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HomeMy WebLinkAbout062718 OB SARDA AgendaIn compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please Icontact the office of the City Clerk (951) 694-6444. Notification 48 hours prior to a meeting will enable the City to make reasonable arrangements to ensure accessibility to that meeting [28 CFR 35.102.35.104 ADA Title IIi. MEETING NOTICE/AGENDA OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY REGULAR MEETING COUNCIL CHAMBERS 41000 MAIN STREET TEMECULA, CALIFORNIA JUNE 27, 2018 — 6:30 PM Next in Order: Resolution: 18-03 CALL TO ORDER: John Kelliher, Chairperson Roll CaII: Gonzalez, Kelliher, Meyer, Ordway -Peck, Thornhill, Turner, Venable PUBLIC COMMENTS A total of 15 minutes is provided so members of the public may address the Board on items that are not listed on the Agenda. Speakers are limited to three minutes each. If you desire to speak to the Board about an item not on the Agenda, a salmon colored "Request to Speak" form should be filled out and filed with the Board Secretary. When you are called to speak, please come forward and state your name for the record. For all other agenda items a "Request to Speak" form must be filed with the Board Secretary prior to the Board addressing that item. There is a three-minute time limit for individual speakers. NOTICE TO THE PUBLIC All matters listed under Consent Calendar are considered to be routine and all will be enacted by one roll call vote. There will be no discussion of these items unless Members of the Oversight Board request specific items be removed from the Consent Calendar for separate action. CONSENT CALENDAR 1 Minutes RECOMMENDATION: 1.1 Approve the Regular Meeting Action Minutes of June 13, 2018 1 BOARD BUSINESS 2 Approve the Proposed Administrative Budget for Fiscal Year 2018-19 for Successor Agency to the Temecula Redevelopment Agency Pursuant to Health and Safety Code Section 34177 RECOMMENDATION: 2.1 Adopt a resolution entitled: RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY APPROVING THE PROPOSED ADMINISTRATIVE BUDGET FOR FISCAL YEAR 2018-19 PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH 3 Adopt a Resolution Approving Repayments of Amounts Borrowed from the Low and Moderate Income Housing Fund for Fiscal Years 2009-10 and 2010-11 Remittances to the Supplemental Educational Revenue Augmentation Fund and Taking Related Actions RECOMMENDATION: 3.1 Adopt a resolution entitled: RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY, APPROVING REPAYMENTS OF AMOUNTS BORROWED FROM THE LOW AND MODERATE INCOME HOUSING FUND FOR FISCAL YEARS 2009-10 AND 2010-11 REMITTANCES TO THE SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND AND TAKING RELATED ACTIONS 4 Make Finding that the 6th Street Promissory Note Between the City of Temecula and the Former Redevelopment Agency was for Legitimate Redevelopment Purposes RECOMMENDATION: 4.1 That the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency adopt the resolution entitled: 2 RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY MAKING A FINDING, PURSUANT TO HEALTH AND SAFETY CODE 34191.4 (b) (1), THAT THE PROMISSORY NOTE BETWEEN THE CITY OF TEMECULA AND THE FORMER TEMECULA REDEVELOPMENT AGENCY WAS FOR LEGITIMATE REDEVELOPMENT PURPOSES ADJOURNMENT (r/a//l F1 Date Randi J 41 Bo. rd Secretary NOTICE TO THE PUBLIC: The Agenda will be available for viewing, prior to the meeting, at the Main Reception at City Hall — 41000 Main Street, Temecula, 8:00 — 5:00 PM as well as on the City's website — TemeculaCA.gov Any staff report/written material pertaining to this meeting will be available, prior to the meeting, for public review at the Main Reception and at the respective meeting. Any Supplemental Material distributed to a majority of the Committee Members regarding any item on the Agenda, after the posting of the Agenda, will be available for public review at the Main Reception. In addition, such material will be made available for review at the respective meeting. If you have any questions regarding any item of business on the Agenda for this meeting, please contact City Hall — 951-694-6444. 3 ITE` -1 1 ACTION MINUTES OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY REGULAR MEETING COUNCIL CHAMBERS 41000 MAIN STREET TEMECULA, CALIFORNIA JUNE 13, 2018-6:30 PM CALL TO ORDER: Roll Call: ABSENT: PUBLIC COMMENTS There were no speakers. NOTICE TO THE PUBLIC Next in Order: Resolution: 18-02 Gary Thornhill, board member called the meeting to order at 6:35 p.m. Gonzalez, Ordway -Peck, Thornhill, Venable KELLIHER, MEYER, TURNER All matters listed under Consent Calendar are considered to be routine and all will be enacted by one roll call vote. There will be no discussion of these items unless Members of the Oversight Board request specific items be removed from the Consent Calendar for separate action. CONSENT CALENDAR 1 Minutes RECOMMENDATION: 1.1 Approve the Regular Meeting Action Minutes of January 24, 2018 APPROVED BY A 4-0-3 VOTE. 1.2 (Continued from the regular meeting of January 24, 2018) Approve the Regular Meeting Action Minutes of September 13, 2017 APPROVED BY A 4-0-3 VOTE. 1.3 (Continued from the regular meeting of September 13, 2017 and January 24, 2018) Approve the Special Meeting Action Minutes of July 5, 2017 APPROVED BY A 4-0-3 VOTE. ACTION: BOARD MEMBER ORDWAY-PECK MOVED APPROVAL OF CONSENT CALENDAR ITEM NO. 1, SECOND BY BOARD MEMBER GONZALEZ; VOTE REFLECTED UNANIMOUS APPROVAL 1 BOARD BUSINESS 2 Approve the First Amendment to the Disposition and Development Agreement for the Town Square Marketplace Development between the Successor Agency to the Temecula Redevelopment Agency, the City of Temecula, and Town Square Marketplace Old Town, LLC, Located at APNs 922-360-004, 005, 006, 007 ACTION APPROVED BY A 4-0-3 VOTE. MOTION BY BOARD MEMBER ORDWAY-PECK, SECOND BY BOARD MEMBER VENABLE; VOTE REFLECTED UNANIMOUS APPROVAL RECOMMENDATION: 2.1 That the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency adopt the resolution entitled: RESOLUTION NO. OB SARDA 18-02 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY APPROVING THE FIRST AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND AMONG THE CITY OF TEMECULA, SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY, AND TOWN SQUARE MARKETPLACE OLD TOWN, LLC CONVEYING APPROXIMATELY ONE ACRE OF PROPERTY LOCATED ON MAIN STREET WEST OF MERCEDES STREET ADJOURNMENT Board member Gary Thornhill adjourned the meeting at 6:38 PM to the next regular meeting: Wednesday, June 27, 2018, 6:30 PM, Council Chambers, 41000 Main Street, Temecula, California. ATTEST: Randi Johl, City Clerk/Secretary 2 John Kelliher Chairperson Aaron Adams Executive Director ITE` -1 2 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY AGENDA REPORT Board of Directors of the Oversight Board of the Successor Agency to the TO: Temecula Redevelopment Agency FROM: Luke Watson, Director of Community Development for the Successor Agency to the Temecula Redevelopment Agency DATE: June 27, 2018 SUBJECT: APPROVE THE PROPOSED ADMINISTRATIVE BUDGET FOR FISCAL YEAR 2018-19 FOR SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 PREPARED BY: Lynn Kelly -Lehner, Principal Management Analyst for the Successor Agency to the Temecula Redevelopment Agency RECOMMENDATION: Adopt a resolution entitled: RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY APPROVING THE PROPOSED ADMINISTRATIVE BUDGET FOR FISCAL YEAR 2018-19 PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH BACKGROUND: Pursuant to ABX1 26, the Successor Agency is required to undertake a number of actions related to winding down the affairs of the former Redevelopment Agency. The Successor Agency has a number of ongoing responsibilities, such as paying debt service on enforceable obligations of the former Redevelopment Agency and preparing an administrative budget and Recognized Obligation Payment Schedule (ROPS) for fiscal year. The proposed administrative budget must include all of the following: • Estimated amounts for Successor Agency administrative costs for the applicable six- month fiscal period; • Proposed sources of payment for the administrative costs; and • Proposals for arrangements for administrative and operations services provided by the City or other entity. ABX1 26 provides that the Successor Agency may include the cost of Oversight Board meetings in its administrative budgets. However, allowable administrative expenses include, among others, the value of City staff, including employee retirement and other benefits, necessary for the administration and operations of the Successor Agency; and the cost of other resources of the City necessary for the administration and operations of the Successor Agency, such as office space, supplies, equipment, utilities, and insurance. ABX1 26 provides for an administrative cost allowance to annually be paid to the Successor Agency of not less than $250,000 a year. However, in the event there are insufficient funds to pay the former Redevelopment Agency's enforceable obligations, some or all of the administrative cost allowance will be used to pay for the enforceable obligations, and these funds will not be available for administrative expenses of the Successor Agency. The administrative cost allowance will exclude any administrative costs that can be paid from bond proceeds or from sources other than property tax. However, the use of bond proceeds to pay administrative expenses is subject to certain limitations. The Successor Agency is required to submit each proposed administrative budget to the Oversight Board for its approval. The Successor Agency is also required to provide administrative cost estimates from its approved administrative budget that are to be paid from property tax revenues deposited in the Redevelopment Property Tax Trust Fund, to the County Auditor -Controller for each six-month fiscal period. The attached Resolution approves the proposed administrative budget for FY 2018-19, which is attached as Exhibits A to the Resolution. FISCAL IMPACT: AB X1 26 provides for the Successor Agency to receive an annual Administrative Cost Allowance of not less than $250,000. However, the allowances are subject to reduction if there are insufficient funds to pay the former Redevelopment Agency's enforceable obligations. ATTACHMENTS: Resolution No. OB SARDA 18- RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY APPROVING THE PROPOSED ADMINISTRATIVE BUDGET PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH THE BOARD OF DIRECTORS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The Board of Directors of the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency does hereby find, determine and declare that: A. Pursuant to Part 1.85 of the Community Redevelopment Law (commencing with Health and Safety Code Section 34170) ("Part 1.85"), the Successor Agency to the Temecula Redevelopment Agency ("Successor Agency") is required to undertake a number of actions related to winding down the affairs of the former Redevelopment Agency pursuant to Health and Safety Code Section 34177(h). B. In connection with the administration and operations of the Successor Agency, the Successor Agency is and will be utilizing the staff, facilities, and other resources of the City. The City Manager of the City serves as Executive Director of the Successor Agency, the Temecula Director of Finance serves as Finance Officer of the Successor Agency, and the City Clerk serves as Secretary to the Successor Agency. Planning, Finance, Engineering, Public Works, and other City departments devote and are expected to devote substantial time with respect to the administration and operations of the Successor Agency, including gathering information relating to the Redevelopment Agency's enforceable obligations, conferring with public officials representing governmental agencies, and undertaking other activities in connection with administration and operations of the Successor Agency. C. By providing and making available to the Successor Agency the staff, facilities, services, and other resources of the City, including, without limitation, consultants, legal counsel, office space, equipment, supplies, and insurance, necessary to the administration and operations of the Successor Agency, the City has advanced and will continue to advance the cost of the foregoing to the Successor Agency. The City and the Successor Agency desire to enter into an agreement to provide for an appropriate method of reimbursement of such advances by the Successor Agency to the City. D. Pursuant to Health and Safety Code Section 34171(d)(1)(F), contracts or agreements necessary for the administration or operation of the Successor Agency are enforceable obligations and pursuant to Health and Safety Code Sections 34178(a) and 34180(h), the Successor Agency may enter into agreements with the City with the approval of the oversight board for the Successor Agency (the "Oversight Board"). E. Pursuant to Health and Safety Code Section 34177(j), the Successor Agency is required to prepare a proposed administrative budget for each six-month fiscal period and submit each proposed administrative budget to the Oversight Board for its approval. Each proposed administrative budget shall include all of the following: (1) Estimated amounts for Successor Agency administrative costs for the applicable six- month fiscal period; (2) Proposed sources of payment for the costs identified in (1); and (3) Proposals for arrangements for administrative and operations services provided by the City or another entity. F. Pursuant to Health and Safety Code Section 34177(k), the Successor Agency is required to provide administrative cost estimates, from its approved administrative budget that are to be paid from property tax revenues deposited in the Redevelopment Property Tax Trust Fund, to the County Auditor -Controller for each applicable six-month fiscal period. Section 2. This Resolution is adopted pursuant to the provisions of Part 1.85. Section 3. The Board hereby approves the administrative budget for the twelve-month fiscal period commencing July 1, 2018 and ending June 30, 2019, attached hereto as Exhibit A and incorporated herein by reference. Section 4. The officers and 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, and any such actions previously taken by such officers and staff are hereby ratified and confirmed. Section 5. The Secretary shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency this 27th day of June, 2018. John Kelliher, Chairperson ATTEST: Randi Johl, City Clerk/Board Secretary [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA I, Randi Johl, City Clerk/Board Secretary of the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency, do hereby certify that the foregoing Resolution No. OB SARDA 18- was duly and regularly adopted by the Board of Directors of the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency at a meeting thereof held on the 27th day of June, 2018, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Randi Johl City Clerk/Board Secretary Exhibit A Successor Agency to the Temecula Redevelopment Agency FY 2018-19 Administrative Budget Successor Agency to the Redevelopment Agency FY 2018-19 Administrative Budget Account Number Category Administrative Portion Other Sources Total 165.199.999.5100 Salaries & Wages $78,230.13 $83,706.87 $161,937.00 165.199.999.5102 PERS Retirement $24,497.49 $26,212.51 $50,710.00 165.199.999.5103 CAL Cash Out $3,315.93 $3,548.07 $6,864.00 165.199.999.5104 Medicare $1,182.60 $1,265.40 $2,448.00 165.199.999.5105 Benefits Flex - Cash Back $0.00 $0.00 $0.00 165.199.999.5106 Auto Allowance $579.71 $620.29 $1,200.00 165.199.999.5108 Vol Life Insurance $76.81 $82.19 $159.00 165.199.999.5109 Unemployment Training Tax $241.54 $258.46 $500.00 165.199.999.5110 Disability Insurance $0.00 $0.00 $0.00 165.199.999.5111 Cafeteria Benefit $14,376.76 $15,383.24 $29,760.00 165.199.999.5112 Workers' Comp $3,448.30 $3,689.70 $7,138.00 165.199.999.5113 Health Insurance $0.00 $0.00 $0.00 165.199.999.5114 Dental Insurance $0.00 $0.00 $0.00 165.199.999.5115 Medical Reimbursement $0.00 $0.00 $0.00 165.199.999.5116 Vision Insurance $0.00 $0.00 $0.00 165.199.999.5117 Child Care Reimbursement $0.00 $0.00 $0.00 165.199.999.5121 Overtime Wages $0.00 $0.00 $0.00 165.199.999.5190 Life & Accident Insurance $0.00 $0.00 $0.00 Total Salaries and Benefits $125,949.27 $134,766.73 $260,716.00 165.199.999.5230 Postage & Packaging $251.21 $268.79 $520.00 165.199.999.5246 Legal Services - General $39,035.60 $41,768.40 $80,804.00 165.199.999.5248 Consulting Services $4,927.52 $5,272.48 $10,200.00 165.199.999.5250 Other Outside Services $62,801.69 $67,198.31 $130,000.00 165.199.999.5260 Professional Meetings $0.00 $0.00 $0.00 165.199.999.5261 Staff Training/Education $1,207.72 $1,292.28 $2,500.00 165.199.999.5262 Mileage $125.60 $134.40 $260.00 165.199.999.5444 Oversight Board Obligations $0.00 $0.00 $0.00 Total Operations and Maintenance $108,349.34 $115,934.66 $224,284.00 165.199.999.5330 Insurance $3,896.12 $4,168.88 $8,065.00 165.199.999.5540 Information Technology $7,334.75 $7,848.25 $15,183.00 165.199.999.5545 Support Services $120.77 $129.23 $250.00 165.199.999.5550 Facilities $4,349.74 $4,654.26 $9,004.00 Total Internal Service Fund Allocation $15,701.39 $16,800.61 $32,502.00 Total SARDA Administrative Budget $250,000.00 $267,502.00 $517,502.00 ITE` -1 3 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY AGENDA REPORT Board of Directors of the Oversight Board of the Successor Agency to the TO: Temecula Redevelopment Agency Luke Watson, Director of Community Development for the Successor Agency FROM: to the Temecula Redevelopment Agency DATE: June 27, 2018 SUBJECT: ADOPT A RESOLUTION APPROVING REPAYMENTS OF AMOUNTS BORROWED FROM THE LOW AND MODERATE INCOME HOUSING FUND FOR FISCAL YEARS 2009-10 AND 2010-11 REMITTANCES TO THE SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND AND TAKING RELATED ACTIONS PREPARED BY: Lynn Kelly -Lehner, Principal Management Analyst for the Successor Agency to the Temecula Redevelopment Agency RECOMMENDATION: Adopt a resolution entitled: RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY, APPROVING REPAYMENTS OF AMOUNTS BORROWED FROM THE LOW AND MODERATE INCOME HOUSING FUND FOR FISCAL YEARS 2009-10 AND 2010-11 REMITTANCES TO THE SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND AND TAKING RELATED ACTIONS BACKGROUND AND DISCUSSION: Before dissolution, the former Temecula Redevelopment Agency (the "Former Agency") was required to maintain a Low and Moderate Income Housing Fund (the "Housing Fund") and deposit certain amounts of tax increment received by the Former Agency into the Housing Fund. For fiscal years 2009-10 and 2010-11, the Former Agency was required to make remittances (the "SERAF Payments") to the Riverside County Auditor -Controller for deposit into the County's Supplemental Educational Revenue Augmentation Fund (which is established by the State to shift property tax revenues to school entities). Pursuant to Sections 33690 and 36690.5, the Former Agency was permitted to, and did, incur loans repayable to the Housing Fund to make the SERAF Payments (the "SERAF Loans"). The SERAF Loans, in the aggregate outstanding amount of approximately $5.2 million, remain unpaid. Pursuant to HSC Section 34176(b), on January 24, 2012, the City Council of the City of Temecula (the "City") adopted Resolution No. 12-11, designating the City as the successor entity with respect to the housing assets and functions of the Former Agency (the City, when acting in such capacity, the "Housing Successor"). Pursuant to HSC Section 34171(d), the Housing Successor must establish and maintain a Low and Moderate Income Housing Asset Fund (the "Housing Asset Fund"). HSC Section 34171(d)(1)(G) provides that amounts borrowed from, or payments owing to, the Housing Fund are enforceable obligations, provided that the Oversight Board approves a repayment schedule. SERAF Loan repayments, when made, will be deposited into the Housing Asset Fund and used for affordable housing purposes in accordance with HSC Section 34176.1. HSC section 34176(e)(6)(B) imposes a cap on the annual repayment amount for the SERAF Loans. Twice a year (in January and in June), taxing entities receive residual moneys ("Taxing Entities Residual"), if any, remaining in the Redevelopment Property Tax Trust Fund ("RPTTF"), after the County Auditor -Controller's disbursement of pass-through payments and disbursement to the Successor Agency for enforceable obligation payments and administrative costs allowance, as listed on the ROPS, as approved by the Oversight Board and the State Department of Finance (the "DOF"). Pursuant to HSC Section 34176(e)(6)(B), each fiscal year, the repayment for the SERAF Loans must not exceed one-half of the increase between the amount of the Taxing Entities Residual in that fiscal year and Taxing Entities Residual in the 2012-13 base year. FISCAL IMPACT: If the Oversight Board adopts the attached Resolution (and the resolution is subsequently approved by the DOF), the Successor Agency will be able to include the SERAF Loans on the ROPS. The amount of each repayment will be subject to the availability of RPTTF funds and the other requirements of the Redevelopment Dissolution Law. ATTACHMENT: Resolution No. OB SARDA 18- RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY, APPROVING REPAYMENTS OF AMOUNTS BORROWED FROM THE LOW AND MODERATE INCOME HOUSING FUND FOR FISCAL YEARS 2009-10 AND 2010-11 REMITTANCES TO THE SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND AND TAKING RELATED ACTIONS THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Recitals. The Oversight Board of the Successor Agency to the Temecula Redevelopment Agency (the "Successor Agency") does hereby find, determine, and declare that: A. The former Redevelopment Agency of the City of Temecula (the "Former Agency") was a duly constituted redevelopment agency pursuant to provisions of the Community Redevelopment Law (the "Redevelopment Law") set forth in Section 33000 et seq. of the California Health and Safety Code ("HSC"). B. Pursuant to HSC 33334.2, the Former Agency was required to maintain a Low and Moderate Income Housing Fund (the "Housing Fund") and deposit certain amounts of tax increment received by the Former Agency into the Housing Fund. C. Pursuant to HSC Sections 33690(a) and 33690.5(a), the Former Agency was required to make remittances (together, the "SERAF Payments") to the Riverside County Auditor -Controller for deposit into the County's Supplemental Educational Revenue Augmentation Fund ("SERAF") for fiscal years 2009-10 and 2010-11, respectively. D. Pursuant to HSC Sections 33690(c) and 33690.5(c), the Former Agency was permitted to incur loans repayable to the Housing Fund by using moneys that were otherwise required to be allocated to the Housing Fund to pay all or a portion of each of the SERAF Payments. E. On February 9, 2010, the governing board of the Former Agency adopted Resolution No. RDA 10-01, authorizing the borrowing of moneys that were otherwise required to be allocated to the Housing Fund to pay the SERAF Payment for fiscal year 2009-10 (the "FY 2009-10 SERAF Loan"). F. On February 8, 2011, the governing board of the Former Agency adopted Resolution No. RDA 11-01, authorizing the borrowing of moneys that were otherwise required to be allocated to the Housing Fund to pay the SERAF Payment for fiscal year 2010-11 (together with the FY 2010-11 SERAF Loan, the "SERAF Loans"). G. Pursuant to AB X1 26 (enacted in June 2011), and the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Ca1.4th 231 (2011), the Former Agency was dissolved as of February 1, 2012, the Successor Agency was established, and the Oversight Board to the Successor Agency was established. H. The SERAF Loans, in the aggregate outstanding amount of approximately $5.2 million, remain unpaid. I. Pursuant to HSC Section 34176(b), on January 24, 2012, the City Council of the City of Temecula (the "City") adopted Resolution No. 12-11 designating the City as the successor entity with respect to the housing assets and functions of the Former Agency (the City, when acting in such capacity, the "Housing Successor"). J. Pursuant to HSC Section 34171(d), all funds transferred to the Housing Successor and all funds generated from housing assets must be maintained in a Low and Moderate Income Housing Asset Fund (the "Housing Asset Fund"), established and held by the Housing Successor. K. Pursuant to HSC Section 34171(d)(1)(G), the SERAF Loans constitute enforceable obligations of the Successor Agency; provided that the repayment schedule must be approved by the Oversight Board, and repayments must be transferred to the Housing Asset Fund and used in a manner consistent with the affordable housing requirements of the Redevelopment Law. L. HSC Section 34176(e)(6)(B) additionally provides that the maximum amount of repayment authorized each fiscal year for the SERAF Loan is equal to one-half of the increase between the amount distributed to taxing entities pursuant to HSC Section 34183(a)(4) in that fiscal year and the amount distributed to taxing entities pursuant to HSC Section 34183(a)(4) in the 2012-13 base year. M. Pursuant to HSC Section 34177(0), the Successor Agency must prepare a Recognized Obligation Payment Schedule ("ROPS") for each annual fiscal period. N. The Successor Agency desires to include the repayment of the SERAF Loan on the ROPS. Section 2. Actions. A. The Oversight Board hereby authorizes the inclusion of one or more line items on the ROPS for the repayment of the SERAF Loans, up to the maximum repayment amount calculated in accordance with HSC Section 34176(e)(6), until the SERAF Loans are paid in full. B. The repayment of the SERAF Loans as described in Section 2.A shall constitute the repayment schedule of the SERAF Loans. The Oversight Board hereby approves such repayment schedule. C. The members of the Oversight Board and Staff of the Successor Agency are hereby authorized, jointly and severally, to execute and deliver any and all necessary documents and instruments and to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution. PASSED, APPROVED, AND ADOPTED by the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency this 27th day of June, 2018. John Kelliher, Board Chair ATTEST: Randi Johl, Secretary [SEAL] STATE OF CALIFORNIA COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA I, Randi Johl, Secretary of the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency, do hereby certify that the foregoing Resolution No. OB SARDA 18- was duly and regularly adopted by the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency at a meeting thereof held on the 27th day of June, 2018, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Randi Johl, Secretary ITE` -1 4 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY AGENDA REPORT Board of Directors of the Oversight Board of the Successor Agency to the TO: Temecula Redevelopment Agency FROM: Luke Watson, Director of Community Development for the Successor Agency to the Temecula Redevelopment Agency DATE: June 27, 2018 SUBJECT: MAKE FINDING THAT THE 6TH STREET PROMISSORY NOTE BETWEEN THE CITY OF TEMECULA AND THE FORMER REDEVELOPMENT AGENCY WAS FOR LEGITIMATE REDEVELOPMENT PURPOSES PREPARED BY: Lynn Kelly -Lehner, Principal Management Analyst for the Successor Agency to the Temecula Redevelopment Agency RECOMMENDATION: Adopt a resolution entitled: RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY MAKING A FINDING, PURSUANT TO HEALTH AND SAFETY CODE 34191.4 (B) (1), THAT THE PROMISSORY NOTE BETWEEN THE CITY OF TEMECULA AND THE FORMER TEMECULA REDEVELOPMENT AGENCY WAS FOR LEGITIMATE REDEVELOPMENT PURPOSES BACKGROUND: Per AB X1 26, upon receiving a Finding of Completion (FOC) from the State Department of Finance (DOF) a successor agency may place loan agreements entered into between a redevelopment agency and the city, county, or city and county that created the redevelopment agency shall be deemed to be enforceable obligations provided that the Oversight Board makes a finding that the loan was for legitimate redevelopment purposes. On April 26, 2013 the Successor Agency to the Temecula Redevelopment Agency (SARDA) received a FOC from the DOF. On March 12, 1996 the Temecula Redevelopment Agency approved a promissory note (the Note) in favor of the City of Temecula in the amount of $918,171 for the conveyance of the 6th Street parking lot (APN: 922-023-021) from the City to the Agency. The note had a term of five years bearing interest at the prime rate. The note was extended by the City Council in 2002, 2006 & 2008. The note currently is set to expire December 13, 2013 unless extended by the City Council and Successor Agency to the Temecula Redevelopment Agency. The former Temecula Redevelopment Agency's purpose for issuing the note was to acquire the subject property for the creation and maintenance of a public parking lot located with the redevelopment project area No1-1988. While Health and Safety Code Section 34191.4 (b)(1) does state that the Oversight Board can make a finding that loan agreements were entered into for legitimate redevelopment purposes, it does not define what "legitimate" redevelopment purposes are. A definition of Redevelopment purposes can be found in the following Health and Safety code sections: H&SC 33020 "Redevelopment" means the planning, development, re -planning, redesign, clearance, reconstruction, or rehabilitation, or any combination of these, of all or part of a survey area, and the provision of those residential, commercial, industrial, public, or other structures or spaces as may be appropriate or necessary in the interest of the general welfare, including recreational and other facilities incidental or appurtenant to them and payments to school and community college districts in the fiscal years specified in Sections 33681, 33681.5, 33681.7, 33681.9, and 33681.12. H&SC 33021: Redevelopment includes: (a) The alteration, improvement, modernization, reconstruction, or rehabilitation, or any combination of these, of existing structures in a project area. (b) Provision for open -space types of use, such as streets and other public grounds and space around buildings, and public or private buildings, structures and improvements, and improvements of public or private recreation areas and other public grounds. (c) The re -planning or redesign or original development of undeveloped areas as to which either of the following conditions exist. (1) The areas are stagnant or improperly utilized because of defective or inadequate street layout, faulty lot layout in relation to size, shape, accessibility, or usefulness, or for other causes. (2) The areas require re -planning and land assembly for reclamation or development in the interest of the general welfare because of widely scattered ownership, tax delinquency, or other reasons. H&SC 33022: Redevelopment does not exclude the continuance of existing buildings or uses whose demolition and rebuilding or change of use are not deemed essential to the redevelopment and rehabilitation of the area. H&SC 33391: Within the survey area or for purposes of redevelopment an agency may: (a) Purchase, lease, obtain option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including Re -purchase of developed property previously owned by the agency. (b) Acquire real property by eminent domain. On September 13, 2013, the Oversight Board approved SARDA OB Resolution No. 13-04, finding that the note was for legitimate redevelopment purposes, allowing the Successor Agency will place the note on the Recognized Obligation Payment Schedule as an approved enforceable obligation. However, the Department of Finance (DOF) has no record of this resolution. The updated resolution will be resubmitted to the DOF, which will allow SARDA to repay the City the amount owed under the terms of the note as modified by Health and Safety Code Section 34191.4 (a)(2). FISCAL IMPACT: The original face value of the note was $918,171. Per AB X1 26 and AB 1485 the outstanding balance of the note was to be recalculated at the rate being offered by the Local Agency Investment Fund (LAIF) during the term of the Note, and repayment is to occur over a reasonable timeframe. Based on these criteria the outstanding balance of the Note is $723,118 and the repayment will take place over the next three (3) fiscal years. The decision to make the term three (3) years was due to the fact that the former Redevelopment Agency had already made two (2) of five (5) annual payments and had only three (3) annual payments left until the debt was retired. ATTACHMENTS: 1. Resolution No. OB SARDA 18- 2. 6TH Street Promissory Note 3. California Department of Finance Finding of Completion Letter, dated April 26, 2013 RESOLUTION NO. OB SARDA 18- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY MAKING A FINDING, PURSUANT TO HEALTH AND SAFETY CODE 34191.4 (B) (1), THAT THE PROMISSORY NOTE BETWEEN THE CITY OF TEMECULA AND THE FORMER TEMECULA REDEVELOPMENT AGENCY WAS FOR LEGITIMATE REDEVELOPMENT PURPOSES THE BOARD OF DIRECTORS OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY DOES HEREBY RESOLVE AS FOLLOWS: WHEREAS, Pursuant to Part 1.85 of the Community Redevelopment Law (commencing with Health and Safety Code Section 34170) ("Part 1.85"), the Successor Agency to the Temecula Redevelopment Agency ("Successor Agency") is required to undertake a number of actions related to winding down the affairs of the former Redevelopment Agency pursuant to Health and Safety Code Section 34177(h). WHEREAS, The City Council of the City of Temecula adopted Resolution No. 12- 02 January 10, 2012, pursuant to Health and Safety Code Section 34173 and applicable law electing for the City to serve as the Successor Agency for the Temecula Redevelopment Agency upon the dissolution of the Redevelopment Agency of the City of Temecula. The City Council of the City of Temecula, Acting as the Governing Body for the Successor Agency to the Temecula Redevelopment Agency, adopted Resolution No. 12-01 on February 28, 2012 declaring the Successor Agency to the Temecula Redevelopment Agency duly constituted pursuant to law and establishing rules and regulations for the operation of the Successor Agency to the Temecula Redevelopment Agency ("Successor Agency"). NOW, THEREFORE, BE IT RESOLVED by the Oversight Board as follows: Section 1. The Board of Directors of the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency does hereby find, determine and declare that: A. The Promissory Note between the City of Temecula and the former Temecula Redevelopment Agency, dated March 12, 1996 and as amended was entered into for legitimate redevelopment purposes per Health and Safety Code Section 34191.4 (b)(1). B. The Promissory Note provided for repayment of reasonable term and interest rate and was accepted as legitimate indebtedness by the State Controller prior to AB X1 26. C. The Promissory Note was established prior to January 1, 2011. Section 2. The Oversight Board finds that the Promissory Note between the City of Temecula and the former Temecula Redevelopment Agency as set forth in Exhibit A attached to this resolution was for legitimate redevelopment purposes and in so finding the Oversight Board finds and determines the Promissory Note is an enforceable obligation and should be recognized as such pursuant to the provisions of AB 1484, including but not limited to Health and Safety Code Section 34191.4. Section 2. This Resolution is adopted pursuant to the Health and Safety Code Section 34191.4. Section 4. The officers and 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, and any such actions previously taken by such officers and staff are hereby ratified and confirmed. Section 5. The Secretary shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Oversight Board Successor Agency to the Temecula Redevelopment Agency this 27th day of June, 2018. John Kelliher, Vice Chairperson ATTEST: Randi Johl City Clerk/Board Secretary STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA I, Randi Johl, City Clerk/Board Secretary of the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency, do hereby certify that the foregoing Resolution No. OB SARDA 18-_ was duly and regularly adopted by the Board of Directors of the Oversight Board of the Successor Agency to the Temecula Redevelopment Agency at a meeting thereof held on the 27th day of June, 2018, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: Randi Johl City Clerk/Board Secretary Exhibit A Promissory Note EXHIBIT "A" PROMISSORY NOTE The Redevelopment Agency of the City of Temecula ("Agency") hereby promises, for consideration received, to pay the City of Temecula ("City") the sum of Nine Hundred Eighteen Thousand One Hundred Seventy One Dollars and NO/100 ($ 918,171.00) bearing simple interest at the rate of the prime interest rate charged by First Interstate Bank of California as of the date this Note. This Note and all accrued interest shall be due and payable five (5) years from the date of this Note unless extended by mutual written agreement of the City and Agency without interim payments by the Agency during the term of the Note, provided that the Agency may make partial payments or repay the amount of the Note in full prior to the due date without penalty. This Note is and will be subordinate to all existing debt of the Agency and such additional debt as the Agency may incur during the term of this Note and no funds of the Agency are pledged to its repayment. In the event of a default by the Agency, the City shall have all legal and equitable remedies available to it to enforce the terms of the Note. This Note is made as of March 12, 1996 at Temecula, California. REDEVELOPMENT AGENCY OP THE CI _ OF TEMECULA Qc,/4.3..Q Pa + icia H. Birdsall Chairperson ATTEST: u ' S. Greek, CMC Secretary/City Clerk APPROVED AS TO FORM: eeX$4'17 eter M. Thorson General Counsel Raorl96-30.exh PROMISSORY NOTE The Redevelopment Agency of the City of Temecula ("Agency") hereby promises, for consideration received, to pay the City of Temecula ("City") the sum of One Million Three Hundred Fifty Seven Thousand Five Hundred Dollars and NO/100 ($1,357,500.00) bearing simple interest at the rate of the prime interest rated charged by Union Bank as of the date of this Note. This Note and all accrued interest from March 12, 1996 shall be due and payable May 1, 2007 unless extended by mutual written agreement of the City and the Agency without interim payments by the Agency during the term of the Note, provided that the Agency may make partial payments or repay the amount of the Note in full prior to the due date without penalty. This Note is and will be subordinate to all existing debt of the Agency and such additional debt as the Agency may incur during the term of this Note and no funds of the Agency are pledged to its repayment. In the event of a default by the Agency, the City shall have all legal and equitable remedies available to it to enforce the terms of the Note. This Note is made as of April 23, 2002 at Temecula California. REDEVELOPMENT AGENCY OF THE 1011; ii •TEM LA finerchero rnerson ATTEST: R:\Oldtown\Sixth Street\Promissorynote.doc Susan . Jones, City Clk Peter M. Thorson General Counsel PROMISSORY NOTE The Redevelopment Agency of the City of Temecula ("Agency") hereby promises, for consideration received, to pay the City of Temecula ("City") the sum of One Million Nine Hundred Thousand Dollars and NO/100 ($1,903,333.00) bearing simple interest at the rate of 5% annually. This Note and all accrued interest from March 12, 1996 shall be due and payable December 16, 2013 as extended by mutual written agreement of the City and the Agency without interim payments by the Agency during the term of the Note, provided that the Agency may make partial payments or repay the amount of the Note in full prior to the due date without penalty. This Note is and will be subordinate to all existing debt of the Agency and such additional debt as the Agency may incur during the term of this Note and no funds of the Agency are pledged to its repayment. In the event of a default by the Agency, the City shall have all legal and equitable remedies available to it to enforce the terms of the Note. This Note is made as of December 16, 2008 at Temecula California. Ron Roberts Chairperson ATTEST: Peter M. Thorson Agency Counsel Z:\Oldtown\Sixth Street\PromissorynoteDec1608.doc Exhibit B California Department of Finance Finding of Completion Letter Dated April 26, 2013 re a. w IIII n a P7 * DEPARTMENT OF 4'-1,,,,,,,,,ANF I N A N C E April 26, 2013 EDMUND G. BROWN JR. ■ GOVERNOR Mr. Luke Watson, Senior Planner City of Temecula 41000 Main Street Temecula, CA 92589 91 5 L STREET ■ SACRAMENTO CA ■ 95614-37D8 • WWW.DDF.CA.GOV Dear Mr. Watson: Subject: Request for a Finding of Completion The California Department of Finance (Finance) has completed the Finding of Completion for the City of Temecula Successor Agency. Finance has completed its review of your documentation, which may have included reviewing supporting documentation submitted to substantiate payment or obtaining confirmation from the county auditor - controller. Pursuant to Health and Safety Code (HSC) section 34179.7, we are pleased to inform you that Finance has verified that the Agency has made full payment of the amounts determined under HSC section 34179.6, subdivisions (d) or (e) and HSC section 34183.5. This letter serves as notification that a Finding of Completion has been granted. The Agency may now do the following: • Place loan agreements between the former redevelopment agency and sponsoring entity on the ROPS, as an enforceable obligation, provided the oversight board makes a finding that the loan was for legitimate redevelopment purposes per HSC section 34191.4 (b) (1). Loan repayments will be governed by criteria in HSC section 34191.4 (a) (2). • Utilize proceeds derived from bonds issued prior to January 1, 2011 in a manner consistent with the original bond covenants per HSC section 34191.4 (c). Additionally, the Agency is required to submit a Long -Range Property Management Plan to Finance for review and approval, per HSC section 34191.5 (b), within six months from the date of this letter. Please direct inquiries to Andrea Schaeffer, Staff Finance Budget Analyst, or Chris Hill, Principal Program Budget Analyst, at (916) 445-1546. Sincerely, STEVE SZALAY Local Government Consultant cc: Mr. Rudy Graciano, Revenue Manager, City of Temecula Ms. Pam Elias, Chief Accountant Property Tax Division, Riverside County Auditor -Controller California State Controller's Office