Update and Approval of Recognized ObligationsMEETING DATE: 5/7/2012
pow N o ITEM NO:
t$ •` <' , TOWN COUNCIL ACTING AS SUCCESSOR AGENCY TO THE TOWN OF LOS
X00 GATOS REDEVELOPMENT AGENCY AGENDA REPORT
S GAS
DATE: MAY 1, 2012
TO: MAYOR AND TOWN COUNCIL ACTING AS THE SUCCESSOR AGENCY TO THE
TOWN OF LOS GATOS REDEVELOPMENT AGENCY
G;
FROM: GREG CARSON, TOWN MANAGER .
SUBJECT: UPDATE AND APPROVAL OF RECOGNIZED OBLIGATIONS
A. SECOND AMENDED CERTIFIED RECOGNIZED OBLIGATION PAYMENT
SCHEDULE AND ADMINISTRATIVE BUDGET FOR THE PERIOD JANUARY
1, 2012 THROUGH JUNE 30, 2012
B. CERTIFIED RECOGNIZED OBLIGATION PAYMENT SCHEDULE AND
ADMINISTRATIVE BUDGET FOR THE PERIOD JULY 1, 2012 THROUGH
DECEMBER 31, 2012
RECOMMENDATION
Accept status report on recognized obligation activities and approve the following items:
1. Second Amended Certified Recognized Obligation Payment Schedule and Administrative
Budget for the period January 1, 2012 through June 30, 2012.
2. Certified Recognized Obligation Payment Schedule and Administrative Budget for the period
July 1, 2012 through December 31, 2012.
BACKGROUND
The California State Legislature enacted Assembly Bill ABxl 26 (the "Dissolution Act ") to dissolve
redevelopment agencies formed under the Community Development Law. The California Supreme
Court in its decision in California Redevelopment Association v. Matosantos, issued December 29, 2011
(the "Supreme Court Decision "), declared the Dissolution Act to be constitutional. Under the
Dissolution Act, all California redevelopment agencies were dissolved effective February 1, 2012 and
various actions are now required by successor agencies to unwind the affairs of all former
redevelopment agencies.
SISTANT FINANCE DIRECTOR/ BUDGET MANAGER
Reviewed by: Assistant Town Manager /Deputy Director
Town Attorney /General Counsel Finance
NAMGR \AdminWorkFiles\2012 Council Reports \5 -7 -12 Update and Apoproval of Recognized Obligations Staff Report.doc
PAGE 2
MAYOR AND TOWN COUNCIL ACTING AS THE SUCCESSOR AGENCY TO THE TOWN OF LOS
GATOS REDEVELOPMENT AGENCY
SUBJECT: UPDATE AND RATIFICATION OF RECOGNIZED OBLIGATIONS
May 1, 2012
DISCUSSION
The following section discusses actions that the Town as Successor Agency must make as required by
the Dissolution Act.
Item A: Ratification of the Second Amended Certified Recognized Obligation Payment
Schedule (BOPS) and Administrative Budget for the period January — June 2012
On March 5, 2012 the Town Council, acting as the Successor Agency for the former RDA, approved the
initial Recognized Obligation Payment Schedule and Administrative budget for the period January —
June, 2012. The County Auditor then reviewed and audited the ROPS and, on Thursday, April 12,
2012, the Oversight Board held a meeting to discuss and consider the County Certified Successor
Agency Recognized Obligation Payment Schedule (ROPS) for the period January — June 2012, the
Successor Agency Administrative Budget for the period February — June 2012, and expenses required to
complete the Library Project. The Oversight Board approved the certified ROPS and administrative
budget and conditionally approved the inclusion of additional certified library project costs by the
County on future ROPS. Subsequent to the Oversight Board's action, the County re- certified the ROPS,
including supplemental library expenses, totaling $472,029. Due to this change, the outstanding
obligation reflected on the ROPS was increased, adjusting the administrative allowance from $125,059
to $132,317 for the period February -June 2012. For FY 2011/12, the annual administrative cost
allowance is 5 percent of anticipated funding from the Redevelopment Property Tax Trust Fund
(RPTTF) or a statutory minimum of $250,000, whichever is greater. Only a prorated amount (6 months)
for the administrative cost allowance ($132,316.70) was allowed by the County and Oversight Board.
Attached for your consideration is the second amended certified ROPS and administrative budget for the
period January— June 2012. (Attachment 1).
Item B: Approval of the Certified Recognized Obligation Payment Schedule and
Administrative Budget for the period July — December 2012
A meeting schedule was adopted at the April 12 Oversight Board meeting, approving meeting dates
during the months of April — June 2012. The previously scheduled Thursday, April 26, 2012 Board
meeting was cancelled due to the time required by the Town and the County to prepare and coordinate
the certification of the July — December 2012 ROPS. In keeping with the Oversight Board's request to
receive source documents in a timely matter, the meeting was rescheduled to Wednesday, May 2, 2012;
however the meeting was subsequently cancelled The County did not send the certified ROPS until
May 1, 2012, resulting in insufficient time to review the document in preparation for the May 2
Oversight Board meeting.
The attached certified ROPS reflects payment authorization for debt service on the Town Certificates of
Participation (COPS) and associated bank fees, and includes approved Library project completion
expenses for future reimbursement from the Redevelopment Agency (RDA) fund balance.
The administrative budget reflects operational costs and other expenses added by the County that were
originally submitted as part of the Successor Agency ROPS. These expenses, which were deemed by
PAGE 3
MAYOR AND TOWN COUNCIL ACTING AS THE SUCCESSOR AGENCY TO THE TOWN OF LOS
GATOS REDEVELOPMENT AGENCY
SUBJECT: UPDATE AND RATIFICATION OF RECOGNIZED OBLIGATIONS
May 1, 2012
DISCUSSION (continued)
the County as administrative in nature, include the RDA wind -down activities and legal consultant costs
found on Attachment 2, Form C, Lines 6 &7. Successor Agency staff believes that these expenses are
not related to the ongoing administrative operations and should be treated as separate enforceable
obligations. The attached administrative budget reflects the statutory amount allowable of $125,000 for
a six month period.
It is anticipated that the Oversight Board will take action on the attached certified ROPS and
administrative budget covering July — December 2012 on May 17, 2012 (Attachment 2). The
administrative budget is subject to approval by the Successor Agency before the Oversight Board can
take action.
Amendment of Conflict of Interest Code
As part of a separate item on the May 7 Town Council Agenda, the Council will consider the adoption
of a resolution amending the appendices to the Los Gatos Conflict of Interest Code to include the
Oversight Board to the Successor Agency for the Town of Los Gatos Redevelopment Agency.
Attachments:
Attachment 1: Second Amended Certified Recognized Obligation Payment Schedule and Administrative
Budget for the period January 1, 2012 through June 30, 2012.
Attachment 2: Certified Recognized Obligation Payment Schedule and Administrative Budget for the
period July 1, 2012 through December 31, 2012.
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LEFT BLANK
County ®f Smite Cl ara
F inance Agency
County Government Center
70 West Hedding Street Fast Wing, 2nd Floor
San Jose, California 95110-1705
(408) 299.5205 FAX: (408) 287 -7629
April 18, 2012
To: State Controller's Office
State Department of Finance
Los Gatos RDA Successor Agency Oversight Board
Town of Los Gatos
Subject: Re- Certified RODS
Please find attached the Recognized Obligation Payment Schedules that have been re-
certified by my office pursuant to Health and Safety Code sections 34177(1) (2) and 34182
for the obligations payable by the Town of Los Gatos RDA Successor Agency between
January 1 and June 30, 2012. The original certification included details and discussion
of allowed and non- enforceable obligations as were originally certified incorporated in
an accompanying report from Macias Gini & O'Connell, LLP dated April 10, 2012.
However, based on actions taken by the oversight board after the original certification,
adjustments were made that were re- certified on the attached schedules. This
document will supersede the original certified ROPS previously submitted.
Respectfully Submitted,
< 1,5; �
Irene Lui
Controller- Treasurer
ATTACHMENT 1
Board of Supervisors: Mike Wasserman, George Shirakawa, Dave Cortese, hen Yeager, Liz Kniss -
County ExCCUtIVC: Jeffrey V. Smith �t8
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