Title
Recommendation to Authorize the City Manager to Submit the Recognized Obligations Payment Schedule (ROPS) and Administrative Budget for the Period from July 1, 2020 to June 30, 2021 to the Countywide Oversight Board. (Community Development 207)
Body
To: Honorable Chair and Member of the Successor Agency to the Community Improvement Commission
EXECUTIVE SUMMARY
Staff recommends authorizing the City Manager to submit the Recognized Obligations Payment Schedule (ROPS 2020-21) and Administrative Budget for the Period from July 1, 2020 to June 30, 2021, to the Countywide Oversight Board. Once the State Department of Finance approves the ROPS, the Successor Agency can pay its financial obligations for Fiscal Year 2020-2021.
BACKGROUND
State Law enacted by Assembly Bill x1 26 (2011), as modified by Assembly Bill 1484 (2012), and Senate Bill 107 (2015), dissolved all redevelopment agencies in California and established successor agencies to administer remaining obligations of the former redevelopment agencies. The City of Alameda (City) serves as the Successor Agency to the Community Improvement Commission of the City, Alameda’s former redevelopment agency and the City Council serves as the Successor Agency Board.
Local oversight boards were established to direct the work of winding down the affairs and obligations of each former redevelopment agency. As of July 1, 2018, local oversight boards within Alameda County are now consolidated into the single County of Alameda Countywide Oversight Board (Countywide Oversight Board).
The Successor Agency is obligated to prepare a Recognized Obligations Payment Schedule (ROPS) for each fiscal year listing all enforceable obligations payable during that twelve-month period. The ROPS must be approved by the Countywide Oversight Board prior to submission to the California Department of Finance (DOF). The deadline for submission to DOF is February 1 of each year. The Successor Agency can only pay obligations listed on the ROPS as approved by the DOF.
DISCUSSION
Following is an overview of the major outstanding obligations listed on the Successor Agency’s ROPS schedule for Fiscal Year (FY) 2020-21. All items have been DOF-approved on previous ROPS schedules.
(1) Bonds (ROPS No. 56, 57, 58, 59, 13, 14)
The Successor Agency has two outstanding bond obligations:
• 2014 Bonds (ROPS No. 56 and 57). Approximately $52.4 million in debt service remains on the bonds. Debt service on the bonds continues through 2034.
• 2017 bonds (ROPS No. 58 and 59). Approximately $18.9 million in debt service remains on the bonds. Debt service on the bonds continues through 2042.
ROPS No. 56 and 58 identify payments to bond holders, while ROPS items 57 and 59 identify funds required to be reserved for payments due to bond holders in the subsequent fiscal year. The Successor Agency is also responsible for trustee fees (ROPS No. 13) and costs of compliance with continuing disclosure requirements (ROPS No. 14) in connection with the bonds.
(2) Alameda Landing Disposition and Development Agreement (ROPS 19 and 23)
The Alameda Landing Disposition and Development Agreement (Alameda Landing DDA) is listed as No. 19 on the ROPS with related public improvement obligations included as No. 23. The agreement provides for disposition of property for development of the Alameda Landing Project encompassing approximately 285,000 square feet of retail and 284 residential units. The Alameda Landing Project also includes a 354-unit future residential phase, and 4.5-acre park to be constructed along the waterfront portion of the property.
The Successor Agency is obligated under the Alameda Landing DDA to reimburse project costs for demolition of existing structures, installation of streets, utilities, and other backbone improvements. Reimbursements are made from property taxes generated by the project and the adjacent Bayport residential project. The maximum reimbursement amount under the agreement is $35.5 million, of which $8 million is contingent upon financial performance of the project and $27.5 million is not contingent on performance. Approximately $15 million remains to be paid under the agreement, including the contingent amount. The non-contingent portion of the obligation is expected to be paid in full in FY 2021-22.
(3) Independence Plaza Agreement (ROPS No. 28)
The Independence Plaza agreement is a commitment by the Successor Agency to provide an operating subsidy for the 186-unit Independence Plaza affordable senior apartment property. Payments occur twice per year and reflect the subsidy required to operate and maintain the units.
(4) Boatworks Settlement Agreement (ROPS Nos. 33 and 34)
This settlement agreement (Agreement) obligation of up to $4.5 million to the developer of a residential project is the subject of pending litigation in which the City has taken the position that the Agreement has expired. However, the Successor Agency is obligated to continue to list the Agreement on its ROPS schedule, with no payment identified until the litigation is resolved.
(5) Guyton Judgment and Settlement Agreement and Alameda Unified School District Pass Through Agreement (ROPS No. 36)
The Successor Agency is a party to a 1991 pass-through agreement with the Alameda Unified School District (AUSD), which provides that eight percent (8%) of property taxes allocated for the Business and Waterfront Improvement Project (BWIP) project area are designated for use by AUSD for affordable housing purposes. AUSD’s use of the funds must comply with the terms of a separate 1990 Guyton Judgement and Settlement Agreement (Settlement Agreement), which requires the City to undertake certain activities to further affordable housing production. AUSD has entered into a Memorandum of Understanding (MOU) with the Alameda Housing Authority to develop affordable housing, including for qualifying District employees.
Administrative Budget (ROPS No. 46)
Administrative costs are included on ROPS No. 46 and are itemized in the proposed administrative budget. The proposed budget is within the applicable statutory maximum of $250,000.
ALTERNATIVES
Staff recommends that the Successor Agency Board authorize the City Manager to submit ROPS 2020-21 to the Countywide Oversight Board and DOF for approval.
There are no alternatives to the Successor Agency authorizing the City Manager to submit the ROPS to the County Oversight Board and DOF, as the Successor Agency is statutorily obligated to do so. Enforceable obligations could be reduced or removed from the ROPS, but that would mean that the Successor Agency believes those items/activities are no longer enforceable obligations to be paid for with Redevelopment Property Tax Trust Fund monies.
FINANCIAL IMPACT
There is no financial impact from authorizing the City Manager to submit ROPS 2020-21 to the Countywide Oversight Board and DOF. All obligations approved by DOF are paid from Redevelopment Property Tax Trust Fund monies.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
ROPS 2020-21 has been prepared on a template provided by DOF in accordance with State law. Following approval by the Countywide Oversight Board, ROPS 2020-21 will be submitted to DOF for its approval.
ENVIRONMENTAL REVIEW
This action is not a project under Public Resources Code section 21065 or California Environmental Quality Act Guidelines section 15378.
CLIMATE IMPACT
There are no climate impacts to approving the ROPS.
RECOMMENDATION
Authorize the City Manager to submit the Recognized Obligation Payment Schedule and Administrative Budget for the Period from July 1, 2020 to June 30, 2021 to the Countywide Oversight Board.
CITY MANAGER RECOMMENDATION
The City Manager request authorization to submit the Recognized Obligation Payment Schedule and Administrative Budget.
Respectfully submitted,
Debbie Potter, Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. ROPS and Administrative Budget
cc: Eric Levitt, City Manager