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Agenda Item 29.

City Council Meeting

Meeting Date:	01/16/2018
FROM:	Bill Gallardo

Subject:

Bond Proceeds Funding Agreement Between the City of Brea and the Successor Agency to the Brea Redevelopment Agency for the 2011A Non-Housing Bonds

RECOMMENDATION

Adopt City and Successor Agency resolutions approving the Bond Proceeds Funding Agreement.

BACKGROUND/DISCUSSION

As a result of the Dissolution Act, the Brea Redevelopment Agency was dissolved on February 1, 2012 and was replaced with the Successor Agency to the Brea Redevelopment Agency. In September 2015, Senate Bill (SB) 107 was enacted amending the Dissolution Act and thus allowing for the expenditure of bonds issued between January 2011 and June 2011. In June 2011, the former Brea Redevelopment Agency issued its 2011A Non-Housing Bonds.

The 2011A Non-Housing Bonds (2011A Bonds) generated approximately $13.4 million for public facilities. Per SB 107, a maximum of 45% of these bonds may be accessed for public facilities and the Successor Agency may spend up to 5% of these bond proceeds before Department of Finance (DOF) approval of what is called a Last and Final Recognized Obligation Schedule (LFROPS). A prior DOF review determined that the Successor Agency had previously expended the 5% portion of these bonds. The remaining 40% of bond proceeds is subject to the approval of DOF on the LFROPS. Staff anticipates filing the LFROPS in January 2018. City Council has approved utilizing these proceeds toward the funding for the Downtown Parking Structure which began construction during Fiscal Year 2016-17.

Prior to submitting the LFROPS, the Successor Agency issued its 2017 Tax Allocation Refunding Bonds in November 2017 to refund all of the outstanding 2011A Bonds. This caused the remaining 55% of the 2011A bond proceeds to be used to defease a portion of the outstanding 2011A Bonds. The 2011A Bond Proceeds Funding Agreement includes $7,351,010.40, as the amount representing the 55% portion that was used toward defeasing the 2011A Bonds. Additionally, the 2011A Bond Proceeds Funding Agreement includes $5,443,433 which represents the remaining bond proceeds plus projected interest earnings that is eligible to be transferred to the City to fund the Downtown Parking Structure.

In order to access the 2011A bond proceeds, the City and Successor Agency must adopt resolutions approving the 2011A Bond Proceeds Funding Agreement. The 2011A Bond Proceeds Funding Agreement must also be approved by resolution of the Oversight Board (OB). Upon approval by the OB, a copy of the resolutions and the 2011A Bond Proceeds Funding Agreement will be forwarded to the DOF for approval.

FISCAL IMPACT/SUMMARY

The 2011A Non-Housing Bonds generated approximately $13.4 million in proceeds for public facilities. As a result of SB 107, the Successor Agency may use up to 45% of these bond proceeds for public projects.

The City Council authorized the 2011A bond proceeds and funding from Community Benefit and Economic Development (CBED) Fund (Fund 140) for the construction of the Downtown Parking Structure. Pending the availability of the 2011A bond proceeds, the City Council authorized temporary funding from the General Fund (Fund110), $1.3 million and the Capital and Improvement Mitigation Fund (Fund 560), $3.9 million for a total of $5.2 million. Upon receipt by the City, the 2011A bond proceeds will be used first to repay temporary funding provided by the General Fund (Fund 110) and the Capital and Improvement Mitigation Fund (Fund 560) and the remainder will be deposited in the Community Benefit and Economic Development (CBED) Fund (Fund 140) to offset CBED funds used on the Downtown Parking Structure.

In order to access these 2011A bond proceeds, the City and Successor Agency must adopt resolutions approving the 2011A Non-Housing Bond Proceeds Funding Agreement. Upon approval by the City and Successor Agency, the 2011A Bond Proceeds Funding Agreement will be submitted to the Oversight Board and then onto the DOF for approval.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Lee Squire, Finance Services Manager
Concurrence: Cindy Russell, Administrative Services Director

Attachments
SA Agreement
SA Resolution
City Resolution