REQUEST FOR SUCCESSOR AGENCY ACTION
SUBMITTED TO: Honorable Chair and Board Members
SUBMITTED BY: Al Zelinka, Executive Director
VIA: Sunny Han, Chief Financial Officer
PREPARED BY: Sunny Han, Chief Financial Officer
Subject:
title
Adopt Successor Agency Resolution No. 2023-03 approving an Amended Recognized Obligation Payment Schedule 23-24B for the FY 2023-24 Fiscal Period of January 1, 2024 to June 30, 2024, Subject to Submittal to, and Review by the Oversight Board and the State Department of Finance under California Health and Safety Code, Division 24, Part 1.85; and, Authorizing the Posting and Transmittal of the ROPS
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Statement of Issue:
The Successor Agency is requested to approve the Amended Recognized Obligation Payment Schedule (ROPS) for the period January 1, 2024 through June 30, 2024. An approved ROPS must be submitted to the County of Orange Oversight Board by September 19, 2023, and then to the Department of Finance (DOF) by October 1, 2023.
Financial Impact:
The ROPS provides the County Auditor-Controller with the amount of the former Redevelopment Agency’s enforceable obligations for which the Successor Agency anticipates incurring expenditures. Once approved by DOF, the Successor Agency will be entitled to receive property tax revenue up to the amount of the DOF-approved enforceable obligations included in the Payment Schedule. The
Amended ROPS requests an additional $10,000,000 in funds to support existing legally required enforceable obligations for FY 2023/24.
Recommended Action:
recommendation
Adopt Successor Agency Resolution No. 2023-03, “A Resolution of The Successor Agency to the Redevelopment Agency of the City of Huntington Beach Approving an Amended Recognized Obligation Payment Schedule 23-24B for the FY 2023-24 Fiscal Period of January 1, 2024 to June 30, 2024, Subject to Submittal to, and Review by the Oversight Board and the State Department of Finance under California Health and Safety Code, Division 24, Part 1.85; and, Authorizing the Posting and Transmittal of the ROPS.”
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Alternative Action(s):
Do not approve the recommended action(s) and direct staff accordingly. Per Health and Safety Code Section 34177.7 (o)(1)(E), the Successor Agency may submit an amendment to the annual submitted ROPS to the Countywide Oversight Board and the Department of Finance no later than October 1st for the period under review.
Analysis:
As part of the 2011 Budget Act, as recommended by then Governor Jerry Brown, Legislature approved the dissolution of the State’s Redevelopment Agencies. After litigation, the
California Supreme Court’s ruled on the Dissolution Act that all redevelopment agencies in California were dissolved effective February 1, 2012.
The Dissolution Act, AB 1484, and related legislation describe the procedures to wind-down the affairs of the former redevelopment agencies. These provisions include the continued payment of recognized enforceable obligations as defined in the law. SB 107 modified the ROPS process and established an annual ROPS starting with ROPS 16-17 and provides for a one time amendment to annual ROPS. The ROPS is “the document setting forth the minimum payment amounts and due dates of payments required by enforceable obligations for each fiscal year as provided in subdivision (o) of Section 34177.”
The amendment to ROPS 23-24 covering the B period of January 1, 2024 to June 30, 2024, and the Amended ROPS 23-24B must be submitted to the DOF no later than October 1, 2023.
The amended ROPS adds a request for funds in the amount of $10,000,000 to repay a portion of monies owed to the City to the former Redevelopment Agency for the purchase of real property in the Fiscal Year 1988-89. This loan was approved as an enforceable obligation by the California Superior Court on February 17, 2023. The total amount of the loan as of June 30, 2023 is $30,464,000, comprised of $22,400,000 in principal and $8,064,000 in accrued interest at the three percent interest rate permitted by Health and Safety Code Section 34191.4(3). The County Oversight Board and DOF has the authority to review the ROPS and return it to the Successor Agency for reconsideration and modification, or to disallow payment for a listed obligation.
The County Oversight Board will review and approve the City’s amended ROPS during its September 19, 2023 meeting. The City must submit the amendment to the State DOF by October 1, 2023. The State DOF will make its determination by April 15th. The City’s ROPS will not be effective until approved by the State DOF.
Environmental Status:
Not applicable
Strategic Plan Goal:
Community Engagement
Infrastructure and Parks
Financial Sustainability, Public Safety or Other
Attachment(s):
1. Resolution No. 2023-03, “A Resolution of The Successor Agency to the Redevelopment Agency of the City of Huntington Beach Approving an Amended Recognized Obligation Payment Schedule 23-24B for the FY 2023-24 Fiscal Period of January 1, 2024 to June 30, 2024, Subject to Submittal to, and Review by the Oversight Board and the State Department of Finance under California Health and Safety Code, Division 24, Part 1.85; and, Authorizing the Posting and Transmittal of the ROPS.”
2. PowerPoint Presentation