7�o`N N 0 MEETING DATE: 2/04/13
ITEM NO: .
r
R , SUCCESSOR AGENCY TO THE TOWN OF LOS GATOS REDEVELOPMENT
os GA��g AGENCY
DATE: January 30, 2013
TO: CHAIR AND MEMBERS OF THE SUCCESSOR AGENCY TO THE TOWN
OF LOS GATOS REDEVELOPMENT AGENCY
FROM: GREG LARSON, EXECUTIVE DIRECTOR 046��
SUBJECT: SUCCESSOR AGENCY ACTIONS
ADOPT RESOLUTION APPROVING RECOGNIZED OBLIGATION
PAYMENT SCHEDULE 13 -14A AND ADMINISTRATIVE BUDGET
FOR SUCCESSOR AGENCY FOR JULY 1, 2013 TO DECEMBER 31, 2013
RECOMMENDATION:
It is recommended that the Successor Agency take the following actions:
1. Adopt a Resolution approving the Recognized Obligation Payment Schedule 13 -14A
and Administrative Budget for the Successor Agency for the period July 1, 2013 to
December 31, 2013
BACKGROUND:
Pursuant to AB xl 26 and the recently enacted AB 1484, the Successor Agency must prepare
a proposed administrative budget and a Recognized Obligation Payment Schedule ( "ROPS ").
for each six -month fiscal period, both of which must be submitted to the Oversight Board for
approval. The format for the ROPS was recently revised and issued by the State Department
of Finance and includes all of the enforceable obligations (payments due) for each six -month
fiscal period. Each proposed administrative budget must include all of the following:
(1) estimated amounts for Successor Agency administrative costs for the applicable six -month
fiscal period; (2) proposed sources of payment for the administrative costs; and (3) proposals
for arrangements for administrative and operations services provided by the Town or other
entity.
The Successor Agency is required to submit ROPS 13 -14A (which includes the
Administrative Budget,) for the period of July 1, 2013 to December 31, 2013 to the Oversight
PREPARED BY: GREG LARSON
Town Manager
Reviewed by: _V)jDeputy Director, General Counsel Finance
NAMGR\AdminWorkFiles\2013 Council ReportsTeb. 4 Council Meeting\RDA Stuff \2-4-2013 SA ROPS 13 -14A staff report.doc
PAGE 2
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: SUCCESSOR AGENCY DISSOLUTION ACTIONS
February 4, 2013
Board for approval and then submit the Oversight Board - approved ROPS 13 -14A to the State
Department of Finance, the State Controller and the County Auditor - Controller no later than
March 1, 2013.
In order to meet the State imposed deadlines, Town staff prepared ROPS 13 -14A for the
Successor Agency Board's approval at this meeting. Staff also recommends that the Board
approve the Administrative Budget for the same period (July 1, 2013 to December 31, 2013)
on the same date as the Board's approval of the ROPS 13 -14A. In addition, as part of the
ROPS 13 -14A process, a true -up for the period July 1, 2012 through December 31, 2012 is
included. Concurrently, Successor Agency staff has forwarded the proposed ROPS 13 -14A,
with the True -up and Administrative Budget with this memorandum to the County for its
review. Upon approval from the Successor Agency Board, and contingent upon review from
the County, both of these items will be considered for approval by the Oversight Board for the
Successor Agency to the Town of Los Gatos Redevelopment Agency at its next meeting on
February 14, 2013. Should the County provided any comments, feedback or recommended
changes; staff will review the recommendations and present any such recommendations to the
Successor Agency Oversight Board.
Staff would like to bring one outstanding issue to the attention of the Successor Agency
Oversight Board.. During the Non - Housing Fund Due Diligence Review, staff noted and
presented to both the Oversight Board and the County for consideration the concern that the
Successor Agency will experience a future contingent liability for which no funds will be
available ranging anywhere from $3.2M to $8.2M depending on the tax increment growth
rate. As staff illustrated to County representatives, the Agency will experience this future
contingent liability when the former Los Gatos Redevelopment Agency's tax increment cap of
$250M for the project area is met. Based on staff projections and depending on the tax
increment growth rate, this future liability will range anywhere from $3.2 M to $8.2M, using
2% and 4% growth rates respectively. Should the growth rate hold steady at 4 %, the tax
increment cap would be hit in the 2025 /26 fiscal year with a contingent liability of $8.2M. At
a slower 2% growth rate, the Successor Agency anticipates the contingent liability to be
approximately $3.2 M and the tax increment cap would be met in the 2027/28 fiscal year.
While this is an estimated range of the liability, the Successor Agency believes identification
of this issue is warranted since without advanced planning, there will be no funds available for
this contingent liability. Town Staff has discussed the matter with the County of Santa Clara
and, the County has committed to working with staff to develop an appropriate amortization
schedule to recover this liability through the semi - annual ROPS process over time and prior to
ROPS 13 -14A approval and by March 4, 2013. County staff has developed a cash projection
for inclusion of set -aside amounts for future 2002 COP and 2010 COP payments after the tax
increment cap is met. Successor Agency staff has reviewed the County's analysis and is in
agreement with the methodology and reserve amounts. Staff would note that the cash
projection will need to be updated annually, to determine actual growth rates and interest.
The County's cash projection is very thorough with the only additional note from Successor
Agency staff being that the reserve build -up is "back loaded," meaning that of the average
annual reserve amount for both the 2002 and 2010 COPs, only 65% is retained during the first
year. Each year, for 13 years, the reserve amount retained increases, by 5 %. By-the. l3th.y_ear, ___ .
PAGE 3
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: SUCCESSOR AGENCY DISSOLUTION ACTIONS
February 4, 2013
the annual set -aside amount will be 130% of the average annual reserve. This "back loading"
approach was recommended by the County in an effort to achieve a more level net amount
available to the taxing entities due in future years ROPS periods as the tax increment grows.
Successor Agency staff is comfortable with this approach as long as the cash flow projection
is monitored yearly and updated as necessary. This proposal will be subject to final review by
the State Department of Finance.
CONCLUSION:
It is recommended that the Successor Agency Board adopt the attached resolution
(Attachment 2) authorizing the approval and adoption of Recognized Obligation Payment
Schedule 13 -14A and the Administrative Budget for the July 1, 2013 to December 31, 2013
period.
ENVIRONMENTAL ASSESSMENT:
This action is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
Approval and adoption of the attached Successor Agency's Administrative Budget for July 1,
2013 to December 31, 2013 and Recognized Obligation Schedule 13 -14A (ROPE 13 -14A) for
the same period (July — December, 2013) will ensure the timely payment of enforceable
obligations as listed in Attachment 1.
Attachments:
Attachment 1: ROPS 13 -14A and Administrative Budget (July 1, 2013 to December 31,
2013)
Attachment 2: Resolution of the Successor Agency of the Town of Los Gatos approving and
adopting the Recognized Obligation Payment Schedule 13 -14A and
Administrative Budget
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ATTACHMENT 1
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Oversight Board Approval Date:
LOS GATOS (SANTA CLARA)
RECOGNIZED OBLIGATION PAYMENT SCHEDULE (BOPS 13 -14A)
July 1, 2013 through December 31, 2013
Funding
Source
Total Due During
Contract /Agreement Contract /Agreement
Total Outstanding
Fiscal Year
Item #t
Project Name / Debt Obligation
Execution Date Termination Date Payee
Description /Project Scope Project Area
Debt or Obligation
2013-14
Bond Proceeds
Reserve Balance
Admin Allowance
RPTTF
Other
Six Month Total
7`79-577
2002 COP Reimbursement
7/1/2002 2031/32 The BNY Mellon Trust Co. N.A.
.
1
Reimbursement Agreement
Central Los Gatos
12,787 899
678,163
0
0
0
484,426
0
X44,2&
2
2010 COP Reimbursement
6/1/2010 2028129 The BNY Mellon Trust Co. N.A.
Reimbursement Agreement
Central Los Gatos
19,800,875
1,267,426
0
0
0
970,413
0
_y970413
3
2002/2010 COP Bank Services Fees
7/1/2002- 6/1/2010 The BNY Mellon Trust Co. N.A.
Bank Services Charges
Central Los Gatos
3,200
3,200
0
0
0
3,200
0
4
S.A. & O.B. Administration Expenses
2012/13 2013/14 Successor Agency
Administrative Allowance per Admin Budget
Central Los Gatos
250,000
250,000
0
0
125,000
0
25�OD
5
Completion of Library Project
6/20/2010 6 20 2012 Town of Los Gatos
County Approved Library Expenses
Central Los Gatos
0
0
0
0
0
0
0
„x xA
”
6
1992 COPS Reimburseement
8/1/1992
S 1 2012
US Bank
Reimbursement Agreement
Central Los Gatos
0
0
0
0
0
0
0
Y£
7
RDA Reserve for COP Payments 1/1/2013-
6/1/2010
The BNY Mellon Trust Co, N.A.
Reserve Required for COP Payments Due August 2013
Central Los Gatos
0
0
0
0
0
135,757
0��35175
6/30/2013
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LOS GATOS (SANTA CLARA)
Pursuant to Health and Safety Code section 34186 (a)
PRIOR PERIOD ESTIMATED OBLIGATIONS vs. ACTUAL PAYMENTS
RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS 11)
July 1, 2022 through December 31, 2012
Item # Project Name Debt obligation
Payee
Description/Project Scope
Project Area
LMIHF
Bond Proceeds
Reserve Balance
AdmIn Allowance
RPTTF
Other
Estimate
Actual
Estimate
777-
Actual
Estimate
Actual
Estimate
Actual
Estimate
Actual
Estimate
Actual
..... ..... ...........
1902 COP Reimbursement
U.S. Bank
Reimbursement Agreement
Central Los Gatos
21,000
21000
2002 COP Reimbursement
The EINY Mellon Trust Co, N.A.
Reimbursement Agreement
Central Los Gatos
479,720
479,720
2010 COP Reimbursement
The PINY Mellon Trust Co, N.A.
Reimbursement Agreement
Central Los Gatos
963,413
963,413
1902/2002/2010 COP Bank Seervice Fees
2010 COP Fiscal Agents
Bank Service Charges
Central Los Gatos
3,200
3,200
Contract for Consulting Services
Goldfarb/Lipman & Jones Hall
Attorney Services
Central Los Gatos
25,000
10,083
S.A. & O.B. Administration Expenses
Successor Agency
Administrative Allowance per Admin Budget
Central Los Gatos
125,000
157,645
Cost exceeded the amounts approved by the Oversight Board.
T
Cost of S.A & O.B. administration expenses exceeded the $125,000 approved by the Oversight Board.
The Town reserves the right to amend the pril r period estimated obligations vs, actual Payments.
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RESOLUTION NO.
RESOLUTION OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE TOWN OF LOS GATOS APPROVING RECOGNIZED
OBLIGATION PAYMENT SCHEDULE 13 -14A AND ADMINISTI2.ATIVE
BUDGET
RECITALS
WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code
Section 33000 et seq.: the "Redevelopment Law "), the Town Council (the "Town Council ") of the Town of Los
Gatos (the "Town ") adopted Ordinance No.1882 on November 25, 1991, adopting the Redevelopment Plan for
the Central Los Gatos Redevelopment Project Area (the "Redevelopment Plan "), as amended from time to time;
and
WHERAS, the Redevelopment Agency of the Town of Los Gatos (the "Agency ") is responsible for
implementing the Redevelopment Plan pursuant to the Redevelopment Law; and
WHEREAS, ABx1 26 (the "Dissolution Act ") was enacted on June 28, 2011; and
WHEREAS, AB 1484 enacted June 27, 2012, established requirements and revised certain dates for
performance of actions under the Dissolution Act; and
WHEREAS, pursuant to Health & Safety Code 34177(1), the Successor Agency to the Town of Los
Gatos Redevelopment Agency (the "Successor Agency ") must prepare a proposed Recognized Obligation
Payment Schedule ( "ROPS ") before each six -month fiscal period (commencing each January 1 and July 1) and
submit each proposed BOPS to the oversight board for the Successor Agency (the "Oversight Board ") for
approval; and,
WHEREAS, pursuant to Health and Safety Code Section 341770), the Successor Agency to the Town
of Los Gatos Redevelopment Agency (the "Successor Agency ") must prepare a proposed administrative budget
before each six -month fiscal period (commencing each January 1 and July 1) and submit each proposed
administrative budget to the oversight board for the Successor Agency (the "Oversight Board ") for approval;
and,
WHEREAS, pursuant to Health and'Safety Code Section 34177(1)(2)(B), at the same time that the
Successor Agency submits a BOPS to the Oversight Board for approval, the Successor Agency must submit a
copy of such ROPS to the State Department of Finance (the "DOF "), the County administrative officer, and the
County Auditor - Controller; and,
WHEREAS, pursuant to Health and Safety Code Section 34177(1)(2)(C) and (m), the Successor
Agency must (1) submit the Oversight Board - approved ROPE for the six -month fiscal period from July 1, 2013
through December 31, 2013 ( "ROPS 13- 14A "), to the DOF, the Office of the State Controller, and the County
Auditor - Controller no later than March 1, 2013; and (2) post a copy of the Oversight Board- approved ROPE 13-
14A on the Successor Agency's website; and,
WHEREAS, under Title 14 of the California Code of Regulations, Section 15378(b)(4), the approval of
the Recognized Obligation Payment Schedule is exempt from the requirements of the California Environmental
Quality Act ( "CEQA ") in that it is not a project, but instead consists of the continuation of an existing
governmental funding mechanism for potential future projects and programs, and does not commit funds to any
ATTACHMENT 2
specific project or program, because it merely lists enforceable obligations previously entered into and
by the Agency; and
WHEREAS, the Agency's board of directors (the "Agency Board ") has reviewed and duly considered
the Staff Report, the proposed ROPS 13 -14A and Administrative Budget, and documents and other written
evidence presented at the meeting.
NOW, THEREFORE, BE IT RESOLVED, that the Agency Board finds that the above Recitals are
true and correct and have served, ,together with the supporting documents, as the basis for the findings and
approvals set forth below.
BE IT FURTHER RESOLVED, that the Agency Board finds, under Title 14 of the California Code of
Regulations, Section 15378(b)(4), that this resolution is exempt from the requirements of CEQA in that it is not
a project.
BE IT FURTHER RESOLVED, that the Agency Board hereby approves and adopts the Recognized
Obligation Payment Schedule 13 -14A (July 1, 2013 to December 31, 2013), Administrative Budget and True -
Up for the period July 1, 2012 to December 31, 2012.
BE IT FURTHER RESOLVED, the Agency Board authorizes and directs the Agency's Executive
Director or the Executive Director's designee to take such other actions and execute such other documents as are
appropriate to effectuate the intent of this Resolution and to implement ROPS 13 -14A on behalf of the Agency
as required by State law.
BE IT FURTHER RESOLVED, that this Resolution shall take immediate effect upon adoption.
PASSED AND ADOPTED at a regular meeting of the Agency Board for the Successor Agency of the
Redevelopment Agency of the Town of Los Gatos held on the 4th day of February, 2013 by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
ATTEST:
CLERK ADMINISTRATOWSECRETARY OF THE
AGENCY BOARD AND SUCCESSOR AGENCY
OF THE REDEVELOPMENT AGENCY OF THE
TOWN OF LOS GATOS
2
CHAIR OF THE AGENCY BOARD FOR
REDEVELOPMENT AGENCY OF THE TOWN OF
LOS GATOS