None to the General Fund. Since dissolution of the Contra Costa County Redevelopment Agency (the “Dissolved RDA”), tax increment is now deposited in the Redevelopment Property Tax Trust Fund (“RPTTF”), which is administered by the County Auditor Controller. Distributions are made semi-annually from the RPTTF by the County Auditor Controller to the Successor Agency to fund the Successor Agency's administrative budget and Recognized Obligation Payment Schedule. These funds are distinct and separate from other funds used by the Department of Conservation and Development. According to state law, any obligation of the Successor Agency that cannot be funded by the RPTTF would not be an obligation of the County.
Administrative Budget
According to Health & Safety Code Section 34177 of Assembly Bill x1 26 (the “Dissolution Act”), the Successor Agency staff prepares a draft administrative budget and submits it to the Oversight Board for approval. Prior to the Oversight Board’s approval of the administrative budget, the Board of Supervisors, acting in the capacity as the governing board of the Successor Agency for the Contra Costa County Redevelopment Agency, should review the proposed administrative budget.
The state statute specifies a minimum administrative cost allowance to the Successor Agency for its administrative costs, using a percentage of property tax revenue allocated by the County Auditor Controller to the Successor Agency to meet enforceable obligations. The County Auditor Controller calculates the allowance using three percent of the distribution to be received by the Successor Agency from the Redevelopment Property Tax Trust Funds (RPTTF) or $250,000 for the fiscal year, whichever amount is greater. The County Auditor Controller general practice has been to provide all successor agencies in the County with the statutory minimum administrative cost allowance in the amount of $250,000 along with the July 1st RPTTF distribution. The County Auditor Controller will distribute a supplemental administrative cost allowance along with the January 2nd RPTTF distribution in cases where three percent of a successor agency's RPTTF distribution for the fiscal year is greater than $250,000.
The Fiscal Year 2014-15 administrative budget is attached (see Exhibit A). The Successor Agency estimates that it will receive an administrative cost allowance equal to three percent of the Successor Agency’s RPTTF distribution or approximately $302,000 for the entire Fiscal Year 2014-15. The budget assumes the minimum $250,000 annual administrative cost allowance will be received in July 2014, with the remaining $52,000 received in January 2015. Some Successor Agency staff costs will be project-related and will be charged to non-administrative enforceable obligations (e.g. management of construction projects) shown on the Recognized Obligation Payment Schedules (ROPSs). These non-administrative and project management costs are estimated to contribute $104,833 in revenue for the administrative budget in Fiscal Year 2014-15.
Recognized Obligation Payment Schedule 14-15A
Beginning in Fiscal Year 2013-14, the DOF implemented a new naming convention for ROPS prepared for each six-month spending period. The ROPS for the July 1, 2014 to December 31, 2014 time period is the sixth ROPS prepared by the Successor Agency. This sixth ROPS is named "ROPS 14-15A" according to the DOF naming convention. This naming convention helps the DOF determine which six-month period of the fiscal year is covered by the ROPS. ROPS 14-15A covers the first half of Fiscal Year 14-15 and ROPS 14-15B covers the second half.
Resolution No. 2014/58 adopts ROPS 14-15A, which is included as Exhibit B to this report. After adoption by the Successor Agency, ROPS 14-15A will be submitted to the Oversight Board for approval. The Oversight Board is scheduled to meet on February 26, 2014. As required under Health and Safety Code Section 34179.6, ROPS 14-15A will be submitted to the State Controller's Office, DOF and the County Auditor-Controller, and will be posted on the Successor Agency's website. The DOF must receive ROPS 14-15A no later than March 1, 2014.
Assembly Bill 1484, the Dissolution Act "clean-up" legislation, became law on June 27, 2012. It provides a 45-day review period for the DOF once the Oversight Board has approved the ROPS. Within five days of the DOF decision on a ROPS, a Successor Agency may request a meet and confer with the DOF to discuss any disputed items.
ROPS 14-15A authorizes all payments to be made by the Successor Agency for enforceable obligations for the six-month time period between July 1, 2014 and December 31, 2014. The payments noted on the ROPS are estimates. In most cases, assumptions made for ROPS 14-15A were based on actual expenditures in the prior ROPS and expected expenditures in ROPS 14-15A.
The title page of ROPS 14-15A shows enforceable obligations require a $5,339,255 distribution from the Successor Agency’s RPTTF. This amount assumes the RPTTF has already set aside pass-through payments to taxing entities and administrative costs for the County Auditor Controller. In cases where the Auditor Controller determines that RPTTF revenue is not sufficient to meet ROPS obligations, the Auditor Controller will make distributions from the RPTTF according to the priorities established by the Dissolution Act. These priorities are as follows: 1) tax allocation bond debt service payments, 2) pass thru payments, 3) other ROPS obligations, and 4) administrative allowance. In a case where there is residual RPTTF after payment of these priorities, this residual revenue would be distributed to the taxing entities based on their tax rates for properties located within the project area.
On July 18, 2013, the Department of Finance issued the Successor Agency a "Finding of Completion" pursuant to Health and Safety Code Section 34179.7. As a result of the issuance of the Finding of Completion, the Successor Agency is authorized to: (1) place loan agreements between the dissolved RDA and the County on the ROPS; (2) utilize proceeds derived from non-housing bonds issued prior to January 1, 2011, in a manner consistent with the original bond covenants; and (3) dispose of properties owned by the Former RDA pursuant to a long-range property management plan approved by the Successor Agency’s Oversight Board and the DOF.
ROPS 13-14B relisted several bond-funded projects; including project management costs as allowed under Section 34191.4(c) which were rejected by DOF in the prior ROPS (see Lines 10, 14, 17, 20, 21, 22, 23, 24, 95). In addition to the bond-funded projects, ROPS 13-14B also committed housing bond proceeds derived from indebtedness obligations that were issued prior to January 1, 2011 to fund affordable housing projects as authorized under Health and Safety Code Section 34176(g)(1) (see Lines 111 through 120). The housing bond proceeds were committed to affordable housing projects consistent with the housing bond covenants through subsequent action by the Housing Successor.
There are currently two outstanding loans from the County that need repayment, including the Montalvin Manor loan #59 and State Supplemental Educational Revenue Fund (SERAF) repayment (#74). According to Section 34191.4.(b)(2)(A), the maximum repayment amount authorized each fiscal year for repayments must be equal to one-half of the increase between the amount distributed to the taxing in a particular fiscal year and the amount distributed to taxing entities pursuant to that paragraph in the 2012–13 base year. In the base year of 2012-13, the County Auditor Controller made a total residual distribution of $359,755.05, the entire amount of which was distributed in July 2012 and no residual distribution was made in January 2013. The County Auditor Controller made a total residual distribution of $359,395.52 for 2013-14, the entire amount of which was paid in July 2013 with no residual distribution in January 2014. Since there was no increase in residual distribution between FY2013-14 and the 2012-13 base year, the Successor Agency is not requesting loan payments at this time, but will consider including loan repayment in the next ROPS. Since the SERAF loan was borrowed from the low and moderate income housing fund (LMIHF), it will need to be repaid before other loans, as required by statute.
ROPS 13-14B also relisted the Fiscal Agreement with the East Bay Regional Park District (EBRPD) (see Line 65). The DOF denied this obligation previously, but the District was unable to participate in the meet-and-confer process to have DOF reconsider its decision. The DOF again denied this item in ROPS 13-14B, but indicated it would be eligible for reimbursement after the improvements proposed for the EBRPD’s Lone Tree Point property are completed. The enforceable obligation is listed on ROPS 14-15A, however no RPTTF revenue is requested at this time.
Environmental Review
The actions set forth in Resolution No. 2014/58 as summarized above, are exempt under Section 15061(b)(3) of the Guidelines for the California Environmental Quality Act (the "CEQA") in that it can be seen with a certainty that the actions will not have a significant adverse impact on the environment. The actions are required to continue a governmental funding mechanism for financial obligations of the former Redevelopment Agency and to perform the statutorily mandated unwinding of the assets, liabilities, and functions of the Dissolved RDA pursuant to the Dissolution Act. A Notice of Exemption will be filed with the County Clerk in accordance with the CEQA guidelines.
Failure to adopt the resolution would require the Board to consider other options for providing and funding staff support for the Successor Agency. Without approving the Recognized Obligation Payment Schedule for the period July through December 2014, the County Auditor-Controller would not be able to allocate funds to the Successor Agency for staffing services and payment of recognized obligations during this six-month period, and the Successor Agency would risk defaulting on enforceable obligations.