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HomeMy WebLinkAboutRDA Minutes 2012-01-11 N s MINUTES REDEVELOPMENT AGENCY 8 CITY OF SOUTH SAN FRANCISCO °9t /FOAo" REGULAR MEETING MUNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, JANUARY 11, 2012 CALLED TO ORDER: 6:30 p.m. ROLL CALL: Present: Boardmembers: Addiego, Matsumoto and Mullin, Vice Chairman Gonzalez and Chairman Garbarino. Absent: None. AGENDA REVIEW Agency Director Nagel advised that Item Number three (3) should be heard as Administrative Business. The Agency agreed. PUBLIC COMMENTS None. CONSENT CALENDAR 1. Motion to approve the minutes of December 14, 2011. 2. Motion to approve expense claims of January 11, 2012. Motion— Boardmember Addiego /Second— Boardmember Mullin: to approve the Consent Calendar. Unanimously approved by voice vote. ADMINISTRATIVE BUSINESS 3. Redevelopment Agency Status Update and Outline of Action Dates as Required by AB xl 26. Counsel Mattas made a presentation to the Agency providing background information as a follow -up to a recent California Supreme Court Decision relating to the future of Redevelopment Agencies in California. He noted that pursuant to AB xl 26, action would have to be taken by January 31, 2012 determining the Agency's Successor. He advised the City Council had the option not to be the Successor and would later seek direction from the Council on this point. If Council determined at its regular meeting this evening that it desired to withdraw from the Successor Agency opportunity it would have to take action tonight as the deadline for such action was January 13, 2012. If Council chose not to withdraw from the Successor Agency opportunity, staff would bring back recommendations for further action at the Redevelopment Agency's Special Meeting and the City Council's Regular Meeting both scheduled for January 25, 2012. Two pieces of RDA Legislation were reviewed by the Supreme Court in CRA v. Matosantos: AB xl 26 — dissolve RDAs and AB xl 27 - reinstate RDA upon agreement to opt in payment. In Matosantos, the Supreme Court upheld AB xl 26 and invalidated AB x1 27. Because AB 26 was upheld, Redevelopment Agencies in California will be dissolved as of January 31, 2012, unless the legislature passes certain legislation extending the proposed dissolution date through April 15, 2012. AB 26 requires Redevelopment Agencies to preserve assets and meet their respective debt obligations. Accordingly, the Agency must adopt a Schedule of Enforceable Obligations. The South San Francisco Redevelopment Agency adopted a Schedule of Enforceable Obligations on August 24, 2011 but an updated schedule will be considered at a January 25, 2012 meeting. "Enforceable Obligations" are defined to include: bonds, including debt service, reserve set - asides and any other required payments; loans borrowed by the agency; payments required by the federal or state government; pension and unemployment payments for agency employees; judgments, settlements or binding arbitration decisions; contracts necessary for operation and administration of the Agency, e.g., rent, insurance, equipment, supplies and professional services; any legally binding and enforceable contract that does not violate the debt limit or public policy (e.g., the S /SKS DDA and Mid -Pen agreements). Prior to dissolution, the Agency may not: execute new contracts, amend existing agreements, prepare, adopt or amend redevelopment plans, incur new debt, sell, lease, pledge or encumber property, acquire property, commence eminent domain proceedings, make new loans, forgive or modify existing loans, increase deposits to housing set -aside funds, or accept financial assistance that is contingent upon incurring debt. The South San Francisco Redevelopment Agency suspended all such activity on June 26, 2011. Additional AB26 requirements include that any Agency actions taken pursuant to the EOPS are not effective for three business days and are reviewable by the State Department of Finance. If the State Department of Finance requests review of an Agency action, it has 10 days from the date of its request to approve the action or return it to the Agency for reconsideration. Additionally, the State Controller must review RDA activities to determine whether agencies have transferred assets to the city or county that created the agency or to any other public agency. If such a transfer occurred after January 1, 2011, the Controller is required to order assets that are not "contractually committed to a third party for the expenditure or encumbrance of those assets" to be returned to the Agency. Counsel Mattas next presented a slide detailing RDA Funds and Indebtedness as of 12.31.2011. The slide represented that total 80% funds were at $75,366,000 and total 80% indebtedness was at $69,140,000. Total 20% funds were at $38,333,000 and total 20% indebtedness was at $3,091,000. The total of these two categories left RDA funds and indebtedness at $113,699,000 and $72,231,000 respectively. City Attorney Mattas advised a bill by Senator Steinberg that would allow Agencies to choose a Successor Housing Agency to retain Low and Mod Funds was presently in the works. Regarding the Successor Agency, a city must decide before January 13, 2012 whether it desires not to be the Successor Agency. If the City elects not to serve as the Successor Agency, another local agency may elect to serve or the Governor will appoint a Successor Agency made up of 3 residents of the County. Staff recommends that the City elect to be the Successor Agency for reasons relating to operation of law and will present a resolution to that effect to the City Council on 1.25.2012 should REGULAR REDEVELOPMENT AGENCY MEETING JANUARY 11, 2012 MINUTES PAGE 2 Council so choose. Staff has also prepared a resolution for adoption this evening in the event the Council chooses not be the Successor Agency. Counsel Mattas next presented Pros and Cons of serving as a Successor Agency as follows: Preserves the City's interest in having an active role in the dissolution process; Section 34171(b) provides for an annual "administrative cost allowance" and it was estimated the Agency will be allocated $250,000 yearly; Section 34173(e) limits the Successor Agency for action taken pursuant to AB 1X 26 to total tax increment it receives on behalf of the former RDA. Counsel Mattas then discussed the Oversight Board. He explained that the seven (7) member board would have duties including directing the disposition of assets with proceeds to be transferred to the county auditor - controller for distribution to taxing entities. The Oversight Boardmembers would be appointed by spring of 2012 through June 2016 and would be comprised of the following: one (1) member appointed by the Board of Supervisors; one (1) public member appointed by the Board of Supervisors; a member appointed by the largest special district, by property tax share, with territory in the former jurisdiction of the Redevelopment Agency, and that is eligible to receive property tax revenues pursuant to new Health and Safety Code Section 34188; a member appointed by the Chancellor of the California Community Colleges; a member appointed by the county Superintendent of Education; one (1) member representing the City appointed by the Mayor; one (1) member appointed by the Mayor to represent the employees of the former Redevelopment Agency, selected from the recognized employee organization representing the largest number of former employees employed by the successor agency at that time. In the City of South San Francisco's case it was believed that representative would come from AFSCME. Oversight Board approval would be required for the following actions: the enforceable obligations payment schedule, as soon as a quorum can be obtained; establishing new repayment terms for outstanding loans where the terms were not specified as of October 1, 2011; refunding outstanding bonds or other debt of the former redevelopment agency, provided that no additional debt can be created and debt service cannot be accelerated; setting aside amounts in reserves as required by indentures or similar bond documents; merging project areas; continuing to accept federal or state grants or other financial assistance conditioned on matching funds of more than five percent; entering into a compensation agreement with the other taxing entities where the successor agency wishes to use its own funds and auspices to retain any properties or other assets for future redevelopment activities; establishing the Recognized Obligation Payment Schedule, including the repayment schedule for amounts borrowed from or owing to the Housing Fund; establishing the Successor Agency's administrative budget; a request by the Successor Agency to enter into an agreement with the city, county, or city and county that formed the redevelopment agency that it is succeeding; and a request by the successor agency or taxing entity to pledge, or agree to pledge, property tax revenues pursuant to Health and Safety Code Section 34178(b), which lists the types of redevelopment agency and city or county agreements that remain valid and binding. Counsel Mattas next presented future actions as follows: prior to February 29, 2012, the Successor Agency must adopt a Recognized Obligation Payment Schedule (ROPS); prior to April 15, 2012 the Successor Agency must submit ROPS to the State Controller and State Department of Finance for Approval; by May 1, 2012, the Oversight Board would Commence Operation. REGULAR REDEVELOPMENT AGENCY MEETING ' JANUARY 11, 2012 MINUTES PAGE 3 Boardmember Addiego questioned when the ROPS would expire such that obligations would be satisfied. Counsel Mattas explained the ROPS would be reallocated to a different entity until payment was satisfied. He cautioned, however, that the legislature wrote AB 26 with a retroactive provision — cooperative agreements between the City and Agency might not be effective if adopted after January 1, 2011. Accordingly, some funds would be at risk. However, if such funds were part of a three (3) party agreement, where one party to the agreement was an entity other than the Agency and the City, the obligations would be protected. In response to a question from the Agency and regarding the PUC land that the Agency transferred to the City last year, Counsel Mattas noted it was in a transit oriented district and the funds were spent consistent with the desires of legislature. ADJOURNMENT Being no further business, Chairman Garbarino adjourned the meeting at 7:00 p.m. Submitted by: £nn ed: / 4.01,4 K M Qrtrneff ' ^ Kra k o, Chairman l City o 1 an F r. co City of South San Francisco // ° ° P a REGULAR REDEVELOPMENT AGENCY MEETING JANUARY 11, 2012 MINUTES PAGE 4