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Agenda Item 30.

City Council Meeting

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

Subject:

Last and Final Recognized Obligation Payment Schedule

RECOMMENDATION

Adopt the Resolution Approving the Last and Final Recognized Obligation Payment Schedule (LFROPS) and take related actions.

BACKGROUND/DISCUSSION

Pursuant to Section 34177(o) of the Health and Safety Code (HSC), the Successor Agency must prepare and submit a Recognized Obligation Payment Schedule (ROPS) every year, specifying the anticipated payments for enforceable obligations from July 1 of such year to June 30 of the following year. Each ROPS must be submitted to the Oversight Board (OB) and the State Department of Finance (DOF).

SB 107 (enacted in September 2015) added HSC Section 34191.6, which permits a Last and Final Recognized Obligation Payment Schedule (LFROPS). Once the Successor Agency’s LFROPS is approved by the OB and the DOF, then among other things, the Successor Agency will no longer have to prepare a ROPS each year. Furthermore, the Successor Agency will be able to use the remaining proceeds of the bonds issued in 2011 for eligible projects.

Staff recommends the adoption of the Resolution approving the Successor Agency’s LFROPS and authorizing submission of the LFROPS to the OB and DOF for approval. Exhibit A to the Resolution is the LFROPS. For purposes of the staff report, the summary pages of the LFROPS have been provided.

Pursuant to Section 34191.6(a), the Successor Agency submits the LFROPS to the OB and the DOF for approval, if the following conditions are met:

1. The remaining debt of the Successor Agency is limited to administrative costs and payments pursuant to enforceable obligations with defined payment schedules including, but not limited to, debt service, loan agreements, and contracts;
2. The Successor Agency is not a party to outstanding or unresolved litigation; and
3. All remaining obligations have been previously listed on a ROPS and approved for payment by the DOF.

The Brea Successor Agency is not a party to any outstanding or unresolved litigation.

Staff has prepared the LFROPS to include all of the Successor Agency’s expected remaining enforceable obligation payments and estimated administrative expenses.

Because the Successor Agency just completed its most recent refunding of bonds in November 2017, the 2017 bonds were not listed as line items on ROPS 17-18 (the ROPS most recently approved by the DOF) or any other prior ROPS. The Successor Agency plans to submit ROPS 18-19 concurrently with its submission of the LFROPS. Furthermore, it is expected that the DOF will review ROPS 18-19 and the LFROPS concurrently or otherwise approve the LFROPS after having first approved ROPS 18-19. As such, the LFROPS will consist only of obligations approved by the DOF on a ROPS.

After the OB-approved LFROPS is submitted to the DOF for approval, the DOF will have 100 days to review. The DOF may make changes to the LFROPS, upon agreement by the Successor Agency in writing. The attached Resolution authorizes the Staff to negotiate with the DOF regarding such changes proposed by the DOF and the Executive Director to execute any related changes.

After the DOF’s approval, the LFROPS will become effective on the first day of the subsequent Redevelopment Property Tax Trust Fund (RPTTF) distribution period (i.e., June 1 or January 2); however, if the LFROPS is approved less than 15 days before the date of a RPTTF distribution date, the LFROPS will not be effective until the subsequent RPTTF distribution period.

Upon the DOF’s approval of the LFROPS, the LFROPS will establish the maximum amount of moneys that the Successor Agency will receive from the RPTTF for each fiscal year through Fiscal Year 2036-37. The Successor Agency may make no more than two requests to the DOF to amend LFROPS.

FISCAL IMPACT/SUMMARY

The adoption of the LFROPS is a major step toward fulfilling the Successor Agency’s task of winding down the former Redevelopment Agency’s affairs. By adopting the LFROPS, the Successor Agency, as well as the OB, will be spared the time and resources required for the preparation, review and approval of the future annual ROPS. Furthermore, the Successor Agency will be able to use the remaining approximate five million dollars in proceeds of the 2011 bonds for eligible projects.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Lee Squire, Financial Services Manager
Concurrence: Cindy Russell, Administrative Services Director/Successor Agency Assistant Treasurer

Attachments
SA Resolution
Exhibit A
Last and Final ROPs