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ADOPT RESOLUTION TO APPROVE THE LAST AND FINAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE
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RECOMMENDATION
It is recommended that the Successor Agency to the former Redevelopment Agency of the City of Stockton (“Successor Agency”) adopt a resolution:
1. Approving the Last and Final Recognized Obligation Payment Schedule, (Exhibit 1 to the Resolution) as required under Health and Safety Code section 34191.6(a); and
2. Authorizing the Executive Director to take necessary and appropriate actions to carry out the purpose and intent of the resolution.
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Summary
The City of Stockton has elected to act as the Successor Agency to the former Stockton Redevelopment Agency following the dissolution of redevelopment agencies by the California State Legislature in February 2012. The Successor Agency is required to prepare a Recognized Obligation Payment Schedule (ROPS) and submit to the County-wide Oversight Board annually until all outstanding obligations have been satisfied.
The County-wide Oversight Board is responsible for reviewing and approving ROPS schedules as required by State law; and ROPS is due to the State Department of Finance and the County Auditor Controller by February 1st.
Pursuant to Health and Safety Code (HSC) section 34191.6(a), agencies that have received a Finding of Completion may file a Last and Final ROPS if all the following conditions are met:
• The remaining debt is limited to administrative costs and payments pursuant to enforceable obligations with defined payment schedules including, but not limited to, debt service, loan agreements, and contracts.
• All remaining obligations have been previously listed on the ROPS and approved for payment by Finance pursuant to HSC section 34177(m) or (o).
• The agency is not a party to outstanding/unresolved litigation, except as specified in HSC section 34191.6(a)(3).
The Successor Agency has met these conditions, and once a Last and Final ROPS is approved by the California Department of Finance, the City will no longer be required to file an Annual ROPS.
DISCUSSION
Background
Assembly Bills x1 26, and 1484 (collectively the “Dissolution Law”) dissolved all existing California redevelopment agencies and replaced them with Successor Agencies effective February 1, 2012. The City of Stockton, elected to become the Successor Agency, and is responsible for winding down the affairs of its former redevelopment agency (Attachment A - Resolution No. 11-0251).
As part of dissolution, an Oversight Board to the Stockton Successor Agency (“Oversight Board”) was established and was responsible for approving or directing the actions of the Successor Agency. Oversight Board actions are subject to the approval of the DOF. In July 2018, the County Auditor-Controller established a consolidated Oversight Board to oversee all successor agencies within San Joaquin County. The adoption of the bylaws and Conflict of Interest Code of the Countywide Oversight Board to the Successor Agency of the County of San Joaquin was approved at the November 7, 2018, Oversight Board meeting.
Successor agencies are required to submit an annual ROPS by February 1 of each year. The ROPS lists all enforceable obligations, which include:
• Bonds, a reserve may be held when required by the bond indenture or when the next property tax allocation will be insufficient for the next payment due in the following half of the calendar year.
• Loans that are legally required to be repaid pursuant to a repayment schedule or other mandatory loan terms.
• Judgments or settlements entered by a competent court of law or binding arbitration decisions against the former redevelopment agency.
• Contracts or agreements necessary for the administration or operation of the successor agency, including agreements concerning litigation expenses related to assets or obligations, judgments and settlements, and costs of maintaining assets prior to disposition.
• Loans from the City to the former Agency, as approved by the Oversight Board and DOF.
The annual ROPS must be approved by the Oversight Board, submitted to State and County offices, and posted online.
In November 2015, the Oversight Board approved 51 City loans totaling $37.5 million in principal and interest. The DOF reviewed the loan agreements and supporting documentation and approved $23.8 million of the loans for repayment as enforceable obligations that were part of a payment schedule. In Fiscal Year 2023-24, the City successfully satisfied all enforceable obligations, and processed its last loan payment.
In place of the Annual ROPS, the Stockton Successor Agency will be submitting its Last and Final ROPS on February 1, 2024. As part of the requirements for submittal, the City needs to include an amortization schedule with all remaining outstanding Bond payments.
Present Situation
Under ABX1 26, Successor Agencies which meet the conditions set forth by HSC section 34191.6(a) may file a Last and Final ROPS to the California Department of Finance. The department has 100 days to review the filing and propose amendments or changes to the Last and Final ROPS schedule. HSC section 34191.6(c)(2) provides that the agency can amend an approved Last and Final ROPS up to two (2) times.
The table below summarizes the total Bond obligations and amounts of Real Property Tax Trust Fund (RPTTF) requested for in the Last and Final ROPS, which begins in Fiscal Year 2024-25. These are balances owed as of July 1, 2024.The last Bond obligation matures in 2037.
|
Description |
Maturity |
Total |
|
2016 Tax Allocation Bonds Series A - Principal |
Sept. 1, 2037 |
$73,310,000 |
|
2016 Tax Allocation Bonds Series A - Interest |
Sept. 1, 2037 |
$26,406,176 |
|
2016 Tax Allocation Bonds Series B - Principal |
Sept. 1, 2024 |
$ 3,415,000 |
|
2016 Tax Allocation Bonds Series B - Interest |
Sept. 1, 2024 |
$ 46,956 |
|
Administrative Costs |
|
$ 335,000 |
|
On Retention from ROPS 2023-2024 |
|
$ (5,758,856) |
|
TOTAL RPTTF Request |
|
$97,754,276 |
FINANCIAL SUMMARY
The recognized obligations have no fiscal impact to the city’s General Fund. Recognized obligations are paid from property tax revenue, and when received, will be deposited into the Successor Agency Administrative Fund 700-000.
Attachment A - Resolution No. 11-0251