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HomeMy WebLinkAbout2013-03-12 e-packetS vi,, e, 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, MARCH 12, 2013 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 second 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 document 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 bernadc available for public inspection in the City Clerk's Office located at City Hall. If, 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) 877-851& Notification 48 hours in advance of the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. Chairperson: Neil Cullen Selected bar: Largest Special District of the type in H&R Code Section 34188 Vice Chair: Denise Porterfield Selected by: San Mateo County Superintendent of Schools Deputy Superintendent, Fiscal and Operational Services San Mateo County Office of Education Alternate: Patti Ernsberger Assistant Superintendent, Business Services South San Francisco Unified School District Board Members: Mark Addiego Councilmember, City of South San Francisco Alternate: Barry Nagel City Manager, City of South San Francisco Gerry Beaudin Principal Planner, City of South San Francisco Barbara Christensen Director of Community /Government Relations, San Mateo County Community College District Reyna Farrales Deputy County Manager, San Mateo County Paul Scannell Counsel Craig Labadie Selected by: Mayor of the City of South San Francisco Mayor of the City of South San Francisco Chancellor of California Community College San Mateo County Board of Supervisors San Mateo County Board of Supervisors (Public Member) Advisory: Marty Van Duyn. — Assistant City Manager, City of South San Francisco Jim Steele — Finance Director, City of South San Francisco Steve Mattas — City Attorney, City of South San Francisco Krista Martinelli. -- City Clerk, City of South San Francisco Armando Sanchez — Redevelopment Consultant, City Of South San Francisco CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE OVI,',RSI(;1-1'1" BOARD REGUIAR NIEE,'IING MARCH I2, 201;3 AGEADA PAGE 2 AGENDA RE, VIEW 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 or, a future agenda for a more comprehensive action report. MATTERS FOR CONSIDERATION Discussion with actuary related to fair cost methodology for allocating retiree health liabilities (OPEB costs) associated with employees providing services to the former RDA. 2. Motion to approve the Minutes of the Special Meeting of February 14, 2013, 3. Resolution of the Oversight Board approving of a grant of Public Utility Easement to Pacific Gas and Electric Company. 4. Future Agenda Items. a) Long Range Property Management Plan. ADJOURNMENT OVERSIGIFFBOARD REGULAR MEEIIING' MARCH 12, 2013.. AGENDA PAGE 3 III! I IN1111111 119 DATE: March 12, 2013 TO: Members of the Oversight Board FROM: Jim Steele, Finance Director SUBJECT: DISCUSSION WITH ACTUARY RELATED TO FAIR COST METHODOLOGY FOR ALLOCATING RETIREE HEALTH LIABILITIES (OPEB COSTS) ASSOCIATED WITH EMPLOYEES PROVIDING SERVICES TO THE FORMER REDEVELOPMENT AGENCY (RDA) N Cif17u iu Wff-xy This staff report is being provided to the Oversight Board to assist in the discussion with Doug Pryor, a professional actuary who will be meeting with the Board on March 13. Mr. Pryor works with the firm Bartel Associates. Included below are some of the discussion points Boardmembers have raised regarding a fair methodology for allocating retiree health liability costs (OPEB) and unfunded California Public Employees' Retirement System (PERS) liability costs for employees who provided services to the former RDA. The Oversight Board of the South San Francisco Redevelopment Successor Agency has requested a working session in which a professional actuary can assist the Board in defining the parameters for how to quantify the share of OPEB costs attributable to a listing of specific employees/positions that can be defined. Actuarial work is always one that requires making professional assumptions, and calculating a fair allocation of OPEB towards employees that provided services (sometimes only partial FTEs) to the former Redevelopment Agency that raises even more complicating factors than usual. The Board wants to ensure that the assumptions made reflect the true costs that can fairly be attributable to employees who provided services to the Redevelopment Agency prior to that Agency being disbanded. The results of these assumptions may be what are used by the Consultant to cost out the share of OPEB and/or PERS unfunded liabilities as of 1/31/2012 that can be fairly attributable to the staff that provided services to the Redevelopment Agency, Examples of questions the Board has had are: 1. Can OPEB and PERS unfunded liability* costs for specific employees be fairly calculated or allocated? *Unfunded liability as reported by CalPERS in their annual actuarial report on funded status. Staff Report Subject: Actuarial Assumptions for Fair Share Allocation of OPEB Costs Page 2 2. How would the consultant handle positions allocated to the Redevelopment Agency where the specific individual was not always the same individual? For example, of the 5 Code Enforcement Officers, the Agency paid for 2 of those 5, but they aren't the same specific individuals. Is there a fair way to calculate the average OPEB costs for that class of individuals? 3. Similar questions for the unfunded PERS liability. PERS can calculate the unfunded liability attributable to specific employees, but as in #2 above, there are occasions where groupings of positions were allocated to the Redevelopment Agency. 4. Is the City/ former RDA's PERS unfunded liabilities primarily driven from the granting of higher pension benefits in 2000-01? If so, would those liabilities then only be attributable to employees who were working prior to 2000-01, since the City/RDA would have paid full PERS rates for those employees hired after 2000? What does that suggest, if anything, about whether post-2000 employees should be included in any calculation of RDA's share of PERS unfunded liabilities? Also attached is information that documents the Department of Finance's approval of the payment plan for the Redwood City Successor Agency for inclusion of OPEB and unfunded PERS costs, and more information about Doug Pryor, the actuary from Bartel Associates. By: oe, Jim t6ele Fin:ce Director Attachments JS/MVD:ed Approw Marty Van Duyn �Y� a r and City M a r and Director of Economic and Community Development Doug Pryor, Vice President, / , EA, MAAA ABOUT US SERVICES STAFF Home - Staff - Biography Biography Page I of I Actuarial Services for the Public Sector RESOURCES NEWS CONTACT Doug Pryor, Vice President, ASA, EA, MAAA (6501) 377-1602 1 Email Doug ExperiencelResponsibilfties 'Nth river 20 years in amploye, benefits Doug splei,polizos in actuarial co"Sultinit and dl tar orcects, including Actuarial valuations of Public ccrporaiL-, ano muiii-arnPicyar aerrsiol, Plans Studios analyzrig the ^ost of now banef.Ts anr! ii to existino proUrsnis Design anc closting of supolomenkai ratromer: ihaito.4is fz)r exec -fives Val(.13110"E of p 3st-rairrement medical p,-ograrrts FL1110ino V'rififilth Zinc WIaUWE n. la ;112 Unri :r VE Elk& I Plon am onunients sunimay plan cicisaii)tznE Ira Plan t,,nni, 4iionr, LA'iz l-,j 1, 0 or,,aL ji,juj, P. aropli �_own arij vverni,,-&-rik 1,;tnos Boneft i4a as ir,�.Ji YO T^erq eis and At unmr ut�u akicns Speaking Engagements scln.nai ",rl nwafuqs Enc,.-inq CLhruu„a Soc ty of li� I Critcrers :ujo ti r i^.Ai, of Son 0ol Eli Officials, Presurriai,ons to Public Bocul4s anj criy CounciN Affiliations/Designations)Education As ccra: of the sairietv rl Ac?,4zi Enrolled Actuary %I zmb=.r American A uriderry of Ac:"nis SS n MEthi Urwafsdy of Calforne Davis �AAA Statiat[CS. Lnrr3rsq of Gali`forni- Santa F,�Varst Other Staff I Contact Doug I Janina (8511; 3-7-16C2 Bartel Asso6arties, LLC Bartel's Actuaries GASB Database 411 Boral Avenue, Suite 101 17 professionals to help you Everworiderhow your OPES Sari Mateo, California 94402 manage Your agency's Porsmin plan $ruiolkis up financially Tekiphoi 653-377-1600 and mt-oa werical beni rigawei other agencies' Check ?oil Free 800.26BL-2090 out our GAM 46 Database. Contact Us Visit OUI Stalf1i Visit the GASB Database Home ' 00rrriu3 rim .7.256.LO501 ific, > -.con; web Developmerd by pianetmagpla Bartel's Actuarial Services OPES CsIPERS Pension Plans Retirement System Audits Consulting Support Bartel Research Arilicles by aarail's actuarial experts 00 Pension reform, heallicare!ssues, and other Important financial concerns. Read Articks 2912 L, uel Mssc o�idS i-i-C htti)://bartel-associates.com/staf`f/biogranhv/2Oil 1 1A /1) f) I I I 1Z I'R= I -, if TTi +�i��+tijlF Mr, Neil Cullen, Chairman South San Francisco Oversight Board P.O. Box 711 South San Francisco, CA 94083 J7. - �W I 11150= ThIs letter Is in response to the Oversight Board's request for clarification on the Department of Finance's (Finace) position regarding the inclusion of past unfunded pension and benefit liabilities in the Recognized Obligation Payment Schedule (BOPS). As Finance understands the situation, the Successor Agency (SA) of the former South San Francisco Redevelopment Agency (RDA) requested to include an issue in the ROPE to reimburse the City of South San Francisco for the unfunded pension and retiree health costs associated with staff time that had previously been charged to the RDA by city employees. Finance expects that in most cases unfunded costs for pensions and other employee benefits will be determined to be enforceable obligations, regardless of whether the employees were employed by the RDA or were city employees performing work for the RDA. However, the specific requirements of Memorandums of Understanding or other contractual agreements related to the employees in question will have to be reviewed before a final determination can be made. Specifically, in regards to the South San Francisco SA's intent to Include the alleged unfunded pension and retiree health costs in the ROPE, Finance does not yet have an official position. If such costs are included on ROPE 4, Finance Will examine whether the repayment is reasonable. In particular, we will examine whether the repayments are proportionate to the percentage of work time that the impacted employees dedicated to the former RDA, as well as the tasks performed by the employees while their salaries were being funded by the former RDA. Should you have any further questions please direct your inquiries to Justyn Howard, Assistant Program Budget Manager, at (91 i6) 445-1546. cc: Ms. Krista Martinelli, City Clerk, South San Francisco P3 QA & I A 5. Info Only: Unfunded Pensions Attachment I z DEPARTMENT OF EDMUND G. E39OW9-4 JR. ® GOVERNOR FI N A N C 91 5 L IBTRCZT 6 SA0kkMeNTQ CA 8 95M 1 4-2700 N WWW.00F.CA.GC3V January 30, 2013 Mr. Brian Panty, Finance Director City of Redwood City 1017 Middlefield Road Redwood City, CA 9463 Dear Mr. Ponty: Subject: Approval of Oversight Board Action The City of Redwood City Successor Agency (Agency) notified the California Department Finance (Finance) of its December 5, 2012 Oversight Board (OB) resolution on December 18, 2012. Pursuant to Health and Safety Code (HSC) section 34179 (h), Finance has completed its review of the 06 action. Based on our review and application of the law, the Agency's OB Resolution No. 12-05 relating to the agreement for the payment of unfunded CalPERS pension and retirement health benefits is approved. The support provided to determine the unfunded liability and the repayment terms appear reasonable. HC section 34171 p _ens i o Uqy _r9ents and other to obligations conferred thrQggb.a qgl1Qqtiyq �-Kqn—s, @1niq agreeme th re, Cre these payments are a 1±ability of the AgMgy,-Tfiii is our determination with respect to the Please direct inquiries to Wency Griffe, Supervisor, or Jenny DeAngelis, Lead Analyst at (916) 445-1546. Sincerely, STEVE SZALAY Local Government Consultant CC: Ms. Kristen Mees, Economic Development Secretary, City of Redwood City Mr. Robert Adler, Auditor Controller, San Mateo County Ms. Shirley Tourel, Manager, Auditor Controllers Office, San Mateo County California State Controllers Office P4 8. Unfunded Pension and Retiree Health Benefits RECOMMENDA11ON Approve, by Resolution, a payment agreement in connection with the unfunded CalPERS pension obligation and unfunded retiree health benefit obligation. BACKGROUND As of January 31, 2012, prior to the February 1, 2012 dissolution date of the Redevelopment Agency (RDA), the RDA employed various employees of the City of Redwood City (City) to perform certain Redevelopment activities for the Agency. Under ABx1 26, enforceable obligations include legally enforceable payments required in connection with the agencies' employees, including pension payments and other obligations conferred through a collective bargaining agreement. Given this provision, the Successor Agency has included on past Recognized Obligation Payment Schedules (ROPS) line items for unfunded pension obligations and retiree health benefit obligations related to former RDA General and RDA Housing employees. As a result of this arrangement the City is exposed to significant unfunded liabilities related to pension costs and retiree health benefits that accrued over many years of having hired employees to provide services to the RDA. The question concerning the payment of retirement and retiree health benefit liabilities was presented to and discussed with the Oversight Board! at the April 12, 2012 meeting. At that time the Board expressed a desire to find' out how the State Department of Finance (DOF) is viewing these liabilities. The Successor Agency sought the DOF's opinion but got no response; rather, the DOF did not exclude the item from the City's ROPS as an enforceable obligation. In addition, according to the results of a survey conducted' in early July on the California Society of Municipal Finance Officers "list serve" at least ten cities received approval from the DOF for payment of these liabilities. Accordingly, in light of the Oversight Board's M 8. Unfunded Pension and Retiree Health Benefits interest in a payment plan for the unfunded liabilities, we believe that this is an -appropriate time to recommend that the Oversight Board approve this agreement so that payment may begin as of the Fourth RODS. The City's unfunded pension liability with CalPERS is calculated as a percentage of payroll (salaries). The unfunded pension liability as of June 30, 2010 (the most recent actuarial valuation date) is 137.3%. This means that for every dollar of payroll the City's unfunded liability is $1.37. To determine the amount, in dollars, of the unfunded liability attributable to employees of the former RDA we multiplied the budgeted payroll for FY 2011-12 by 137.3%. The following are the calculations for the former RDA's General Fund and Housing Fund: General Fund Housing Fund Budgeted FY 2011-12 Payroll $1,155,757 $273,508 Unfunded Pension Liability factor .137.3% 137,3% Unfunded Pension Liability $1,5861854 $375,526 The unfunded liability for retiree health benefits is calculated as a flat dollar amount per full time equivalent (FTE) because the benefit is the same regardless of salary. As of June 30, 2011 (the most recent date this information is available) the unfunded liability was $93,574 per FTE. The calculations to determine the amount attributable to the former RDA's General Fund and Housing Fund are as follow: General Fund — Hous!qy Fund Budgeted FTE FY 2011-12 11.01 2.39 Unfunded Liability 2er FTE $93,574 $93,574 Unfunded Retiree Health Benefits Liability $1,030,250 $223,642 Recommended Payment Schedule The Oversight Board has requested that the Successor Agency provide a payment schedule for paying off the unfunded liabilities. The Successor Agency recommends that the payments be made over five years. Given that the combined unfunded liability for both pension and retiree health benefits is $3,216,272 payments spread over a five year period without any interest being applied to unpaid balances, would result in the City receiving $643,254 annually for five years. If these payments commence on the Fourth ROPS (July — December 2013 payment period) the payment schedule would be as follows: FY 2013-14 $643,254 FY 2014 -'l' 5 $643,254 FY 2015-16 $643,254 FY 2016 -1, 7 $643,254 FY 2017 -1' 8 $643,254 in the event that the Oversight Board believes that the recommended payment horizon creates a financial hardship on the entities receiving Redevelopment Property Tax Trust Fund distributions, the Successor Agency is willing to negotiate a longer payment period. 0 Page 2 P6 8. Unfunded Pension and Retiree Health Benefits Should the Oversight Board approve this agreement, the agreement will then be presented to the City Council for approval and, presuming Council approval, the initial payment will be included on the Fourth BOPS. 6� Brian Ponty Finance Director of Successor Agency ATTACHMENTS 1. Resolution approving the payment agreement in connection with the unfunded CalPERS pension obligation and unfunded retiree health benefit obligation (includes the agreement) 2. RDA Housing Staff FY 2011-12 Staff Budget 3. RDA General Staff FY 2011-12 Staff Budget 4, FY 2010-11 Comprehensive Annual Financial Report — Required Supplementary Information for Note 2 — Public Employees Retirement System Schedule of Funding Progress. 5. FY 2010-11 Comprehensive Annual Financial Report — Required Supplementary Information for Note 3 — Other Postemployment Benefits (Retiree Health Benefits) Schedule of Funding Progress 6. CalPERS Actuarial Valuation — June 30, 2010 7. Retiree Health Benefit Actuarial Valuation — June 30, 2011 G Page 3 P7 Exhibit 6. Pension Liabilities Attachment 1, Exhibit A AGREEMENT FOR PAYMENT OF CALPERS PENSION AND RETIREE HEALTH BENEFIT UNFUNDED LIABILITITES This AGREEMENT ("Agreement") is made and entered into as of this _ day of _, 2012 ("Effective Date") by and between the CITY OF REDWOOD CITY, a charter city and California municipal corporation ("City") and the SUCCESSOR AGENCY TO THE REDWOOD CITY REDEVELOPMENT AGENCY, ("Successor Agency"). The City and Successor Agency are hereinafter collectively referred to as "Parties." RECITALS A. Under AB XI 26, a new Part 1.85 was added to Division 24 of the California Health and Safety Code (Health and Safety Code Section 34170 et seq., as amended by the December 29, 2011 decision of the California Supreme Court and AB 1484, enacted as part of the 2012-2013 state budget, the "Dissolution Act") and, in accordance therewith, all redevelopment agencies in the State of California, including the Redwood City Redevelopment Agency ("Redevelopment Agency"), were dissolved as of February 1, 2012. B. In compliance with the Dissolution Act, the City determined it would serve as the Successor Agency effective February 1, 2012. C. Pursuant to the Dissolution Act, members making up the oversight board of the Successor Agency ("Oversight Board") have been duly appointed. D. The Dissolution Act tasks the Successor Agency and the Oversight Board with winding down the affairs of the former Redevelopment Agency, including payment of the former Redevelopment Agency's enforceable obligations. E. Pursuant to Section 34171 (d)(1)(C) of the Dissolution Act, payments required in connection with the former Redevelopment Agency's employees, including but not limited to, pension payments, pension obligation debt service, unemployment payments, or other obligation conferred through a collective bargaining agreement are enforceable obligations. F. The Redevelopment Agency did not have any direct employees, but several employees performed work for the Redevelopment Agency and the Redevelopment Agency contributed toward their salaries, The accrued CaIPERS pension and retiree health benefit obligations have historically been funded by the Redevelopment Agency in an amount directly proportionate to each employee's pro rata share of redevelopment work performed. The unfunded liabilities for pension benefits and retiree health benefits attributable to employees who provided services to the former Redevelopment Agency and payable to CalPERS as set forth in Exhibit A ("Unfunded Liabilities"), attached hereto and incorporated herein by this reference, are legacy costs of the former Redevelopment Agency that the Successor Agency is responsible for paying- ATTYIAGRI2012.103/RDA PERS UNFUNDED LIABILITIES AGREEMENT REV: 11-27-12 VR Page 1 of 5 10 Exhibit A 6. Pension Liabilities Attachment 1, Exhibit A G. The Successor Agency has included, and the Oversight Board has approved, the payment of the Unfunded Liabilities as enforceable obligations on all Recognized Obligation Payment Schedules ("ROPS") to date. H. The Oversight Board and Successor Agency recognize that the costs reflected on the ROPS for the Unfunded Liabilities were real costs incurred for employees for their past services to the former Redevelopment Agency. However, the Oversight Board has requested that the Successor Agency enter into a long-term payment plan for the Unfunded Liabilities. 1. The Parties desire to enter into this Agreement to set up a payment schedule for the Successor Agency to pay to the City the Unfunded Liabilities, in accordance with the Oversight Board's direction. J. On December 5, 2012, the Oversight Board approved this Agreement by Resolution No. OB at a duly noticed public meeting. AGREEMENT NOW, THEREFORE, in consideration of the foregoing Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows: 1. Recitals. The Recitals set forth above are incorporated by reference as though fully set forth herein. 2. Payment of Unfunded Liabilities. The Successor Agency shall pay to the City the total amount of Unfunded Liabilities identified in Exhibit A pursuant to the Payment Scheduled attached hereto as Exhibit B, attached hereto and incorporated herein by this this reference. Notwithstanding anything in this Agreement to the contrary, the Successor Agency shall be entitled to pre-pay all or part of the Unfunded Liabilities at any time with no penalties. 3. Enforceable Obligation. The Unfunded Liabilities are already enforceable obligations; the purpose of this Agreement is to agree to a schedule for payment of the enforceable obligation consistent with the Oversight Board's direction. However, the obligations of the Successor Agency under this Agreement shall also constitute an indebtedness and enforceable obligation under the Dissolution Act, and the payments agreed to in Section 2 shall be included in the relevant BOPS for payment by the Successor Agency. 4. Remedies. If either party defaults with regard to any of the provisions of this Agreement, the non-defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within thirty (30) days after service of the notice of default, the defaulting party shall be liable to the other party for damages caused by such default. S. Miscellaneous Provisions. This Agreement is made and entered into in the State of California and shall be interpreted, construed and enforced in accordance with the laws of the State of California without reference to its "choice of laws" rules. If any provision of this ATTY/AGRI2012.103/RDA PERS UNFUNDED LIABILITIES AGREEMENT REV: 11-27 -12 VR Page 2 of 5 P9 Exhibit A 6. Pension Liabilities Attachment 1, Exhibit A Agreement is declared invalid or is unenforceable for any reason, that provision shall be deleted from the document and shall not invalidate any other provision contained in the Agreement. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both Parties. Nothing contained herein nor any acts of the Parties hereto shall be deemed or construed by the Parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership or of joint venture by the Parties hereto. Nothing herein is intended to create any third party benefit. Each individual executing this Agreement on behalf of each of the Parties represents and warrants that he or she is duly authorized to execute and deliver this Agreement on behalf of that Party and that such execution is binding upon that Party. IN WITNESS WHEREOF, the undersigned have entered into this Agreement. CITY: Alicia Aguirre, Mayor Silvia Vonderlinden, City Clerk f�1 111614 i V , TO = N Robert B. Bell, Executive Director ATTEST: Silvia Vonderlinden, Secretary ATTY/AGRI2012.103/RDA PIERS UNFUNDED LIABILITIES AGREEMENT REV: 11-27-12 VR Page 3 of 5 PIO Exhibit A 6. Pension Liabilities Attachment 1, Exhibit A Exhibit A UNFUNDED LIABILITIES Unfunded Pension Liability $832,917 Unfunded Retiree Health Benefits Liability $1,253,892 A7TYIAGR/2012.103/RDA PERS UNFUNDED LIABILITIES AGREEMENT REV: 11-27-12 VR Page 4 of 5 pli Exhibit A 6. Pension Liabilities Attachment 1, Exhibit A Exhibit B PAYMENT SCHEDULE FY 2013-14 $417,632 FY 2014-15 $417,632 FY 2015-16 $417,632 FY 2016-17 $417,632 FY 2017-18 $417,631 ATTY/AGR/2012.103/RDA PERS UNFUNDED LIABILITIES AGREEMENT REV: 11-27 -12 VR Page 5 of 5 ROLI, CALL MINUTES 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 PLEDGE OF ALLEGIANCE wan-al bawnwiL sm 19J90-11) THURSDAY FEBRUARY 14, 2013 2:00 p.m. Time: 2:00 p.m. Present: Boardmembers Addiego, Beaudin, Christensen, Farrales and Scannell, Patti Ernsberger as Alternate for Vice Chairperson Porterfield and Chairperson Cullen. MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes of the Special Meeting of January 23, 2013. Motion— Boardmember Scannell/Second— Boardinember Farrales: Unanimously approved by voice vote. 2, Resolution No. 6-2013 approving a Loan Agreement in the amount of $8,652 with the City of South San Francisco to allow the Successor Agency to make payments for two Non-housing Recognized Obligation Payment Expenses shown on ROPS I but incurred during ROPS 11. Finance Director Steele advised that because the ROPS covers a finite time period, payments for projects completed after the close of a ROPS cycle but before approval of another are unable to be paid. To deal with this circumstance, staff recommends that the City advance funds for payment of certain recognized obligation payment expenses in the form of a loan to the Successor Agency. The recommendation in this instance is to approve a loan agreement covering $8,652 to fund former Redevelopment enforceable obligations shown on ROPS I but incurred during ROPS 11 for the following items: (1) $1,380 to TechAccutitefWilsey Ham for performance of remediatio,n work related to train station improvements (Line 28 of ROPS 1, Line 21 of ROPS TV); and (2) $7,272 to Muni Financial Services for contracted roll correction work (Line 56 of ROPS I, Line 44 of ROPS IV). Boardmember Scannell queried the work done by Muni Services. Finance Director Steele noted that Muni Services audits the property tax roll to find misallocations amongst jurisdictions. The service is only compensated for actual corrections achieved on the behalf of the Agency. Motion— Boardmember Scannell/Second— Boardmember Addiego: to approve Resolution No. 6- 2013. Unanimously approved by voice vote. Resolution No. 7-2013 approving a Recognized Obligation Payment Schedule (ROPS) and Administrative Budget for the period July 1 — December 31, 2013, pursuant to Health and Safety Code Section 34177(1). Finance Director Steele presented the staff report recommending approval of the Recognized Obligation Payment Schedule ("ROPS") for the period July through December 2013. He advised that DOF now sets and locks the line item numbers for each RDA Successor Agency through the use of a mandatory template it has distributed and tailored to each agency. Boardmembers reviewed the ROPS by asking various questioned related to specific line items. Chairperson Cullen questioned whether line item #64 pertaining to actuarial consultant costs would be better categorized as an Administrative Expense, SPECIAL OVERSIGHT BOARD MEFFING FEBRUARY 14, 2013 MINUTES PAGE 2 Finance Director Steele responded that staff would argue that the expense is not administrative in nature. Boardmember Christensen requested timeframes for items 14 and 16 pertaining to the Oyster Point Ventures DDA and Harbor District Agreement. Assistant City Manager Van Duyn advised there is no projected timeline for the beginning of development related to these items. He noted, however, that the DDA outlines certain commitments. In any event, there was no indication the project would move ahead before 2017, Boardmember Christensen inquired on the timeline for the train station improvements identified at lines 21-24, Assistant City Manager VanDuyn advised the train station improvements are a high priority. He noted the former Redevelopment Agency had purchase land for the tunnel that would assist in providing midlevel access, however due to High Speed Rail, plans stalled. Despite these obstacles, the City is still seeking funding and commitments for this priority project. Boardmember Scannell inquired as to the Administrative Budget set forth on Exhibit B questioning when a drop in administrative expenses might be realized. City Attorney Mattas advised that once the Board gets through the asset disposition plan then the costs will begin to diminish as the ROPE narrows. Motion —Boardmember Addiego/Second• Boardmember Beaudin: to approve Resolution No. 7- 2013. Unanimously approved by voice vote. 4. Review of Former Redevelopment (RDA) Employee Staffing and Next Steps for Calculating RDA Share of Unfunded Retirement and Retiree Health Liabilities. Chairman Cullen advised the Board had discussed receipt of the letter from DOF in response to the letter from the Chairman requesting a position on former RDA employment staffing liabilities. The DOF had not taken a position. Accordingly, for the Board's consideration, staff prepared an inventory of staff time charged to the former RDA alongside a description of the work performed. The Board is charged with making a determination as to time properly allocated towards the RDA. Director of Finance Steele presented the staff report recommending that the Board review and discuss the information contained in the report and provide further direction to staff to calculate the fair cost of unfunded liabilities for retiree health and pension costs, including OPEB and PERS costs, that are attributable to the former RDA. Staff recommends calculating the liability and putting the amount aside in a trust. In order to assist the Board with this task, Director Steele recommended first reviewing and agreeing upon the positions that provided services to the RDA. Once agreement was reached, the OP'EB and PERS amounts could be calculated by an Actuary and PERS. SPI"CIAL 0WRSIGHTBOARD MEETING FEBRUARY 14, 2013 MINUTES PAGE 3 Boardmember Scannell queried whether the PERS contribution rate is adjusted annually, Finance Director Steele advised that in early 2000, most cities in San Mateo County, including South San Francisco, granted employees a pension increase. The City has only been paying the full amount for each new employee hired after the increase took effect. Accordingly, the only unfunded amount is for employees hired before 2000 plus gains and losses. Finance Director Steele then directed the discussion to the Board's task of determining the share of the PERS and OPEB obligations that properly belonged to the former RDA. Once specific positions are identified and agreed upon by the Board, a more precise allocation could be determined. Director Steele advised that staff believed the overall staffing allocation presented was extremely reasonable. He noted that total staff time charged to the former RDA was 18.02 out of a total of 406 Regular full time employees ("FTE"), or 4.4% of total staff time. He opined this was certainly reasonable for an RDA with a project area covering roughly 1/3 of the City's square mileage and a budget that was 55% of the City's General Fund. Furthermore, if all of the identified positions were analyzed for OPEB and PERS costs, the resulting number would be projected to be in the neighborhood of $6.2 million out of a total of $134 million or 4.7% percent of the City's total liability. The City has already set aside $11 million from the General Fund of a total OPEB liability of $92 million. Finally, a 4.4 %- 4.7 %o staffing rate is much lower than the general guidelines for an RDA. The City's percentages were never questioned by outside auditors or the state. Anecdotally, Director Steele noted reports from RDA consultants who worked with other agencies where administrative staffing charges were in the 1.0 -1.5% of the total RDA budget range. He concluded by reiterating the reasonableness of the proposal as compared against the total former RDA operations. Responding to a request for clarification from Boardmember Farrales, Finance Director Steele advised that the City and RDA were fully funding the annual PERS contribution. Neither, however, was meeting the annual OBEP funding requirement. Boardmembers questioned the relationship of certain of the positions to the RDA areas, They further questioned whether any of the employees had been let go since the cessation of RDA, and if not, whether proportionate liabilities could be determined. City Attorney Mattas advised an actuary could be directed to be position and time specific in his or her calculations. He suggested that the Board meet with the actuary to define a scope it is comfortable with. Boardmember Farrales stated that the bottom line estimate seemed reasonable. It was Chairman Cullen's recollection that specific and different funds showed at least full time equivalents. Boardmember Beaudin commented that the brevity of the list was surprising, Boardmember Scannell raised concern that 3 sworn police officers and a literacy services employee were charged to the RDA. SPECIAL OVERSIGHT130ARD MEETING F EBRUARY 14, 2013 MINUTES PAGE 4 Boardmember Addiego commented on the breadth of the Downtown Redevelopment Core, which included specific blight related issues inherent to such a location. Assistant City Manager Van Duyn reminded the Board that increased housing and commitments in the affected Redevelopment areas yields an increased level of enforcement and demands for services. Consultant Sanchez observed that economic development is dual pronged. There are both the physical and social elements to improving an area. Improvements can be made to an area by enticing developers; however, this is all for naught if substantial crime exists in the location. The two pronged approach was thus critical to the success of the Redevelopment Project Areas. At the close of discussion, the Board agreed to call an actuary to its next Regular Meeting to discuss a possible scope of services and attempt to define a calculation methodology. Future Agenda Items. a) Long Range Property Management Plan. The Board did not add Future Agenda items at this meeting. ADJOURNMENT Motion —Boardmember Addiego/Second— Boardmember Scannell: to adjourn the meeting. Unanimously approved by voice vote. Pursuant to the above motion, Chairperson Cullen adjourned the meeting at 3:40 p.m. Submitted: Approved: !a` . Martinclli, ity �Cle Neil Cullen, Chairperson City of South Sarr'�rancisco Oversight Board for the Successor Agency to the City of South San Francisco Redevelopment Agency SPECIAL OVERSIGHT BOARD MEMING FEBRUARY 14, 2013 MINMTS PAGE 5 DATE: March 12, 2013 TO: Members of the Oversight Board FROM: Marty Van Duyn, Assistant City Manager SUBJECT: RESOLUTION OF THE OVERSIGHT BOARD APPROVING OF A GRANT OF A PUBLIC UTILITY EASEMENT TO PACIFIC GAS & ELECTRIC COMPANY The Successor Agency recommends that the Oversight Board adopt a Resolution granting a Public Utility Easement to Pacific Gas & Electric Company. Pacific Gas & Electric (PG&E) is proposing to acquire an underground transmission gas line easement on City property formerly owned by the Redevelopment Agency, identified as APN 043- 331 -050 & 060 (Centennial Way Park). In 2012, PG&E upgraded its gas transmission pipeline within the City of South San Francisco along Mission Road. This year, PG&E is proposing to upgrade the pipeline south of Chestnut Avenue, which would include replacing old pipes and rerouting a portion of the pipeline to El Camino Real. Over the past several months, PG&E has completed cultural, biological, appraisal, and engineering studies and would like to move forward to secure the required property rights. A portion of Centennial Way lies within the proposed route and will be necessary for PG&E to acquire an easement for the pipeline. Proposed A Street Easement The existing underground gas pipeline runs along A Street and a portion of the Centennial Way park area between A Street and 12-Mile Creek. PG&E is proposing to remove a portion of the underground gas line under A Street and relocated the pipeline to be under El Camino Real and the Burger King property. Currently, PG&E does not have a Public Utility Easement along the gas pipeline route in the subject area. The proposed easement would be in the form of an underground gas line easement. The area of the gas pipeline easement is approximately 15,170 square feet and the dimensions are 50 feet wide and approximately 360 feet in length. The location of the easement is at the northwesterly end of the Centennial Way Park, adjacent to 12-Mile Creek and property owned by BART. The easement would extend northward from the property line with the Burger King Property and just north of A Street, to the property line with the Petrocchi property. The easement area would include 12-Mile Creek. PG&E prepared an appraisal, which determined that the value of the land is $11,871. The Agency's appraiser reviewed the PG&E appraisal and concurs with the Report's conclusion and valuation. Staff Report Subject: Grant of a Public Utility Easement to PG&E Page 2 Proposed Easement Deed The proposed Easement Deed would grant PG&E the right at any time to excavate for, install, replace, maintain and use the area for conveying gas. PG&E would be granted the riot to trim and cut down trees or bushes within the easement area, install and use gates in all fences which now cross the easement area, and place markers that show the location of the easement. PG&E agrees to not fence easement areas, maintain the area and repair damage to private roads, landscaping, and lanes, and indemnify the Grantor. SUCCESSOR AGENCY RECOMMENDATION On February 26, 2013, the Successor Agency recommended by consent that the Oversight Board adopt a Resolution granting a Public Utility Easement to Pacific Gas & Electric Company. I KIM R The Successor Agency recommends that the Oversight Board adopt a Resolution approving the proposed Grant of a Public Utility Easement to Pacific Gas & Electric Company. By: Marty arty Van Duyn Assistant City Manag d Director Attachments: 1. Resolution 2. Map — PG&E L -132 3. (PG&E) Exhibit B-1, Gas Pipeline Easement 4. Property Profile 5. Proposed Easement Deed 2055460.1 ATTAR ENT I pi is I reffm RESOLUTION APPROVING A GRANT OF A PUBLIC UTILITY EASEMENT TO PACIFIC GAS & ELECTRIC COMPANY WHEREAS, on February 27, 2013, the City Council of the City South San Francisco (City") adopted Resolution No. , and the Successor Agency of the City of South San Francisco Redevelopment Agency ("Successor Agency") adopted Resolution No. pursuant to which the City was authorized to transfer to, and the Successor Agency was authorized to acquire, title to that certain real property identified as San Mateo County Assessor's Parcel Numbers 093- 331 -050 and 093-331-060 (the "Property"); and WHEREAS, the City and the Successor Agency have executed a Grant Deed for the Property, and the Successor Agency has executed a certificate of acceptance of the Property, which Grant Deed has been or will be recorded in the Official Records of San Mateo County substantially concurrently herewith; and WHEREAS, Pacific Gas and Electric Company ("PG&E") is upgrading its underground gas transmission lines within the City, including a proposed relocation of a portion of the line under the Property; and WHEREAS, PG&E has requested a public utility gas line easement of approximately 15,170 square feet, and has commissioned an appraisal of the proposed easement, which is valued at $11,871: and WHEREAS, the City's appraiser has confirmed the valuation; and WHEREAS, PG&E has prepared a proposed Easement Deed that would permit PG&E to excavate for, install, replace, maintain and use the easement area for the conveyance of gas, including the right to trim and remove trees and bushes, install and use gates in existing fences, and place easement markers, in return for payment to the Successor Agency based on the appraised value; and WHEREAS, the Successor Agency and the Oversight Board have determined that the public will benefit from such grant of easement to PG&E for the improvement of its gas transmission system, and consents to such grant; and WHEREAS, the easement is statutorily exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to California Resources Code section 21080.21. 2055472.1 P3 NOW, THEIZEFORE, BE IT RESOLVED that the here Board of the City Of South San Francisco Reevelopment Agencby for the Successor Agency 1. Finds that 2. the foregoing Recitals are true and correct and Made a part of this Resolution. Company. Approves the Proposed grant of the public utility easement to Pacific Gas and Electric 3. Directs staff to transmit this Resolution, the Easement Deed and related State Department of Finance - Assembly Bill 1484. In accordance with Assembly Bill x] 26, as modified to the modified by I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Oversight Board for the Successor Agency of the C ty of South S Francisco Redevelopment Agency at a meeting held by the following vote: on the. day ' 0 th an of March, 2013 AYES: NOES: ABSTAIN: ABSENT: 2055472,1 2 ATTEST: Successor —Agency Secretary Mfr r IN ATTACHMENT 3 10 R-m-5-011 05 i LIN APN: olA—A i 160 109 s �A roo C10 0 —A STREET 35' PG&E CIM (,zTA TE RTE, 82), EL UA1m M1v n EXHIBI r 'V- I" CAS PIPEL INE EA sa 4EN r PGAE L INF lJV CVV LANDS 010 C1rY0FS0UrHS4A1FRA1V0SC0 PACIFIC GAS AND ELECTRIC COMPANY UE ON- ATTACHMENT P3.2 "A" Street, South San Franebeo APN 093-331-050,060 LEGAL DES=MN- LeW deser'pt'on Is found In the Preliminary title report dated December b 2011 and prepared by First American Title Company. Said title m?ort is found at the cad of this tab, section. IMM MAIMIN, LA"ZIRIM111 V 11 7 Fee acquisition ffiflJECT FRO PERT Y VA�LUE: $93,900 (Subject Property Assumed to be 30,000 sqUAL.) $11,971 (PCY&E easoment) $ 0 Severance Damages $ 0 Benefits $1 I-A71 Total Compensation P13 ATTACHMENT 1 ] GAS L1NETfiANSWSSFGN-'AjRF.V.08? I I) 'Xi r4ay- PrIm 245 MarketStmt, N10A, Room iol's P.O. Box 770000 San Francisco, Calffiorma 94177 of declarant or agent determining tax (SPACE ABOVE FOR RECORDER'S USE ONLY) LD 2303-05-2339 EASEMENT DEED 2012039 (22-12-035) 3 12 2 Line 132 Replacement in South San Francisco (MP 41-83 - 42.95) South Segment CITY OF SOUTH SAN FRANCISCO, a municipal corporation, (APP 093-331-050 &-060) The portion of the parcel of land described and designated "TAKE PARCEL 4" in the deed from the Redevelopment Agency of the City of South San Francisco to the City of South San Francisco, dated March 2, 2011 and recorded as Recorder's Serial Number 2011 - 029256 in the Official Records of San Mateo County, lying on the westerly side of the northerly Prolongation Of the easterly boundary line of A Street. The aforesaid easement area is described as follows: am The strip of land described in EXHIBIT "A-1- and -shown on EXHIBIT "B-l", both of which are attached hereto and made a part hereof. Grantor further grants to Grantee: (c) the right to use such portion of said lands contiguous to said easement am as may be reasonably necessary in connection with the installation and replacement of said facilities; (d) the right to install, maintain and use gates in all fences which now cross or shall hereafter cross said easement area; and (C) the right to mark the location of said easement area by suitable Markers Set in the ground; provided that said markers shall be placed in fences or other locations which will not interfere with any reasonable use Grantor shall make of said easement area. Grantee hereby covenants and agrees: (a) not to fence said easement area; (b) to Promptly backfill any excavations made by it on said cmelntnt area and repair any damage it shall do to Grantoes private roads or lanes on said lands; and (c) to indemnify Grantor against any loss and damage which shall be caused by any wrongful or negligent act or omission of Grantee or of its agents or employees in the course of their employment, provided, however, that this indemnity shall not extend to that portion of such loss or damage that shall have been caused by Grantor's comparative negligence or willful misconduct. Grantor reserves the right " to use said easement area for purposes which will not interfere with Grantees full enjoyment of the rights hereby granted; provided that Grantor shall not erect or construct any building or other structure, or drill or operate any well, or construct any reservoir or other obstruction within said easement area, or plant any trees or vines, or construct associated supporting structures, within ten feet of the centerline(s) of the pipeline(s), or diminish or P16 substantially add to the ground cover over said facilities, or construct ally fences that will interfere with the maintenance and operation of said facilities. The provisions hereof shall inure to the benefit of and bind the successors and assigns of the respective parties hereto, and all covenants shall apply to and run with the land. Dated 20 CITY OF SOUTH SAN rpMCISCO, a municipal corpc)ration M By Attach to LD 2303-05-2339 Area 1, Golden Gate Region, Peninsula Division Land Service Office: San Francisco Operaling Department. Gas Transmission T3S, R5W, MDM Sec 20, NW4ofSE4 FE RC License Numbe*).- NA PC &E Dm wi ng Num beiI s) - FLAT NO.: Gas., 07-1315,Elec: E0310 LD of any affectod documents: NA LDof any Cross-referenced documents. NA Vwing Deed: 2011-029256 TYPE OF INTEREST: 5, 6, 52 'SEE Parcel Number. NA (For Quitclaims. % being quitclaimed): NA Order# or PM #, 30604188 - 0180 JCN. 22-12-0.35 Counl3r San Mateo Utility Notice Numbers.* NA 85]' Approval Application No, decision NA Prepared By. TEP Checked By; MT1 Revised By: DQTJ (11-26-12) P17 File No:. I I November 13, 2012 EXHIBIT "A-111 PG&E GAS LNEEASEMENT � 1, � &CIL L�I�IWIIAAIV;kjk Being a portion of that certain parcel of land described as "TAXE PARCEL 4-in the grant deed to the City Of South San Francisco, a Municipal corporation, filed for record on March 11, 2011, as Document No. 2011-029256, Son Mateo County Records, described as follOws: Beginning at the most northerly comer of said parcel of land; thence proceeding along the northeasterly line of said par-eel of land, S 54. 47-38" E, 178.30 fed; thence leaving said northeasterly line, S, 25*1 V5 I" E, 89.40 feet; thence S 64148'09" W, 52.71 feet to the intersection with the southwesterly line of said parcel of land; said point of intersection also being the most easterly comer of that certain parcel of land described in the grant deed to Jack Lin and Connie S. Lin, filed for record on August 17, 2007, as Document No. 2007-124006, San Mateo County Records; thence along said southwesterly line, N 547 "38 4 W, 40.2 f t; 5 ee thence leaving said southwesterly line, 1'4 64*48'09"E,22,59 feet; thdnc6, N25011,sl,,W, 41.19 feet; thence along a line parallel with and 50.00 feet southwesterly, measured at light angles to said northeasterly Line of said parcel of land, N 54047'38" W, 165.09 feet to the intersection with the northwesterly line of said parcel of land; thence along said northwesterly line, N 35-12,,22., E, 50.00 feet to the Point of Beginning of this description. Containing 13,168 square feet of land, more or less, Basis of Bealings., The bearings for this description are based on the North American Datum of 1983 (NAD83)1, Continuous Operating Reference Stations, Epoch Date 2002.00. Coordinates are on the California Coordinate Systern of 1983, Zone 3 (CCS83, Zone 3), in U.S. feet, All distances are ground. This real property description has been prepared by me, or under my direction, in conformance with the Professional Land Surveyor's Act. Signature.* A404 /-6k. a*,, Lester lk -i RI 30 590 Expires 3-31-14 Date: November 13 2012 IAA�� P18 x . q x 03 ybill § Qq ® � LIN . 4P 014-011-320 ` k � �� � � . ® EL CAS N0 REAL . TATE RTE. B P!9 ffim P20