HomeMy WebLinkAbout066-2012SARESOLUTION NO.66- 2012SA
APPROVING AND ADOPTING THE AMENDED FIRST RECOGNIZED
OBLIGATION PAYMENT SCHEDULE FOR THE TOWN OF DANVILLE ACTING
AS THE SUCCESSOR AGENCY TO THE FORMER COMMUNITY
DEVELOPMENT AGENCY OF THE TOWN OF DANVILLE IN COMPLIANCE
WITH STATE DEPARTMENT OF FINANCE REQUEST FOR RECONSIDERATION
OF SPECIFIED ITEMS AND APPROVING THE ADMINISTRATIVE BUDGET FOR
THE SUCCESSOR AGENCY FOR THE PERIOD FROM JANUARY 1 THROUGH
JUNE 30, 2012
WHEREAS, the California state legislature enacted Assembly Bill x1 26 (the
"Dissolution Act ") to dissolve redevelopment agencies formed under the Community
Redevelopment Law (Health and Safety Code Section 33000 et seq .); and
WHEREAS, on December 29, 2011, the California Supreme Court. delivered its decision
in California Redevelopment Association v. Matosantos, finding the Dissolution Act largely
constitutional; and
WHEREAS, under the Dissolution Act and the California Supreme Court's decision in
California Redevelopment Association v. Matosantos, all California redevelopment agencies,
including the Community Development Agency of the Town of Danville (the
"Dissolved CDA "), were dissolved on February 1, 2012; and
WHEREAS, on January 10, 2012 and pursuant to Health and Safety Code Section 34173,
the Town Council (the "Town Council ") of the Town of Danville (the "Town ") adopted a
resolution declaring that the Town, a municipal corporation, would act as the successor
agency (the "Successor Agency ") for the Dissolved CDA; and
WHEREAS, under the Dissolution Act, the Successor Agency must prepare a
"Recognized Obligation Payment Schedule" ( "ROPS ") that enumerates the enforceable
obligations and expenses of the Successor Agency for specified six -month periods;
WHEREAS, the Successor Agency staff prepared, and on February 21, 2012, the Town
Council, in its capacity as the governing board of the Successor Agency, approved the
ROPS for the six-month period ending June 30, 2012 (the "First ROPS "); and
WHEREAS, pursuant to the Dissolution Act, the duly - constituted Oversight Board for
the Successor Agency met at a duly- noticed public meeting on April 9, 2012, to review
and consider the First ROPS, and specific obligations listed on the First ROPS, and by
adoption of Oversight Board Resolution No. 2 -2012, approved the First BOPS, attached
hereto as Exhibit 1, incorporated herein by this reference; and
WHEREAS, staff posted the First ROPS on the Successor Agency's website, and
transmitted the First ROPS to the Auditor - Controller of the County of Contra Costa (the
"County- Auditor'), to the California State Controller (the "State Controller "), and to the
California Department of Finance (the "DOF ") by notice dated April 10, 2012; and
WHEREAS, under Health and Safety Code Section 34179(h), Oversight Board actions
do not become effective for three (3) business days, pending request for review by the
DOR If the DOF requests a review of a given Oversight Board action, the DOF has ten
(10) days from the date of its request to approve the Oversight Board action or return
the action to the Oversight Board for its reconsideration and any particular disapproved
item shall not become effective until approved by the DOF; and
WHEREAS, on April 11, 2012, and within the three (3) business day notice period, the
DOF informed the Successor Agency and the Oversight Board that the DOF was
requesting review of unspecified items on the First RODS and sent an informal request
for additional information, to which the Successor Agency staff timely responded; and
WHEREAS, by letter of April 20, 2012 (the "Formal Notification Letter'), attached
hereto as Exhibit 2 and incorporated herein by this reference, the DOF notified the
Successor Agency and the Oversight Board that the DOF was returning the First ROPS
for reconsideration by the Oversight Board, specifically requesting the Oversight Board
reconsider the inclusion of the following two items on the First ROPS that were
disapproved by the DOF (together the "Reconsideration Items ");
1. Item 4 (described as "Town Loan/ Cooperation Agreement entered into on
12/7/87', hereinafter referred to as the "Cooperation Agreement "), which was
disapproved by the DOF pursuant to Health and Safety Code Section
34171(d)(2), which invalidated most types of contracts between the Dissolved
CDA and the Town; and
2. Item 6 (described as and hereinafter referred to a "Housing Fund Balance "),
which was disapproved by the DOF due to its interpretation of the required
treatment of that balance under the Dissolution Act.
WHEREAS, the Formal Notification Letter was issued within the ten day decision
period authorized by Health and Safety Code Section 34179(h), which expired on or
about April 21, 2012 (the "DOF Notification Deadline'); and
WHEREAS, pursuant to the Formal Notification Letter, and consistent with the
guidance issued by Ana Matosantos, the Director of the DOF, by letter dated March 2,
2012, only the Reconsideration Items are ineffective until approved by the DOF; and
WHEREAS, other than for the Reconsideration Items identified in the Formal
Notification Letter and listed above, the remainder of the enforceable obligations and
recognized obligations listed in the First ROPS (the "Accepted Enforceable
Obligations ") are deemed to constitute the First ROPS for the six -month period ending
June 30, 2012, and failure by the DOF to challenge the Accepted Enforceable Obligations
PAGE 2 OF RESOLUTION NO.66- 2012SA
listed on the First ROPS forecloses the DOF's challenge of the Accepted Enforceable
Obligations because of the expiration of the DOF Notification Deadline; and
WHEREAS, under Health and Safety Code Sections 34178(a) and 34180(h), a successor
agency may enter or reenter into agreements with the town that formed the
redevelopment agency that it is succeeding upon obtaining the approval of its oversight
board; and
WHEREAS, in compliance with the Dissolution Act, and as part of the Oversight
Board's reconsideration of the Cooperation Agreement as requested by the DOF, the
Oversight Board adopted a resolution approving and authorizing reentry by the
Successor Agency into the Cooperation Agreement with the Town, thereby reinstating
the validity of the Cooperation Agreement as an enforceable obligation that may be
included in the First ROPS; and
WHEREAS, pursuant to Health and Safety Code Section 341770), the Successor Agency
must prepare an administrative budget for its general administrative costs and
expenses for each six month period (the "Administrative Budget "). Pursuant to Health
and Safety Code Section, the administrative budget for fiscal year 2011/12 shall be up to
five percent (5%) of the Redevelopment Obligation Retirement Fund, but not less than
$250,000, unless a lower amount is agreed to by the Successor Agency: and
WHEREAS, the Successor Agency agrees that its Administrative Budget for fiscal year
2011/12 shall not exceed five percent (5%) of the Redevelopment Obligation Retirement
Fund, an amount which is less than $250,000; now, therefore, be it
RESOLVED that the Danville Town Council, acting as the Successor Agency to the
former Community Development Agency of the Town of Danville hereby finds, resolves,
and determines as follows:
1. The foregoing recitals are true and correct, and, together with information provided
by the Successor Agency staff and the public, form the basis for the approvals,
findings, resolutions, and determinations set forth below.
2. As requested by the DOF in the Formal Notification Letter, the Successor Agency
has duly considered the Reconsideration Items and hereby makes the modifications
and determinations with respect to the First RODS as set forth below.
3. The Danville Town Council, acting as the Successor Agency to the former Community
Development Agency of the Town of Danville, has reconsidered the Housing Fund
Balance item and hereby determines that the Housing Fund Balance item is removed
from the First ROPS, and the First RODS is hereby amended to effectuate such
removal.
4. The Danville Town Council, acting as the Successor Agency to the former Community
Development Agency of the Town of Danville, has reconsidered the Cooperation
PAGE 3 OF RESOLUTION NO.66- 2012SA
Agreement and hereby finds and determines that retention and inclusion of the
Cooperation Agreement on the First ROPS is appropriate because, pursuant to
Health & Safety Code Sections 34178(a) and 34180(h), the Town and the Successor
Agency have approved reentering the Cooperation Agreement and have requested
the Oversight Board to approve this reentry, and as such, the Cooperation
Agreement constitutes an "enforceable obligation" and "recognized obligation" for
all purposes of the Dissolution Act.
5. No further action of the Successor Agency or Oversight Board is required of the
Accepted Enforceable Obligations contained on the First ROPS. The
Reconsideration Deadline has passed for the Accepted Enforceable Obligations
without challenge by the DOF. Consequently, each of the Accepted Enforceable
Obligations constitutes an "enforceable obligation" and "recognized obligation" for
all purposes of the Dissolution Act, and is necessary for the continued maintenance
and preservation of property owned by the Successor Agency until disposition and
liquidation, the continued administration of the ongoing agreements herein
approved by the Oversight Board, or the expeditious wind -down of the affairs of the
Dissolved CDA by the Successor Agency.
6. To memorialize the amendment to the First ROPS and the other actions set forth in
this Resolution, the Danville Town Council, acting as the Successor Agency to the
former Community Development Agency of the Town of Danville, hereby approves
the Amended First Recognized Obligation Payment Schedule (the "Amended First
ROPS ") in the form attached to this Resolution as Exhibit 3 and incorporated in this
Resolution by this reference. The Danville Town Council, acting as the Successor
Agency to the former Community Development Agency of the Town of Danville,
hereby declares its intent that the Amended First ROPS (Exhibit 3) shall amend,
replace, and supersede the First ROPS (Exhibit 1) in its entirety.
7. The Danville Town Council, acting as the Successor Agency to the former Community
Development Agency of the Town of Danville, authorizes and directs the Successor
Agency staff to take all actions necessary under the Dissolution Act to post this
Resolution on the Successor Agency website, transmit a copy of this Resolution to
the Auditor - Controller, to the State Controller and the DOF, to submit the Amended
First ROPS to the Oversight Board for their review and approval, and to take any
other actions necessary to effectuate this Resolution.
8. Nothing in this Resolution shall abrogate, waive, impair or in any other manner
affect the right or ability of the Town, in its capacity as a municipal corporation or in
its capacity as Successor Agency, to initiate and prosecute any litigation with respect
to any agreement or other arrangement between the Town and the Dissolved CDA,
including, without limitation, any litigation contesting the purported invalidity of
the Cooperation Agreement as stated in the Formal Notification Letter.
9. This Resolution shall take effect at the time and in the manner prescribed in Health
and Safety Code Section 34179(h).
PAGE 4 OF RESOLUTION NO.66- 2012SA
10. The Danville Town Council, acting as the Successor Agency to the former Community
Development Agency of the Town of Danville, hereby approves the Administrative
Budget for the period from January 1, 2012 through June 30, 2012, attached hereto as
Exhibit 4.
11. Successor Agency staff is directed to: (1) provide a copy of the Administrative Budget
to the County Auditor - Controller; and (2) submit the Administrative Budget to the
Oversight Board for consideration of approval.
APPROVED by the Danville Town Council, acting as the Successor Agency to the
former Community Development Agency of the Town of Danville, at a regular meeting
on May 1, 2012, by the following vote:
AYES: Andersen, Arnerich, Doyle, Stepper, Storer
NOES: None
ABSTAINED: None
ABSENT: None
MAYOR
APPROVED AS TO FORM: TTE
CITY ATTORNEY CITY CLER
PAGE 5 OF RESOLUTION NO.66- 2012SA
EXHIBIT 1
APPROVED FIRST ROPS
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EXHIBIT 2
FORMAL NOTIFICATION LETTER
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DEPARTMENT OF EDMUND G. BROWN .1R. GOVERNOR 6�C�FbR��r F I N A N C E 91 5 L STREET ■ SACRAMENTO CA ■.9581 4'3706 ■ WWW.DOr.GA.00v
April 20, 2012
Elizabeth Hudson
Town of Danville
510 La Gonda Way
Danville, CA 94526
Dear Ms. Hudson:
Pursuant to Health and Safety Code (HSC) section 34177 (1) (2) (C), the Town of Danville
Successor Agency submitted a Recognized Obligation Payment Schedule (ROPS) to the
California Department of Finance (Finance) on April 10, 2012. Finance staff contacted you for
clarification of items listed in the ROPS.
HSC section 34171 (d) lists enforceable obligations characteristics. Based on our application of
the law, the following items are not Enforceable Obligations (EO):
• Item'No. 4 - Operating advances in the amount of $8,063,814. HSC section 34171 (d)
(2) states that loans between the entity that created the redevelopment agency (RDA)
and the former RDA are not EO.
• Item No. 6 — Housing fund balance in the amount of $53,093. HSC section 34177 (d)
requires that all unencumbered balances in the Low and Moderate Income Housing
Fund be remitted to the county auditor controller for distribution to the taxing entities.
As authorized by HSC section 34179 (h), Finance is returning your ROPS for your
reconsideration. This action will cause the specific ROPS items noted above to be ineffective
until Finance approval. Furthermore, items listed on future ROPS will be subject to review and
may be denied as EOs.
If you believe we have reached this conclusion in error, please provide further evidence that the
items questioned above meet the definition of an EO.
Please direct any inquiries to Robert Scott, Supervisor or Doug Evans, Lead Analyst at
(916) 322 -2965.
Sincerely,
/Viv
MARK HILL
Program Budget Manager
cc: Mr. Robert Ewing, City Attorney, Danville
Mr. Bob Campbell, Auditor - Controller, Contra Costa County
Mr. Robert Ewing, City Attorney
EXixiBIT 2
EXHIBIT 3
AMENDED FIRST RODS
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SUCCESSOR AGENCY TO THE FORMER COMMUNITY DEVELOPMENT
AGENCY OF THE TOWN OF DANVILLE
ADMINISTRATIVE BUDGET
1/9/12- 6/30/12
Budget Item
Purpose
Estimated Cost
Bank of New York
Fiscal Agent for 2001 and 2005
$5,000
COP's and 2001 TRB's
Willdan Financial
Required annual disclosure
$1,700-
Services
statements
Chandler Asset
Investment management fees (part
$200
Management
of pooled funds)
Contra Costa County
Property Tax and Sewer charge
$325+ $1,750
Tax Collector
Marcum, LLP
Financial audit for CDA/Successor
$4,000
Agency
Goldfarb & Lipman
Legal Counsel to Successor Agency
$23,567
Town of Danville
Town staff and overhead costs
$16,000
Overhead
necessary to administer Successor
Agency duties per Cost Allocation
Study
Total Budget
52 42
EXHIBIT 4