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2015-08-18 e-packet
S REGULAR MEETING OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM, TOP FLOOR 400 GRAND AVENUE TUESDAY, AUGUST 18, 2015 2:00 P.M. PEOPLE OF SAN MATEO COUNTY You are invited to offer your suggestions. In order that you may know our method of conducting Board business,we proceed as follows: The regular meetings of the South San Francisco Oversight Board for the Successor Agency to the City of South San Francisco Redevelopment Agency are held on the third Tuesday of each month at 2:00 p.m. in the in the Large Conference Room, Top Floor at City Hall, 400 Grand Avenue, South San Francisco, California. In accordance with California Government Code Section 54957.5, any writing or docurnent that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk's Office located at City Hall. lf, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080. In compliance with Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the South San Francisco City Clerk's Office at (650) 877-8518. Notification 48 hours in advance of the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. Chairperson: Selected by: Neil Cullen Largest Special District of the type in H&R Code Section 34188 .... ...... Vice Chair: Selected by: Michael Krause San Mateo County Superintendent of Schools Assistant Superintendent, Business Services South San Francisco Unified School District Alternate: Vacant Superintendent, South San Francisco Unified School District Board Members: Selected by: Mark Addiego Mayor of the City of South San Francisco Councilmcmber, 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 San Mateo County Board of Super-visors Deputy County Manager, San Mateo County Paul Scannell San Mateo County Board of Supervisors (Public Member) Billy Gross Mayor of the City of South San Francisco Senior Planner, City of South San Francisco Counsel Craig Labadie Advisory: Jim Steele, Assistant City Manager, City of South San Francisco Richard Lee—Finance Director, City of South San Francisco Alex Greenwood—Director of Economic and Community Development, 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 CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE AGENDA REVIEW COMMUNICATIONS FROM STAFF OVERSIGHT BOARD REGULAR MEETING AUGUST 18,2415 AGENDA PAGE 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 for attention, or have a matter placed on a future agenda for a more comprehensive action report. MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes of the Regular Meeting of May 21, 2015. 2. Resolution of the Oversight Board directing the Successor Agency to return an asset in the amount of$8,792,327 related to the Downtown Parking Garage to the City of South San Francisco Parking District Enterprise Fund and to nullify and remove the "Loan"Receivable asset from the Successor Agency's accounting records. 3. Closed Session: Conference with Real Property Negotiators (Pursuant to Government Code Section 54956.8) Properties: 201-219 Grand Avenue (APN: 012-316-110, 012-316-100, 01.2-310- 090, and 012-316-080) Agency Negotiator: Alex Greenwood Negotiating Parties: Brookwood Equities, LLC., the City of South San Francisco, and the Successor Agency to the Redevelopment Agency of the City of South San Francisco, Under Negotiation: Price and terms for disposition of the property. (Alex Greenwood, Economic & Community Development Director and Steve Mattas, City Attorney) ADJOURNMENT OVERSIGHT BOARD REGULAR MEETING AUGUST 18,2015 AGENDA PAGE D Ell MINUTES SPECIAL MEETING 0 OF THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 CITY HALL LARGE CONFERENCE ROOM, TOP FLOOR 400 GRAND AVENUE THURSDAY, MAY 21, 2015 2:00 P.M. CALL TO ORDER TIME: 2:00 P.M. ROLL CALL PRESENT: Boardmembers Addiego, Christensen, Gross, Farrales, and Scannell, Vice Chair Krause, and Chairperson Cullen. ABSENT: None. PLEDGE OF ALLEGIANCE Recited. AGENDA REVIEW No Changes. COMMUNICATIONS FROM STAFF City Attorney Mattas stated that the Department of Finance (DOF) has rejected payment and consequently stalled the process for tenant improvements at 636 El Camino because they have not formally approved the Long Range Property Management Plan (LRPMP). Mattas recommended that a subcommittee be formed to address the present issues with them, highlighting that this is a situation where revenue will not be realized unless action is taken, Boardmembers Christensen and Addiego volunteered to act as the Subcommittee. PUBLIC COMMENTS None. MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes of the Regular Meeting of February 17, 2015, Motion—Boardmember Scannell/Second—Boardmember Christensen: to approve the amended Minutes of the Regular Meeting of February 17, 2015. Unanimously approved by roll call vote with one abstention. 2. Resolution approving the amended Long Range Property Management Plan and authorizing the Executive Director to submit it to the California Department of Finance. (Armando Sanchez, Housing Consultant). Housing Consultant Armando Sanchez presented the Staff Report explaining that the amended Long Range Property Management Plan closely follows the previously approved one but includes a number of small changes and corrections resulting from their conversation with the Department of Finance. Sanchez detailed a few key policy points as well as several proposed, rejected changes. He explained that this has been a slow process because of additions, clarification, and unforeseen challenges with reviewers. Further discussion ensued regarding 559 Gateway deed restrictions and tenant relocation costs. Motion—Boardmember Scannell/Second—Boardmember Christensen: to approve the amended Long Range Property Management Plan and authorizing the Executive Director to submit it to the California Department of Finance. Unanimously approved by roll call vote. ADJOURNMENT Being no further business, Chair Cullen adjourned the meeting at 2:41 P.M. Sub Approved: e exandraTupper, e -Lty City Clerk Neil Cullen, Chairperson Tupper; I versight Board f r t e Successor Oversight Board for the Successor I o r I Agency y to Sou S Agency to the Sou h t, Francisco Agency to the South San Francisco Redevelopment Agency Redevelopment Agency OVERSIGHT BOARD SPECIAL MEETING MAY 21,2015 MINUTES PAGE TO: Oversight Board Members August 7, 2015 The following Agenda item 42 refers to report issued by the State Controller's Office titled "Final Report on the Asset Transfer Review of the City of South San Francisco's former Redevelopment Agency ("RDA") Assets for the period between January 1, 2011 through January 31, 2012". That report was previously provided to the Board by the City Clerk on June 23, 2015 via email. Due to its length, it is not being provided as a hard copy attachment to the following staff report, but is being emailed again separately today by the City Manager's Office. If you would like a hard copy,please email Jim Steele at jim.steelegssf.net or call him at(650) 829-6619. The City Attorney's Office has indicated there is a 10 day noticing period for Agenda item 2, which is why this item is being provided to the Board 1 week earlier than normal. The other items for the August 18 meeting will be distributed next Friday. S d,, " Redevelopment Successor Agency Oversight Board Staff Report DATE: August 18, 2015 TO: Members of the Oversight Board FROM: Jim Steele, Assistant City Manager/Assistant Executive Director SUBJECT: RESOLUTION OF THE OVERSIGHT BOARD DIREC'FING THE SUCCESSOR AGENCY TO RETURN AN ASSET INTHE AMOUNT OF $8,792,327 RELATED TO THE DOWNTOWN PARKING GARAGE TO THE CITY OF SOUTH SAN FRANCISCO PARKING DISTRICT ENTERPRISE FUND AND TO NULLIFY AND REMOVE THE "LOAN" RECEIVABLE ASSET FROM THE SUCCESSOR AGENCY'S ACCOUNTING RECORDS RECOMMENDATION It is recommended that the Oversight Board adopt a resolution directing the Successor Agency to nullify and return a "loan" receivable asset from the Successor Agency o f t he former Redevelopment Agency in the amount of$8,792,327 to the City's Downtown Parking District Enterprise Fund. SUMMARY In June 2015, the State Controller's Office ("SCO") issued its Final Report on the Asset Transfer Review of the City of South San Francisco's former Redevelopment Agency ("RDA") Assets for the period between January 1, 2011 through January 31, 2012 ("Final Report"). Asset Transfer Reviews were performed on all former Redevelopment Agency assets under the terms of the RDA Dissolution Law, and was not specific to the City of South San Francisco's Redevelopment Agency. Despite the City of South San Francisco ("City") setting forth its position and supporting documentation that the expenditure at issue was a lawful RDA expenditure in response to the SCO's draft report, the SCO nonetheless ordered that the City's Parking District Enterprise Fund' must treat the prior expenditure as a loan payable to the Successor Agency of the former Redevelopment Agency ("Successor Agency"). The Final Report was originally provided to the Oversight Board by the City Clerk's Office on June 23, 2015, and is being emailed again to the Board in advance of the August 18th regular Oversight Board meeting. (Due to its length, it is not being reproduced in hard copy for this report). The receivable asset at issue has to do with a presumed "loan" or "advance" the SCO stated should remain on the Successor Agency's accounting records as an asset. Note that neither the Miller Avenue parking garage nor the underlying land itself are the assets in question, 1. The City's Downtown Parking District is all contained within the former Downtown Contra]Redevelopment Project Area,As an Enterprise Fund,it is S self-supporting through parking permit and parking meter revenues.Its purpose is to provide parking for the downtown area. LLZ---- Staff Report Subject: RESOLUTION OF THE OVERSIGHT BOARD DIRECTING THE SUCCESSOR AGENCY TO RETURN AN ASSET IN THE AMOUNT OF $8,792,327 RELATED TO THE DOWNTOWN PARKING GARAGE TO THE CITY OF SOUTH SAN FRANCISCO PARKING DISTRICT ENTERPRISE FUND AND TO NULLIFY AND REMOVE THE "LOAN" RECEIVABLE ASSET FROM THE SUCCESSOR AGENCY'S ACCOUNTING RECORDS Page 2 The City does not believe that there was ever an actual "loan" or "advance", and this amount was properly removed from the City's accounting records in March 2011, prior to the RDA dissolution legislation. The alleged "loan" or "advance" was between the former Redevelopment Agency and the City's Parking District Enterprise Fund (Parking Fund) for the cost of construction of the downtown parking garage, which was begun in 2009. The staff recommends that the Board, after reviewing the information contained in this staff report, make the findings and adopt the attached Resolution, that would direct the Successor Agency to remove the "loan" receivable asset from the Successor Agency's books. This action is consistent with California Health and Safety Code § 34181 (relevant language included as Attachment 1). Background Discussions for a downtown parking garage began prior to the 2007 budget appropriation for construction. In 2006, the City Council Downtown Subcommittee met regularly with Downtown stakeholders to discuss the lack of parking in Downtown. It was also observed that parking was located on too many surface lots, which could be used more efficiently as development sites. On February 14, 2007 the Redevelopment Agency Board determined that the benefits in assisting with the building of the parking structure included: • Allowing for land use efficiency by enabling density and land for open space; • Providing an opportunity for shared parking; • Reducing walking distance from parking to destinations on Grand Avenue; • Creating a strategic location for sharing between residential uses on Miller Avenue and commercial uses on Grand Avenue; • Justifying active parking management within the Parking District; and • Integrating the design with the neighborhood, In the 2007-08 Capital Improvement Program ("CIP"), $10.0 million was appropriated from Redevelopment Funds to pay for the construction of the Downtown Parking Garage, making it the only parking garage downtown (also known as the Miller Avenue Parking Garage-Attachment 2). Because those funds were effectively obligated by the RDA at that point, that should control the characterization of this expenditure. Further, this 2007-08 CIP expenditure does not characterize the Miller Avenue Parking Structure funding allocation as being funded by loans. Instead, the budget records the $10,000,000 transfer strictly as a RDA funded appropriation. Notably, that CIP budget contains a legend with a separate category for bonds/loans (B/L), and the entry for the Miller Avenue Parking Structure funding project does not contain a reference to bond/loan funding. This demonstrates, that at the time of the allocation, the RDA transfer to the Miller Avenue Parking Structure project was merely an expenditure of the RDA, not a loan or advance. Staff Report Subject: RESOLUTION OF THE OVERSIGHT BOARD DIRECTING THE SUCCESSOR AGENCY TO RETURN AN ASSET IN THE AMOUNT OF $8,792,327 RELATED TO THE DOWNTOWN PARKING GARAGE TO T14E CITY OF SOUTH SAN FRANCISCO PARKING DISTRICT ENTERPRISE FL TND AND TO NULLIFY AND REMOVE THE "LOAN" RECEIVABLE ASSET FROM THE SUCCESSOR AGENCY'S ACCOUNTING RECORDS Page 3 Further, the majority of the Miller Avenue Parking Garage ("Garage") was constructed on land owned primarily by the City and under control of the Downtown Parking District. A portion of the Miller Avenue Parking Garage was constructed on land formally owned by the RDA and now included in the Long Range Property Management Plan (LRPMP) that was approved by the Oversight Board on November 19, 2013. In the LRPMP, the relevant portion of land on which the Miller Avenue Parking Garage exists was expressly reserved for public use. The construction contract for the Parking Garage was approved in May 2009 by the Redevelopment Agency. The approved budget in place for the construction was funded from RDA funds as demonstrated in the budget documents referenced above and attached to this staff report. As an investment to spur economic development in the downtown, and as planned for in the Redevelopment Implementation Plan, a downtown parking garage was an appropriate RDA expenditure, that is, it had been contemplated for the RDA prior to the project's being budgeted. Neither the City Council nor the former Redevelopment Agency Board ever considered or approved a loan agreement between the Redevelopment Agency and the Parking Enterprise Fund. No formal loan terms or documents exist. Beginning in 2010-11, the City accounting records showed $8.8 million under "Loans Receivable" on the City's year end accounting records even though there were no loan documents to support the accounts receivable entry. This was not a policy decision made by the City Council, but a series of accounting entries made administratively by staff. City staff removed the erroneously described "loan" from its accounting records pursuant to a Resolution passed by the former RDA Board in March 2011. At the time, staff believed this action to be the clearest way to leave an accurate paper trail. In September 2011, the Governor signed legislation dissolving the RDA. ABxl 26, as supplemented by AB 1484, which disallowed transfers of assets between RDAs and cities going back retroactively to January 1, 2011, two months before the alleged "loan" had been formally removed from the City's books, The Miller Avenue Garage was largely completed by January 2011, and opened in April 2011. Funds had all been committed in 2007 from the RDA (as evidenced by original budget documents and construction contract approvals), and the City maintains that the funding constituted a valid RDA expenditure. Impact of the SCO Audit By stating that a "loan" of $8.8 million must be reinstated on the Successor Agency's books, it appears that the SCO intends for the Successor Agency staff to work with the Oversight Board to come up with loan terms and a loan payback to the Successor Agency from the Parking District revenues over time. The loan payback would be exceedingly long and therefore impractical, and not Staff Report Subject: RESOLUTION OF THE OVERSIGHT BOARD DIRECTING THE SUCCESSOR AGENCY TO RETURN AN ASSET IN THE AMOUNT OF $8,792,327 RELATED TO THE DOWNTOWN PARKING GARAGE TO THE CITY OF SOUTH SAN FRANCISCO PARKING DISTRICT ENTERPRISE FUND AND TO NULLIFY AND REMOVE THE "LOAN" RECEIVABLE ASSET FROM THE SUCCESSOR AGENCY'S ACCOUNTING RECORDS Page 4 of material benefit to the taxing entities, as discussed below. ReturningLReversiny the "Loan" Receivable will benefit the Taxing Entities The downtown's recent success in attracting new development is consistent with findings from the Urban Land Institute (ULI), which estimates the successful transformation of a downtown into a transit oriented development (TOD) district can lead to increases in property income of between 30% and 100%, which in turn leads to corresponding increases in property value. Public parking is a critical component of an overall TOD strategy. Public parking is ideally located 5-7 minutes walking distance from a transit node, in order to activate parcels for development between the transit station and parking garage. This type of parking strategy has a direct economic benefit on adjacent and nearby parcels, because it supports transit and pedestrian-oriented activity, it supports ground-floor retail, and it takes the pressure off of individual parcels to provide all necessary parking on-site, thereby allowing greater flexibility in how development can happen on individual parcels. By this measure, the Miller Avenue Parking Garage has played a critical role in the transformation of the downtown into a functional TOD district, and has enabled the rapid increase of lease rates and property values for parcels throughout downtown, thereby providing direct economic benefit to the taxing agencies through higher property taxes over time. In addition to providing a valuable amenity to downtown businesses and residences, the presence of the Miller Avenue Parking Garage in the downtown area allows the City/Successor Agency to sell less- utilized surface parking lots in the future for mixed use development, thereby increasing future property tax revenues to all taxing entities. In fact, besides the Brookwood residential/mixed use development (Grand/Cypress) partially on a former surface parking lot, there are two other housing projects planned downtown on a former downtown surface parking lots (the Rotary's Miller Ave project and Brook-wood's Linden Ave project), and other potential TOD residential projects within, the downtown in various stages of planning: the former Ford Properties and 211 Airport Blvd. All of these projects will rely, in some part, on the presence of the Miller Avenue Parking Garage being strategically situated in the downtown area. Finally, staff believes that a "loan" payback is impractical and of minimal benefit to the taxing entities. City staff have projected a typical Parking District annual revenue over expenses of $160,000 (Attachment 3). A loan payoff of$160,000 would be of minimal value to taxing entities, and would take roughly 55 years to pay off without interest. In fact, a long-time loan payback due to insufficient funding was precisely the reason that the RDA paid for the parking garage in the first place; to jumpstart an investment in public infrastructure that would spur economic development in the downtown. Staff Report Subject: RESOLUTION OF THE OVERSIGHT BOARD DIRECTING THE SUCCESSOR AGENCY TO RETURN AN ASSET IN THE AMOUNT OF $8,792,327 RELATED TO THE DOWNTOWN PARKING GARAGE TO THE CITY OF SOUTH SAN FRANCISCO PARKING DISTRICT ENTERPRISE FUND AND TO NULLIFY AND REMOVE THE "LOAN" RECEIVABLE ASSET FROM THE SUCCESSOR AGENCY'S ACCOUNTING RECORDS Page 5 Health and Safety Code Section 34181 Health and Safety Code Section 34181(a) requires the Oversight Board to direct the Successor Agency to dispose of all assets of the former Redevelopment Agency; provided however, that the Oversight Board ma instead direct the Successor Agency to transfer owr�ersh�iof assets u�sedfo�ra governmental purpose to the 4pprgpriate public jurisdiction. If there are any existing agreements relating to the use of those assets, the transfer shall be pursuant to them. Here, however, there is no loan agreement or any other existing agreement between the RDA and the City or its Parking District. In accordance with Health and Safety Code Section 34181(f), at least ten days' notice of the Oversight Board's public meeting regarding this proposed action has been given to the public. CONCLUSION In summary, staff recommends that the Oversight Board consider the bigger picture of economic development against the nominal value of a long term loan payback from the Parking District Fund that operates on very small margins. Further, staff recommends that the Oversight Board consider this information when deciding whether rigid adherence to arbitrary dates and somewhat inconsistent former accounting records should take precedence over what staff believes is an equitable and sensible approach to remove a presumed "loan receivable" as an asset on the Successor Agency's books. Staff therefore requests that the Oversight Board adopt the attached resolution directing the Successor Agency to reverse/return an asset in the amount of$8,792,327 of the Successor Agency to the City's Downtown Parking Fund, thereby removing the alleged "advance" or "loan" from the Successor Agency's accounting records. Adoption of the attached Resolution will make economic sense for all taxing entities and will support continued economic growth in the downtown area. By: l< Approved: Jim 9teele —M11'1e, Futrell Assistant City Manager City Manager Attachments: Resolution Attachment 1: Health and Safety Code language Attachment 2: Original CIP Budget for Parking Construction Attachment 3: Revenue and Expenditure projections, Downtown Parking Fund Attachment 4: State Controller's Report (Via Email to Boardmembers) 3 S/MFdm 2503037.2 RESOLUTION NO. OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY OF THE CITY OF SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY RESOLUTION OF THE OVERSIGHT BOARD DIRECTING THE SUCCESSOR AGENCY TO RETURN AN ASSET IN THE AMOUNT OF $8,792,327 RELATED TO THE DOVvTNTOWN PARKING GARAGE TO THE CITY OF SOUTH SAN FRANCISCO PARKING DISTRICT ENTERPRISE FUND AND TO NULLIFY AND REMOVE THE "LOAN" RECEIVABLE ASSET FROM THE SUCCESSOR AGENCY'S ACCOUNTING RECORDS WHEREAS, in 2007, $10,000,000 in Redevelopment Agency funds were appropriated to construct the Miller Avenue Parking Garage within the Downtown Parking District ("Project"); and WHEREAS, at the time of the 2007 appropriation, there was no indication of a loan financing the Project, nor were there any accompanying loan documents ever executed; and WHEREAS, the Miller Avenue Parking Garage was budgeted in the City's Capital Improvement Budget for the 2007-08, 2008-09, and 2009-10 fiscal years, with appropriation originating from the former Redevelopment Agency funds in order to construct the garage on land owned by the City and the former Redevelopment Agency under the control of the Downtown Parking District; and, WHEREAS, on December 12, 2007, the City Council adopted a resolution stating that the Project is consistent with the Downtown/Central Redevelopment Plan; and, WHEREAS, in 2009, the former Redevelopment Agency of the City of South San Francisco ("RDA"), by resolution 112009, awarded the Project to C. Overaa & Co., and subsequently entered into an agreement with C. Overa,a & Co. for the construction of the Miller Avenue Parking Garage; and WHEREAS, the Miller Avenue Parking Garage was completed and opened for use in 2011, and has since been utilized for public use; and WHEREAS, the Miller Avenue Parking Garage is located completely within the former Downtown Central Redevelopment Project Area; and, WHEREAS, the appropriations and the expenditures for the Miller Avenue Parking Garage were valid RDA expenditures, and the vast majority of funds were expended prior to January 1, 2011, the beginning effective date of RDA dissolution; and 2503109.2 1 WHEREAS, there are conflicting accounting records that show funds expended prior to 2011 as both an RDA expenditures and then later as an "advance", however an "advance" is an accounting term in municipal accounting when one fund provides funds for another fund, and in this case, it appears that City accounting staff booked the expenditures as an advance administratively without formal City Council or RDA Board approval; and, WHEREAS, Health and Safety Code § 34181 permits the Oversight Board for the Successor Agency of South San Francisco Redevelopment Agency ("Board") to direct the Successor Agency to transfer ownership of assets used for a governmental purpose to the appropriate public jurisdiction; and WHEREAS, there is no loan agreement or any other existing agreement between the RDA and the City or its Parking District to dictate how the assets should be treated; and WHEREAS, in November 2013, Oversight Board adopted the Long Range Property Management Plan ("LRPMP") for the Successor Agency, which includes land underlying a portion of the Miller Avenue Parking Garage, and that land and the Miller Avenue Parking Garage are specifically set aside for governmental use within the LRPMP and is a critical component to the economic revitalization of the downtown; and WHEREAS, downtown area businesses benefit from the provision of additional parking in the downtown area, and therefore the construction of a parking garage that is publicly owned is of benefit to the former Project Area; and WHEREAS, a parking garage in the Downtown area was consistent with the RDA Implementation Plan in effect at the time, The Implementation Plan in effect at the time of appropriations sought to revitalize the downtown, encourage customers to shop, and make the area more pedestrian friendly. On June 4, 2007, a City Council Staff Report stated that the project could spur future commercial development and create a "more pleasant pedestrian experience," Thus, before the 2007-08 CIP Budget was adopted, the proposed garage was described by the City Council in terms that were consistent with the goals of the RDA Implementation Plan. NOW, THEREFORE, BE IT RESOLVED that the Oversight Board for the Successor Agency of the City of South San Francisco Redevelopment Agency hereby: 1. Finds that the foregoing Recitals are true and correct and made a part of this Resolution. 1 Finds that the return of the asset through this Resolution itself does not commit the Successor Agency or the City of South San Francisco to any action, that may have a significant effect on the environment and thus does not constitute a "project" subject to the requirements of the California Environmental Quality Act ("CEQA"), pursuant to CEQA Guidelines §15061(b)(3). 3. Directs the Successor Agency to nullify and return a "loan" receivable asset from the Successor Agency of the former Redevelopment Agency in the amount of$8,792,327 to 2503109.2 2 the City's Downtown Parking District Enterprise Fund, related to the construction of the Miller Avenue Parking Garage, and removing the receivable asset from the Successor Agency's accounting records, 4. Authorizes and directs the Successor Agency to undertake such actions as are necessary to carry out the intent of this Resolution, including transmittal of this Resolution to the State Department of Finance, I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Oversight Board for the Successor Agency of the City of South San Francisco Redevelopment Agency at a regular meeting held on the 18th day of August, 2015 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Successor Agency Secretary 2503109.2 3 Attachment 1 Health and Safety Code § 34181 (emphasis added) The oversight board shall direct the successor agency to do all of the following: (a) Dispose of all assets and properties of the former redevelopment agency; provided, however; that the oversight board may instead direct the successor agency to transfer ownership of those assets that were constructed and used for a governmental purpose, such as roads, school buildings, parks, police and fare stations, libraries, and local agency administrative buildings, to the appropriate public jurisdiction pursuant to any existing agreements relating to the construction or use of such an asset. Any compensation to be provided to the successor agency for the transfer of the asset shall be governed by the agreements relating to the construction or use of that asset. Disposal shall be done expeditiously and in a manner aimed at maximizing value. Asset disposition n-xay be accomplished by a distribution of income to taxing entities proportionate to their property tax share from one or more properties that may be transferred to a public or private agency for management pursuant to the direction of the oversight board. (b) Cease performance in connection with and terminate all existing agreements that do not qualify as enforceable obligations. (c) Transfer housing assets pursuant to Section 34176. (d) Terminate any agreement, between the dissolved redevelopment agency and any public entity located in the same county, obligating the redevelopment agency to provide funding for any debt service obligations of the public entity or for the construction, or operation of facilities owned or operated by such public entity, in any instance where the oversight board has found that early termination would be in the best interests of the taxing entities. (e) Determine whether any contracts, agreements, or other arrangements between the dissolved redevelopment agency and any private parties should be terminated or renegotiated to reduce liabilities and increase net revenues to the taxing entities, and present proposed termination or amendment agreements to the oversight board for its approval. The board may approve any amendments to or early tennination of those agreements if it finds that amendments or early termination would be in the best interests of the taxing entities. (f) All actions taken pursuant to subdivisions (a) and (c) shall be approved by resolution of the oversight board at a public meeting after at least 10 days' notice to the public of the specific proposed actions. The actions shall be subject to review by the Department of Finance pursuant to Section 34179 except that the department may extend its review period by up to 60 days. If the department does not object to an action subject to this section, and if no action challenging an action is commenced within 60 days of the approval of the action by the oversight board, the action of the oversight board shall be considered final and can be relied upon as conclusive by any person. If an action is brought to challenge an action involving title to or an interest in real property, a notice of pendency of action shall be recorded by the claimant as provided in Title 4.5 (commencing with Section 405) of Fart 2 of the Code of Civil Procedure within a 60-day period. a w � ,,;,��' ; � n/� l%fib ���li�J/�!//r jiyl%r� ✓ r16�i������j/ � a i rli rm r r r �, � 4 CL. �.tC i1L �y IL ry m W�CDU :w C<1 ! u a c iry3 �{ w z w ry A.� WD W o W �W ♦- u., LW ul ul < `` O: ul w U CC LL. 7 J 4 CD LU 2. L. U 4. * LL- w m me > cr w o a>z of li Z UCVi xrwvmmmoui m el 0 r-I 00 w N r, -tt 0 RT CD 10 0 Ln 0 LM -zr Rt 00 P, r, Cs N cn to 0) 0 CD 0 CS ri 14 N KT -1 0 01 m Lr) 00 1�11 00 1^ 00 m r-I kD "q -4 N rq CD O Ln N cu E Ln m r, 4 Rr LM 00 00 110 N W Ln M 00 00 N eq 4T h N C7 CS I't N r4 0 r, 0 N N 00 LO V) r, Ln Ln u 00 00 N V1, -I m c N V CD CD fli N W 00 (n 00 a 00 0 Ca CO C) � 00 N LM N cl LD m (n ch -C L'� Z� a 9 U� Ln C> (TI m Ci co Ln 007 fy� fy� ca Ln M e 00 —1 Ch N m F- o v-VI m x rf) �.c w 0 a 1� e4 C> Ln m N' o c c ci m a) Ln 00 00 m N %D Ln rn Ln N 0 r, a 0) -Zt 00 M fli Ln w CD 00 q r-I Ch 0 0 0 0 LO N LM �l {,5 lll� M h C'4 tD r1i N d df ? 2 00 1--1 m m Ln rl a 00 Ln 0 a m �4 Ln eq iol� N a) V1. 1^ V). F: > L co L E o c -C c o CL c CU 0 0 - bn tc u cr cs Ln LU 0 bt D 0 0 tw Ln �i CL �a 01 Qj 4) LLJ � LAJ > a) 2 urn o 4 J V) F- —0 O Er Ln LLJ LO u CL LLI m X LL LL cr G aj R7. c U c cu ui Ln a LL �,e cu 4. X CL CL to E m 40 X > cu t D - Im, Sc CL (D Ck..- a 0- 0 CL -0 0 m (D 4) �g M = -6 0 Lrl m 5- r CL ro Z z = CL V aj E > 0 c ,, T D Wi u Yin > cq m < 0 a, u C) CL cl.. CL > CL --"Z a, w V) r,4 -C OJ 0 -4 N', 0 oc t UJ x oa 4- C C) C) 0 0 00 00 00 Lr) Ln Ln 0 0 0 0) M m M C) M Ft 'o Q > a 5. CL W =IOC 4 1 m m a) ui SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY Review Report TRANSFER ASSET VI Januai-y 1, 2011, through January 31, 20-12 IHE� C0 tiyRik }+ v" p� O , BETTY T. YEE California State Controller June 2015 THE BETTY T. YEE California State Controller June 15, 2015 Jim Steele, Finance Director South San Francisco Redevelopment/Successor Agency P.O. Box 711 South San Francisco, CA 94083 Dear Mr. Steele: Pursuant to Health and Safety Code section 34167.5, the State Controller's Office (SCO) reviewed all asset transfers made by the South San Francisco Redevelopment Agency(RDA) to the City of South San Francisco (City) or any other public agency after January 1, 2011. This statutory provision states, "The Legislature hereby finds that a transfer of assets by a redevelopment agency during the period covered in this section is deemed not to be in furtherance of the Community Redevelopment Law and is thereby unauthorized." Therefore, our review included an assessment of whether each asset transfer was allowable and whether the asset should be turned over to the Successor Agency. Our review applied to all assets including, but not limited to, real and personal property, cash funds, accounts receivable, deeds of trust and mortgages, contract rights, and rights to payment of any kind. We also reviewed and determined whether any unallowable transfers to the City or any other public agency have been reversed. Our review found that the RDA transferred $216,208,113 in assets after January 1, 2011, including unallowable transfers totaling $41,844,014, or 19.35% of transferred assets. The unallowable transfers included $17,543,148 to the City and $24,300,866 to the Entity Assuming the Housing Functions. However, the following corrective actions have been taken: • On June 30, 2012, the City turned over$8,750,821 in capital assets to the Successor Agency, • On August 14, 2012, the Successor Agency effectuated the transfer of housing functions and assets of$24,300,866 to the Entity Assuming the Housing Functions. Therefore, the remaining unallowable asset transfers in the amount of$8,792,327 must be turned over to the Successor Agency, JU-n Steele, Finance Director -2- June 15, 2015 If you have any questions,please contact Elizabeth GonzAlez, Chief, Local Government Compliance Bureau, by telephone at (916) 324-0622 or by email at
[email protected]
. Sincerely, Original signed 1)y JEFFREY V. BROWNFIELD, CPA Chief, Division of Audits JVB/1s cc: Bob Adler, Controller County of San Mateo Neil Cullen, Oversight Board Chair South San Francisco Redevelopment/Successor Agency David Botelbo, Program Budget Manager California Department of Finance Richard J. Chivaro,, Chief Legal Counsel State Controller's Office Elizabeth GonzAlez, Bureau Chief Division of Audits, State Controller's Office Betty Moya, Audit Manager Division of Audits, State Controller's Office Daniel Tobia, Auditor-in-Charge Division of Audits, State Controller's Office South San Francisco Redevelopn ica t Ageiiey Asset Transfer Review Af-I Contents Review Report Summary....----.............---......................---............ ...... ............................. I Background,,.,...................---.... ................ ............................... ........................... I Objective, Scope, and Methodology.... --.......................... ..........—...... ...... 2 Conclusion............ ........................ 2 Views of Responsible Officials........... ............................. ...... ................ 3 Restricted Use..... .................-...........- 3 Findings and Orders of the Controller ................................................................................ 4 Schedule 1—Unallowable Asset Transfers to the City of South San Francisco..—.... 7 Schedule 2—Unallowable Asset Transfers to the Entity Assuming the Housing Functions...... ...................-...... ......... 8 Attachment—City's Response to Draft Review Report South Sari Francisco Redevelopwnt Agency Asset Trfmsfer-Review Asset Transfer Review p Summary The State Controller's Office (SCO) reviewed the asset transfers made by the South San Francisco Redevelopment Agency (RDA) after January 1, 2011. Our review included, but was not limited to, real and personal property, cash funds, accounts receivable, deeds of trust and mortgages, contract rights, and rights to payments of any kind from any source. Our review found that the RDA transferred $216,208,113 in assets after January 1, 2011,. including unallowable transfers totaling $41,814,014, or 19.35% of transferred assets. The unallowable transfers included $17,543,148 to the City of South San Francisco (City) and $24,300,866 to the Entity Assuming the Housing Functions. However, the following corrective actions have been taken: • On .rune 30, 2012, the City turned over $8,750,821 in capital assets to the Successor Agency. • On August 14, 2012, the Successor Agency effectuated the transfer of housing functions and assets of $24,300,866 to the Entity Assuming the Housing Functions. Therefore, the remaining unallowable asset transfers in the amount of $8,792,327 must be turned over to the Successor Agency. Background In :January of 2011, the Governor of the State of California proposed statewide elimination of redevelopment agencies (RDAs) beginning with the fiscal year (FY) 2011-12 State budget. The Governor's proposal was incorporated into Assembly Bill 26 (ABXI 26, Chapter 5, Statutes of 2011, First Extraordinary Session), which was passed by the Legislature, and signed into law by the Governor on June 28, 2011. ABX1 26 prohibited RDAs from engaging in new business, established mechanisms and timelines for dissolution of the RDAs, and created RDA successor agencies and oversight boards to oversee dissolution of the RDAs and redistribution of RDA assets. A California Supreme Court decision on December 28, 2011 (California Redevelopment association el al. v. Matvsantos), upheld ABX1 26 and the Legislature's constitutional authority to dissolve the RDAs. ABXI 26 was codified in the Health and Safety (H&S) Code beginning with section 34161. H&S Code section 34167.5 states in part,". . . the Controller shall review the activities of redevelopment agencies in the state to determine whether an asset transfer has occurred after January 1, 2011, between the city or county, or city and county that created a redevelopment agency or any other public agency, and the redevelopment agency." -1- South San Francisco Redevelopinew Agency Asset Transfer Review The SCO identified asset transfers that occurred after January 1, 2011, between the RDA, the City and/or any other public agency. By law, the SCO is required to order that such assets, except those that already had been committed to a third party prior to June 28, 2011, the effective date of ABXI 26, be turned over to the Successor Agency. In addition, the SCO may file a legal action to ensure compliance with this order, Objective, Scope, Our review objective was to determine whether asset transfers that and Methodology occurred after January 1, 2011, and the date upon which the RDA ceased to operate, or January 31, 2012, whichever was earlier, between the city or county, or city and county that created an RDA or any other public agency, and the RDA,were appropriate. We performed the following procedures-, • Interviewed Successor Agency personnel to gain an understanding of the Successor Agency's operations and procedures. • Reviewed meeting minutes, resolutions, and ordinances of the City, the RDA,the Successor Agency, and the Oversight Board. • Reviewed accounting records relating to the recording of assets. • Verified the accuracy of the Asset Transfer Assessment Forrn, This form was sent to all former RDAs to provide a list of all assets transferred between January 1,2011, and January 31,2012. • Reviewed applicable financial reports to verify assets (capital, cash, property,etc.), Conclusion Our review found that the South San Francisco Redevelopment Agency transferred $216,208,113 in assets after January 1, 2011, including unallowable transfers totaling $41,844,014, or 19.35% of transferred assets. The unallowable transfers included $17,543,148 to the City of South San Francisco (City) and $24,300,866 to the Entity Assuming the Housing Functions. However, the following corrective actions have been taken: • On June 30, 2012, the City turned over $8,750,821 in capital assets to the Successor Agency. • On August 14, 2012, the Successor Agency effectuated the transfer of housing functions and assets of $24,300,866 to the Entity Assuming the Housing Functions. Therefore, the remaining unallowable asset transfers in the amount of $8,792,327 must be turned over to the Successor Agency. Details of our findings are described in the Findings and Orders of the Controller section of this report. -2- South San Francisco Redevelopmew Agew.v Asset Trans✓Ler Review Views of We issued a draft review report on October 10, 2014. Mike Futrell, City Responsible Manager and Successor Agency Executive Director, responded by letter dated November 3, 2014, partly agreeing with the review results. The Officials City's response is included in this final review report as an attachinent. Restricted Use This report is solely for the infon-nation and use of the City of South San Francisco, the Successor Agency, the Oversight Board, the Entity Assuming the Housing Functions, and the SCO; it is not intended to be and should not be used by anyone other than these specified parties. This restriction is not intended to limit distributioii of this report, which is a matter of public record when issued final. Original signed by JEFFREY V. BROWNFIELD, CPA Chief, Division of Audits June 15,2015 -3- South Sure Francisco Redevelopinew Age'nccy ksae8 Trwn fer Review Findings and Orders of the Controller FINDING l-- The South San Francisco Redevelopment Agency (RDA.) trade Unallowable asset unallowable asset transfers of $17,543,148 to the City of South. San transfers to the Francisco (City). The transfers occurred after January 1, 2011, and the City of South San assets were not contractually committed to a third party prior to June 28, Francisco 2011. Unallowable transfers were as follows: • Can March 10, 2011,the RDA forgave a loan with the City, resulting in an $8,792,327 reduction in loans receivable assets. This transfer was accomplished in accordance with RDA Resolution- o. 08-2011. • On September 2,2011,the City purchased properties on behalf of the RDA. On January 30., 2012, the RDA transferred $8,750,821 in cash to reimburse the City for this purchase. The City retained the properties. Pursuant to Health and Safety (H&S) Code section 34167.5, the RDA may not transfer assets to a city, county, city and county, or any other public agency after January 1, 2011. The assets must be turned over to the Successor Agency for disposition in accordance with H&S Code section 34177(4)and (e). Order of the Controller Pursuant to H&S Code section 34167.5, the City is ordered to reverse the transfer of the assets in the amount of $17,543,148 and turn over the assets to the Successor Agency. However, on June 30, 2012, the City turned over $8,750,821 in capital assets to the Successor Agency. Therefore, the remaining '$8,792,327 in unallowable transfers must be turned over to the Successor Agency. City's Response November 3, 2014 letter: With regards to the "loan forgiven" in the amount of 88,792,327, the City does not agree that the `.`loan" inust be returned to the Successor Agency. 'The City provided additional documents to support their position and stated the following: • The transfer was a legitimate RDA expenditure, not a loan. The most pertinent budgetary documents characterize the Miller Avenue Parking Structure expenditure as an allocation, and not a. loan, • Subsequent characterization of loan forgiveness was unnecessary and was based on the City's understanding at that time of its obligations under Dissolution Law. -4- South San Francisco Redei,elopipwnlAgency Asses Trmufer Re riew Any docurnentation referring to a loan points to the Parking District Enterprise Fund as having the obligation to repay the loan specifically through parking permit and parking meter revenues. An order to repay the Successor Agency, if sustained, should be directed to the Parking District Enterprise Fund exclusively. See Attachment for the City's complete response. SCO's Comment Based on our review of additional documents provided by the City, the SCO acknowledged that the RDA may have appropriated $10,000,000 for the Miller Avenue Parking Structure through the budgetary documents; however, various documents and subsequent actions taken by the City Council and the RDA refer to the existence and forgiveness of a loan related to the Miller Avenue Parking Structure. Despite the absence of a legal agreement between the RDA and the City, the RDA's Financial Statements for fiscal year (FY) 2008-09, FY 2009-10, and FY 2010-11, recognized that the City Parking District Enterprise Fund owed the Merged Redevelopment Project Area for the construction of the Downtown Parking Garage (Miller Avenue Parking Structure), The advances to the City referenced on the RDA's Financial Statements are also supported by a schedule that was prepared by the City for Miller Parking, which demonstrated that effective June 30, 2009, the RDA made multiple advances to the Parking District Enterprise Fund, and it shows an accumulated balance of$8,792,327 (loan forgiveness amount); therefore, the SCO maintaitis that the assets were advances to the City; therefore, the City Parking District Enterprise Fund must turn over the assets to the Successor Agency. FINDING 2— The RDA made unallowable asset transfers of$24,300,866 to the Entity Unallowable asset Assuming the Housing Functions, The transfers occurred after January 1, transfers to the 2011, and the assets were not contractually committed to a third party Entity Assuming prior to June 28, 2011, the Housing Unallowable transfers were as follows: Functions • On March 11, 2011,the RDA transferred $5,163,916 in capital assets in order to presci ve and continue redevelopment projects. • On January 31, 2012, the RDA transferred a total of$19,136,950 in cash and capital assets directly to the Entity Assuming the Housing Functions as part of the RDA dissolution. The assets consisted of property,loans receivable, and allowance for uncollectables. Pursuant to H&S Code section 341.67.5, the RDA may not transfer assets to a city, county, city and county, or any other public agency after January 1, 2011, The assets must be turned over to the Successor Agency for disposition in accordance with H&S Code section 34177(d) and (e). -5- South San Francisco Rcdewelopynent Agency Asset Trwasfb-Review Order of the Controller Pursuant to H&S Code section 34167.5, the Entity Assuming the Housing Functions is ordered to reverse the transfer of the assets in the amount of $24,300,866, and turn over the assets to the Successor Agency. However, on August 14, 2012, the Successor Agency effectuated the transfer of housing functions and assets of$24,300,866 to the Entity Assuming the Dousing Functions in accordance with H&S Code section 34176(b) and 34177(g) and under Resolution OB 04-2012. Therefore,no further action is necessary. City's Response The City does not dispute that $23,370,296 in assets were prematurely transferred to the Entity Assuming the Housing Functions, However,the City provided additional documentation and noted some changes and corrections on this document, and stated that the total book value of housing property assets should be adjusted to the correct book values. Also,the City requested that the Draft Report be revised to acknowledge that all the assets now correctly reside in the Successor Dousing Agency's books. See Attachment for the City's complete response. SCO's Comment The SCO has adjusted the finding from $23,370,296 to $24,300,866 to properly reflect the correct book values. Based on our review of additional documents provided by the City, the SCO revised the report to acknowledge that on August 1.4, 2012, the Successor Agency effectuated the transfer of housing functions and assets of$24,300,866 to the City of South San Francisco, as the Housing Successor, under Resolution OB 04-2012, and that these assets correctly reside in the'Successor Dousing Agency's accounting records. No further action is necessary regarding this finding. ..f,_ South San Francisco Redevelopment Agency Asset Tronsfcr Rcrfoa Schedule I- allowa le Asset Transfers to the e C tyr of South San Francisco January ], 2011, through January 31, 2012 Unallowable asset transfers to the City of South San Francisco: Loan forgiven(March 10, 2011) $ 8,792,327 Cash transfer to purchase properties(January 30, 2012). 8,750,821 Total unallowable transfers 17,543,148 Properties turned over to the Successor Agency(.Tune 30,2012) (8,750,821) Total assets subject to H&S Code section 34167.5 $ 8,792,327 -7- Smith San Francisco Redevelopment Agency Asset Transfer Reviov Schedule 2— Unallowable Asset Transfers to the Entity Assuming the Housing Functions January 1, 2011, through January 31, 2012 UnalloNvable asset transfers to the Entity Assuming the Housing Functions: 339-341 Commercial Avenue(March 11,2011) $ 804,086 312 Miller(March 11, 2011) 717,183 310 Miller/311 Tannarack 586,309 630 Baden(March 11,2011) 948,244 380 Alta Vista (March 11,2011) 683,080 314 Miller—land and building(March 11,2011) 669,896 714-718 Linden---building only(March 11, 2011) 755,118 636 El Camino(January 31, 2012) 4 J 470 3 47 ,000 Allowance for Uncollectables (January 31, 2012) (9,973,728) Loans Receivable(January 31, 2012) 24,621,688 Commercial Rehab Loans (January 31, 2012) 18,990 Total asset transfers 244300,866 Assets that effectuated to the Entity Assuming the Housing Functions (August 14,2012) (24,300,866) Total transfers sul jest to H&S Code section 34167.5 $ -8- South Sun Francisco Redevelopment Agent�y A..s-sei TransferReview Attachment— City's Response to Draft Review Report CITY COUNCIL 2014 KARY7_MA7'SUM01-0,MAY{}It 1110 LARD A.GARBAJUNO,VICE:MAYo}2 a MARK.A1 DlEGO,COUNCILM-�M3MR PR.AI7 F E;F GUFTA,}?I3.D.,COUNCILMEM138R. LIZ,A N O)RMANDY,COUNCPLM..&'s1s BER hSIIK:E.Rt 7',{'ItE;LL,CITY MANAGER t�l~FIGE �7�THE CITY MANAGER November 3,2014 Elizabeth Gonzalez,Chief Local Government Compliance Bureau State Controller's Office Division of Audits Past Office Boar 942850 Sacramento,California 942505874 Dear Ms.Gonzalez: This letter is provided in response to the draft State Controller Office("SCO")Report("Draft Report')on the Asset Transfer Review for the former Redevelopment Agency of the City of South San Francisco ("RDA") and the cover letter thereto (signed by Jeffrey Browrt$eld,Chief, Division of Audits)dated October 10,2014, We appreciate the SCO's grant of an extension of time,to and including November 3,2014,in which to respond to the Draft Report. The Draft Report and cover letter find that the RDA made unallowable transfers to the City of South San Francisco ("City") and to the Entity Assuming the Housing.Functions. Specifically, the Draft Report states that the outstanding amounts that must be turned over to the Successor Agency include$8,750,821 in capital assets from the City,and$23,370,296 in assets from the Entity Assuming the Housing Functions. Ile Successor.Agency and the City agree with two of the findings,but request the final Report reflect the City's corrective actions, and dispute the findings as they pertain to the Miller Avenue Parking Structure,The Successor Agency and City are providing the following information in support of our position, 1. "Transfers to the Entity Assuming the Housing Functions Finding 2 of the Draft Report identifies two transfers that were unallowable due to timing and must be turned over toe Successor Agency. Specifically,one transfer of$4,233,346 in capital assets and another transfer of$19,136,950 in cash and capital assets,totaling$23,370,296. The City does not dispute that these assets were prematurely transferred to the Entity Assuming the .Housing Functions. However,the City would like the Draft Report to be revised to reflect the corrective actions that have already occurred with respect to these asset transfers. Pursuant to Resolution 08-2012 adopted on January 25,2012,the City Council of the City of South San.Francisco elected to act as the Entity Assuming the Housing Functions (Successor Housing Agency)to manage former RDA housing assets. On August 31,2014 the'California Department of Finance (DOF) approved the Successor Housing Agency's Housing Asset"Transfer Form,whereby it authorized. the transfer of the$23,370,296 to the Successor Housing Agency.Accordingly,the City 1 City Ha @:400 Grand Avenue •'South Sara Francisco,CA 94080-P.O. Box 711 -South San Francisco,CA 94083 Phone:650.877.8800 M Fax:650.829.6609 acknowledges it transferred these assets prematurely,but requests that the Draft Report recognize that the asset transfer is now in compliance due to the DOF's prior approval, Further, the City requests that the Draft Report be revised to acknowledge that the .assets now correctly reside in the Successor Housing Agency's books and that no further action is required by the City or Successor lousing Agency, Additionally,from a phone conversation with the SCO's Audit Manager Scott Freesmeier on or about October 29,2014, the City's Finance Director,Jim.Steele,understood that by providing documentation to the SCC)that shows that the Successor Housing Agency assets were correctly reflected on the City's accounting records as of February 1,2012,the SCO would note that the housing assets were now in compliance with applicable State requirements, notwithstanding any timing issues that may have existed.That documentation is attached hereto as Attachment A. Attachment A is a spreadsheet that shows the addresses of the housing assets and their book values on the City's boobs as of Klatch 11,2011,which is consistent with the asset values listed in Schedule 2 of the Draft Report,Attachment A shows that those properties are correctly still showing on the City's Successor Housing Fund fixed asset listing as of February 1,2012, l here are some changes/corrections noted on the footnotes of Attachment A to reconcile the two sets of numbers.The Draft Report listed a property value matched with the wrong housing address. Note 1 on Attachment A correctly shows that the$586,309 book value matches the property at 311 Miller/311 Tamarack (not 630 Baden). Note 2 shows that the correct book value for 630 Baden is$948,244.With those two corrections,and reflecting the accounting depreciation of $17,674.23 (reflecting building deprecation between 3/4/11 and 2/1/12),the total book value of all housing property assets should reflect$9,633,915,77 as shown on Attachment A. "T'he City believes that Attachment.A demonstrates that all former RDA housing fixed assets (land and buildings) are now correctly showing on the Successor Housing Agency's accounting records in compliance with applicable law. 11. Transfers to the City of South San Francisco Finding 1 of the Draft Report identifies two transfers that were unallowable and must be turned over to the Successor Agency. Specifically,one cash transfer of$8,750,821 and another a"loan forgiven"in the amount of$8,792,327. The City notes that the Draft Report correctly reflects that the cash transfer of$8,750,821 has already been turned over to the Successor.Agency via the asset transfer of the former Ford properties.However.,the City does not agree that the "loan"as characterized in the Draft Report must be returned to the Successor Agency,for the reasons stated below. A. The transfer wasa let�itarmate RDA ependiture_not a,loan. The RDA expenditure for the Miller Avenue Parking Structure was neither an advance nor a loan to the Parking District Enterprise Fund. Careful review of the City's past Capital Improvement Program ("CIP")budgets demonstrates that the RDA funding for the design and construction of Miller Parking Garage was in fact a RDA expenditure. In the 2007-08 CIP, adopted on June 13,2007,CIP perm No. 19,Miller Avenue Parking Structure,received a $10,000,0410 appropriation from the RDA, (see attachment B)Because those funds were 2 effectively spent by the RDA at that point,that should control the characterization of d-lis expenditure.Further,this 2007-08 CIP expenditure does not characterize the Miller Avenue Parking Structure funding allocation as being funded by bonds or loans.Instead,the budget records the$10,000,000 transfer,strictly as a RDA funded appropriation.'rhe CIP budget contains a legend with a separate category for bonds/loans (B/L), and the entry for the Miller Avenue Parking Structure funding project does not contain a reference to bond/loan funding. Other entries,however,do contain the bond/loan demarcation.This demonstrates,that at the time of the allocation,the RDA transfer to the Miller Avenue Parking Structure project was merely an expenditure,not a loan or advance. Other City documents confirm that the RDA did not loan or advance the funds.Within the RDA budget page of the City's 2007-08 Operating Budget,which was also adopted can June 13, 2007,there is no record of an advance to the Parking District Enterprise Fund for the Miller Avenue Parking Structure. (see attachment C)However,the adopted 2007-018 Operating Budget does explicitly state that the RDA "will advance$3.2 million to the Sewer Izund in 2007/08"for a specified project.This demonstrates that the Operating Budget could and did identify sources that in fact received loans or advances from the RDA.Because the 2007-08 Operating Budget did not identify the Parking District Enterprise Fund as receiving a loan or advance from the RDA,the budget action that occurred,appropriating funds for the Miller Avenue Parking Structure project,should be characteri2ed as a RDA expenditure and not a loan or advance. Despite the fact that the Parking District's balance sheet in the 20108-09 Operating Budget contains a reference to an advance and a loan between the Parking District and RDA,this inclusion was an inadvertent characterization of the prior year's expenditure.When looking at the 2008--09 Operating Budget,it is appropriate to refer back to the prior budget documents to determine the correct characterization of the funds at the time they were actually allocated,and as discussed above,the 2007-08 CIP budget and Operating Budget clearly state that the expenditure was not a loan.Moreover,the 2008-09 Capital Improvement Program budget identifies the$10 million expenditure as funded by the RDA,not as a loan. (see attachment D) Furthermore,the RDA subsequently referred to the transfer to the CIP budget as an allocation, not as a loan or an advance. For example, several RDA Staff Reports from 2008,specifically: ;March 12;March 26;April 9;and May 1.4;all state, "The 2007-2008 Capital Improvement Budget includes an apirrripiiad©n of$1 o,000;0o0 for design and construction of the Miller Avenue Parking Structure, from Redevelopment Funds." (see attach rrrent E(emphasis added))The RDA was in the best position to characterize its funding as a loan or an allocation, and it clearly described it as an allocation. Moreover,RDA Resolution No. 11-2008 states that that the City Council"has appropriated$10,000,00o in the 2007-2008 Capital Improvement Budget for the design and construction of the Miller Avenue Parlrang Structure." (see attachment F)'These documents demonstrate that the RDA intended to,and the City Council consented to,the appropriation as an expenditure,and did not intend for the transfer to be a loan. Further,the absence of loan documents between the RDA and the City or Parking.District demonstrates that the transfer was in fact merely an expenditure effectuated through a budgetary action..No documents exist that evidence that a loan between the RDA and the Parking District was executed.As stated above,the RDA merely made a budgetary transfer in 2007 into the Miller Avenue Parking Structure capital project,and at that time it did not intend to be repaid 3 for that expenditure,Despite a prior RDA Staff Report from February 14, 2007 and related minutes that show the RDA approved a conceptual financing plan that included a loan to the Parking District., there were never any documents prepared or executed effectuating such a loan or advance. Furthermore,the City never provided any security for the loam. Thus,evidence of the loan's existence is based solely off a conceptual financing plan and subsequent overall references to that financing plan.The absence of a legal agreement or statement of obligation specifying the actual amount of the loan and terms of repayment between the RDA and the City demonstrates that there is no loan,and therefore no asset to return to the Successor Agency. Because the most pertinent budgetary documents characterize the Miller Avenue Parking Structure expenditure as an allocation,and not a loan,the SCO should revise its Draft Report and find that there was never a loan or advance between the Parking District and the RDA,and therefore no asset to return,to the'Successor Agency. B. ,$ubsequmt cliaractcrization of loan for veess was unnec ssa and was based on the City's understandn t that tune of its obli ati ns under Dissolution I aw As the project was funded in the 2007-08 budgets,the RDA's subsequent references to the loan/advance in 2011 were a m scharacterization of the character of the asset.The March 2, 2011 RDA Staff Report regarding forgiveness Of the advance to the Parking Enterprise Fund wrongly stated that funding was advanced pursuant to the CIP budget approved on July 28, 2010.As explained above,this transfer actually occurred in the 2007-08 budget,not in 2010. Accordingly, Resolution No.08-2011,which forgave the purported loan,was unnecessary. Further,the 2012. RDA Resolution (Resolution No. 01-2012)approving the loan forgiveness was also legally unnecessary--m the RDA only took this action because it believed that it was obligated to do so at the time pursuant to Ala 936. C. The RDA su stantiall com lied "th 1le nd Safe Code Sec "c>ra 33445 a Notwithstanding the City's positions stated above,the SCO should revise its finding relating to the Miller Avenue Parking Structure funding because the City achieved substantial compliance with section 3344.5(a),thereby barring invalidation by AFx1-26 or Ali 1.484. Section 33445(a) authorizes an RDA to pay for projects of cities and other public entities upon certain determinations,The doctrine of substantial compliance allows substance to prevail over form provided that the policy behind a statute has been satisfied. (Friends of Shingle Springr Iratelclaan�e, Inc. v. Cnty. of.F'Dorado(2011) 200 Cal.App. 4th 1470,1489; Male, v, Blue C.rosr of Cal or aia (2004) 121 Gal.App.4th 44,72-73.)Further,the doctrine of substantial compliance has been applied to determine that that a legislative body satisfied statutory findings requirements. (Sraaa uirtelti v. Oily Couneil of.Stockton(1965)231 Cal App.2d 813.) In.Sanguinetti V. GO ofStodeion,the court upheld a redevelopment plan,rejecting challenges that Stockton.failed to snake required findings.'There,the court discussed that,in making findings,a city council hearing is held to a lower standard than a judicial proceeding. (1d. at 81T)As such, findings and determinations do not have to be"in exact accord with the legislative language." (Id. at 818.) "Substantial compliance with the legislative requirements is sufficient." (Ibid.)The court emphasized the significance of whether a city council fully considered the applicable issues,complied with the law,and acted to benefit the affected community. (Ibid.)Therefore, 4 compliance with legislative requircments and full consideration of applicable issues is of greater significance tl-an precisely following legislative mandate. The analysis in S'rxvSuinetti demonstrates that here the City substantially complied with the requirements of section 33445(a).'l'lae City considered the substantive issues presented by section 33445(a) because when it authorized the design and construction of the Muller Avenue Parking Structure it addressed the elimination of blight,means of financing, and consistency with the implementation plan,as is further outlined below. First,section 33445(a)(1)requires a determination that the hand purchase, construction, or improvement will benefit the project area by helping to eliminate blight.Blight is caused in part by depreciating or stagnant property values,high crime rates,and vacant businesses. (See Cal. Health&Saf.Code§33031.) City Council and RDA meetings demonstrate that the City intended to improve property values and reduce vandalism through construction of the Miller Avenue Parking Structure.During the February 14,2007 RDA Meeting,Boardrnernbers discussed the need for a parking garage to revitalize the downtown's economy,I urtl�er,the June 4,2007 City Council Staff Report stated the garage could function as a catalyst for future commercial development in the downtown,and further,would enhance the marketability of that development.The Dec. 12,2007 City Council Staff Report anticipated that the Miller Parking Garage with ground floor commercial uses would reduce vandalism and trespass issues.Thus, the City Council fully determined that the Miller Avenue Parking Structure would reduce blight by improving economic conditions and reducing vandalism and trespass rates. Furthermore,the RDA's 2005 and 20110 Implementation Plans directly link the need for a Downtown/Central public parking lot to the obligation to reduce blight.First,the 2005 Implementation Plan notes that the Downtown/Central Area suffered from "[sjtagnant sales tax revenue and business decline."It then focused on parking as a key factor deterring revitalization in the Project Areas and,therefore,a necessary project to correct this deficiency. Similarly,the 2010 Implementation Plan found the following blighted conditions within the Downtown/Central.Area: stagnant and declining businesses and inadequate infrastructure and public facilities, The 2010 Implementation Plan then explains that the parking projects,which included Miller Avenue Parking Structure,would "eliminate the remaining blighting influences" by improving parking facilities to"ameliorate parking and circulation problems throughout the Project Areas that deter tevitalization."Therefore,Miller Avenue Parking Structure was not only found to help eliminate blight but was designed and constructed with section 33445(a)(1)'s goal specifically in mind. Next,section 33445(a)(2)requires a finding that no other reasonable means of financing is available. In 2001,an analysis regarding a potential new parking structure for the.Downtown Parking District stated that no reasonable funding source was identified at that time. (RDA;Staff Report,Feb. 14,2007.)This statement meets the requirements of section 33445(x)(1) because it asserts that no other reasonable means of financing existed to fund construction of the Miller Parking Garage.Pursuant to a 2006 update of the study,the RDA determined RDA funds would be necessary to subsidize the garage,further indicating absence of alternative funding. The RDA adopted the financial plan for the garage,incorporating the studies,at the February 14,2007 meeting. 5 1.ast,section 33445(a)(3)requires that the payment be consistent with the implementation plan. The Implementation Plan in effect at the time of appropriations sought to revitalize the downtown,encourage customers to shop,and make the area more pedestrian friendly, On June 4,2007,a City Council Staff Report stated that the inclusion of commercial space in the garage was consistent with the General Plan and was considered"an urban design 'best practice' for downtown parking structures." It further noted that the project could spur futur e commercial development and create a"more pleasant pedestrian experience,'Thus,before th e 2007-08 C IP Budget was adopted,the proposed garage was described by the City Council in terms that were consistent with the goals of the implementation plan,which indicates substantial compliance with section 33445(a)(3). Further,on December 12,2007,the Caity Council adopted a resolution stating that the project is consistent with the Downtown/Central Redevelopment Plan, The 2005 and 2010 Implementation Plans themselves establish that Miller Parking Garage in fact consistent with the Implementation Plans.The 2005 Implementation Plan addressed the need to construct additional surface public parking and allocated$1 million for die identification, study,and design of new surface public parking lots.The 2005, Implementation Plan also notes that goals and expenditures must serve to eliminate blight and then discusses that the lack of parking deters revitalization in certain Project Areas, The RDA's expenditures for the design and construction of Miller Avenue Parking Garage are explicitly consistent xith the 2010 Implementation Plan because that plan specifically includes projected expenditures for the Miller Avenue Parking Garage the amount of$10 million. -more, the 2010 Implementation Plan discusses that improving public parking in the Further in milli n Downtown/Central Area is a specific goal of the 2010 plan,Therefore,the A4iller Avenue Parking Garage was consistent with existing implementation Plans as the 2005 Implementation Plan recognized the need for additional parking and the 2010 Implementation plan explicitly included the Miller Avenue Parking Structure. 'nus,the evidence dernonstrates that the City Council and RDA substantially complied with section 33445(a)before 2008.Both entities expected the gara ge t the project was consistent with to help eliminate blight, recognized the lack of:alternative financing,,and discussed that the implementation plan.This shows both entities fully considered the issues presented by section 33445(a). Moreover,some of these determinations occurred before the adoption of the 2007-08 CTP Budget,in which the RDA funds were appropriated to the Miller parking Structure project. It is also noteworthy in establishing substantial compliance that the City Council and RDA's actions regarding Miller Parking Garage satisfied the policy behind section 33445(a). One court has found that the statutory intent behind section 33445 is "to effectively limit Potential abuses in tax increment financing." (Meang v. Jarramentv How, &RrdevelobventAgeng(1993) 13 Cal. App.4th 566,581.) Construction of the Miller Parking Garage was consistent with the goals of Redevelopment Law in existence during its design and construction.From the outset,the RDA and City Council recognized that a parking structure was"a valid Agency expense"and considered it to be"a proper use of Agency dollars," (RDA Staff Report,Feb. 14,2007.)I'lic structure was integral to the Downtown/Central Improvement Plan and was specifically anticipated to reduce blight in the area.Further,RDA funds were the only available means of 6 finance,which demonstrates that the Ciry was not abusing tax increment financing in seeking RDA funds for the garage's design and construction. Thus,the City achieved substantial compliance with section 33445(a).As discussed above,the City Council and RDA,fully considered the issues presented in section 33445(a)and made determinations that complied with these legislative requirements.]Exact accord with legislative language was not necessary.Moreover,the City satisfied the policy goals behind section 33445(a) because die parking structure was a valid use of RDA funds. III. If SCO determines an expenditure to be a"loan,"the Parking District should be ordered to return the assets to the Successor Agency A. If 5LQ d terrain s an ex enditure .o be a"lo n" e bli a 'on o re a h d be limited to net revenue from Parkarr Dis rict Ent- ri Fund In the event the SCO's Final Report concludes that there was a loan between the RDA and the Parking Enterprise Fund,the SCO should order the asset to be repaid from the Parking District Enterprise Fund,exclusively.The Parking District received the benefit of the funds,and any references to a"loan"or"advance," although inaccurate,for the reasons discussed above,cite the Larking District's responsibility to repay the loan..Also,the Parking District Enterprise Fund was the subject of the purported loan forgiveness action in 2011 and 2012.At no time did another City fund or agency bear any responsibility for,or receive any benefit from,the assets.. The Parking District is an Enterprise Fund.,meaning its expenses are funded: solely from the operations of the enterprise itself(parking revenues).Tbus, the Parking District Enterprise Fund is not a part of the City of South San Francisco's General Fund,and has consistently been shown as a separate fund on the City's financial records. The RDA expenditure benefitted the Parking District alone because the Miller Avenue Parking Structure is part of the South San.Francisco Parking District#1. lnitiai City documents illustrate that the Parking District revenues would bear primary responsibility to repay the obligation.The garage's financing plan stated. "Funds from the Redevelopment Agency will be loaned to the Parking District to fund design and construction." (RDA Staff Report,Feb. 14,2007.) Tlie City's 2008-09 and 2009-10 Operating Budgets state that all parking revenue would go to repayment of the"loan."Specifically,a footnote to the Parking District Enterprise Fund budget page in those budgets states that the Parking District borrowed funds from the RDA and that the funds will be paid back from harking permit and parking meter revenues over the span of 20 years. Lastly,when the RDA forgave the purported advance on March 2,2011,it specifically forgave the"City of South San Francisco's Downtown Parking Enterprise Fund." (]RDA Resolution No. 08-2011.)The accompanying March 2,2011 RDA Staff Report further demonstrates that the funds were solely directed to Parking District use and benefit.The report stated the advances were made due to insufficient Parking District funds to pay for construction costs.Moreover, the RDA forgave the loan so that the Parking District could attend to downtown parking needs instead of dedicating parking permit sales and parking meter revenues for 15--20 years to loan repayment.In fact,the 2012 RDA Resolution approving the loan forgiveness discussed the 7 positive benefit to the Parking District and noted that it could use its annual revenue for maintenance and operations instead of repaying the advance. A Resolution No. 01-2012) Thus,any documentation referring to a loan points to the Parking District :Enterprise Fund as having the obligation to repay the loan specifically through parking pernut and parking meter revenues.This supports the argument that the Parking District.Enterprise Fund is ultimately responsible for receiving the funds and is the entity responsible for repaying them. Therefore,because the Parking District Enterprise Fund received the assets and bore responsibility to repay the RDA under the conceptual,financing plan,an order to repay the Successor Agency,if sustained.,should be directed to the Parking District Enterprise Fund exclusively. Finally,the City does not have sufficient funds on hand to pay the amount directed by the SCO. Any order that is finalized would need to accommodate installment payments following a further review of the City's outstanding obligations and anticipated revenue.. W. Conclusion For all of the reasons stated above, including Community Redevelopment Law as supplemented by.t Bxl-26 and Ala 1484,the'Successor Agency and the City submit that the SCO's proposed asset transfer order cannot be sustained,and we respectfully request that the SCG revise the :Draft Report accordingly. In addition,please note that the Successor Agency and the City reserve all rights to raise such other and further legal arguments with respect to the Draft Report as we deem necessary and appropriate. Should you have any questions regarding this letter or our position,please contact Jim Steele, Finance Director,at(650) 877-8507. Sincerely f'' �ilrke �`uttell, City Manag r and Successor Agency Executive Director Attachments c: Steve Mattas,City Attorney 2351066.7 8 Attachment A Housing Successor Agency Capital Assets as of February 1,201 Cc, -0 Cc u ja SOSO CL ap A 00 r2 Attachment B 2007-2008 Capital Improvement Program Budget K � Y f=via a a] � r (�} e Wool l7 ✓ � }F ('Qv�j �Y Ah �+7 z . 1t] K 1_ + z r Ob ,tt' �v s 4r to e VA s 0 wwdlu ft 2 If 0 a ❑ a � � u o 'n' it � w 4 M Ix 0 x C7 p 26. tl�. iul +3 o mn m r- a LLy ❑93 � h^ 67 c t LL co ❑ 7 W 4t 2 qn r1! rvo 0 17 vQ dO; d 'UJI wtai 4 J �. ~icy w w a" g LU U" w $[3 4y 0:0 . e�iim a. mat. �O �m p OCR w w a a7 c N ui � f CL t C3 47 w r. r1 r �� i i 7� x � �/° W ✓ /✓ / '✓!'a,.r�j rlu � ✓ f�wN%j � l� ✓�'il �1n✓fir✓ ✓✓iJ'� a � mA������°u r�r NMfI � 1 � i✓�^/�,✓i IVi��f�✓ r✓✓ �i" � �% � �k:'Jill � I�✓��i/✓'14"�,J r �� l��H+rt�l� �%✓/�/ f ✓ / Il✓ 1 v✓✓ .. � m w t7 <a� 0µ T IL WE Gu ate. 00 w II y0. w © .,. a w u IL U t9 m d S7 W IdM. q w k � Mm uj W L) o q rs 2 lui tl'C O. 9°y IL R{� LU cr .. O�wGC q Y u w w m m o o' z ,. 4- sv .. w U OW Y p Ob z ❑v, o N 1- IX 0 ~p wGSrcYw- K 11d rs C ry cr p c n m aq "z° •- w. �'i ry n n rv... av U�`'�a', u u r� Attachment C 2007-2408 Operating Budget,pages 61-62 m n m ri co in f5, Mss T m L6 46 to d Li pj L4's fn v - LO Qn 8p . � g -ks I 9 's 77 In 9 AL E is HER CR iq at cw W wri 6 ul LLI td d 'o d cl U5 m d a tv 43 2 LE La Z a B Z3 s; FD tn Ln w CL CL Ln re m U3 Am m Ell EL as10, ej Attachment D 2008-20109 Capital Improvement Program Budget M3 -O:d 46 qj z x z < < z < 4! z Z5 FF m w 7 ? ILI LO IL ui 4z f< C Of Q Ll .1 loo z j- ce z co CU 9 4 41 C 7# OC 0 2 e» n � 1 q ci G 00 tu z cw '' at m iL ui I M. C Yek a fr a _ ua f3 z-z a Attachment E RDA Staff Report,regarding Resolution N®,11-2008 to approve the final design of the Miller Avenue Parking Structure and authorize contract for design May 14,2008,page 3 Staff Report RE.' Watry Design Contract—Miller Ave,Parking Structure Date;May 15,2008 Page 3 of 3 LUMING The 2007-2008 Capital Improvement Budget includes an appropriation of$10,000,000 for de and construction of the Miller Avenue Parking Structure,from Redevelopment I sign Agency Funds, CONCLUSIM Staff recommends that the Redevelopment Agency Board adopt the attached resolution approving the final design for the Miller Avenue Parking Garage and authorizing the Executive Director to execute a contract with Watry Design,Inc.to complete the construction documents and competitive bid packages for the Miller Avenue Parking Structure. By: , Many Van Duyn Burry M,l+Iage Assistant Executive Director Executive D- or Resolution Exhibit A-Watry Design,Inc,Scope of Services December 12 2007 City Council Minutes Plans BMN,MVD:SK S-'Oaff RCPOr&dOMO5-I"0 CMASR-Wad'm*.Wt$1"$,doc Attachment F RIBA Resolution No. 11-2008 RESOLUTION NO. 1 t-2008 REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FR-ANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING THE FINAL DESIGN OF Tfi MILLER AVENUE PARKING STRUCTURE AND AUTHORIZING THE EXECUTION OF A CONTRACT WITH WATRY DESIGN,INC,FOR CONSTRUCTION DESIGN Ori THE MIl L) AVE E l'AR K lNG ST SMAE WHEREAS.,.the Redevelopment Agency of the City of South'San Francisco C'Agency") is a redevelopment agency existing pursuant to the Community R+edeveloprritnt Law,California Health and Safety Code Section 33000, et seq. (the "CPI.''), and pursuant to the authority granted thereunder,has the responsibility to carry out the Pcdevclopment.Plan("Redevelopment Plan")for the Downtown/Central Redevelopment Project Area("Project Area");and WHEREAS, the City Council of the City of South San Francisco has appropriated $10,000,000 in the 2007.2008 Capital Improvement Budget for the design,and construction of the Miller Avenue Parking Structure;and WHEREAS, Watry Design, Inc. and Group 4 Architecture/Walker.Panting Consultants submitted proposals for the design and construction administration of the Miller Avenue Parking Structure,though Watry Design,Ine,was able to provide a full scope of services and complete delivery of the project seven months earlier than Group 4 ArchiteetutwWalker Parking Consultants;and WHEREAS, Watry Design,Inc.has completed schematic designs of the Miller Avenue Parking Structure, and is prepared to proceed with construction drawings, bill packages, and constructiona administration services for an amount not to exceed$1,101,232,as detailed in their Proposal,attached to this Resolution and incorporated herein by reference;and "WHEREAS,a Mitigated Negative Declaration has been completed in accordance with the California Environmental Quality Act, analyzing the proposed project'.'s effcats on the environment and concluding that after mitigation, the. project will not have any significant enw irotairriental impacts. NOW THEREFORE,BE IT RESOLVED,that the Redeveltdprnent Agency of the City of South Sara Francisco, does hereby approve the final design of the Miller Avenue Parkin Structure and atath0620 the,Executive Director or hit,designee,to execute 'cotitract'+with Wairy Eicsign, 1nc,.,not to exceed$1,101,232, to cornplete the cottstrtietion design and dtactatuents and competitive bid packages for the Miller Avenue Parking Structure. J hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redew-lopment Agoncy of the City of South Sacs Francisco at a regular meeting held on the 14th day of May 2008 by the following vote: AYES Boardmembers Mark K Addiggtr„Riehard A Garbarino.Kevin lvlullira ice,;hair liar l. . is o and hpjr,Evdi:oGopZajez NOES, None ABSTAIN: None ABSRNTa None A EST: Jerk State Controller's office Division of Audits Post Office Box 942850 Sacramento, CA 94250-5874 http://www.sco.ca.gov S I 4-RDB-993