OB - 2013-0005 - Confirming the Master Agreement for Excess Bond Proceeds Between The City of Rosemead and Successor Agency for the Completion of Capital Improvement Projects and Approval of The Transfer and Expenditure of Expenditure to the CityRESOLUTION: 2013 -0005
A RESOLUTION OF THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY
TO THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION " ROSEMEAD
SUCCESSOR AGENCY" CONFIRMING THE MASTER AGREEMENT FOR EXCESS
BOND PROCEEDS "AGREEMENT" BETWEEN THE CITY OF ROSEMEAD AND
THE SUCCESSOR AGENCY FOR THE COMPLETION OF CAPITAL IMPROVEMENT
PROJECTS AND APPROVAL OF THE TRANSFER AND EXPENDITURE OF
EXCESS BOND PROCEEDS TO THE CITY OF ROSEMEAD IN ACCORDANCE
WITH THE AGREEMENT
WHEREAS, on April 25, 2012 the Oversight Board for the Rosemead Successor
Agency approved the inclusion of Capital Improvement Projects to be funded with existing bond
proceeds on the Recognized Obligation Payment Schedule; and
WHEREAS, the approved Capital Improvement Projects have been included on each
Recognized Obligation Payment Schedule filed by the Rosemead Successor Agency; and
WHEREAS, the Rosemead Successor Agency received the Finding of Completion on
April 18, 2013 from the Department of Finance; and
WHEREAS, the Finding Completion states that the Rosemead Successor Agency may
utilize proceeds derived from bonds issued prior to January 1, 2011 in a manner consistent with
the original bond covenants per Health and Safety Code section 34191.4(c); and
WHEREAS, the Rosemead Successor Agency is holding approximately $7.1 million in
bond proceeds derived from bonds issued prior to January 1, 2011 for Capital Improvement
Projects identified in the bond covenants; and
WHEREAS, the City Council and the Successor Agency have entered into a Master
Agreement for Excess Bond Proceeds ( "Agreement') transferring excess bond proceeds and
the responsibility for completing all of the bond proceed funded capital improvement projects to
the City of Rosemead
WHEREAS, the completion of the capital improvement projects will be complex in
nature and require numerous contracts that are time sensitive to ensure that the projects move
forward in a timely manner and according to budgeted figures; and
WHEREAS, a delay in sending each individual contract to the Department of Finance
through the Recognized Obligation Payment Schedule for oversight and approval will create
unnecessary delays in the project that may result in cost increases or missed deadlines.
LA 44830 -8861 -9796 vl
NOW THEREFORE, THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY
TO ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION HEREBY RESOLVES:
1. The Oversight Board confirms the execution of the Agreement between the City of
Rosemead and the Rosemead Successor Agency, including the transfer of the
existing bond proceeds in the amount of $7,077,558.51 from the Successor Agency
to the City of Rosemead.
2. The Oversight Board confirms that the Master Agreement for Excess Bond Proceeds
will serve as the enforceable obligation related to the bond proceed funded projects
to be reported on the Recognized Obligation Payment Schedule; thereby removing
the necessity to report each individual contract on the Recognized Obligation
Payment Schedule and the need for Department of Finance review.
3. The Oversight Board understands that the Master Agreement for Excess Bond
Proceeds provides the Oversight Board with an opportunity to review all contracts
prior to the City issuing a Notice to Proceed.
4. Successor Agency staff is directed to submit amended ROPS for the July to
December 2013 period to include the Master Agreement for Excess Bond Proceeds.
5. Successor Agency staff is directed to provide a copy of this Resolution to the County
Auditor - Controller, the State Controller's Office and the State Department of
Finance.
PASSED, APPROVED AND ADOPTED this 12 of June 2013.
Pat Wallach
Chairperson
ATTEST:
Ma� � r
E. Ha kesworth
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 12 day of June 2013, by the following vote, to wit:
AYES: ALLRED, JONES, LASH, REDONDO- CHURCHWARD, WALLACH
NOES: NONE
ABSENT: MILLER, SOTELO
ABSTAINED: NONE
Matthe E. Haw<esworth
Successor Agency Staff
Assistant City Manager
AGREEMENT REGARDING
EXPENDITURE OF EXCESS BOND PROCEEDS
This Agreement Regarding Excess Bond Proceeds (this "Agreement ") is entered into
effective as of June 12, 2013 ( "Effective Date ") by and between the Successor Agency to the
Community Development Commission of the City of Rosemead ( "Successor Agency ") and the
City of Rosemead, a Municipal Corporation ( "City "). The Successor Agency and the City are
hereinafter collectively referred to as the "Parties."
RECITALS
A. Pursuant to authority granted under Community Redevelopment Law (California Health
and Safety Code Section 33000 et seq.) ( " CRL "), the former Community Development
Commission of the City of Rosemead ( "Redevelopment Agency ") had responsibility to
implement the Merged Project Areas (the "Project Area "), originally approved by Ordinance
Nos. 340 and 809 enacted by the City of Rosemead City Council (the "City Council') and
subsequently merged by Ordinance No. 871 on February 10, 2009.
B. Pursuant to an Indenture of Trust dated as of June 1, 2010, and executed by and between
the Redevelopment Agency and U.S. Bank National Association as Trustee (the "Indenture "),
the Agency issued Tax Allocation Bonds, Series 2010A Bonds in the original principal amount
of $11,230,000 (the "Bonds ").
C. Pursuant the Indenture, $9,629,060.80 of the Series 2010A Bonds were deposited into the
Redevelopment Fund and are required to be used solely in the manner provided by the CRL to
provide financing certain infrastructure improvements within the Project Area.
D. Pursuant to Resolution No. 2012 -04 adopted by the City Council on January 10, 2012,
the City agreed to serve as the Successor Agency to the Redevelopment Agency commencing
upon dissolution of the Redevelopment Agency on February 1, 2012 pursuant to Assembly Bill
xl 26 ( "AB 26 ").
E. On April 18, 2013 the Successor Agency to the Redevelopment Agency received its
finding of completion from the Department of Finance.
F. Health and Safety Code Section 34191.4(c) provides that once the finding of completion
has been issued by the Department of Finance, the successor agency is authorized to use bond
proceeds for the purposes for which the bonds where sold. Further, the Successor Agency may
designate the use of and commit indebtedness obligation proceeds that were derived from
indebtedness issued for redevelopment purposes on or before December 31, 2010, and that
remain available after the satisfaction of enforceable obligations that have been approved on a
Recognized Obligation Payment Schedule (`BOPS ") and that are consistent with the
indebtedness obligation covenants (hereafter, "Excess Bond Proceeds ").
1
G. Health and Safety Code Section 34191.4(c) fiuther provides that the expenditure of
Excess Bond Proceeds must be listed separately on the ROPS.
H. The Official Statement for the Bonds at page 5 "Plan of Finance" provides that the Bonds
are being issued by the Commission to provide funds for certain infrastructure improvements.
The projects include but are not limited to: the Rosemead Community Center and Parking Lot
Expansion and City Park and Playground Facilities and other projects referenced or allowed
pursuant to the bond covenants.
I. The oversight board for the Successor Agency ( "Oversight Board ") approved the ROPS
submitted by the Successor Agency for the January — June 2013 period (`BOPS I11 ") which
included infrastructure projects consistent with the Bond issuance. They include: Rosemead
Community Center Parking Lot Improvements, Rosemead Park Improvements, Zapopan Park
Improvements, Sewer System Expansion, Rosemead Park Turf Improvements, Valley Blvd.
Street Improvements, and New Park at Walnut Grove and Rush.
J. Now that the Successor Agency has received its Finding of Completion the Parties desire
to enter into this Agreement to use the Excess Bond Proceeds for the purposes identified in and
consistent with the Bond covenants and the requirements of the CRL, and to provide for the
Successor Agency to transfer the Excess Bond Proceeds to the City for deposit into the City's
General Fund to be used for such purposes.
K. The execution of this Agreement was approved by the City Council acting in its capacity
as the governing board of the City and in its capacity as the governing board of the Successor
Agency by resolutions adopted on June 11, 2013.
L. The execution of this Agreement by the Successor Agency was approved by the
Oversight Board by resolution adopted on June 12, 2013.
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
promises herein contained, the Parties hereby agree as follows.
1. Incorporation of Recitals. The Parties acknowledge the truth of the foregoing Recitals
which by this reference are incorporated into this Agreement.
2. Term. The term of this Agreement shall commence on the Effective Date, and shall
continue in effect until the date that all Excess Bond Proceeds are expended in accordance with
the requirements of this Agreement.
3. Use of Available Tax Increment Bond Proceeds. The City agrees that it shall use the
Excess Bond Proceeds within the City solely for the purposes identified in Recital J above, the
projects identified in this Section 3, or for other infrastructure projects consistent with the Bond
covenants and the provisions of the CRL that apply to the expenditure redevelopment funds.
2
4. Transfer of Available Tax Increment Bond Proceeds The Successor Agency shall
transfer the remaining Excess Bond Proceeds to the City, and the City shall deposit such funds
into an Excess Bond Proceeds Fund for City's use in accordance with the terms, conditions, and
purposes set forth in this Agreement. As of the Effective Date, the amount of Available Tax
Increment Bond Proceeds equals the sum of seven million seventy -seven thousand five hundred
fifty -eight dollars and fifty -one cents ($7,071,558.51).
5. Project Approvals; Environmental Review. This Agreement is not intended to limit in
any manner the discretion of City in connection with the issuance of approvals and entitlements
for the projects described in this Agreement, including without limitation, the undertaking and
completion of any required environmental review pursuant to CEQA and NEPA, as applicable,
and the review and approval of plans and specifications.
6. Oversight Board Authorization of Contracts Using Excess Bond Proceeds The City
agrees to obtain Oversight Board authorization for all contracts utilizing Excess Bond Proceeds
prior to authorizing a Notice to Proceed.
7. Severability If any term, provision, covenant, or condition set forth in this Agreement is
held by the final judgment of a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions, covenants, and conditions shall continue in full force
and effect to the extent that the basic intent of the Parties as expressed herein can be
accomplished. In addition, the Parties shall cooperate in good faith in an effort to amend or
modify this Agreement in a manner such that the purpose of any invalidated or voided provision,
covenant, or condition can be accomplished to the maximum extent legally permissible.
8. No Third -Party Beneficiaries; Assignments. Nothing in this Agreement is intended to
create any third -party beneficiaries to this Agreement, and no person or entity other than the
Successor Agency and the City, and the permitted successors and assigns of either of them, shall
be authorized to enforce the provisions of this Agreement.
9. Further Assurances. Each Party agrees to execute, acknowledge and deliver all additional
documents and instruments, and to take such other actions as may be reasonably necessary to
carry out the intent of the transactions contemplated by this Agreement.
10. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
11. Counterparts This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which shall constitute but one and the same instrument.
12. Amendments. This Agreement may be modified or amended, in whole or in part, only by
an instrument in writing, executed by the Parties.
ki
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the
date first written above.
CITY:
CITY OF ROSEMEAD
SUCCESSOR AGENCY:
SUCCESSOR AGENCY TO THE
ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
go
POLLY LOW, Mayor
By:
POLLY LOW, Chair
Board of Directors
SIGNED AND CERTIFIED THAT A COPY
OF THIS DOCUMENT HAS BEEN
DELIVERED TO THE MAYOR
GLORIA MOLLEDA
City Clerk
By:
APPROVED AS TO LEGAL FORM
RACHEL RICHMAN
CITY ATTORNEY
Dated:
SIGNED AND CERTIFIED THAT A COPY
OF THIS DOCUMENT HAS BEEN
DELIVERED TO THE CHAIR OF
THE BOARD
GLORIA MOLLEDA
Secretary
By:
APPROVED AS TO LEGAL FORM
RACHEL RICHMAN , Counsel
Dated:
M
s E M E
° 9 ° ROSEMEAD SUCCESSOR
AGENCY STAFF REPORT
yyCORpOFAIi� 105
TO: THE HONORABLE CHAIR AND BOARD MEMBERS
FROM: MATTHEW HAWKESWORTH, ASSISTANT CITY MANAGER
DATE: JUNE 12, 2013
SUBJECT: CONFIRMATION OF THE MASTER BOND AGREEMENT
SUMMARY
In order to expedite the completion of the capital improvement projects funded by the July
2010 tax increment bond proceeds, the Rosemead City Council and the Rosemead
Successor Agency have approved a Master Bond Agreement (Agreement) to be utilized
as the enforceable obligation to be included on the Recognized Obligation Payment
Schedule (ROPS). As stated in the proposed Resolution 2013 -0005, the Oversight Board
will be confirming the execution of the Agreement, including the transfer of existing bond
proceeds from the Successor Agency to the City of Rosemead. The Agreement will serve
as the enforceable obligation between the Successor Agency and the City for the
completion of the capital improvement projects in accordance with the bond covenants.
Through the utilization of this agreement, authority to review contracts for individual
projects to ensure compliance with the bond covenants will remain with the Oversight
Board; however, it would eliminate the need to itemize every contract related to these
projects on the ROPS. This would ensure that the funds are spent appropriately while
allowing the City to move forward in a timely manner without having to wait for the
Department of Finance to review and approve projects, which could potentially take
several months.
Assembly Bill 1484 enabled Successor Agencies to expend bond proceeds once a
Finding of Completion is received; however, there continues to be ambiguity regarding
the Department of Finance's role in the oversight of these projects. Under the current
Health and Safety Code, the Successor Agency has very strict timelines in which it must
submit a ROPS or amended ROPS. These strict timelines create a very real potential for
a delay of at least 180 days between the issuance of a request for proposal, and the
actual work being allowed during a ROPS period. This type of delay would cause
significant problems for the completion of any of the City's proposed projects. In order to
clarify how the expense of bond proceeds may be spent, Assembly Bill 564 (AB 564) has
been drafted, and is currently being considered by Legislators. AB 564 would transfer the
approval authority of all bond proceed funded projects to the Oversight Board, eliminating
the requirement of having the Department of Finance review and approve every contract
related to a project. AB 564 has been unanimously approved by the Assembly and is
awaiting approval in the Senate. Through the adoption of the Master Bond Agreement,
the Successor Agency will be establishing a system very similar to the intent of AB 564
ITEM NO. _2.C�
Rosemead Successor Agency Oversight Board
June 12, 2013
Page 2 of 2
in which the larger projects are provided on the ROPS, but the management of the
contracts and oversight will be delegated to the Oversight Board.
Staff Recommendation:
That the Oversight Board approve Resolution 2013 -0005 confirming the Master Bond
Agreement between the City of Rosemead and the Rosemead Successor Agency.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process in accordance
with the Brown Act.
Prepared by:
Matthew E. Hawkesworth
Assistant City Manager
Attachments — Resolution 2013 -0005