OB - 2012-0005 - Approving Recognized Obligation Payment Schedules for the Period of July 1, 2012 Through December 31, 2012RESOLUTION: 2012 -0005
A RESOLUTION OF THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY
TO THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION APPROVING
THE RECOGNIZED OBLIGATION PAYMENT SCHEDULES FOR THE PERIOD OF
JULY 1, 2012 THROUGH DECEMBER 31, 2012
WHEREAS, California Health and Safety Code section 34179 requires that each
Successor Agency have an Oversight Board; and
WHEREAS, Section 34177 requires each Successor Agency to prepare a draft
Obligation Payment Schedule ( "ROPS ") and section 34180 requires the Oversight Board to
approve same; and
WHEREAS, Section 34177 provides that each ROPS shall be forward looking to the
next six months; and
WHEREAS, section 34177 requires that the draft ROPS prepared by the Successor
Agency be certified by an external auditor designated by the County Auditor - Controller and then
submitted to the Oversight Board for approval, after which it is to be transmitted to the County
Auditor - Controller, the State Controller and the State Department of Finance; and
WHEREAS, notwithstanding the sequencing contemplated in section 34177, the
Department of Finance is requesting the ROPS be considered by the Oversight Board and
transmitted as soon as possible; and
WHEREAS, the County of Los Angeles has assigned an auditor, but has not indicated
when it will complete the external audits of the draft ROPS; and
WHEREAS, the County will not make any payments of property taxes to the Successor
Agency for use in payment of the obligations listed on the ROPS until the ROPS has been
approved by the Oversight Board. Any delay in such payment could impair the Successor
Agency's ability to make payments for the enforceable obligations; and
WHEREAS, the Successor Agency prepared a draft ROPS for the period July 1, 2012
through December 31, 2012 is attached hereto as Exhibit A.
NOW THEREFORE, THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY
TO ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION HEREBY RESOLVES:
1. The ROPS for the period July 1, 2012 through December 31, 2012 attached hereto
as Exhibit B is hereby approved.
Successor Agency staff is directed to provide a copy of this Resolution along with
the approved ROPS to the County Auditor - Controller, the State Controller's Office
and the State Department of Finance.
PASSED, APPROVED AND ADOPTED this 16th day of May 2012.
FW � i i
Chairperson
ATTEST:
Matt* w E. l4awkesworth
Successor Agency Staff
Assistant City Manager
HEREBY CERTIFY that the above and foregoing resolution was duly passed and adopted by
the Oversight Board for the Successor Agency to the Rosemead Community Development
Commission at its special meeting held on the 16 day of May 2012, by the following vote, to
wit:
AYES:
NOES:
ABSENT:
ABSTAINED:
Matth w E. HFaWkesworth
Successor Agency Staff
Assistant City Manager
ROSEMEAD SUCCESSOR
AGENCY STAFF REPORT
TO: THE HONORABLE CHAIR AND BOARD MEMBERS
FROM: MATTHEW HAWKESWORTH, ASSISTANT CITY MANAGER
DATE: MAY 16, 2012
SUBJECT: UPDATED ROPS SUBMITTAL
SUMMARY
The Department of Finance (DoF) has returned the ROPS for the period of July to
December 2012 with three items that they are specifically opposing. Per the letter
(Attachment A) sent to the Successor Agency, the DoF is objecting to the Public
Plaza /Rosemead Community Center Construction, the Zapopan Park Renovations and
the Sewer System Expansion projects. Based upon the letter, it appears that the DoF
did not review all of the items included on the ROPS, but rather took a sampling of the
items and has objected to these based upon the sampling. Since the DoF has not
taken a look at the ROPS as a whole, it is unclear whether the DoF may object to any
other items included in the ROPS; however, it is understood that if these Capital
Improvement Projects were rejected, then it is likely that all Capital Improvement
Projects would be rejected.
Further complicating the ROPS submittal is an email sent by the DoF regarding the
County's property tax distributions set for June 1 In this email (Attachment B), the
DoF clarifies the position that the County will not distribute any funds to a Successor
Agency if the ROPS is not approved by the DoF. In the case of Rosemead, failure to
distribute property tax funds would result in the inability to make the required debt
service payments on the 2006 and 2010 series bonds. This is a scenario that should
avoided if possible, but with the DoF's partial review of the initial ROPS, makes the
entire process a bit unclear. Due to the incredibly tight timeframes involved, the
Successor Agency is prepared to submit a revised ROPS with the caveat that based
upon feedback from the DoF, certain items may be further removed in order to obtain
approval.
Staff Recommendation:
That the Oversight Board approve Resolution 2012 -0005 (Attachment C) approving the
Revised ROPS for the period of July through December 2012.
BACKGROUND
On April 26, 2012, the ROPS, as approved by the Oversight Board, was submitted to
the County of Los Angeles, the State Controller and the Department of Finance for
review. As allowed under the Health and Safety Code, the DoF utilized their full 13
APPROVED FOR CITY COUNCIL AGENDA:
Rosemead Successor Agency Oversight Board
May 16, 2012
Page 2 of 3
working day allowance to review the ROPS and request additional information. During
the review period a number of contracts and background information was requested by
the DoF, and on May 14 a letter was received from the DoF returning the ROPS back
to the Successor Agency for reconsideration. Successor Agency staff immediately
contacted the DoF for further clarification of their letter in hopes of avoiding a prolonged
back - and -forth negotiation with future ROPS submittals. Thus far the DoF staff has
been very responsive in listening to our requests although no specific feedback or
direction has been provided. The City of Rosemead as the Successor Agency still
believes that the Capital Improvement Projects included in the ROPS are Enforceable
Obligations; however, due to the looming June 1 St deadline and threats by the State of
not releasing any funds, the City also recognizes that this dispute will likely not be
resolved by the deadline. In an effort to reach a compromise for the time being, the
Successor Agency has requested the ability from the DoF to leave the Capital
Improvement Projects on the ROPS without any funding required for the ROPS period
of July to December 2012 in hopes that a resolution can be made prior to the next
ROPS adoption. The League of California Cities has provided direction from their
meetings with the DoF that the DoF has expressed a willingness to entertain such
measures while these types of issues are worked through. Additionally, the Successor
Agency has not received the Agreed Upon Procedures report that was conducted by a
third -party auditor of the County. During the preliminary discussions with the auditor
who conducted the review, staff believes that the auditor may very well support the
Successor Agency's stance that the projects were clearly defined and obligated as part
of the 2010 Bond issuance.
Further complicating the ROPS submittal, the DoF has not provided feedback on the
remaining items included on the ROPS. More specifically, no determination has been
made in regards to the funding for the two low- income senior housing complexes. As
previously presented to the Oversight Board, this funding is critical to the ongoing
operations of the two sites and any failure to approve funding will likely result in these
facilities being turned over to the County's Housing Authority or other housing agency
as provided by law. The Successor Agency would like to resubmit the revised ROPS
with the senior housing projects still included with the understanding that if the DoF was
to reject the ROPS once again on the basis of these projects, the Successor Agency
staff could follow the same steps to keep them on the ROPS, but remove funding for the
current six month period while a resolution is sought. Staff also believes that based
upon the preliminary conversations with the County's third -party auditor, these contracts
are valid under the Health and Safety Code requirements.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process in
accordance with the Brown Act.
Rosemead Successor Agency Oversight Board
May 16, 2012
Page 3 of 3
Prepared by:
Matthetnr E. Hawkesworth
Assistant City Manager
Attachments:A — DoF Letter
B — Email from DoF
C — Resolution 2012 -0005