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Home My WebLink AboutRes OB-062 (2)OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVE RESOLUTION NO. OB- 062 AUTHORIZING REPAYMENT OF OUTSTANDING LOAN INCURRED IN FISCAL YEAR 2009-10 TO PAY REMITTANCE TO THE SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND SUBMITTED BY: Veronica Tapia, Management Analyst II DATE: February 24, 2014 CONTENTS: Resolution OB - 062 Recommendation: By Minute Motion, that the Oversight Board adopt Resolution No. OB -062 authorizing the repayment of a loan incurred in fiscal year 2009-10 to pay a statutorily required remittance to the Riverside County Supplemental Educational Revenue Augmentation Fund ("SERAF"). Executive Summary: In fiscal year 2009-10, the former Palm Desert Redevelopment Agency (the "Former Agency") was required to make a remittance (the "FY 2009-10 SERAF Payment") to the Riverside County Auditor -Controller for deposit into SERAF. Pursuant to Section 33690(c) of the California Health and Safety Code ("HSC"), the Former Agency incurred a loan repayable to the Housing Fund (the "SERAF Loan") by using moneys that were otherwise required to be allocated to the Housing Fund to pay the FY 2009-10 SERAF Payment. As of February 1, 2012, the date of the Former Agency's dissolution, the SERAF Loan, in the amount of $17,821,288.59, remained outstanding and unpaid. The adoption of the attached resolution will allow the Successor Agency to include the repayment of the SERAF Loan on its Recognized Obligation Payment Schedule ("ROPS") pursuant to the requirements of HSC Section 34176(e)(6). Discussion: HSC Section 34171(d)(1)(G) provides that amounts borrowed from, or payments owing to, the Housing Fund are enforceable obligations, provided the Oversight Board G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB staff report re repayment of SERAF loan rev by TH 2-24-14.DOC Staff Report Approval of SERAF Repayment Page 2 of 2 February 24, 2014 approves a repayment schedule. Per the DOF's interpretation of HSC Section 34176(e)(6), repayment of the SERAF Loan by the Successor Agency may not begin until the period covered by ROPS 14-15A (i.e., the upcoming six-month fiscal period commencing July 1, 2014). Approval of the attached Resolution will allow the Successor Agency to include the repayment of the SERAF Loan on ROPS 14-15A. HSC section 34176(e)(6)(B) imposes a cap on the annual repayment amount for the SERAF Loan. Twice a year (on January 2 and June 1), 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 DOF-approved ROPS. Pursuant to HSC Section 34176(e)(6)(B), each fiscal year, the SERAF Loan repayment 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. Pursuant to HSC Section 34171(d)(1)(G), SERAF Loan repayments are to be deposited into the Low and Moderate Income Housing Asset Fund (which is held by the Palm Desert Housing Authority, as the housing successor) and used for low and moderate income housing purposes. By adopting the attached Resolution, the Oversight Board will authorize the inclusion of a line item on the Successor Agency's ROPS, commencing with ROPS 14-15A, for the repayment of the SERAF Loan, up to the annual cap under HSC Section 34176(e)(6), until the SERAF Loan is paid in full. (5-c), (��o,r-J-I < <�g� �-rl �oV BY OVERSIGHT OARD J ON 4:--L+ VERIFIED BY -� - Original on file with City Clerk's Office Submi by: • eronica Tapia, Managen'{ent Analyst II Approval: Janet Miore, Director of Housing PIiI S. Gibson, Director of Finance Joh;li M. Wohlmuth, Executive Director G.\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB staff report re repayment of SERAF loan rev by TH 2-24-14 DOC RESOLUTION NO. OB-062 A RESOLUTION OF THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TO APPROVE REPAYMENT OF A LOAN INCURRED IN FISCAL YEAR 2009- 10 TO PAY REMITTANCE TO THE SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND AND TAKE CERTAIN RELATED ACTIONS RECITALS: A. The Palm Desert Redevelopment Agency (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 Section 33690(a), the Former Agency was required to make a remittance (the "FY 2009-10 SERAF Payment") to the Riverside County Auditor -Controller for deposit into the County Supplemental Educational Revenue Augmentation Fund ("SERAF") for fiscal year 2009-10. D. Pursuant to HSC Section 33690(c), the Former Agency was permitted to incur a loan 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 the FY 2009-10 SERAF Payment. E. On October 8, 2009, the governing board of the Former Agency authorized the borrowing of moneys that were otherwise required to be allocated to the Housing Fund to pay the FY 2009-10 SERAF Payment (the "SERAF Loan"). F. 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 an oversight board to the Successor Agency (the "Oversight Board") was established. G. As of the date of the Former Agency's dissolution, the SERAF Loan, in the amount of $17,821,288.59, remained outstanding and unpaid. H. Pursuant to HSC Section 34176(b), on February 9, 2012, the City Council of the City of Palm Desert adopted Resolution No. 2012-07 designating the Palm Desert Housing Authority (the "Housing Authority") as the successor entity with respect to the G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB reso re repayment of SERAF loan 2-24-14.DOCX RESOLUTION NO. OB- 062 housing assets and functions of the Former Agency (the Housing Authority, when acting in such capacity, the "Housing Successor"). I. 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. J. Pursuant to HSC Section 34171(d)(1)(G), the SERAF Loan constitutes an enforceable obligation; 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. K. 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. L. Pursuant to HSC Section 34177(1), the Successor Agency must prepare a Recognized Obligation Payment Schedule ("ROPS") for each six-month fiscal period ("ROPS Period"). M. The Successor Agency desires to include the repayment of the SERAF Loan on the ROPS, starting with the ROPS for the upcoming July 1, 2014 through December 31, 2014 period ("ROPS 14-15A"). NOW, THEREFORE, THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The above recitals, and each of them, are true and correct. Section 2. The Oversight Board hereby authorizes the inclusion of a line item on the ROPS, commencing with ROPS 14-15A, for the repayment of the SERAF Loan, up to the maximum repayment amount calculated in accordance with HSC Section 34176(e)(6), until the SERAF Loan has been paid in full. Section 3. The repayment of the SERAF Loan as described in Section 2 shall constitute the repayment schedule of the SERAF Loan. The Oversight Board hereby approves such repayment schedule. Section 4. The members of the Oversight Board and all officers and employees 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 2 G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB reso re repayment of SERAF loan 2-24-14.DOCX RESOLUTION NO. OB- 062 things which they may deem necessary or proper to effectuate the purposes of this Resolution. APPROVED and ADOPTED this day of , 2014. AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY 3 G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB reso re repayment of SERAF loan 2-24-14.DOCX