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HomeMy WebLinkAboutRes OB-100 (2)OVERSIGHT BOARD TO SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY REQUEST: SUBMITTED BY: DATE: CONTENTS: Recommendation STAFF REPORT APPROVE RESOLUTION NO. os-1oo - A RESOLUTION APPROVING THE EXECUTION OF A HOUSING PROGRAM BUY -DOWN HOUSING BOND PROCEEDS FUNDING AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AND THE PALM DESERT HOUSING AUTHORITY AND TAKING CERTAIN RELATED ACTIONS Veronica Tapia, Management Analyst II November 3, 2014 Resolution No. OB-100 Reimbursement Agreement- HA33980 By Minute Motion that the Oversight Board: OB-100 1. Waive further reading and adopt Resolution No. approving the execution of a Housing Program Buy -Down Subsidy Bond Proceeds Funding Agreement between the Successor Agency to the Palm Desert Redevelopment Agency and the Palm Desert Housing Authority and taking certain related action. Background The City and Housing Authority staff are currently engaged in negotiations with prospective developers regarding implementation of the Housing Authority's buy -down subsidy programs for low and moderate income housing developments that will include some low and moderate income units. Pursuant to dissolution law, only existing contracts have been eligible for payment from ROPS, until a Finding of Completion is received by the Successor Agency. The DOF issued our Finding of Completion on May 15, 2013, which provides the ability for the Successor Agency to utilize existing bond funds for the purpose in which they were issued; however in order to spend these funds, the project must be included on an approved ROPS. Therefore estimated subsidy needs have been included and approved on 14-15A and also for approval on ROPS 14-15B. G1rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB SR-Homebuyer Subsidy Reimbursement Agreement 11-3-14 doc Staff Report Housing Program Buy -Down Subsidy Reimbursement Agreement Page 2 of 3 November 3, 2014 Based on the Department of Finance's recent request for such an agreement, expenditures will be reimbursed upon approval of ROPS 14-15B and available after January 1, 2015. Staff recommends approval of the Housing Program Buy -Down Subsidy Bond Proceeds Funding Agreement between the Successor Agency and Housing Authority and taking certain related actions. Fiscal Analysis The estimated cost for the entire subsidy program is estimated at ($5,000,000) and is listed on ROPS, line 174. Although the Housing Authority would initially advance the funds for this purpose, it is the intention of the Successor Agency to reimburse the Housing Authority for the costs from bond proceeds which include a project for the Buy - Down Subsidies in the bond covenant. Upon approval of ROPS 14-15B, reimbursement will occur after January 1, 2015. Prepared By: eronica Tapia Management Analyst II Paul S. Gibson Director of Finance M. Wohlmuth (FlIn y Manager/Executive Director of the ccessor Agency of the Palm Desert development Agency -->5))7 oore ctor of Housing (a- o LQ.rSc.r) At5 ^) foVLBY OVERSIGHT BOARD ON 1 — VERIFIED BY Original on file with City Clerk's Office G.\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB SR-Homebuyer Subsidy Reimbursement Agreement 11-3-14 doc RESOLUTION NO. OB-ioo A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE EXECUTION OF A HOUSING PROGRAM BUY -DOWN HOUSING BOND PROCEEDS FUNDING AGREEMENT BETWEEN THE SUCCESSOR AGENCY AND THE PALM DESERT HOUSING AUTHORITY RECITALS: A. Pursuant to AB X1 26 (which became effective at the end of 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 Palm Desert Redevelopment Agency (the "Former RDA") was dissolved as of February 1, 2012, and the Successor Agency was constituted. B. Pursuant to Section 34175(b) of the California Health and Safety Code ("HSC"), assets of the Former RDA, including all unspent bond proceeds, transferred to the control of the Successor Agency by operation of law. C. Pursuant to HSC Section 34176(b), the City Council of the City of Palm Desert (the "City") adopted Resolution No. 2012-07, electing for the City not to retain the responsibility for performing housing functions previously performed by the Former RDA, and determining that all of the assets, as allowed by law, and all rights, powers, liabilities, duties, and obligations associated with the housing activities of the Former RDA be transferred to the Palm Desert Housing Authority (the "Housing Authority," or in its capacity as the housing successor to the Former RDA, also the "Housing Successor"). D. The Palm Desert Financing Authority (the "Financing Authority") previously issued its Tax Allocation Revenue Bonds (Housing Set Aside Refunding Revenue Bonds), Series 2007, in the principal amount of $86,155,000 (the "2007 Housing Bonds"), pursuant to an Indenture of Trust, dated as of February 1, 2007, by and between the Financing Authority and Wells Fargo Bank, National Association, as trustee (the "2007 Bond Trustee"), for the purpose of financing projects for low and moderate income housing purposes. E. Pursuant to the Loan Agreement, dated as of February 1, 2007 (the "2007 Loan Agreement"), by and among the Financing Authority, the Former RDA, and the 2007 Bond Trustee, proceeds of the 2007 Housing Bonds were loaned to the Former RDA (the "2007 Loan"). F. The Former RDA caused a portion of the proceeds of the 2007 Housing Bonds that was received as part of the 2007 Loan to be deposited into a Project Fund (the "2007 Project Fund"), which was established, and is held, by the 2007 Bond Trustee pursuant to the 2007 Loan Agreement. G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\Palm Desert SA - OB reso - agreement re buydown subsidy housing bond proceeds funding agrecment.DOCX RESOLUTION NO. OB-100 G. There remains a balance in the 2007 Project Fund (the "2007 Housing Bond Proceeds"). H. HSC Section 34176(g) provides that the Housing Authority, as the Housing Successor, may designate the use of, and commit, the 2007 Housing Bond Proceeds; provided that such use and commitment of 2007 Housing Bond Proceeds are consistent with the bond covenants. I. 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"). The ROPS must be submitted to the Oversight Board of the Successor Agency (the "Oversight Board") and the State Department of Finance (the "DOF") for approval. J. HSC Section 34176(g) provides that a designation of the use (or commitment) of the 2007 Housing Bond Proceeds must be listed on a ROPS. K. HSC Section 34176(g) provides that the Successor Agency's, the Oversight Board's and the DOF's review of the designations and commitments of 2007 Housing Bond Proceeds by the Housing Authority, as the Housing Successor, shall be limited to a determination that the designations and commitments are consistent with bond covenants and that there are sufficient funds available therefor. L. The Housing Authority has been engaged in negotiation with prospective developers regarding the implementation of the Housing Authority's buy -down subsidy programs for low and moderate income housing developments (the "Buy -Down Subsidy Program"). M. As documented by the Certificate Regarding Compliance with Certain Tax Matters, dated as of February 7, 2007 (the "2007 Tax Certificate"), it was intended, at the issuance of the 2007 Bonds, that moneys deposited in the 2007 Project Fund be used for, among other projects, buy -down subsidies for development of low and moderate income multi -family housing units. N. The Housing Authority desires to use the 2007 Housing Bond Proceeds for the Buy -Down Subsidy Program. O. Pursuant to the previous designation by the Housing Authority, the use of the 2007 Housing Bond Proceeds for the Buy -Down Subsidy Program, in the amount of $2,000,000, is listed on ROPS 14-15B as Item No. 174. P. The Successor Agency and the Housing Authority desire to enter into a Housing Program Buy -Down Housing Bond Proceeds Funding Agreement (the "Agreement," in substantially the form attached as Exhibit A, to provide that the transfer of the 2007 Housing Bond Proceeds to the Housing Authority for use for the Buy -Down Subsidy Program. G:\rda\Veronica'fapia\Word Piles\Staff Reports\Oversight Board\Staff Reports\Palm Desert SA - OB reso - agreement re buydown subsidy housing bond proceeds funding agreement.DOCX RESOLUTION NO. OB-100 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. Recitals. The above recitals, and each of them, are true and correct. Section 2. Housing Program Buv-Down Housing Bond Proceeds Funding Agreement. This Oversight Board hereby approves the Successor Agency's execution and delivery of the Agreement, substantially in the form attached hereto as Exhibit A. Section 3. Other Acts. The members of this Oversight Board and the staff of the Successor Agency are hereby authorized, jointly and severally, to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution and the Agreement. 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 G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\Palm Desert SA - OB reso - agreement re buydown subsidy housing bond proceeds funding agreement.DOCX RESOLUTION NO. OB-100 EXHIBIT A Housing Program Buy -Down Housing Bond Proceeds Funding Agreement (in substantial final form) (see attached) G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\Palm Desert SA - OB reso - agreement re buydown subsidy housing bond proceeds funding agreement.DOCX RESOLUTION NO. OB-100 CONTRACT NO. HA33980 HOUSING PROGRAM BUY -DOWN SUBSIDY HOUSING BOND PROCEEDS FUNDING AGREEMENT This HOUSING PROGRAM BUY -DOWN HOUSING BOND PROCEEDS FUNDING AGREEMENI' (this "Agreement"), dated as of , 2014, is entered into by and between the Palm Desert Housing Authority (the "Housing Authority") and the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency," and together with the Authority, the "Parties"). RECITALS: A. Pursuant to AB X1 26 (which became effective at the end of June 2011) and the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th 231(2011), the former Palm Desert Redevelopment Agency (the "Former RDA") was dissolved as of February 1, 2012, and the Successor Agency was constituted. B. Pursuant to Section 34175(b) of the California Health and Safety Code ("HSC"), assets of the Former RDA, including all unspent bond proceeds, transferred to the control of the Successor Agency by operation of law. C. Pursuant to HSC Section 34176(b), the City Council of the City of Palm Desert (the "City") adopted Resolution No. 2012-07, electing for the City not to retain the responsibility for performing housing functions previously performed by the Former RDA, and determining that all of the assets, as allowed by law, and all rights, powers, liabilities, duties, and obligations associated with the housing activities of the Former RDA be transferred to the Housing Authority (the Housing Authority, acting in such capacity, being also referred to in this Agreement as the "Housing Successor"). D. The Palm Desert Financing Authority (the "Financing Authority") previously issued its Tax Allocation Revenue Bonds (Housing Set Aside Refunding Revenue Bonds), Series 2007, in the principal amount of $86,155,000 (the "2007 Housing Bonds"), pursuant to an Indenture of Trust, dated as of February 1, 2007, by and between the Financing Authority and Wells Fargo Bank, National Association, as trustee (the "2007 Bond Trustee"), for the purpose of financing projects for low and moderate income housing purposes. E. Pursuant to the Loan Agreement, dated as of February 1, 2007 (the "2007 Loan Agreement"), by and among the Financing Authority, the Former RDA, and the 2007 Bond Trustee, proceeds of the 2007 Housing Bonds were loaned to the Former RDA (the "2007 Loan"). F. The Former RDA caused a portion of the proceeds of the 2007 Housing Bonds that was received as part of the 2007 Loan to be deposited into a Project Fund (the "2007 Project Fund"), which was established, and is held, by the 2007 Bond Trustee pursuant to the 2007 Loan Agreement. G. There remains a balance in the 2007 Project Fund (the "2007 Housing Bond Proceeds"). -1- G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\Palm Desert SA - Housing I'rogram BuyDown Subsidy I lousing Bond Proceeds Funding Agrecment.DOCX RESOLUTION NO. OB-100 CONTRACT NO. HA33980 H. HSC Section 34176(g) provides that the Housing Authority, as the Housing Successor, may designate the use of, and commit, the 2007 Housing Bond Proceeds; provided that such use and commitment of 2007 Housing Bond Proceeds are consistent with the bond covenants. I. 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"). The ROPS must be submitted to the Oversight Board of the Successor Agency (the "Oversight Board") and the State Department of Finance (the "DOF") for approval. J. I ISC Section 34176(g) provides that a designation of the use (or commitment) of the 2007 Housing Bond Proceeds must be listed on a ROPS. K. I ISC Section 34176(g) provides that the Successor Agency's, the Oversight Board's and the DOF's review of the designations and commitments of 2007 Housing Bond Proceeds by the Housing Authority, as the Housing Successor, shall be limited to a determination that the designations and commitments are consistent with bond covenants and that there are sufficient funds available therefor. L. The Housing Authority has been engaged in negotiation with prospective developers regarding the implementation of the Housing Authority's buy -down subsidy programs for low and moderate income housing developments (the "Buy -Down Subsidy Program"). M. As documented by the Certificate Regarding Compliance with Certain Tax Matters, dated as of February 7, 2007 (the "2007 Tax Certificate"), it was intended, at the issuance of the 2007 Bonds, that moneys deposited in the 2007 Project Fund be used for, among other projects, buy -down subsidies for development of low and moderate income multi -family housing units. N. The Housing Authority desires to use the 2007 Housing Bond Proceeds for the Buy -Down Subsidy Program. O. The Successor Agency has prepared and submitted to the Oversight Board and the DOF, a ROPS ("ROPS 14-15B") for the six-month fiscal period commencing January 1, 2015 (the "ROPS 14-15B Period"). P. Pursuant to the previous designation by the Housing Authority, the use of the 2007 Housing Bond Proceeds for the Buy -Down Subsidy Program, in the amount of $2,000,000, is listed on ROPS 14-15B as Item No. 174. Q. The Successor Agency and the Housing Authority desire to enter into this Agreement, to provide that the transfer of the 2007 Housing Bond Proceeds to the I -lousing Authority for use for the Buy -Down Subsidy Program. R. Resolution No. adopted by the Oversight Board on , 2014 approving the Successor Agency's execution and delivery of this Agreement was approved [deemed approved] by the DOF pursuant to HSC Section 34179(h) on , 2014. -2- G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\Palm Desert SA - Housing Program BuyDown Subsidy I lousing Bond Proceeds Funding Agrcement.DOCX RESOLUTION NO. OB-100 CONTRACT NO. HA33980 NOW, THEREFORE, THE PARTIES DO HEREBY AGREE AS FOLLOWS: Section 1. At the commencement of the ROPS 14-15B Period, the Successor Agency shall transfer $2,000,000 from the 2007 Housing Bond Proceeds (as indicated in Item No. 174 of ROPS 14-15B) to the Housing Authority. Section 2. From time to time, the Housing Authority may make future designations for additional transfer of 2007 Housing Bond Proceeds to provide additional funding for the Buy -Down Subsidy Program (the dollar amount of each such designation being referred to below as the "Additional Designated Amount"). Whenever the Successor Agency receives such designation from the Housing Authority, to the extent that sufficient unspent 2007 Housing Bond Proceeds remain available, the Successor Agency shall list the Additional Designated Amount on the ROPS for the next available ROPS Period. Upon obtaining the Oversight Board's and the DOF's approval for such ROPS item(s), the Successor Agency shall transfer, or caused to be transferred, to the Housing Authority the Additional Designated Amount from the 2007 Housing Bond Proceeds as soon as practicable upon the commencement of the applicable ROPS Period. Section 3. If the Housing Authority, at a future date, determines that the amount of 2007 Housing Bond Proceeds transferred to it under this Agreement exceeds the actual amount it will use for the Buy -Down Subsidy Program, the Housing Authority may either (i) return such excess 2007 Housing Bond Proceeds to the Successor Agency, or (ii) maintain such excess in an account of the Housing Authority and apply such excess towards other low and moderate income housing projects in a manner that complies with the covenants set forth in the 2007 Loan Agreement and the 2007 Tax Certificate regarding use of Housing Bond Proceeds. Section 4. Each Party shall maintain books and records regarding its duties pursuant to this Agreement. Such books and records shall be available for inspection by the officers and agents of the other Party at all reasonable times. Section 5. The Parties agree to take all appropriate steps and execute any documents which may reasonably be necessary or convenient to implement the intent of this Agreement. Section 6. This Agreement may be amended from time to time by written instrument executed by both Parties. Section 7. No official, agent, or employee of the Successor Agency or the Housing Authority, or members of the governing board of the Housing Authority, or members of the Successor Agency Board of Directors or members of the Oversight Board shall be individually or personally liable for any payment hereunder in the event of any default or breach by the Successor Agency or the Housing Authority, or for any amount which may otherwise become due to the Housing Authority or Successor Agency, or successor thereto, or on any obligations under the terms of this Agreement. Section 8. This Agreement is made in the State of California under the Constitution and laws of the State of California, and is to be so construed. -3- G:\rda\Veronica'I'apia\Word Files\Staff Reports\Oversight Board\Staff Reports\Palm Desert SA - Housing Program BuyDown Subsidy !lousing Bond Proceeds Funding Agreement.DOCX RESOLUTION NO. OB-100 CONTRACT NO. HA33980 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized officers. SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By ATTEST: Secretary Executive Director PALM DESERT HOUSING AUTHORITY By ATTEST: Board Secretary APPROVED: OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY Chair By Date: Chair -4- G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\Palm Desert SA - !lousing Program BuyDown Subsidy !lousing Bond Proceeds Funding Agreement.DOCX