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OB - Item 2A - Minutes of September 16, 2013Minutes of the Oversight Board for the Successor Agency to the Rosemead Community Development Commission Meeting September 16, 2013 The regular meeting of the Oversight Board for the Successor Agency to the Rosemead Community Development Commission was called to order by Chair Wallach at 5:04 p.m. in the Rosemead City Council Chamber located at 8838 East Valley Boulevard, Rosemead, California. PLEDGE OF ALLEGIANCE: Board Member Allred PRESENT: Board Members Allred, Jones, Lash, Redondo - Churchward, Sotelo ABSENT: Board Members Miller, Wallach STAFF PRESENT: Assistant City Manager Hawkesworth and City Clerk Molleda 1. PUBLIC COMMENTS FROM THE AUDIENCE - None 2. CONSENT CALENDAR A. Minutes May 13, 2013 - Regular Meeting Board Member Dalila Sotelo made a motion, seconded by Board Member Marty Jones, to approve the Oversight Board minutes of May 13, 2013 meeting. Vote resulted in: Yes: Allred, Jones, Lash, Redondo - Churchward, Sotelo No: None Abstain: None Absent: Miller, Wallach June 12, 2013 - Regular Meeting Board Member Irene Redondo - Churchward made a motion, seconded by Board Member Marty Jones, to approve the Oversight Board minutes of June 12, 2013 meeting. Vote resulted in: Yes: Allred, Jones, Lash, Redondo - Churchward, Sotelo No: None Abstain: None Absent: Miller, Wallach Rosemead Oversight Board Meeting Minutes of September 16, 2013 Page 1 of 5 ITEM NO. 3. MATTERS FROM STAFF OF THE ROSEMEAD SUCCESSOR AGENCY A. Chamber Loan Agreement On October 8, 2012, the Oversight Board approved modifications to the loan agreement between the former Community Development Commission and the Rosemead Chamber of Commerce (Chamber). Under the modifications, the first payment, due on July 1, 2012, was amortized over the subsequent three years of the term without any penalties or interest. Per the attached letter, the Chamber is requesting that the payments due July 1, 2013 and July 1, 2014 be suspended and one lump sum payment be made on July 1, 2015 for the entire $25,000 amount. The requested modifications are permitted under the Health and Safety Code since the debt is not being forgiven and the final payment period is not being extended. Additionally, the loan will continue to be secured by the real property owned by the Chamber and used as their offices. Recommendation: That the Oversight Board provide direction regarding the requested loan modification. If the Oversight Board is willing to approve the modifications as requested, the Oversight Board needs to approve Resolution 2013 -0009, entitled: A RESOLUTION OF THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION APPROVING REVISED TERMS FOR THE PROMISSORY NOTE WITH THE ROSEMEAD CHAMBER OF COMMERCE DATED SEPTEMBER 14, 2010 Vice President Robert Oehler and CEO /Executive Director Helen Hua, representatives of the Rosemead Chamber of Commerce addressed the Oversight Board Commission and requested a two -year extension to their loan agreement. Board Member Dalila Sotelo made a motion, seconded by Board Member Irene Redondo - Churchward, to direct staff to modify Resolution No. 2013.0009, to reflect a one year deferment. In addition, the Oversight Board directed the Chamber of Commerce to work with City staff to develop an operating financing plan that will demonstrate the likelihood of the repayment to the City by 2015. Vote resulted in: Yes: Allred, Jones, Lash, Redondo - Churchward, Sotelo No: None Abstain: None Absent: Miller, Wallach Rosemead Oversight Board Regular Meeting Minutes of September 16, 2013 Page 2 of 5 B. Resolution No. 2013 -0011 Approving the Loan Agreement between the City and the Rosemead Successor Agency for Capital Improvement Projects to be Repaid by Excess Bond Proceeds of the Rosemead Successor Agency As the Board is aware, the Successor Agency has been working to obtain approval from the State Department of Finance (DOF) for the completion of the capital improvement projects funded with existing bond proceeds from the former redevelopment commission. On August 9, 2013, the DOF provided a letter to the City outlining the steps the City must follow in order to expedite the intended bond funded projects. In the letter, the DOF suggests that the Successor Agency may want to utilize the permitted loan procedures of Health and Safety Code section 34173(h) to permit the City to move forward with the capital improvement projects in a timelier manner. Staff and the City Attorney reviewed the DOF letter and the Health and Safety Code, and agree that executing a loan agreement between the City and the Successor Agency will provide for the most expedited method for moving forward with the intended capital improvement projects. Under the loan agreement, the City will loan the Successor Agency the funds to construct capital improvement projects, and the City will be reimbursed by the Successor Agency every six months with the first reimbursement on January 31, 2014. It is important to note that the Successor Agency has control of all the bond funds in a bank account and will not need to wait for funding through Tax Increment or the DOF. The City will loan the Successor Agency funds, which will allow staff to move forward immediately with some of the capital improvement projects, including the construction of the Public Plaza and the expansion of the Rosemead Community Recreation Center (RCRC). Bids have already been issued for the Public Plaza construction and an award may be made at the September 24, 2013 City Council meeting. Additionally, engineering and planning work necessary for the RCRC expansion will be completed as soon as possible in an effort to meet the previously promised deadline of July 1, 2014 for re- opening of the center. Recommendation: That the Oversight Board approve Resolution No. 2013 -0011, entitled: A RESOLUTION OF THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION APPROVING THE LOAN AGREEMENT BETWEEN THE CITY OF ROSEMEAD AND THE SUCCESSOR AGENCY DATED SEPTEMBER 10, 2013 Assistant City Manager Matt Hawkesworth reviewed the staff report. Board Member Irene Redondo - Churchward made a motion, seconded by Board Member Dalila Sotelo, to approve Oversight Board Resolution No. 2013.0011. Vote resulted in: Yes: Allred, Jones, Lash, Redondo - Churchward, Sotelo No: None Abstain: None Absent: Miller, Wallach Rosemead Oversight Board Regular Meeting Minutes of September 16, 2013 Page 3 of 5 C. ROPS Submittal — January through June 2013 The Department of Finance (DOF) requires that the Recognized Obligation Payment Schedule (ROPS) for the January through June 2014 be submitted by October 1, 2013. As with every previous ROPS, the layout and format of the schedules has been modified, and the schedules may look slightly different. The new ROPS document now includes a summary page, a fund balance page, a schedule for the current ROPS period, a reconciliation page of prior ROPS periods, and a notes page. The two major changes are to the reconciliation page and the inclusion of the new Fund Balance page. The reconciliation page has new columns and formulas, which change has the reconciliation and any necessary true -up payments are calculated. In our case, this has created some true -up issues for the Administrative Cost Allowance and is described in detail in the Analysis section of this report. The Fund Balance page is new for this ROPS and is designed to provide a longer term look at the funds available. Unfortunately, despite the title of "Fund Balances," this report is not designed as a normal fund balance worksheet. As the Board may note in Column I for the worksheet, there is no beginning balance and the revenues and expenditures are equal; however, line 5 shows that the Successor Agency has a negative prior period adjustment of $13,176 but the balance on line 6 is still zero. The DOF has locked this spreadsheet and prohibits negative ending balances, which creates some unique financial reporting problems to properly account for variances in a ROPS period. A detailed explanation is provided in the Analysis section of this report. Printed copies of the entire new ROPS document have been included with this report for approval by the Board. Recommendation: That the Oversight Board approve the ROPS for the period of January through June and Resolution No. 2013 -0010, entitled: 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 JANUARY 1, 2014 THROUGH JUNE 30, 2014 Assistant City Manager Matt Hawkesworth reviewed the staff report. Board Member Dalila Sotelo made a motion, seconded by Board Member Jeff Allred, to approve Oversight Board Resolution No. 2013.0010. Vote resulted in: Yes: Allred, Jones, Lash, Redondo - Churchward, Sotelo No: None Abstain: None Absent: Miller, Wallach Rosemead Oversight Board Regular Meeting Minutes of September 16, 2013 Page 4 of 5 4. ADJOURNMENT The meeting adjourned at 5:47 pm. The next regular Rosemead Oversight Board meeting is scheduled to take place on Wednesday, October 16, 2013 at 5:00 p.m. Nicole Lash Vice -Chair ATTEST: Matt Hawkesworth Successor Agency Staff Assistant City Manager Rosemead Oversight Board Regular Meeting Minutes of September 16, 2013 Page 5 of 5