OB - Item 2A - Update Regarding the ROPS SubmittalName of Redevelopment Agency: Rosemead Community Development Commisson Pagel oft Pages
Projecl Area(s) Merged Pro ecl Areas
RECOGNIZED OBLIGATION PAYMENT SCHEDULE
Per AS 26 - Section 34167 and 34169 (')
These figures are saturated based upon 2010 -11 actual figures. The agreement states the fax Increment fund must offset an shortfalls due to necessary maintenance and overhead costa.
Prolec[Name /Debt Obligation
Payee
Description
Category
Footling Source
Total Outstanding
Debt or Obligation
Total During
Fiscal Vear
Payments by month
July An Sept Oct Nov Dec Total
2006A Tax Increment Bonds
US Bank
Tax Increment Bontl Debl Service
1 -Bonds
Redevelopment Property Tax Trust Fund
11,906 BMA9
1,333,206.26
1158465.63
$11584fi5.63
- 11
2
2006BTax Increment Bonds
US Bank
Tax Increment Bontl Debl Service
1 -Bonds
Redevelopment Property Tax Trust Fund
40,403520.81
1110,048.]6
595468.13
$ 595
3
2010 Tax Increment Bonds
US Bank
Tax Increment Bond Debt Service
1 -Bonds
Redevelopment Property Tax Trust Fund
15213,]3].58
666,]93.]6
981,696.88
$ 981896.88
4
Con Discolsure on Bonds.
Urban Futures
Continuing discolureservice10 r2006A, 2006B and 2010A Bon
6- Contracts or Agreement far conlinuetl o,peration
Administrative Cast Allowance
109,200.00
5,200.00
5,200.00
$ 5200.00
5
State Contallers'Re ort
RAMS
Preparation of annual export
8- Contracts or AgmeEnents for continued operation
Administrative Cast Allowance
21,000.00
1,000.00
$
8
Bond Trustee Fees
US Bank
Banking fees related to the 2006.0 B and 2010A Bonds
8 - Cordacts or Alureenrents for continued operation
Administrative Cost Allowance
42,294.00
2,014.00
$
]
Annual Audit
RAMS
Annual aud0 services
8- ConOacts or Agreements for continued o
Administrative Cast Allowance
169,596.00
8,076.00
$
6
FinamcsSyalem V
Bank of the West
Lease Oblialon for Finance S
8- Contacts or Agreement for continued o
Administrative Cast Allowance
47,400.00
11,800.00
966.67
966.67
966.67
966.67
966.67
966.67
$ 5800.02
9
Statement of Indebtedness
Redevelopment Reporting Solutions
Pre eration of annual mount
8- Contacts or Agmemers, for conlinuetl operation
Administrative Cast Allowance
21000.00
1000.00
1
1
$
10
Anemias Calculations V
Wlldan
Preparation of Arbitre a Rebate Calculation
8- Contracts or Agreement for continued operation
Administrative Cost Allowance
86,100.00
4100.00
$
11
Pro ert Tax AuditsMlonitodn
HDL
Monitor Property Tax Colleclions8 Appeals b ensure Bond Coverage
8- Contracts or Agreements for continued operation
Administrative Cost Allowance
264600.00
12600.00
3150.00
3,150.00
$ 6,00.00
12
Rosemead Community Center Parkin Lot
Boghossian Enonscring
Community Center parking lot deli n
7- Agreements or related obligations
Bond Pr.ce.ds
13670.00
13670.00
13670.00
$ 13,670.00
13
Rosemead Community Center Parkin Lod
Wlldan
Material Testing for P.,bnQ lot en ineenn
7- Agreement or related obligations
Bond Proceeds
12720.00
12]20.00
12720.00
$ 12,720.00
L41
Za o an Park Improve ents 1
ADA accessibility &additional Purling
7- Agreements or relatetl obligations
Bond Proceeds
1050000.00
1050000.00
$
15
Rosemead Park Imp rovemants 1
ADA accessibility improvements
7- Agreement or related obligations
Bond Proceeds
280,000.00
280000.00
$
L61
Rosemead Community Center l4 Public Plaza Ex anion W6
ADA accessibilit teen center B OUWDDr Placni
7- reemenls or related obligations
Bond Proceeds
4,000,000.00
4000000.00
$
17
New Park at Rush and Walnut Grove 1
Community Infrastructure improvement
7- Agreements or related obligations
Bond Proceeds
500 000.00
500 000.00
$
18
SevrerSystem Expansion 1
Sewer Main Replacement/Upgrade on Garvey Ave.
7 -Agreements or related obligations
Bond Proceeds
750,000.00
750000.00
$
19
Em to e/Ovemead Costs
Successor Agency - Crty of Rosemead
Administrative Caats (Staffing audits legal, supplies. etc.
4- Salaries B Benefits 8. Contracts or Agreements for continuedoperations
Administrative Cost Allowance
4.292 00
204410.00
17034.1]
1]034.1]
17034.17
1],034.1]
1]034.1]
17,034.17
$ 102,205.02
2
Valley Blvd Sbeat Improvements 1
Infrastructure improvement - Dmnlown Corridor
7- Agreements or related obligations
Bond Proceeds
250000.00
25000.00
$
21 I
Rosemead Park Turf Renovations 1
Community Infrastructure Improvement
7 -Agreements or related obligate
Bond Proceeds
784000.00
78400.00
$
221
Senior Housing Land Lease -An elus - /
Rosemead Housing Development Corp.
Cost of annual land lease for pro
7 -Agreements or related obli ation
Low and Moderate Income Housing Fund
2553600.00
9120.00
7600.00
7600.00
7600.0
7600.00
7600.00
7,00.00
$ 45600.0
L31
Senior Housing 0 erakons/Ovarhead -An elus
Rosemead Housing Development Cam.
Cost of annual operations and overhead subsidy amends by City
7 -Agreements orrelalad obli ation
Low and Moderate Income Housing Fund
3166800.00
11310.00
9,425.00
9425.00
9425.00
9,425.00
9,425.00
9,425.00
$ 56550.0
L41
Senior Housing Shortfall Subsidy -An In
Rosemead housing Development Cor
Cost to cover shortfall between rents and. erekonshni intenance
7- Agreements or related obli allons
Low and Moderate Income Housing Fund
459340.00
16405.00
1367.08
1367.08
1367.00
1,367.08
1367.08
1,367.08
$ 8202.48
Z51
Senior Housing Land Lease - Garve
Rosemead HDusina Development Cam.
Cost of annual land lease for property
7 -A reemenls...elated obligate
Low and Moderate Income Housing Fund
4202783.31
9220.00
7,683.33
7663.33
7.683.33
7,683.33
7,683.33
7,863.33
$ 46099.98
26
Senior Housing 0 emb rLs/Overhead - Garvey v
Rosemead HDusina Development Corp.
Cost of annual operators and overhead subsidy provide by City
7 -Agreements or related obligations
Low and Moderate Income Housine, Fund
5155475.00
11310.00
9425.00
9425.00
9425.0
9425.00
9425.00
9,425.00
$ 56550.0
27
Senior Housing Shortfall Subsidy - Gamey V
Rosemead Housina Development Cor
Cost to rover shortfall between rents and. eakoneftmuntenance
7 -A reemenls or related obligations
Low and M.demtalnceme Housinq Fund
1495589.19
32,810.00
2,]34.1]
2,]34.1]
2,]34.1]
2,]34.1]
2,734.17
2,734.17
$ 16405.02
28
$
29
$
0
31
32)
$
Totals - This Page
Total Redevelopment Property Tax Trust Fund
Total Administrative Cost Allowance -
Total Bond Proceeds
Total Low and Modeate Income Housing Fund
97251870.38
11459253311
$ 82,625.42
$ 56,2 35.42
$ 59,385.42
$1,810.169.18
$ 56,235.42
$1046482.30
$3111133.16
$
$ 3,110,0411]8
$
$
$
$
$
$
$
$ 20,000.00
$
$
$
$
$
$
$
$ 7
$
$
$
$
$
$
$
$ 458,815.00
$
$
$
$
$
$
These figures are saturated based upon 2010 -11 actual figures. The agreement states the fax Increment fund must offset an shortfalls due to necessary maintenance and overhead costa.
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 15t 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:
Matthe\v E. Hawkesworth
Assistant City Manager
Attachments: A — DoF Letter
B — Email from DoF
C — Resolution 2012 -0005
Q� er` � NT o � Af 1• .
Attachment A
w IIII n
DEPARTMENT OF EoMUNO G , BRO JR. • GOVERNOR
64klm ' Fl N A N C E 915 L 9THEET N 9ACI MENTO CA ■ 958 743706 ■ WWW.00F.CA.MOV
May 11, 2012
Matthew Hawkesworth, Assistant City Manager
City of Rosemead
8838 E. Valley Blvd.
Rosemead, CA 91770
Dear Mr, Hawkesworth:
Pursuant to Health and Safety Code (HSC) section 34177 (1) (2) (C), the City of Rosemead
Successor Agency submitted a Recognized Obligation Payment Schedule (ROPS) to the
California Department of Finance (Finance) on April 26, 2012 for the period July through
December 2012. Finance staff contacted you for clarification of items listed in the ROPS.
HSC section 34171 (d) lists enforceable obligation (EO) characteristics. Based on a sample of
line items reviewed and application of the law, the following does qualify as an EO:
Page 1, Line items 14, 16, and 18 totaling $5.8 million. HSC section 34163(b) prohibits
a redevelopment agency from entering into a contract with any entity after June 27,
2011. It is our understanding that no contracts have been awarded for the amounts
listed on the RODS.
As authorized by HSC section 34179 (h), Finance is returning your ROPS for reconsideration.
This action will cause the 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.
Finance may continue to review items on the ROPS in addition to those mentioned above and
identify additional issues. We will provide separate notice if we are requesting further
modifications to the ROPS. It is our intent to provide an approval notice with regard to each
ROPS prior to the June 1 property tax distribution date.
If you believe we have reached this conclusion in error, please provide evidence the item above
meets the definition of an EO and submit to Redevelopment Administration@dof.ca.00v
Please direct inquiries to Robert Scott or Jenny DeAngelis at (916) 322 -2985.
Sincerely, fi
/ *� A
MARK HILL
Program Budget Manager
cc: Ms. Arlene Barrera, Division Chief of Property Tax Division, Los Angeles County
Ms. Kristina Bums, Program Specialist 111, Los Angeles County
Attachment B
From: Hill, Chris [Chris. Hill@dof. ca.gov< Chris. Hill(@dof. ca.gov
Sent: Thursday, May 10, 2012 3:41 PM
Cc: Hill, Mark; Monroe, Mark; Stacy, Zachary
Subject: Guidance on June 1 Payments
Per our conversation earlier today, I'd like to clarify Finance's position on the
distribution of property tax revenues to the successor agencies from the RPTTF -
I think we may have given some conflicting guidance on the matter. Finance's
position is that all distributions from the RPTTF must be made on June 1 for the
ROPS covering July 2012 through December 2012. If a successor agency has not
submitted to Finance a RODS before June 1 and we have not approved a ROPS, then
that successor agency should receive no property tax revenue for the July through
December BOPS. Instead, all property tax to which that successor agency may have
been entitled should flow to the ATEs as property tax revenue in accordance with
HSC section 34183.
To facilitate this, Finance will provide auditor - controllers with letters of
approval and letters of denial for every ROPS we have received - we will attempt
to provide these letters by May 25, but some additional letters may trickle in
over the course of the subsequent days. If an auditor - controller does not have
an approval or denial letter in hand for a successor agency on June 1, then our
position is that the auditor - controller should provide that successor agency no
property tax revenue for July 2012 through December 2012. If an auditor -
controller needs to lock down the system prior to June 1 in order to process the
payments, and you do not have an approval or denial letter in hand for a given
successor agency by the lock -down date, then our position is that the auditor -
controller should provide no property tax to that successor agency for July 2012
through December 2012.
We would appreciate if you could share this e -mail with the property tax
managers' group. Please let me know if you have any questions or
concerns. Thanks.
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by
the IRS, we inform you that, unless expressly stated otherwise, any federal tax
advice or analysis contained in this communication (including any attachments)
was not intended or written to be used, and cannot be used, for the purpose of
(i) avoiding penalties imposed under the Internal Revenue Code or (ii) promoting,
marketing or recommending to another party any transaction or matter addressed in
this communication. This transmission is intended only for the use of the
addressee and may contain privileged information, confidential and exempt from
disclosure under applicable law. If you are not the intended recipient, or
responsible for delivering the message to the intended recipient, you are hereby
notified that any dissemination, distribution or copying of this communication is
prohibited. If you received this e -mail communication in error, please
immediately notify the sender by replying to this communication or by contacting
the sender by telephone at (510) 836 -6336. Thank you.
Attachment C
RESOLUTION: 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:
The ROPS for the period July 1, 2012 through December 31, 2012 attached hereto
as Exhibit B is hereby approved.
2. 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.
Chairperson
Matthew E. Hawkesworth
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:
Matthew E. Hawkesworth
Successor Agency Staff
Assistant City Manager