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Home My WebLink About 3 - JOINT- RESO - 2003 BONDSREQUEST FOR COUNCIL SUCCESSOR AGENCY ACTION CITY COUNCIL MEETING DATE: OCTOBER 4, 2016 TITLE: RESOLUTION APPROVING A PLAN FOR SPENDING EXCESS 2003 SERIES A TAX ALLOCATION BONDS AND AUTHORIZING A BOND PROCEEDS EXPENDITURE AGREEMENT; APPROPRIATION ADJUSTMENT TO TRANSFER 2003 SERIES A BOND PROCEEDS TO THE CITY {STRATEGIC PLAN NOS. 4, 1 & 6, 1G) 2' / Z CITY MANAGER RECOMMENDED ACTION CITY COUNCIL ACTION CLERK OF COUNCIL USE ONLY: ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2"' Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. Adopt a resolution approving a plan for spending excess tax allocation bond proceeds from the 2003 Series A Tax Allocation Bonds, authorizing a bond proceeds expenditure agreement with the Successor Agency, and making certain findings in connection therewith. 2. Authorize the City Manager and the Clerk of the Council to execute the Bond Proceeds Expenditure Agreement with the Successor Agency to the former Community Redevelopment Agency to receive current excess bond proceeds in the amount of $2,515,560.32 and any future excess bond proceeds, and to expend the funds for capital improvements, subject to non - substantive changes approved by the City Manager and City Attorney. 3. Approve an appropriation adjustment recognizing $2,515,560.32 in the Successor Agency 2003 Series A Bonds prior year carry forward account (no. 65218002 - 50001) and appropriating same to the expenditure account (no. 65218020 - 69142); approve an appropriation adjustment recognizing $2,515,560.32 in the CDA Capital Projects Fund in revenue account (no. 41818002 - 59899) and appropriating same to expenditure account (nos. 41818831 -66220 and 41818831 - 69011). 3 -1 Resolution, Agreement, and Appropriation Adjustment — Tax Allocation Bonds, Series 2003A October 4, 2016 Page 2 SUCCESSOR AGENCY ACTION 1. Adopt a resolution approving a plan for spending excess tax allocation bond proceeds from the 2003 Series A Tax Allocation Bonds, authorizing a bond proceeds expenditure agreement with the City of Santa Ana, directing the transfer of funds to the City, and making certain findings in connection therewith. 2. Authorize the City Manager and the Clerk of the Council to execute the Bond Proceeds Expenditure Agreement with the City of Santa Ana to transfer current excess bond proceeds in the amount of $2,515,560.32 and any future excess bond proceeds to the City for capital improvements, subject to non - substantive changes approved by the City Manager and City Attorney. DISCUSSION Pursuant to Part 1.85 of Division 24 of the California Health & Safety Code ( "Dissolution Law "), the City Council on January 9, 2012, elected for the City to act as the "Successor Agency" to the dissolved Community Redevelopment Agency ( "Agency "). On February 1, 2012, in accordance with the Dissolution Law and the California Supreme Court's decision in California Redevelopment Association v. Matosantos, Case No. S194861, the Agency was dissolved and the City began to serve as the "Successor Agency." The City Council serves as the governing body of the Successor Agency under the Dissolution Law as amended by AB 1484, AB 471, and SB 107, to administer the enforceable obligations of the Agency and otherwise unwind the Agency's affairs. All actions of the Successor Agency are subject to the review and approval by the Oversight Board. The Agency previously issued its South Main Street Redevelopment Project, Tax Allocation Bonds, Series 2003A, in the amount of $20,945,000 and Tax Allocation Refunding Bonds, Series 2003B, in the amount of $34,145,000. The Series 2003A bonds were issued to fund redevelopment activities of benefit to the South Main Street Redevelopment Project Area. The Series 2003B bonds were issued to refund the Agency's bonds issued in 1993. Of the $20,945,000 in bond proceeds from Series 2003A, the Agency expended the majority of the proceeds in compliance with the bond covenants prior to the dissolution of the Agency. The Dissolution Law prohibited the Agency from creating new debts and incurring any new obligations. Therefore, bond proceeds in the amount of $2,515,560.32 are currently remaining as of August 31, 2016. Health and Safety Code Section 34191.4(c) allows a successor agency that has received a finding of completion to use bond proceeds from bonds issued prior to January 1, 2011 for the purposes for which the bonds were sold. The Successor Agency received its Finding of Completion on November 26, 2014, and accordingly it now has authority to expend the proceeds in a manner consistent with the original bond covenants. In order to accomplish this, the Successor Agency included the remaining bond 3 -2 Resolution, Agreement, and Appropriation Adjustment — Tax Allocation Bonds, Series 2003A October 4, 2016 Page 3 proceeds on the Recognized Obligation Payment Schedule (ROPS) 16 -17 and planned to expend via transfer of funds to the City, as allowed by the Dissolution Law. On May 17, 2016, the State Department of Finance (DOF) pre- authorized the transfer of the remaining Series 2003A bond proceeds to the City, pending final review of the bond expenditure agreement between the City and the Successor Agency approved by the Oversight Board. Upon the City Council and Successor Agency Board's approval of the recommended actions, the bond proceeds expenditure agreement will be submitted to the Oversight Board for approval on October 11, 2016. The City plans to expend the bond proceeds to construct public improvements within the former Agency's South Main Street Redevelopment Project Area, in compliance with the bond covenants (Exhibit B of Exhibits 1 & 2). STRATEGIC PLAN ALIGNMENT Approval of this item assists the City in meeting Goal #4 — City Financial Stability, Objective #1 (Maintain a stable, efficient and transparent financial environment); Goal #6 — Community Facilities & Infrastructure, Objective #1 (Establish and maintain a Community Investment Plan for all City assets), Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment and Deferred Maintenance Plans (e.g. transit vision, street car, fixed guideway project, SARTC master plan, Bristol Street widening, neighborhood streets, traffic improvements, park facilities, sport fields, soccer fields, senior centers, bike master plan, etc.). FISCAL IMPACT Approval of the appropriation adjustment will recognize $2,515,560.32 in the Successor Agency's 2003 Series A Bonds prior year carry forward account (no. 65218002 - 50001) and appropriate same to the expenditure account (no. 65218020 - 69142). The appropriation adjustment will also recognize $2,515,560.32 in the CDA Capital Projects Fund in revenue account (no. 41818002 - 59899) and appropriate to the following accounts: Account Projected Expenditure in Amount 41818831 -66220 FY 2016 -17 $ 552,183.00 41818831 -69011 FY 2017 -18 $1,963,377.32 Total $2,515,560.32 APPROVED AS TO FUNDS AND ACCOUNTS: Re ortez / __ -. Francisco Gutierrez Z� O Deputy City Mani Executive Director City Manager's Office Finance and Management Services Agency 3 -3 Resolution, Agreement, and Appropriation Adjustment — Tax Allocation Bonds, Series 2003A October 4, 2016 Page 4 SG /sb Exhibits: 1. City Council Resolution (with Bond Spending Plan) 2. Successor Agency Resolution (with Bond Spending Plan) 3. Bond Proceeds Expenditure Agreement 3 -4 JOINT SESSIONS OF THE SUCCESSOR AGENCY AND THE CITY COUNCIL For exhibits 1, 2 and 3 related to Item SA -3, please see Item 80A of the City Council agenda. 3 -5 3 -6