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Home My WebLink AboutAGENDA REPORT 2014 0415 OB REG ITEM 06AITEM 6.A. OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK AGENDA REPORT TO: FROM: DATE: SUBJECT: SUMMARY Oversight Board to the Successor Agency Ron Ahlers, Finance Director ~ April 7, 2014 (Oversight Board Meeting April 15, 2014) Consider Resolution to Receive and File Report on Department of Finance Disapproval of Certain Items on the Recognized Obligation Payment Schedule (ROPS 14-15A) for July 1, 2014 to December 31, 2014 Pursuant to Part 1.85 of Division 24 of the California Health and Safety Code (the "Redevelopment Dissolution Law"), the Successor Agency must prepare a Recognized Obligation Payment Schedule ("ROPS") for each six-month fiscal period (commencing each January 1 and July 1 ), listing the payments to be made by the Successor Agency during such period. All ROPS must be approved by the Oversight Board. Furthermore, each Oversight Board-approved ROPS must be submitted to the State Department of Finance ("DOF"), State Controller's Office ("SCO") and County Auditor-Controller for review. At the February 18, 2014 meeting, the Oversight Board approved the ROPS 14-15A for Jul~ 1, 2014 to December 31, 2014. Staff submitted the ROPS to the DOF on February 191 . The DOF responded on April 1, 2014 with the attached letter disallowing three items on the ROPS. DISCUSSION The DOF has disallowed items 1, 2 and 3 on the ROPS submittal. These three items are the debt service payments for the three outstanding bonds of the Successor Agency that are due on October 1, 2014. Please refer to paragraphs 2-4 of page 1 of the attached DOF letter. 1 Oversight Board to the Successor Agency April 15, 2014 Page 2 The DOF has denied the debt service payments since the Successor Agency received these funds with the January 2014 distribution. This is true. However, due to the significant variance between the timing of cash flows, the Successor Agency requested to receive RPTTF distribution on June 1, 2014. After a few phone conversations and a few emails between the DOF and staff, the DOF decided to disallow the debt service payment request. The DOF letter specifically approves of all the remaining items on the ROPS; therefore, the Successor Agency shall receive $370,364 on June 1, 2014. The other taxing entities shall receive whatever is remaining from the Redevelopment Property Tax Trust Fund (RPTTF) distribution. FISCAL IMPACT The Successor Agency is limited to spending resources as they are listed on the ROPS. The preparation and submittal of ROPS 14-15A is for the purpose of allowing the Successor Agency to pay its enforceable obligations for the period from July 1, 2014 to December 31, 2014. The Successor Agency shall receive $370,364 on June 1, 2014. STAFF RECOMMENDATION Adopt Resolution No. 2014-__ _ Attachments: 1. Resolution No. 2014---- 2. DOF letter of April 1, 2014 2 Attachment 1 RESOLUTION NO. OB-2014---- A RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, CALIFORNIA, FOR THE REGULAR MEETING OF APRIL 15, 2014, RECEIVE AND FILE REPORT OF DEPARTMENT OF FINANCE DISAPPROVAL OF CERTAIN ITEMS ON THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS 14-15A) FOR JULY 1, 2014 TO DECEMBER 31, 2014 WHEREAS, Section 34179 (e) of the Health and Safety Code requires all actions taken by the Oversight Board to the Successor Agency of the Redevelopment Agency of the City of Moorpark be adopted by resolution; and WHEREAS, on April 15, 2014 the Department of Finance letter regarding the Recognized Obligation Payment Schedule for July 1, 2014 to December 31, 2014 was submitted to the Oversight Board for its review and consideration (Agenda Item 6.A.). NOW, THEREFORE, THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The above recitals are true and correct and are a substantive part of this Resolution. SECTION 2. The Oversight Board hereby receives and files the Department of Finance letter regarding the Recognized Obligation Payment Schedule for July 1, 2014 to December 31, 2014. SECTION 3. The officers of the Oversight Board and the staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution, including requesting additional review by the DOF and an opportunity to meet and confer on any disputed items, and any such actions previously taken by such officers and staff are hereby ratified and confirmed. SECTION 4. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions. 3 PASSED AND ADOPTED this 15th day of April, 2014. Bruce Hamous, Chair ATTEST: Maureen Benson, City Clerk 4 April 1, 2014 Mr. David C Moe II, Redevelopment Manager City of Moorpark 799 Moorpark Avenue Moorpark, CA 93021 Dear Mr. Moe II: Subject: Recognized Obligation Payment Schedule ATTACHMENT 2 Pursuant to Health and Safety Code (HSC) section 34177 (m), the City of Moorpark Successor Agency (Agency) submitted a Recognized Obligation Payment Schedule (ROPS 14-15A) to the California Department of Finance (Finance) on February 19, 2014 for the period of July through December 2014. Finance has completed its review of your ROPS 14-15A, which may have included obtaining clarification for various items. HSC section 34171 (d) defines enforceable obligations. Based on a sample of line items reviewed and application of the law, the following do not qualify as enforceable obligations for the reasons specified: Item Nos. 1 through 3 -Debt service payments totaling $1,290,273. The Agency was authorized and received $1,290,273 in Redevelopment Property Tax Trust Funds (RPTTF) during the ROPS period of January through June 2014 (ROPS 13-14B) period for these obligations. Therefore, Finance is authorizing payments in the amount of $1,290,273 from Reserve Balances for the current ROPS period. Additionally, the Agency wishes to request an additional $1,290,273 of RPTTF to hold as reserves for the following ROPS periods. HSC section 34171 (d) (1) (A) allows successor agencies to hold a reserve for debt service payments when the next property tax allocation will be insufficient to pay all obligations due under the provisions of the bond for the next payment due in the following half of the calendar year. Therefore, the request to fund payments due for the first half of the calendar year is not allowed. Pursuant to HSC section 34186 (a), successor agencies were required to report on the ROPS 14-15A form the estimated obligations and actual payments (prior period adjustments) associated with the July through December 2013 period. The amount of RPTTF approved in the table below includes the prior period adjustment self-reported by the Agency. HSC section 34186 (a) also specifies prior period adjustments self-reported by successor agencies are subject to audit by the county auditor-controller (CAC) and the State Controller. Any proposed CAC adjustments were not received in time for inclusion in this letter. Therefore, the amount of RPTTF approved in the table below only includes the prior period adjustment self-reported by the Agency. 5 Mr. David C Moe 11 April 1, 2014 Page 2 Except for items denied in whole or in part as enforceable obligations, Finance is not objecting to the remaining items listed on your ROPS 14-15A. If you disagree with the determination with respect to any items on your ROPS 14-15A, you may request a Meet and Confer within five business days of the date of this letter. The Meet and Confer process and guidelines are available at Finance's website below: http://www.dof.ca.gov/redevelopmenUmeet and confer/ The Agency's maximum approved RPTTF distribution for the reporting period is $370,364 as summarized below: Approved RPTTF Distribution For the period of July through December 2014 Total RPTTF requested for non-administrative obligations 1,578,273 Total RPTTF requested for administrative obligations 125 000 Total RPTTF requested for obligations $ 1,703,273 Total RPTTF requested for non-administrative obligations 1,578,273 Denied Items Item No. 1 (686,413) Item No. 2 (312,588) Item No. 3 (291,272) (1,290,273) Total RPTTF authorized for non-administrative obligations I $ 288,000 Total RPTTF requested for administrative obligations 125,000 Total RPTTF authorized for administrative obligations I $ 125,000 Total RPTTF authorized for obligations I $ 413,000 ROPS 13-14A prior period adjustment (42,636) Total RPTTF approved for distribution I $ 370,364 Please refer to the ROPS 14-15A schedule that was used to calculate the approved RPTIF amount: http://www. dof. ca. gov/redevelopmenUROPS Absent a Meet and Confer. this is Finance's final determination related to the enforceable obligations reported on your ROPS for July 1 through December 31, 2014. This determination only applies to items where funding was requested for the six-month period. Finance's determination is effective for this time period only and should not be conclusively relied upon for future periods. All items listed on a future ROPS are subject to a subsequent review and may be denied even if it was or was not denied on this ROPS or a preceding ROPS. The only exception is for those items that have received a Final and Conclusive determination from Finance pursuant to HSC section 34177.5 (i). Finance's review of items that have received a Final and Conclusive determination is limited to confirming the scheduled payments as required by the obligation. 6 Mr. David C Moe II Apri11,2014 Page 3 The amount available from the RPTIF is the same as the amount of property tax increment that was available prior to enactment of ABx1 26 and AB 1484. This amount is not and never was an unlimited funding source. Therefore, as a practical matter, the ability to fund the items on the ROPS with property tax is limited to the amount of funding available to the successor agency in the RPTIF. To the extent proceeds from bonds issued after December 31, 2010 exist and are not encumbered by an enforceable obligation pursuant to HSC section 34171 (d), HSC section 34191.4 ( c) (2) (8) requires these proceeds be used to defease the bonds or to purchase those same outstanding bonds on the open market for cancellation. Please direct inquiries to Beliz Chappuie, Supervisor or Susana Medina Jackson, Lead Analyst at (916) 445-1546. Sincerely, / z__ ~YNHOWARD Assistant Program Budget Manager cc: Mr. Ron Ahlers, Finance Director, City of Moorpark Ms. Sandra Bickford, Chief Deputy, Ventura County California State Controller's Office 7