Attention: City Manager or to such other addresses as the Parties may designate by notice as set forth above. 7.3 Successors and Assigns. All of the terms of this Agreement shall apply to and be binding upon, and inure to the benefit of, the successors and permitted assigns of City and Successor Agency, respectively, 7.4 Attorneys' Fees. If any action is instituted by either Party to enforce this Agreement or to collect any sums due hereunder or pursuant to this Agreement, the prevailing party in such action shall be entitled to recover its costs and reasonable attorneys' fees as awarded by the court in that action. 7.5 Severabilfty. If one or more provisions of this Agreement are found invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, the remaining provisions shall not in any way be affected, prejudiced, disturbed or impaired thereby, and all other provisions of this Agreement shall remain in fall force and effect. 7.6 Amendments/Entire Ap-reement. City and Successor Agency reserve the right to amend this Agreement by mutual consent. It is mutually understood and agreed that no amendment, modification, alternation or variation of the terms of this Agreement shall be valid unless in writing and signed and acknowledged and approved by both parties. This Agreement constitutes the entire agreement of the Parties and no oral understandings or agreement not incorporated herein shall be binding on either Party. 7.7 Time. Time is of the essence in the performance of the terms and conditions of this Agreement. 7.8 Governing Law. The laws of the State of California govern this Agreement. 7.9 City's Rights and Consent. No forbearance, failure or delay by City in exercising any right, power, or remedy, nor any single or partial exercise of City or any right or remedy hereunder shall 7 24 preclude the further exercise of such right, power or remedy. The consent of City to any act or omission by Successor Agency may not be construed as City consent to any other or subsequent act or omission or as a waiver of the requirement to obtain City consent in any other instance. All of City's rights, powers and remedies are cumulative and shall continue in full force and effect until specifically waived in writing by the City. 7.10 Duration/Survival. This Agreement continues in full force and effect until the Loan is repaid in full. 7.11 Headings. The headings within this Agreement are for the purpose of reference only and do not limit or otherwise affect any of the terms of this Agreement. 7.12 Counterparts, Facsimile Copies. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one and the same agreement. This Agreement is effective upon transmission by either Party to the other Party of a fully signed facsimile copy of the Agreement after the formal approval by the governing body of the Successor Agency and the City Council. In case of any conflict, the counterpart maintained by the City Council will be deemed to be determinative. IN WITNESS WHEREOF, City and the Successor Agency have executed this Agreement as of the date first above written. City of South San Francisco IN Attest: Barry M. Nagel, City Manager Krista J. Martinelli, City Clerk Approved as to Form: Steven T. Mattas, City Attorney 2012595.1 M W Successor Agency to the Redevelopment Agency of the City of South San Francisco 0 Marty Van Duyn, Assistant City Manager Krista J. Martinelli, Secretary Steven T. Mattas, Agency Counsel