oversight board meeting agenda - berkeley, california...sep 23, 2013 · the city issued the...

Berkeley

Redevelopment

Successor Agency

2180 Milvia Street, 2nd

Floor, Berkeley, CA 94704 Tel: 510. 981.5400 TDD: 510.981.6903 Fax: 510. 981.5450 E-Mail: [email protected] ● Website: http://www.cityofberkeley.info/ContentDisplay.aspx?id=974

OVERSIGHT BOARD MEETING AGENDA

Monday, September 23, 2013

4:00 P.M.

Location

Douglas Fir Room 2120 Milvia Street, 1st Floor

Berkeley, CA

All agenda items are for Discussion and Possible Action.

Public Comment Policy: Members of the public may speak on any items on the Agenda and items not on the Agenda during the initial Public Comment period. Members of the public may also comment on any item listed on the agenda as the item is taken up. Members of the public may not speak more than once on any given item. The Chair may limit public comments to 3 minutes or less.

1. Roll Call

2. Public Comment

3. Agenda Approval

4. Approval of Minutes of February 25, 2013 Meeting [Action Item, Attachment A]

5. Approval of Recognized Obligation Payment Schedule (ROPS 13-14B) and

Semi-Annual Administrative Budget: January 1 – June 30, 2014 [Action Item, Attachment B]

Oversight Board Meeting Agenda – September 23, 2013

of 2

6. Approval Loan Agreement between the City and Successor Agency for the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan [Action Item, Attachment C]

7. Staff Update on Successor Agency Topics [Information Item, Attachment D]

8. Announcements

• Next Regularly Scheduled Meetings:

October 28, 2013 and February 24, 2014

9. Future Agenda Items

• Long-Range Property Management Plan

• Oceanview Gardens – Transfer of Asset to the City as Housing Successor Agency

10. Adjourn

ATTACHMENTS:

A. Draft Minutes of February 25, 2013, Oversight Board Meeting

B. Staff Report Regarding Recognized Obligations Payment Schedule (ROPS 13-14B) and Administrative Budget

C. Staff Report Regarding Loan Agreement between the City and Successor Agency for Savo Island Project Area Debt Service Payments

D. Staff Report - Update on Successor Agency Topics

Berkeley

Redevelopment

Successor Agency

ATTACHMENT A

2180 Milvia Street – 2nd

Floor, Berkeley, CA 94704 ● Tel: (510) 981-5400 ● TDD: (510) 981-6903 ● Fax: (510) 981-5450 E-Mail: [email protected] ● Website: http://www.cityofberkeley.info/ContentDisplay.aspx?id=974

Time: 4:00 p.m.

Douglas Fir Room

Permit Service Center

2120 Milvia Street – Berkeley, CA

Secretary – Lourdes Chang, (510) 981-5419

Draft Minutes of the February 25, 2013

Oversight Board Meeting

All agenda items are for Discussion and Possible Action.

1. Roll Call

Present: Arreguin, Decredico, Gerhard, Hardaway and Riddle. Absent: Brooks (for Keith Carson) and Harper. Staff Present: Cosin and Chang.

2. Public Comments

None.

3. Approval of Agenda

The agenda was approved. (M/S/C: Decredico/Riddle. Unanimous)

4. Approval of Minutes of January 7, 2013

A motion to approve the January 7, 2013, minutes was unanimously approved. (M/S/C: Riddle/Hardaway)

5. Approval of ROPS IV

Staff reviewed the ROPS IV and answered questions from the Oversight Board. Staff noted the Savo Island Loan Payable is listed in the ROPS IV although DOF denied the loan as an enforceable obligation. The Successor Agency will continue to list the loan as an enforceable obligation, pending the outcome of the Successor Agency’s lawsuit against the State Department of Finance (DOF). The $1Million bond/City Loan, also denied by DOF as an enforceable obligation, had been listed in ROPS I and ROPS II because it is a loan that needs to be repaid. The City recently

Oversight Board Meeting – Draft Minutes February 25, 2013 Page 2 of 3

issued a demand letter for $1 million loan. The amount listed in ROPS IV is attributed to the interest due on the loan. The item will continue to be listed in the ROPS pending DOF decision. Lines 19-28 in the ROPS IV lists Capital Projects that are to be funded using proceeds from the 2005 Tax Allocation Bond. These projects were approved by the former Redevelopment Agency prior to the dissolution of the redevelopment agencies in 2012 and the bond was issued specifically to fund these capital projects. Only one project, Aquatic Park Construction, is currently under contract. The project is nearly complete and the Successor Agency must pay off expenses associated with the project. The remaining projects are not under contract but are part of the West Berkeley Circulation Master Plan and which are to be funded with the 2005 Tax Allocation Bond proceeds. The bond proceeds must be used on the projects for which the bond was issued. The funds cannot be used for other purposes and they cannot be distributed to other taxing agencies. If the funds cannot be used for the capital projects, they would be used to repay the bond. Although the projects have not yet been approved by the Oversight Board and DOF as enforceable obligations, staff is recommending to list the projects in ROPS IV to expedite implementation of the capital improvements. The Successor Agency has a deadline to spend the bond proceeds by January 2015. If the projects are not listed on ROPS IV then the Successor Agency would not be able to spend the funds and begin work on the projects until January 2014. Staff assured the Oversight Board that the Successor Agency would not spend the funds until it receives the necessary approvals from the Oversight Board and DOF. Staff added the Successor Agency must receive a Finding of Completion from the DOF before staff can return to the Oversight Board to get approval of specific expenses related to the capital projects. There were some concerns that DOF would not approve these projects since they were not under contract as of June 2012. To address this concern, staff recommended to add a footnote on the ROPS IV stating no funds will be expended and the Successor Agency will not enter into contracts for the capital projects until the Oversight Board and DOF approves the projects as enforceable obligations. Other comments on the ROPS IV included clarification that the Successor Agency has a pending lawsuit against the state for the Savo Island Loan Payable. In its capacity as the Successor Agency, the City Council voted to enter into litigation with the Department of Finance and the lawsuit was file on February 22, 2013. Staff clarified the expenses for legal counsel as noted in Line 16 is for litigation expenses and in Line 11 for administrative legal expenses. A motion to approve the ROPS IV was approved as recommended by staff with additional language noting that funds will not be spent until the Oversight Board and the DOF gives approval that these projects are enforceable obligations. If the projects are not approved by the Oversight Board or DOF as enforceable obligations, the Oversight Board understands the bond proceeds provides no benefits to the taxing agencies and cannot be used to pay off other future obligations and the funds would then go towards defeasance of bond debt.

Oversight Board Meeting – Draft Minutes February 25, 2013 Page 3 of 3

(M/S/C: Hardaway/Decredico. Ayes: Arreguin, Decredico, Gerhard and Hardaway. Noes: Riddle)

6. Status of Final Determination from Department of Finance regarding the Low

Moderate Income Housing Fund Due Diligence Review – Information Item

After obtaining a Finding of Completion from DOF, Successor Agency staff will request to transfer the housing development loans from the City to the Successor Agency.

7. Announcements

• Next regularly scheduled meeting: April 22, 2013

8. Future Agenda Items

• Long-term Property Management Plan

9. Adjourn

The meeting was adjourned at 4:35 p.m. (M/S/C: Riddle/Decredico. Unanimous) Approved on ____________ _______________________, Lourdes Chang, Secretary

Berkeley Redevelopment

Successor Agency

ATTACHMENT B

2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

STAFF REPORT

Date: September 23, 2013

To: Berkeley Redevelopment Successor Agency Oversight Board

From: Wendy Cosin, Deputy Planning Director

Subject: Recognized Obligation Payment Schedule (ROPS 13-14B) and Semi-Annual Administrative Budget: January 1 – June 30, 2014

RECOMMENDATION Staff recommends that the Oversight Board approve the Recognized Obligation Payment Schedule (ROPS 13-14B) and Administrative Budget for the six month fiscal period commencing on January 1, 2014 and ending June 30, 2014.

FISCAL IMPACTS OF RECOMMENDATION Approval of the ROPS is required for the Successor Agency to pay enforceable obligations of the former redevelopment agency; it does not create any new unfunded fiscal obligations for the City. The Administrative Budget describes the planned use of the remaining $110,000 that will be allocated by the County for administrative expenses. CURRENT SITUATION AND ITS EFFECTS Successor agencies are required to prepare Recognized Obligation Payment Schedules (''ROPS'') and Administrative Budgets prior to each six-month fiscal period. The ROPS for the period commencing on January 1, 2014 and ending June 30, 2014 (ROPS 13-14B) and Administrative Budget are due to the State Department of Finance (DOF) by October 1, 2013. The Oversight Board must approve the documents prior to submittal to the DOF. The payments as listed below and in the ROPS 13-14B are anticipated to be made from Successor Agency funds between January 1, 2014 and June 30, 2014.

1. 2005 Tax Allocation Bonds – These bonds were issued for capital projects. Half of the annual $946,918 debt service is listed with payment to come from the Agency’s share of tax increment held by the county in the Redevelopment Property Tax Trust Fund (RPTTF).

Recognized Obligation Payment Schedule (ROPS13-14B) and Semi Staff Report Annual Administrative Budget: January 1 - June 30, 2014 September 23, 2013

Page 2

3. $1 Million Bond – These bonds were issued in 1997 for affordable housing purposes. The bonds matured on December 15, 2012. On January 15, 2013, the City issued the attached demand letter to the Successor Agency Executive Director for repayment of the $1,000,000 plus accrued interest ($554,265). In response to the demand letter, $1,000,000 was transferred from the Agency’s reserve funds; the ROPS 13-14A listed half of the remaining $554,265 to be paid from the RPTTF. The DOF’s rejection of this item as an enforceable obligation caused the Successor Agency to challenge the DOF determination by filing a Writ against the DOF. The balance of accrued interest of $554,265 is listed in the ROPS to be paid from the RPTTF. Although it is expected that the DOF will not approve this item, it is listed to allow it to be paid after conclusion of litigation, if the Agency is successful.

6. Administrative Costs – $110,000 is proposed to be paid from the RPTTF for administrative costs. $95,000 is budgeted for staff expenses; $10,000 is budgeted for Goldfarb and Lipman to provide legal assistance to the Agency; and $5,000 is budgeted for Stein and Lubin as independent legal counsel for the Oversight Board. The DOF has previously approved these administrative expenses.

12. Contract for Consulting Services – Nava is a general contractor company that provides assistance as needed with Agency-owned properties. These services will continue to be needed until the DOF allows the Agency to sell 1654 Fifth Street. $5,000 is included for the ROPS period to be paid from the allowable RPTTF as has been previously approved by the DOF.

16. Contract for Consulting Services – Consulting Services – Goldfarb and Lipman provides legal assistance to the Agency. $50,000 is budgeted for litigation costs associated with the Successor Agency’s challenge to DOF findings regarding the $1 million bond discussed above and the Savo Island Loan discussed below. These costs have previously been approved by the DOF.

18. Savo Island Loan Payable – This item is a 2001 loan from the City of Berkeley Retiree Health Benefits Trust to the former RDA that was used for affordable housing purposes. This item was denied as an enforceable obligation by the DOF. The Successor Agency and the City Manager as Trustee for the Retiree Health Premium Assistance Plan Trusts challenged the DOF determination by filing a Writ against the DOF. Until the court issues a decision on the writ, the payments will continue to be listed in accordance with the payments schedule of the loan, but payments from RPTTF cannot be made.

29. City of Berkeley Loan – The DOF’s rejection of the Savo Island Project Area Debt Service Payment caused the Successor Agency to default on its debt service payment of $18,480 on March 1, 2013 and $40,480 on September 1,


Page 3

2013 for a total of $58,960. As indicated above, the City and Successor Agency challenged the DOF determination by filing a Writ against the DOF.

Also on the September 10, 2013 Successor Agency and City agendas and on the

September 23, 2013 Oversight Board agenda, a loan is proposed from the City to the Successor Agency in the amount of $58,960. If approved, this will allow the delinquent payments to be made. Re-payment of the loan is listed in the ROPS to ensure that the City will be repaid from RPTTF if litigation is successful.

30. Contract for Consulting Services – $5,000 is budgeted for this item to be paid

from the RPTTF to obtain Title Reports and appraisals for the Agency-owned property that will be sold once the Agency receives a Finding of Competition from the DOF for property 1654 Fifth Street and 1631 Fifth Street, as well as ground leases for Oceanview Gardens and 1817-1819 Fourth Street.

31. Savo Island Loan Payable, Missed Payments – If the loan referenced in Line 29 is approved, $58,960 is budgeted to make the March 1 and September 1, 2013 missed debt service payments.

On September 10, 2013, the Agency adopted Resolution No. 5, authorizing the Executive Officer to approve the Recognized Obligation Payment Schedule (ROPS 13-14B) and Administrative Budget for the six month fiscal period commencing on January 1, 2014 and ending June 30, 2014. BACKGROUND Upon dissolution of the Berkeley Redevelopment Agency on February 1, 2012 pursuant to AB X1 26, the Successor Agency to the Berkeley Redevelopment Agency was constituted and is governed by the members of the City Council. Successor agencies are required to prepare Recognized Obligation Payment Schedules prior to each six-month fiscal period. The purpose of the ROPS is to designate all enforceable obligations of the former redevelopment agency. The City Council, acting as the Successor Agency for the Redevelopment Agency, approved the first and second ROPS on February 28 and May 15, 2012, respectively. Both were subsequently approved by the Department of Finance. The third ROPS was approved by the Successor Agency on October 2, 2012. The DOF issued a determination challenging specific items, which were discussed at a Meet and Confer session on November 29, 2012. The DOF issued its final determination in its December 18, 2012 letter. Also, the fourth ROPS 13-14A was approved by the Successor Agency on February 5, 2013. The DOF issued a determination challenging specific items, which were discussed at a Meet and Confer session on April 25, 2013. The DOF issued its final determination in its May 17, 2013 letter.


Page 4

In brief, the DOF denied the Savo Island Loan Payable in the amount of $759,600 as eligible for repayment through the Redevelopment Property Tax Trust Fund (RPTTF). The $600,000 Savo Island loan is between City of Berkeley Retiree Medical Trust Fund and the former Redevelopment Agency; the City of Berkeley is the Trust Administrator for the loan. The City and Agency are litigating the DOF determination; therefore, payments continue to be listed in the ROPS until a finding is rendered. Similarly, the DOF denied the $1M Bond and accrued interest as eligible for repayment through the Redevelopment Property Tax Trust Fund (RPTTF). The indenture of trust designates the City as the trustee for the bond which does not make it invalid. As such, the Agency is litigating the DOF determination; therefore, payments continue to be listed in the ROPS until a finding is rendered. An “administrative cost allowance” is one line item on the ROPS, which is allowed under AB X1 26 and AB 1484 to be paid to the Successor Agency from property tax revenues allocated by the County Auditor-Controller. The amount may be up to three percent of the property tax allocated to the Successor Agency for the fiscal year, provided however that the annual amount shall not be less than $250,000, or such lesser amount as agreed to by the Successor Agency. The proposed administrative budget for the ROPS 13-14B six-month period is $110,000. Consistent with previously approved administrative costs, portions of six staff members from three departments, totaling .97 FTE, are included, as is $15,000 for consultant and legal assistance. An administrative cost allowance of $140,000 was approved in ROPS 13-14A for the six month fiscal period commencing on July 1, 2013 and ending December 31, 2013. The total for the two periods does not exceed the maximum allowance of $250,000 for the fiscal year. Detail is provided in Exhibit B of the attached resolution. Oversight Board approval of the proposed administrative budget is included in the recommended action. Funding for capital projects are not included in the ROPS 13-14B. The Aquatic Park Streetscape Improvements will be completed and all payments made from the 2005 Tax Allocation Bonds during the current ROPS period in accordance with the approved ROPS. The capital projects to implement the West Berkeley Circulation Master Plan were previously denied by the DOF because the Successor Agency does not have a Finding of Completion. Due to litigation, the Agency will not receive a Finding of Completion before January 1, 2014; therefore, the DOF will not approve funding from the 2005 Tax Allocation Bond in the ROPS 13-14B period. The projects must be completed by December 31, 2015. RATIONALE FOR RECOMMENDATION Adoption of a recognized enforceable obligation schedule will allow the City, acting as Successor Agency, to comply with state law and will allow required payments to be made.


Page 5

ALTERNATIVE ACTIONS CONSIDERED None

CONTACT PERSON Wendy Cosin, Deputy Planning Director, Planning and Development, 981-7402 Attachments: 1: Resolution

Exhibit A: ROPS 13-14B Exhibit B: Administrative Budget

2: Demand Letter, January 15, 2013 re: Repayment of Housing Bond

RESOLUTION NO. ##,###-N.S.

RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS 13-14B) AND ADMINISTRATIVE BUDGET: JANUARY – JUNE, 2014

WHEREAS, Successor Agencies are required to prepare a Recognized Obligation Payment Schedule (ROPS) for the six month fiscal period commencing on January 1, 2014 and ending June 30, 2014; and

WHEREAS, the original ROPS was approved by the Successor Agency on February 28, 2012 (Resolution No. 65,612) listing the dissolved Berkeley Redevelopment agency’s enforceable obligations for payments required to be made from January 1, 2012 through June 30, 2012; and

WHEREAS, the second ROPS was approved by the Successor Agency on May 15, 2012 (Resolution No. 65,704) listing the dissolved redevelopment agency’s enforceable obligations for payments required to be made from July 1, 2012 through December 31, 2012; and

WHEREAS, a third ROPS was approved by the Successor Agency on October 2, 2012 (Resolution No. 1), which listed the dissolved redevelopment agency’s enforceable obligations for payments required to be made from January 1, 2013 through June 30, 2013; and

WHEREAS, a fourth ROPS 13-14A was approved by the Successor Agency on February 5, 2013 (Resolution No. 3), which listed the dissolved redevelopment agency’s enforceable obligations for payments required to be made from July 1, 2013 through December 31, 2013; and

WHEREAS, a fifth ROPS 13-14B has been prepared for the six month fiscal period commencing on January 1, 2014 and ending June 30, 2014; and

WHEREAS, on September 10, 2013, the Agency adopted Resolution No. 5, authorizing the Executive Officer to approve the Recognized Obligation Payment Schedule (ROPS 13-14B) and Administrative Budget for the six month fiscal period commencing on January 1, 2014 and ending June 30, 2014. NOW THEREFORE, BE IT RESOLVED by the Berkeley Redevelopment Successor Agency Oversight Board, that it hereby approves Exhibit A, the attached Recognized Obligation Payment Schedule (ROPS 13-14B) and authorizes the Successor Agency to make such changes and revisions to the ROPS as deemed necessary based on the review and approval of the ROPS by the Department of Finance.

Exhibits

A. Recognized Obligation Payment Schedule (ROPS 13-14B), January - June, 2014 B. Administrative Budget

Name of Successor Agency: Berkeley

Name of County: Alameda

Current Period Requested Funding for Outstanding Debt or Obligation

A 58,960$

B -

C -

D 58,960

E 994,152$

F 884,152

G 110,000

H Current Period Enforceable Obligations (A+E): 1,053,112$

Successor Agency Self-Reported Prior Period Adjustment to Current Period RPTTF Requested Funding

I Enforceable Obligations funded with RPTTF (E): 994,152

J (0)

K 994,152$

County Auditor Controller Reported Prior Period Adjustment to Current Period RPTTF Requested Funding

L Enforceable Obligations funded with RPTTF (E): 994,152

M -

N 994,152

Name Title

/s/

Signature Date

Recognized Obligation Payment Schedule (ROPS 13-14B) - SummaryFiled for the January 1, 2014 through June 30, 2014 Period

Enforceable Obligations Funded with Non-Redevelopment Property Tax Trust Fund (RPTTF) Funding

Sources (B+C+D):

Non-Administrative Costs (ROPS Detail)

Enforceable Obligations Funded with RPTTF Funding (F+G):

Bond Proceeds Funding (ROPS Detail)

Reserve Balance Funding (ROPS Detail)

Other Funding (ROPS Detail)

Six-Month Total

Administrative Costs (ROPS Detail)

Less Prior Period Adjustment (Report of Prior Period Adjustments Column U)

Adjusted Current Period RPTTF Requested Funding (I-J)

Less Prior Period Adjustment (Report of Prior Period Adjustments Column AB)

Adjusted Current Period RPTTF Requested Funding (L-M)

Certification of Oversight Board Chairman:

Pursuant to Section 34177(m) of the Health and Safety code, I hereby

certify that the above is a true and accurate Recognized Obligation

Payment Schedule for the above named agency.

A B C D E F G H I J K

Other

Bonds Issued

on or before

12/31/10

Bonds Issued

on or after

01/01/11

Due Diligence

Review balances

retained for

approved

enforceable

obligations

RPTTF balances

retained for bond

reserves

Rent,

Grants,

Interest, Etc. Non-Admin Admin

ROPS III Actuals (01/01/13 - 6/30/13)

1

Beginning Available Fund Balance (Actual 01/01/13)

Note that for the RPTTF, 1 + 2 should tie to columns L and Q in the

Report of Prior Period Adjustments (PPAs) 1,555,614 15,000 1,000,000 238,911 2,809,525$

2

Revenue/Income (Actual 06/30/13) Note that the RPTTF amounts

should tie to the ROPS III distributions from the County Auditor-

Controller 72,442 884,591 580,293 1,537,326$

3

Expenditures for ROPS III Enforceable Obligations (Actual

06/30/13) Note that for the RPTTF, 3 + 4 should tie to columns N

and S in the Report of PPAs 45,756 15,000 1,000,000 49,143 894,209 129,126 2,133,234$

4

Retention of Available Fund Balance (Actual 06/30/13) Note that

the Non-Admin RPTTF amount should only include the retention of

reserves for debt service approved in ROPS III -$

5

ROPS III RPTTF Prior Period Adjustment Note that the net Non-

Admin and Admin RPTTF amounts should tie to columns O and T in

the Report of PPAs.

No entry required

0 - 0$

6 Ending Actual Available Fund Balance (1 + 2 - 3 - 4 - 5) 1,509,858$ -$ -$ -$ 23,299$ (9,618)$ 690,078$ 2,213,618$

ROPS 13-14A Estimate (07/01/13 - 12/31/13)

7

Beginning Available Fund Balance (Actual 07/01/13) (C, D, E, G,

and I = 4 + 6, F = H4 + F6, and H = 5 + 6) 1,509,858$ -$ -$ -$ 23,299$ (9,618)$ 690,078$ 2,213,618$

8

Revenue/Income (Estimate 12/31/13)

Note that the RPTTF amounts should tie to the ROPS 13-14A

distributions from the County Auditor-Controller -$

9

Expenditures for 13-14A Enforceable Obligations

(Estimate 12/31/13) 580,293 580,293$

10

Retention of Available Fund Balance (Estimate 12/31/13)

Note that the RPTTF amounts may include the retention of reserves

for debt service approved in ROPS 13-14A -$

11 Ending Estimated Available Fund Balance (7 + 8 - 9 -10) 1,509,858$ -$ -$ -$ 23,299$ (9,618)$ 109,785$ 1,633,325$

Recognized Obligation Payment Schedule (ROPS) 13-14B - Report of Fund Balances(Report Amounts in Whole Dollars)

Pursuant to Health and Safety Code section 34177(l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an

enforceable obligation.

Fund Balance Information by ROPS Period

Fund Sources

Comments

Bond Proceeds RPTTF

Total

Reserve Balance

A B C D E F G H I J K L M N O P

Bond Proceeds Reserve Balance Other Funds Non-Admin Admin

3,705,368$ -$ -$ 58,960$ 884,152$ 110,000$ 1,053,112$

1 2005 Tax Allocation Bonds Bank of New York Bonds - To Fund Non-Housing Projects

1,856,446

N

473,459

473,459$

2 Savo Island Loan Payable City Retiree Medical Trust HTF - Affordable Housing N -$

3 $1Million Bond - City Loan City of Berkeley Housing Activities 554,265 N 277,133 277,133$

4 Delaware Street Historical Project Successor Agency to CDBG Land Assets & Loans Payable

230,137

N -$

5 Contract for Consulting Svcs 4/16/2012 Meyers Nave Outside Legal Services for O.B. N -$

6 Administration Costs City of Berkeley Admin/Operations Plus Goldfarb &

Lipman & Seifel Consulting, Inc. 110,000

N 110,000 110,000$

7 Financial Services Bank of New York Fiscal Agent Fee N -$

8 Labor Agreement Obligations:

Compensated Absence for

Employees

Employees Post Employment Obligations:

Accrued Sick & Vac Leave

N -$

9 City of Berkeley Loan to Successor

Agency

City of Berkeley to Pay

Licensed Accountant

Licensed Accountant Due Diligence

Review of Unobligated Balances for

Transfer to Taxing Entities per Section

341975

N -$

10 Contract for Consulting Svcs 11/1/2010 12/31/2013 Seifel Consulting, Inc. BRA Consulting N -$

11 Contract for Consulting Svcs 11/1/2010 12/31/2013 Goldfarb & Lipman BRA Legal Services N -$

12 Contract for Consulting Svcs 9/27/2006 12/31/2013 Nava General Contractor Property Repair & Maintenance 5,000 N 5,000 5,000$

13 Contract for Consulting Svcs 7/1/2009 7/1/2013 Paul O Webb Property Survey N -$

14 Savo Island Cooperative Homes 3/26/2010 Savo Island Cooperative

Homes

Predevelopment Loan Agreement N -$

15 Contract for Consulting Svcs Stein Lubin Outside Legal Services for O.B. 10,000 N -$

16 Contract for Consulting Svcs Goldfarb & Lipman Legal Services - Litigation 50,000 N 50,000 50,000$

17 Contract for Consulting Svcs Unknown Annual Audit 10,000 N -$

18 Savo Island Loan Payable City Retiree Medical Trust HTF - Affordable Housing 759,600$ N 17,600 17,600$

19 Capital Projects/ APC City of Berkeley & Various

Contractors

Aquatic Park Construction N -$

20 Capital Projects/ Vehicle Turning City of Berkeley & Various

Contractors

Veh Turning Mvmnt Improv N -$

21 Capital Projects/ Bicycle Crossing City of Berkeley & Various

Contractors

Bicycle X-ing Imprvmnts N -$

22 Capital Projects/ Univ Ave Ped

Improv

City of Berkeley & Various

Contractors

Univ Ave Ped Imprvmnts N -$

23 Capital Projects/ San Pablo Ped

Improv


Contractors

S.P. Ave Ped Imprvmnts N -$

24 Capital Projects/ Ped X-ing

Gilman/5th&10th


Contractors

Ped X-ing Gilman/5th&10th N -$

25 Capital Projects/Pave Sidewalks NW

Berk


Contractors

Pave Sidewalks NW Berk N -$

26 Capital Projects/ Install Audible

Signals


Contractors

Install Audible Signals N -$

27 Capital Projects/ ACT Stop @

Univ/SPA & 4th


Contractors

ACT Stop @ Univ/SPA & 4th N -$

28 Capital Projects/ ACT Stop @

SP/Cedar & Delaware


Contractors

ACT stop @ SP/Cedar & Del N -$

29

City of Berkeley Loan to Successor Agency

City of Berkeley to Pay

Savo Island Loan Payable

A Loan to cover the City Retiree

Medical Trust - Debt Service Payment 58,960$ 58,960

58,960$

30 Contract for Consulting Svcs Unknown Title Reports 2,000 2,000 2,000$

31 Savo Island Loan Payable City Retiree Medical Trust Delinquent Debt Service Payments 58,960$ 58,960 58,960$

.

Item # Payee Description/Project Scope Project Area

Total Outstanding

Debt or Obligation Retired

Funding Source

Six-Month TotalProject Name / Debt Obligation Obligation Type

Contract/Agreement

Execution Date

RPTTF

Non-Redevelopment Property Tax Trust Fund

(Non-RPTTF)

Contract/Agreement

Termination Date

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA AB

Net SA Non-Admin

and Admin PPA

Net CAC Non-

Admin and Admin

PPA

Authorized Actual Authorized Actual Authorized Actual Authorized Actual Authorized

Available

RPTTF

(ROPS III

distributed + all

other available as of

1/1/13)

Net Lesser of

Authorized/

Available Actual

Difference

(If M is less than N,

the difference is

zero) Authorized

Available

RPTTF

(ROPS III distributed

+ all other available

as of 1/1/13)

Net Lesser of

Authorized /

Available Actual

Difference

(If R is less than S,

the difference is

zero)

Net Difference

(Amount Used to

Offset ROPS 13-14B

Requested RPTTF

(O + T))

Net Lesser of

Authorized /

Available Actual

Difference

(If V is less than W,

the difference is

zero)

Net Lesser of

Authorized /

Available Actual

Difference

(If Y is less than

Z, the difference

is zero)

Net Difference

(Amount Used to

Offset ROPS 13-14B

Requested RPTTF

(X + AA)

-$ -$ -$ 49,143$ -$ -$ -$ -$ 909,209$ 894,209$ 909,209$ 1,909,209$ 0$ 85,724$ 85,724$ 85,724$ 129,126$ -$ 0$ -$ -$ -$ -$ -$ -$ -$

1 2005 Tax Allocation Bonds 894,209 894,209 894,209$ 894,209 0$ -$ -$ 0$ -$ -$ -$

2 Savo Island Loan Payable -$ -$ -$ -$ -$ -$ -$ -$

3 $1Million Bond - City Loan -$ 1,000,000 -$ -$ -$ -$ -$ -$ -$

4

Delaware Street Historical

Project -$ -$ -$ -$ -$ -$ -$ -$

5 Contract for Consulting Svcs -$ -$ -$ -$ -$ -$ -$ -$

6

Administration Costs -

Personnel -$ -$ 85,724 85,724 85,724$ 116,727 -$ -$ -$ -$ -$

7 Financial Services -$ -$ -$ -$ -$ -$ -$ -$

8

Labor Agreement Obligations:

Compensated Absence for

Employees -$ -$ -$ -$ -$ -$ -$ -$

9

City of Berkeley Loan to

Successor Agency 15,000 15,000$ 15,000 -$ -$ -$ -$ -$ -$ -$

10

Contract for Consulting Svcs

Goldfrb & Lipman -$ -$ -$ 10,099 -$ -$ -$ -$ -$



13

Contract for Consulting Svcs -

Paul Webb -$ -$ -$ 2,300 -$ -$ -$ -$ -$

14

Savo Island Cooperative

Homes -$ -$ -$ -$ -$ -$ -$ -$




18 Savo Island Loan Payable -$ -$ -$ -$ -$ -$ -$ -$

19 Capital Projects/ APC 49,143 -$ -$ -$ -$ -$ -$ -$ -$

20

Capital Projects/ Vehicle

Turning -$ -$ -$ -$ -$ -$ -$ -$

21

Capital Projects/ Bicycle

Crossing -$ -$ -$ -$ -$ -$ -$ -$

22

Capital Projects/ Univ Ave Ped

Improv -$ -$ -$ -$ -$ -$ -$ -$

23

Capital Projects/ San Pablo Ped

Improv -$ -$ -$ -$ -$ -$ -$ -$

24

Capital Projects/ Ped X-ing

Gilman/5th&10th -$ -$ -$ -$ -$ -$ -$ -$

25

Capital Projects/Pave

Sidewalks NW Berk -$ -$ -$ -$ -$ -$ -$ -$

26

Capital Projects/ Install Audible

Signals -$ -$ -$ -$ -$ -$ -$ -$

27

Capital Projects/ ACT Stop @

Univ/SPA & 4th -$ -$ -$ -$ -$ -$ -$ -$

28

Capital Projects/ ACT Stop @

SP/Cedar & Delaware -$ -$ -$ -$ -$ -$ -$ -$

ROPS III CAC PPA: To be completed by the CAC upon submittal of the ROPS 13-14B by the SA to Finance and the CAC

Recognized Obligation Payment Schedule (ROPS) 13-14B - Report of Prior Period Adjustments

Reported for the ROPS III (January 1, 2013 through June 30, 2013) Period Pursuant to Health and Safety Code (HSC) section 34186 (a)(Report Amounts in Whole Dollars)

ROPS III Successor Agency (SA) Self-reported Prior Period Adjustments (PPA): Pursuant to HSC Section 34186 (a), SAs are required to report the differences between their actual available funding and their actual expenditures for the ROPS III (July through December 2013) period. The amount of Redevelopment Property Tax Trust Fund (RPTTF)

approved for the ROPS 13-14B (January through June 2014) period will be offset by the SA’s self-reported ROPS III prior period adjustment. HSC Section 34186 (a) also specifies that the prior period adjustments self-reported by SAs are subject to audit by the county auditor-controller (CAC) and the State Controller.

Item #

Project Name / Debt

Obligation

Non-RPTTF Expenditures

Non-Admin Non-Admin CAC Admin CAC

RPTTF Expenditures

Admin

LMIHF

(Includes LMIHF Due Diligence

Review (DDR) retained balances) Bond Proceeds

Reserve Balance

(Includes Other Funds and Assets

DDR retained balances) Other Funds

Item # Notes/Comments

Recognized Obligation Payment Schedule 13-14B - Notes January 1, 2014 through June 30, 2014

Berkeley Successor Agency Exhibit B

Successor Agency Administrative Budget

January 1, 2014 - June 30, 2014

Other ROPS-13-14B

Salary & Admin Jan-June

Administrative Costs Description FTE% Benefits Costs 2014

1) Deputy Director Admin Direct Labor 15% 21,919.00$ 21,700.00$

2) Associate Mgmnet Analyst Admin Direct Labor 32% 28,305.00$ 28,200.00$

3) Associate Mgmnet Analyst Admin Direct Labor 4% 3,538.00$ 3,538.00$

4) Comm Dev Proj Coord Admin Direct Labor 13% 12,192.00$ 12,071.00$

5) Comm Svs & Admin Manager Admin Direct Labor 8% 9,091.00$ 9,091.00$

6) Accountant II Admin Direct Labor 25% 20,695.00$ 20,400.00$

7) Goldfarb & Lipman Legal Assistance 10,000.00$ 10,000.00$

8) Stein & Lubin Oversight Board Legal Council 5,000.00$ 5,000.00$

0.97 110,000.00$

Proposed source of payment - Redevelopment Property Tax Trust Fund (RPTTF)

Berkeley Redevelopment

Successor Agency

ATTACHMENT C

2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

STAFF REPORT




Subject: Approval for Loan Agreement between the City and Successor Agency for the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan

RECOMMENDATION Staff recommends that the Oversight Board approve and accept the loan from the City of Berkeley to the Successor Agency for the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan in the amount of $58,960.

FISCAL IMPACTS OF RECOMMENDATION Approving the loan will allow the Successor Agency to pay this obligation of the former redevelopment agency, using funds borrowed from the City. In order to obtain reimbursement in the future if the Savo Island debt service payments are determined to be approved enforceable obligations, the Successor Agency must enter into a legally binding loan agreement with the City. CURRENT SITUATION AND ITS EFFECTS Successor agencies can only make payments included in approved Recognized Obligation Payment Schedules (''ROPS'') for each six-month fiscal period. The Agency requested funds in the ROPS III and ROPS IV periods to pay the Savo Island Debt Service Payments, but they were denied as enforceable obligations by the Department of Finance (DOF). Failure to deem the Savo Island Loan Payable as an enforceable obligation prompted the Successor Agency to file a Petition for Writ against the DOF. The DOF’s rejection of these obligations on ROPS III and IV caused the Successor Agency to default on its debt service payment obligation of March 1, 2013 in the amount of $18,480, and $40,480 which was due on September 1, 2013. A loan from the City of Berkeley will allow debt service to be paid; if litigation is successful, the City will be repaid from the Redevelopment Property Tax Trust Fund (RPTTF). The receipt and use of this loan must be reflected on the ROPS and is subject to approval of the Oversight Board and submittal to the Department of Finance for their review. This loan will provide cash to the Successor Agency so all enforceable

Approval for Loan Agreement between the City and Successor Agency for the Staff Report Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan September 23, 2013

Page 2

obligations can be met. The Agreement becomes effective five (5) business days after notice has been provided to the DOF, pending approval by the DOF. If approved, the loan will be listed on the ROPS for January – June 2014. To the extent there are insufficient available property tax allocations, the unpaid balance will be carried over as an enforceable obligation on the subsequent ROPS cycles until paid in full. On September 10, 2013, the Agency adopted Resolution No. 6, authorizing the Executive Officer to approve the loan from the City of Berkeley to the Successor Agency for the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan in the amount of $58,960.

BACKGROUND Funding for the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan in the ROPS III period (January 1, 2013 – June 30, 2013) was denied on October 18, 2012 as an enforceable obligation by the Department of Finance (DOF). The Successor Agency challenged the DOF’s findings and requested a Meet and Confer which was held on November 29, 2012. The Successor Agency submitted additional information and documentation to Finance during the Meet and Confer process.

After review, the Department of Finance issued a final determination on December 18, 2012, to deny this item as an enforceable obligation. On February 22, 2013 the Successor Agency filed a Petition for Writ against the DOF regarding its denial of the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan. The Successor Agency prepared a ROPS 13-14A for the period between July 1, 2013 and December 31, 2013 (the “Fourth ROPS”); again listing the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan as an enforceable obligation. On April 13, 2013, the Department of Finance disapproved the Savo Island Loan Payable as an enforceable obligation. The Successor Agency challenged the DOF’s findings and requested a Meet and Confer which was held on April 25, 2013; the Department of Finance issued a final determination on May 17, 2013, again, denying the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan.

RATIONALE FOR RECOMMENDATION Adoption of a loan agreement will allow the Successor Agency to meet debt service payment obligations. If the Agency prevails in litigation, the proposed loan will allow reimbursement from the Redevelopment Property Tax Trust Fund (RPTTF).

ALTERNATIVE ACTIONS CONSIDERED None.

CONTACT PERSON

Approval for Loan Agreement between the City and Successor Agency for the Staff Report Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan September 23, 2013

Page 3

Wendy Cosin, Deputy Director, Planning and Development, 981-7402

Attachments: 1: Resolution

Exhibit A: Loan Agreement

RESOLUTION NO. ##,###-N.S.

APPROVING AND AUTHORIZING A LOAN AGREEMENT BETWEEN THE CITY AND THE SUCCESSOR AGENCY FOR THE SAVO ISLAND PROJECT AREA DEBT SERVICE PAYMENTS OF THE RETIREE MEDICAL TRUS FUND LOAN WHEREAS, on January 17, 2012, pursuant to Resolution No. 65,574-N.S., the City of Berkeley (the “City”) elected to become the successor (the “Successor Agency”) to the former Berkeley Redevelopment Agency upon the Berkeley Redevelopment Agency’s dissolution on February 1, 2012, pursuant to Section 34173 of the Health and Safety Code; and WHEREAS, the Successor Agency currently has obligations in the amount of $58,960 which includes past due debt service payments of $18,480 and $40,480, which were denied by the Department of Finance (DOF) and must be paid; and WHEREAS, on February 22, 2013 the Successor Agency filed a Petition for Writ against the DOF regarding its disapproval of the Retiree Medical Trust Fund Loan Payable as an enforceable obligation; and WHEREAS, the Successor Agency requires a loan in an amount of $58,960 to make payments and meet its enforceable obligations; and WHEREAS, it is in the best interest of the Successor Agency and the City that the Successor Agency pay the enforceable obligations; and WHEREAS, on September 10, 2013, the Agency adopted Resolution No. 6, authorizing the Executive Officer to approve the loan from the City of Berkeley to the Successor Agency for the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan in the amount of $58,960; and WHEREAS, the loan would be evidenced by a Loan Agreement, attached as Exhibit A, requiring repayment of the loan by the Successor Agency at no interest, and the receipt of funds shall be reflected on the Recognized Obligation Payment Schedule of the Successor Agency and therefore subject to Oversight Board approval. NOW THEREFORE, BE IT RESOLVED by the Berkeley Redevelopment Successor Agency Oversight Board, that it hereby approves Exhibit A, the attached Loan Agreement in the amount of $58,960 between the City and Successor Agency for the Savo Island Project Area Debt Service Payments of the Retiree Medical Trust Fund Loan. Exhibits

A. Loan Agreement

Exhibit A – Loan Agreement Page 1 of 5

1

LOAN AGREEMENT

(City Advance to Successor Agency)

This Loan Agreement (the "Loan Agreement") is made and entered into as of

September 24, 2013, by and between the City of Berkeley, a municipal corporation (the "City"), and the Berkeley Successor Agency, the successor to the former Berkeley Redevelopment Agency ("Successor Agency").

RECITALS

WHEREAS, pursuant to AB1x 26 (the "Dissolution Act"), the Successor Agency

must prepare a Recognized Obligation Payment Schedule (“ROPS”) for each six-month period setting forth all enforceable obligations (as defined in the Dissolution Act) of the Successor Agency; and

WHEREAS, the Dissolution Act created an oversight board ("Oversight Board")

to oversee the wind down of the Berkeley Redevelopment Agency; and WHEREAS, the Successor Agency prepared a ROPS for the period between

July 1, 2013 through December 31, 2013; and WHEREAS, on February 5, 2013, the Oversight Board approved the Fourth

ROPS 13-14A by Resolution No. 2013-03; and WHEREAS, as part of the ROPS 13-14B, the Successor Agency requested that

the Oversight Board include a loan between the City and Successor Agency pursuant to Health & Safety Code Section 34173(h), wherein the City would advance funds to the Successor Agency in an amount not to exceed $58,960 (the “Loan”) for the purpose of paying for the Retiree Medical Trust Fund Loan; and

WHEREAS, pursuant to Health & Safety Code Sections 34173(h), the ROPS 13-

14B reflects receipt of the Loan from the City and the use of the Loan to pay certain obligations of the Successor Agency; and

WHEREAS, at its September 23, 2013 meeting the Oversight Board voted to

approve the Loan and the Oversight Board thereby authorize the Successor Agency to enter into this Loan Agreement with the City pursuant to the authority granted by Health & Safety Code Sections 34173(h) and 34180(h); and

WHEREAS, the City and the Successor Agency have determined that entering

into this Loan Agreement is in the best interests of the City and the Successor Agency; and


2

WHEREAS, pursuant to Health & Safety Code Section 34179(h), written notice about the approval of this Agreement by the Oversight Board is provided to the Department of Finance (DOF) and this Agreement becomes effective five (5) business days after notice has been provided to the DOF, pending a request for review by the DOF.

NOW, THEREFORE, in consideration of the promises and the mutual

agreements herein contained, the parties hereto do hereby agree as follows. The foregoing recitals are hereby incorporated by reference and made part of this Loan Agreement.

ARTICLE I.

LOAN PROVISIONS

Section 1.01 Loan. The City hereby agrees to lend to the Successor

Agency the principal amount of Fifty Eight Thousand Nine Hundred Sixty Dollars ($ 58,960) (the “Loan”) for the purposes set forth in Section 1.03.

Section 1.02 Interest. The City hereby agrees not to charge any

interest on the Loan. Section 1.03 Use of Loan Funds. The Successor Agency shall use the

Loan for the purpose of paying the following obligations shown on the ROPS 13-14B: Payment to the City Retiree Medical Trust Fund for Savo Island Debt Service Payments per Section 34179.5 (Item No. 29 on the ROPS 13-14B).

Section 1.04 Repayment of Loan.

(a) Pursuant to Health & Safety Code Section 34173(h), the Loan is an enforceable obligation of the Successor Agency and is payable on September 1 and March 1 of each year from the RPTTF maintained by the Alameda County Auditor-Controller for the purpose of paying enforceable obligations of the Successor Agency.

(b) If not repaid in full from the ROPS 13-14B, the Loan shall be set

forth in full as an enforceable obligation of the Successor Agency on the ROPS for the period from July 1, 2014 through December 31, 2014 (the ROPS 14-15A). It shall be due and payable in full from the RPTTF. However, should the Successor Agency receive insufficient funds from the RPTTF to pay all costs shown on the Sixth ROPS, then the amount due and payable on the Loan shall equal the amount deposited into the RPTTF less all other approved costs shown on the ROPS 14-15A, and the balance of any Loan principal shall be due and payable in full on the next ROPS.

(c) The procedure described in subsection (b) of this Section shall

continue to be followed for each ROPS until the Loan principal is paid in full. Any


3

remaining principal due on the Loan shall continue to be shown as an enforceable obligation on each ROPS until the Successor Agency has received sufficient funds to pay all principal due on the Loan.

Section 1.05 Optional Prepayment of the Loan. The Successor

Agency shall have the right to prepay the unpaid Loan principal at any time.

Section 1.06 Books and Accounts; Financial Statements. The Successor Agency will keep, or cause to be kept, proper books of record and accounts showing the use of the Loan funds and Loan repayments.

ARTICLE II.

DEFAULT AND REMEDIES

Section 2.01 Event of Default. Failure by the Successor Agency to pay

the principal on the Loan when due and payable shall constitute a Default.

Section 2.02 No Waiver. A waiver of any Default by the City shall not affect any subsequent Default or impair any rights or remedies on the subsequent default.

Section 2.03 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise.

ARTICLE III.

MISCELLANEOUS

Section 3.01 No Merger. In entering into this Loan Agreement, the City

is acting in its capacity as a municipal corporation, and, pursuant to Health & Safety Code Section 34173(g), the Successor Agency is a separate public entity from the City; and both the City and the Successor Agency are acting pursuant to the specific authority granted by the Oversight Board and by Health & Safety Code Sections 34173(h) and 34180(h) authorizing agreements between the City and the Successor Agency. In consequence, the parties to this Loan Agreement are not merged.

Section 3.02 Successor is Deemed Included in All References to

Predecessor. Whenever in this Loan Agreement either the Successor Agency or the City is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Loan Agreement contained by or on behalf of the Successor Agency or the City shall bind and inure to


4

the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 3.03 Amendment. This Loan Agreement may be amended by

the parties hereto but only by a written instrument signed by both parties and with the approval of the Oversight Board.

Section 3.04 Effective Date. This Loan Agreement shall take effect

upon approval by the Oversight Board and, following that approval, at the time and in the manner prescribed in Health & Safety Code Section 34179(h) (the "Effective Date").

Section 3.05 Severability. If any Section, paragraph, sentence, clause

or phrase of this Loan Agreement shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Loan Agreement. The City and the Successor Agency hereby declare that they would have adopted this Loan Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the Loan irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Loan Agreement may be held illegal, invalid or unenforceable.


5

IN WITNESS WHEREOF, the City of Berkeley and the Successor Agency have caused this Agreement to be signed by their respective officers.

CITY OF BERKELEY, CALIFORNIA,

a California municipal corporation (“CITY”)

Approved: Date: __________________________________ _____________________ _______, City Manager APPROVED AS TO FORM: ___________________________________ _____________________ ___________, City Attorney

BERKELEY SUCCESSOR AGENCY,

the successor to the former Berkeley Redevelopment Agency

("SUCCESSOR AGENCY")

Approved: Date: ___________________________________ _____________________

Title APPROVED AS TO FORM: ___________________________________ _____________________ ___________, Successor Agency Attorney

Berkeley

Redevelopment

Successor Agency

ATTACHMENT D

2180 Milvia Street – 2nd

Floor, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 ● E-Mail: [email protected] ● Website: http://www.CityofBerkeley.info/Manager

STAFF REPORT




Subject: Update on Successor Agency Topics (ROPS IV, PW Capital Projects, Asset Transfer Review, Oceanview Gardens, Long Range Property Management Plan)

This memo provides an update and overview of several Successor Agency topics.

ROPS IV The ROPS 13-14A, for the 7/1/13 – 12/31/13 period, was approved by the Oversight Board (OB) on February 25, 2013. On April 13, 2013, the Department of Finance (DOF) denied several items. The Successor Agency challenged the DOF’s findings and requested a Meet and Confer which was held on April 25, 2013. The DOF issued the attached final determination on May 17, 2013. The challenged items are summarized below.

Challenges re: ROPS 13-14A (7/1/13 – 12/31/13)

ROPS Submittal Issue DOF Resolution after Meet & Confer

$1 Million Housing Bond: DOF denied $554,265 in interest

DOF denial; City litigating

Savo Island: DOF denied $759,600 loan payable

DOF denial; City litigating

Contracts for OB attorney & annual audit: DOF reclassified from RPTTF to Administrative Costs - $15,000

DOF required the expenses to continue as part of the Administrative Allowance

Contract for legal services for litigation: DOF reclassified from RPTTF to Administrative Costs - $40,000

DOF accepted litigation expenses as RPTTF

Capital Projects: $518,208 planned for West Berkeley capital projects denied by DOF

Successor Agency did not challenge; will wait for Finding of Completion

Update on Successor Agency Topics September 23, 2013

Page 2

PW Capital Project Implementation

Several capital projects were approved by the former Redevelopment Agency to implement the West Berkeley Circulation Master Plan and are funded from the 2005 Tax Allocation Bonds. City Public Works staff are responsible for completion of these projects by December 31, 2015. Because contracts have not yet been approved, the bond proceeds cannot be spent (and reimbursed) until after the Agency receives a Finding of Completion in accordance with Health and Safety Code Section 34191.4(c). Once litigation is settled, the Successor Agency should receive a Finding of Completion and the projects can be listed in the next ROPS.

State Controllers’ Office - Asset Transfer Review The State Controllers’ Office conducted an Asset Transfer Review pursuant to H&S Codes section 34167.5 to determine whether any unallowable asset transfers occurred after January 1, 2011, and if so, whether the assets should be turned over to the Successor Agency. The Draft Findings indicated the following:

• The City RDA did not transfer $2.3 M in non-cash assets (interest and notes receivable) to the Successor Agency on February 1, 2012 as required. This was identical to the DOF Due Diligence Review determination for the L&MIHF, which the SA disputed.

• The $58,000 Savo loan payments that were made in March and September 2011, which were previously approved by DOF should not have been made.

The Successor Agency responded to the Findings. A Final Report has not yet been issued.

Oceanview Garden Apartments Oceanview Garden Apartments (1715-1735 Fifth Street; 1726-1732 Sixth Street; 1816-1832 Sixth Street and 813-815 ½ Hearst Street), a 62-unit affordable rental development for very low and lower income households, was not retained as a housing asset in accordance with State procedures in 2012. On September 10, 2013, the Successor Agency adopted Resolution No. 7, authorizing the Executive Officer to transfer title of the Oceanview Garden Apartments Property to the City of Berkeley, acting as Housing Successor Agency. The report is available from the following link: http://www.ci.berkeley.ca.us/Clerk/City_Council/2013/09Sep/Documents/2013-09-10_SA_Item_04_Transfer_Oceanview_Garden.aspx This will be scheduled for Oversight Board consideration at the next meeting, following provision of the required public notice.

Update on Successor Agency Topics September 23, 2013

Page 3

Long Range Property Management Plan Update

The Successor Agency continues to own the following assets.

• 1654 Fifth St: Vacant single-family dwelling

• 1631 Fifth Street: Active community garden

• Fourth Street commercial ground leases: Ground lease runs until 2051 and then can be extended to 2085

• Oceanview residential ground leases: Ground lease runs until 2059 Once a Finding of Completion is received from the DOF, the Successor Agency will prepare and approve a Long Range Property Management Plan (LRPMP), which will then be forwarded to the OB for review and approval, and then to the DOF.