Agenda of the Oversight Board to the City of Vacaville Successor Agency June 27, 2012 6:00 p.m. Vacaville City Council Chamber 650 Merchant Street, Vacaville, CA 95688 (Note: Entrance at the rear of the building from the parking lot accessed off of Lovers Lane or Walnut Street.) 1. Call to Order 2. Roll Call Chair Curtis Hunt Vice Chair Dilenna Harris Board Members: Emily Cantu Michael Kitzes Larry Mazzuca Mike Reagan Jerry Wilkerson 3. Pledge of Allegiance 4. Approval of the Agenda 5. Approval of Minutes: A. April 25, 2012 Oversight Board Meeting B. May 14, 2012 Oversight Board Meeting 6. Business from the Floor 7. Presentations None 8. Consent Calendar A. Department of Finance Approval of January June 2012 and July December 2012 Recognized Obligation Payment Schedules B. Property Binder Update for Nut Tree Properties APN(S) 0129-210-080, 090 and 0129-240-080 9. Business A. Cancellation of July 25, 2012 Meeting B. Authorization for the Oversight Board Chair to Sign a Letter of Opposition to the May 22, 2012 DOF AB1X26 Clean-Up Legislation
Agenda of the Oversight Board to the City of Vacaville Successor Agency June 27, 2012 Page Two 10. Reports of Staff A. Review of Vacaville Redevelopment Agency Real Property Transferred to the City of Vacaville for Public Purposes B. Former Vacaville Redevelopment Agency Property Disposition Policy Discussion 11. Reports of Board 12. Adjournment The City of Vacaville is committed to providing meeting facilities that are accessible to persons with disabilities. To request meeting materials in alternative formats, or to request a sign language interpreter, real-time captioning, or other accommodation, call 707-449-5409 (or 707-449-5162 TTY) at least two days prior to the meeting. Assistive listening devices may be obtained at the meeting or by calling the numbers above. Any writings or documents related to an agenda item for the open session of this meeting are available for public inspection during normal business hours at the Administration Counter at City Hall, 650 Merchant Street. Customary photocopying charges for requested copies of such documents may apply. If you have questions, please contact the Secretary to the Board at 707-449-5100. I declare that the agenda for the Meeting of the Oversight Board to the City of Vacaville Successor Agency was posted and available for review by the time and place prescribed by law. Michelle A. Thornbrugh Secretary to the Oversight Board June 22, 2012 Date
Minutes of the Oversight Board to the City of Vacaville Successor Agency April 25, 2012 1. Call to Order Chair Hunt called the meeting to order at 6 p.m. 2. Roll Call Board Members Present: Cantu, Kitzes, Mazzuca, Vice Chair Harris, Chair Hunt Board Members Absent: -Board Members Reagan and Wilkerson 3. Pledge of Allegiance The Pledge of Allegiance was led by Board Member Mazzuca. 4. Approval of the Agenda On a motion by Board Member Mazzuca, seconded by Board Member Cantu, the agenda of the regular meeting was approved as written (6-0). 5. Approval of Minutes of the April 4 and April 11, 2012 Oversight Board Meetings On a motion by Vice Chair Harris, seconded by Board Member Cantu, the minutes of the April 4 and April 11, 2012 Oversight Board Meetings were approved (6-0; 5-0 Mazzuca abstained) 6. Business from the Floor -None 7. Presentations None 8. Consent Calendar - None 9. Business - A. REVIEW OF SCHEDULE OF ACTIONS FOR THE OVERSIGHT BOARD AND CANCELLATION OF DECEMBER 26, 2012 MEETING On a motion by, seconded by Board Member Kitzes, the Board cancelled the meeting of December 26, 2012. 10. Reports of Staff A. DISTRIBUTION OF FORMER REDEVELOPMENT TAX INCREMENT TO TAXING ENTITIES Informational, no action required. B. ROLE OF THE OVERSIGHT BOARD TO THE CITY OF VACAVILLE SUCCESSOR AGENCY Informational, no action required. C. LEGISLATIVE UPDATE Informational, no action required. 11. Reports of Board 12. Adjournment There being no further business, the meeting was adjourned at 6:55 p.m.
Minutes of the Special Meeting of the Oversight Board to the City of Vacaville Successor Agency May 14, 2012 1. Call to Order Chair Hunt called the meeting to order at 6 p.m. 2. Roll Call Board Members Present: Cantu, Kitzes, Mazzuca, Reagan, Wilkerson, Vice Chair Harris, Chair Hunt 3. Pledge of Allegiance The Pledge of Allegiance was led by Chair Hunt. 4. Approval of the Agenda On a motion by Board Member Mazzuca, seconded by Board Member Cantu, the agenda of the regular meeting was approved as written (6-0). 5. Approval of Minutes of the April 25, 2012 Oversight Board Meeting- The Minutes of the April 25, 2012 were deferred to the June 27, 2012 meeting. 6. Presentations None 7. Consent Calendar - None 8. Business - A. Resolution Approving the Amended January 1 June 30, 2012 and July 1 December 31, 2012 Recognized Obligation Payment Schedules 1/1-6/30/12 ROPS I505/80 Project Area 1. Reduce Callen Property Management/Project to approximately $200,000 (between both Project Areas): Line Item 5/Callen Property Management/Project: Reduce amount to reflect obligations related to tenant leases -- $100,268.64 On a motion by Board Member Kitzes, seconded by Board Member Mazzuca, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. 2. Combine Property management/maintenance obligations with the Administrative Budget and reduce to $419,988 (5%) allowance (between both Project Areas): Line Item 13/Loan Servicing Fees: Delete, then add to Administrative Budget (as appropriate) Line Item 24/Administrative Costs: Reduce to $310,508.88
Line Items 33-40/Property Maintenance & Harbison Event Center: Delete, then add to Administrative Budget (as appropriate) On a motion by Vice Chair Harris, seconded by Board Member Cantu, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. Vaca Project Area 1. Reduce Callen Property Management/Project to approximately $200,000 (between both Project Areas): Line Item 7/Callen Property Management/Project: Reduce amount to reflect obligations related to tenant leases -- $26,653.68 On a motion by Board Member Kitzes, seconded by Vice Chair Harris, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. 2. Combine Property management/maintenance obligations with the Administrative Budget and reduce to $419,988 (5%) allowance (between both Project Areas): Line Item 16/Loan Servicing Fees: Delete, then add to Administrative Budget (as appropriate) Line Item 22/Administrative Costs: Reduce to $109,031.81 Line Item 25/Property Maintenance: Delete, then add to Administrative Budget (as appropriate) On a motion by Board Member Kitzes, seconded by Vice Chair Harris, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. 7/1-12/31/12 ROPS I505/80 Project Area 1. Modify to reflect DOF s direction on 1/1-6/30/12 ROPS: Line Item 5/Callen Property Management/Project: Delete Line Item 13/Loan Servicing Fees: Delete, then add to Administrative Budget (as appropriate) Line Item 24/Administrative Costs: Reduce to $127,815.98 Line Items 33-40/Property Maintenance & Harbison Event Center: Delete, then add to Administrative Budget (as appropriate) On a motion by Board Member Mazzuca, seconded by Vice Chair Harris, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. 2. Remove credits reflecting the reconciliation between the 1/1-6/30/12 and 7/1-12/31/12 ROPS:
Line Item 9/Affordable Housing Projects/Property Tax Assessments -- Scoggins Court: Increase to $70,803.67 Line Item 22/Paramedic Tax: Increase to $416,643.28 Line Item 28/Nut Tree Partnership Agreement: Increase to $751,000.00 On a motion by Board Member Mazzuca, seconded by Vice Chair Harris, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. Vaca Project Area 1. Modify to reflect DOF s direction on 1/1-6/30/12 ROPS: Line Item 7/Callen Property Management/Project: Delete Line Item 16/Loan Servicing Fees: Delete Line Item 22/Administrative Costs: Reduce to $82,264.59 Line Item 25/Property Maintenance: Delete, then add to Administrative Budget (as appropriate) On a motion by Board Member Kitzes, seconded by Board Member Wilkerson, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. 2. Remove credits reflecting the reconciliation between the 1/1-6/30/12 and 7/1-12/31/12 ROPS: Line Item 11/Affordable Housing Projects/Property Tax Assessments -- Scoggins Court: Increase to $18,821.25 Line Item 20/Paramedic Tax: Increase to $99,102.65 Line Item 24/Capitalized Lease Skating Center: Increase to $102,201.18 Line Item 31/Carnegie Library: Increase to $6,178.24 On a motion by Board Member Cantu, seconded by Board Member Mazzuca, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. 3. Adjust funding source to Low and Moderate Income Housing Fund: Line Item 6/2006 Taxable Housing Bonds On a motion by Vice Chair Harris, seconded by Board Member Kitzes, the Oversight Board unanimously amended the referenced line items on the specified ROPS schedule. B. Cancellation of May 23, 2012 Meeting On a motion by Board Member Mazzuca, seconded by Board Member Kitzes, the Board unanimously approved cancellation of the May 23, 2012 Oversight Board meeting. 9. Reports of Staff A. Development of Asset Dissolution Strategy/Plan and Review of former Vacaville Redevelopment Agency Owned Properties
Staff reviewed strategy plans with the Board for review of properties and processes for dissolution and noted that the next phase would be for staff to provide binders to the Board with property asset information. B. Legislation Update No formal action was required 10. Reports of Board Chair Hunt thanked the Board for making themselves promptly available for the Special Meeting. 11. Adjournment There being no further business before the Oversight Board, the special meeting of May 14, 2012, was adjourned at 7:05 p.m.
Agenda Item No. 8A June 27, 2012 TO: FROM: SUBJECT: Honorable Chair and Oversight Board Members Attn: Laura C. Kuhn, Successor Agency Executive Director Jeremy Craig, Director of Finance and Information Technology Cynthia W. Johnston, Director of Housing and Redevelopment APPROVAL LETTER FROM DEPARTMENT OF FINANCE OF THE JANUARY 1 JUNE 30, 2012 AND JULY 1 DECEMBER 31, 2012 RECOGNIZED OBLIGATION PAYMENT SCHEDULES DISCUSSION: One of the Oversight Board s responsibilities is to establish a Recognized Obligation Payment Schedule (ROPS) which lists the financial obligations or enforceable obligations of the former Redevelopment Agency. At its April 4 and April 11, 2012 meeting, the Oversight Board approved, on a line by line basis, enforceable obligations to be placed on the Successor Agency s January 1 through June 30, 2012 and July 1 through December 31, 2012 Recognized Obligation Payment Schedules (ROPS). Both ROPS were submitted on April 12, 2012 to the Solano County Auditor-Controller, State Controller s Office and Department of Finance (DOF). As mandated in the Dissolution Act, DOF must approve the ROPS. The Successor Agency was notified by DOF on April 26 that both schedules needed to be modified in order to be approved. In response, in order to meet DOF deadlines, the Oversight Board held a Special Meeting on May 14, 2012. During that meeting, the ROPS amendments were reviewed and approved. The approved amended ROPS were resubmitted for approval the same day. Staff is pleased to announce that the Successor Agency received email notification from DOF on May 23, 2012 that both amended ROPS have been approved. A letter confirming approval of both ROPS was received on May 31, 2012 (Attachment 1). Approval of the ROPS ensured that the Successor Agency received funds to meet its enforceable obligations for the January June and July December 2012 ROPS periods. RECOMMENDATION: For information only. Attachment 1: Approval Letter from Department of Finance
Agenda Item No. 8B June 27, 2012 TO: FROM: Honorable Chair and Oversight Board Members Attn: Laura C. Kuhn, Successor Agency Executive Director Cynthia W. Johnston, Housing & Redevelopment Director SUBJECT: PROPERTY BINDER UPDATE FOR NUT TREE PROPERTIES APN(S) 0129-210-080, 090 AND 0129-240-080 DISCUSSION: At the May 14, 2012 special meeting, the Oversight Board began familiarizing itself with the former Agency s properties. These properties were transferred to the Successor Agency by Operation of Law, as of February 1, 2012. It is anticipated that these properties will become part of a comprehensive Asset Disposition Strategy/Plan to be approved for implementation by the Oversight Board. To facilitate the review of these properties, Successor Agency staff prepared and distributed a Property Binder to each Oversight Board member on May 14, 2012. The binder provides information on each of the properties including asset description and address, assessor s parcel number, acres, any improvements, acquisition date and cost, funding source and purpose for acquisition, current use, zoning, and any encumbrances. Attachment 1, Updated Nut Tree Properties Document, provides an updated sheet for three Nut Tree properties assessor s parcel numbers 0129-210-080, 090, and 0129-240-080. This sheet reflects a change in the acquisition cost for the three parcels as follows: May 14, 2012 Nut Tree Properties Document Acquisition Cost: $1,725,976.10 $ 394,981.85 $ 178,569.64 Updated Nut Tree Properties Document Acquisition Cost: $0/donated The updated document will replace the May 14, 2012 document under Tab 1 of the Property Binder. RECOMMENDATION: Information only, to update Property Binder. Attachment 1 Updated Nut Tree Properties Document
Agenda Item No. 9A June 27, 2012 TO: FROM: SUBJECT: Honorable Chair and Oversight Board Members Attn: Laura C. Kuhn, Successor Agency Executive Director Cynthia W. Johnston, Director of Housing and Redevelopment CANCELLATION OF THE JULY 25, 2012 REGULAR MEETING OF THE OVERSIGHT BOARD TO THE CITY OF VACAVILLE SUCCESSOR AGENCY DISCUSSION: At its April 4, 2012 meeting, the Oversight Board approved Rules of Procedure of the Oversight Board to the Successor Agency of the City of Vacaville. These procedures designate the day and time of regular meetings which shall be held the fourth Wednesday of the month. The Vacaville City Council regular meeting of July 24, 2012 has been cancelled in order to allow for summer vacations. According to the Oversight Board s Rules of Procedure, the next regular meeting of the Oversight Board is scheduled for July 25, 2012. As both Oversight Board members, as well as some staff, will not be in town due to planned vacations, staff is recommending that the Oversight Board s regular meeting of July 25, 2012 be cancelled. The next regular meeting of the Oversight Board to the City of Vacaville Successor Agency would be August 22, 2012. RECOMMENDATION: By simple motion, to cancel the July 25, 2012 Regular Meeting of the Oversight Board to the City of Vacaville Successor Agency.
Agenda Item No. 9B June 27, 2012 TO: FROM: SUBJECT: Honorable Chair and Oversight Board Members Attn: Laura C. Kuhn, Successor Agency Executive Director Cynthia W. Johnston, Director of Housing and Redevelopment LEGISLATIVE UPDATE ON AB1X 26 TRAILER BILL AND AUTHORIZATION FOR CHAIR TO SIGN LETTER OF OPPOSITION DISCUSSION: Several clean-up bills have been introduced since the California Supreme Court upheld the constitutionality of AB1X 26 (the Redevelopment Dissolution Act ) this past December. Staff has been monitoring the progress of these bills and reporting back to the Oversight Board on a regular basis. Over the past month, most pending legislation was put aside while the legislators focused on adoption of the Fiscal Year 2012/13 Budget. On June 15, the State of California Budget was approved and submitted to the Governor. The budget did not include a number of trailer bills that are presently being considered by the Legislature, who has until June 30th to take action. The California Department of Finance (DOF) has drafted very aggressive trailer bill language to modify AB1X 26. In general, the proposed language gives the DOF greater power over the work and authority of Oversight Boards, Successor Agencies, and counties. Specifically, if approved, the bill will negatively impact the work and reduce the authority of the Oversight Board, as follows: Prevents Oversight Board from exercising power to restore funding for an enforceable obligation that was deleted or reduced by the DOF (Section 34178 (a)). Requires that all actions taken by the Oversight Board must be submitted for approval by DOF (electronically as well as any other means of DOF s choosing) (Section 34179 (h)(1)). Increases, from three to five days, for an Oversight Board s actions to become effective (unless DOF wants additional information) (Section 34179 (h)(1)). Allows DOF to eliminate or modify any item on the Recognized Obligations Payment Schedule, even after the Oversight Board has approved the schedule (Section 34179 (h)(2). Provides DOF up to 60 days to approve disposition of former agency properties and assets (Section 34181 (f). As of the date staff was preparing the Oversight Board packet, the DOF language had not been incorporated into a trailer bill. Even so, staff is recommending that the Oversight Board oppose the proposed language as it would severely impact the work and authority of the Oversight Board, who has a clear fiduciary responsibility to the taxing entities each member represents and is in a better position to make decisions regarding former redevelopment agency assets and enforceable obligations than the DOF may be. Staff is also recommending that the Oversight Board authorize the Chair to sign a letter of opposition to both Senator Wolk and Assemblywoman Yamada (Attachment 1). RECOMMENDATION: By simple motion, to oppose proposed Department of Finance AB1X 26 trailer bill language and authorize the Chair to sign a letter of opposition. Attachment 1 Letter opposing proposed Department of Finance AB1X 26 trailer bill language
Attachment 1 DRAFT June 27, 2012 Senator Lois Wolk State Capitol Building, Room 5114 Sacramento, CA 95814 Assembly Member Mariko Yamada State Capitol Building, Room 5160 Sacramento, CA 95816 RE: Department of Finance AB1x26 (Redevelopment Dissolution Act) Trailer Bill Language Notice of Opposition Dear Senator Wolk and Assembly Member Yamada: On behalf of the Oversight Board to the City of Vacaville Successor Agency, I regret to inform you of our opposition to the revisions to AB1x26 proposed by the Department of Finance (DOF). The Oversight Board consists of appointed representatives of the following taxing entities that benefit from the dissolution of the former Vacaville Redevelopment Agency: Solano County Board of Supervisors: Michael Reagan Solano county Superintendent of Education: Michael Kitzes Chancellor of California Community Colleges: Jerry Wilkerson Mayor of City of Vacaville: Curtis Hunt Vacaville Library Foundation: Larry Mazzuca The Oversight Board also has a Public-at-Large Representative (Dilenna Harris) and former Redevelopment Agency employee (Emily Cantu). While the Oversight Board supports the need for the adoption of legislation that would provide the policy, technical, and other clarifications necessary to clean-up AB1x26, the proposed DOF revision language does not portray the intent of AB1X 26 in winding down the affairs in fair and reasonable manner. Specifically, the language expands the power of the DOF over the work and authority of Oversight Boards, Successor Agencies, and counties. DOF s proposed language, if approved, will negatively impact the work and reduce the authority of the Oversight Board and place most, if not all decision making in the hands of DOF. Proposed language: Prevents Oversight Board from exercising power to restore funding for an enforceable obligation that was deleted or reduced by the DOF. Requires that all actions taken by the Oversight Board must be submitted for approval by DOF (electronically as well as any other means of DOF s choosing). Increases, from three to five days, for an Oversight Board s actions to become effective (unless DOF wants additional information). Allows DOF to eliminate or modify any item on a Recognized Obligations Payment Schedule, even after the Oversight Board has approved it. Provides DOF up to 60 days to approve disposition of former agency properties and assets.
Honorable Lois Wolk Honorable Mariko Yamada June 27, 2012 Page 2 of 2 The types of actions and decisions being proposed to be handled by DOF need to be handled with transparency, due process and fairness; and at the most immediate level possible within our community and in a manner that benefits those taxing entities that AB1X 26 originally intended to help. For these reasons, the Oversight Board to the City of Vacaville Successor Agency opposes the DOF revisions to AB1x26 and urges a more balanced solution to cleaning up this bill. If you have any questions about our position, do not hesitate to call. Sincerely, Curtis Hunt Chair
Agenda Item No. 10A June 27, 2012 TO: FROM: SUBJECT: Honorable Chair and Oversight Board Members Attn: Laura C. Kuhn, Successor Agency Executive Director Cynthia W. Johnston, Housing & Redevelopment Director REVIEW OF VACAVILLE REDEVELOPMENT AGENCY REAL PROPERTY TRANSFERRED TO THE CITY OF VACAVILLE FOR PUBLIC PURPOSES DISCUSSION: Dissolving the former Vacaville Redevelopment Agency (Agency) is being conducted on a day-to-day basis by the Successor Agency and directed by the Oversight Board, as required by the Redevelopment Dissolution Act (AB1X 26). At the May 14, 2012 special meeting, the Oversight Board began familiarizing itself with eleven of the former Agency s properties. These properties were transferred to the Successor Agency by Operation of Law, as of February 1, 2012. It is anticipated that these properties will become part of a comprehensive Asset Disposition Strategy/Plan to be approved for implementation by the Oversight Board. Tonight s discussion will focus on properties transferred from the former Agency to the City of Vacaville for public purposes: properties that currently have a public use designation, such as parks, parking lots, etc. Basic information, including maps, for Public Purpose Properties was provided to each Oversight Board member as part of the Property Binder during the May 14, 2012 special meeting (also attached as Attachment 1 - Public Purpose Properties). The seventeen properties were transferred from the former Agency to the City between January 1 and June 29, 2011. These transfers are being reviewed by the State Controller s Office (SCO) to determine if they were allowable under AB1X 26. If the SCO determines that these transfers are not allowable, they will require that the City transfer the properties to the Successor Agency for Oversight Board review and inclusion in the Asset Disposition Strategy/Plan. The State Department of Finance has drafted budget trailer bill language that, if enacted, would require the sale of parking lots formerly held by redevelopment agencies. It is critical that a discussion on this issue be held in light of the financial and historical perspective of the Downtown Parking District that was formed prior (1966) to the former Redevelopment Agency being formed (1982); as well as the responsibility the City has to those whose properties have been assessed for public parking. In addition, it is anticipated that the sale of public parking lots would negatively impact nearby businesses whose patrons use the lots to frequent their shops and restaurants, which in turn would bring down sales and property taxes. As stated during both the April 25 and May 13, 2012 Oversight Board meetings, the City is interested in retaining some of these properties for continued public use in accordance with Sections 34180 (f)(1) and (2) of AB1X 26 (Attachment 2). RECOMMENDATION: Information only. Attachment(s) 1 Public Purpose Properties 2 Section 34180(f) (1) and (2) of AB1X 26
Attachment 2 Section 34180(f)(1) and (2) of the Dissolution Act 34180. All of the following successor agency actions shall first be approved by the oversight board: (a) (b) (c) (d) (e) The establishment of new repayment terms for outstanding loans where the terms have not been specified prior to the date of this part. Refunding of outstanding bonds or other debt of the former redevelopment agency by successor agencies in order to provide for savings or to finance debt service spikes; provided, however, that no additional debt is created and debt service is not accelerated. Setting aside of amounts in reserves as required by indentures, trust indentures, or similar documents governing the issuance of outstanding Redevelopment Agency bonds. Merging of project areas. Continuing the acceptance of federal or state grants, or other forms of financial assistance from either public or private sources, where assistance is conditioned upon the provision of matching funds, by the successor entity as successor to the former Redevelopment Agency, in an amount greater than 5 percent. (f) (1) If a city, county, or city and county wishes to retain any properties or other assets for future redevelopment activities, funded from its own funds and under its own auspices, it must reach a compensation agreement with the other taxing entities to provide payments to them in proportion to their shares of the base property tax, as determined pursuant to Section 34188, for the value of the property retained. (2) If no other agreement is reached on valuation of the retained assets, the value will be the fair market value as of the 2011 property tax lien date as determined by the county assessor. (g) (h) (i) Establishment of the Recognized Obligation Payment Schedule. A request by the successor agency to enter into an agreement with the city, county, or city and county that formed the Redevelopment Agency that it is succeeding. A request by a successor agency or taxing entity to pledge, or to enter into an agreement for the pledge of, property tax revenues pursuant to subdivision (b) of Section 34178.
Agenda Item No. 10B. June 27, 2012 TO: FROM: SUBJECT: Honorable Chair and Oversight Board Members Attn: Laura C. Kuhn, Successor Agency Executive Director Cynthia W. Johnston, Housing & Redevelopment Director FORMER VACAVILLE REDEVELOPMENT AGENCY ASSET (PROPERTY AND OTHER) DISPOSITION POLICY DISCUSSION Formatted: Font: Not Bold Formatted: Font: Not Bold DISCUSSION: Dissolving the former Vacaville Redevelopment Agency (Agency) is being conducted on a day-to-day basis by the Successor Agency and directed by the Oversight Board as required by the Redevelopment Dissolution Act (AB1X 26). Tonight, staff is seeking direction from the Oversight Board regarding the overall objectives and process for the Successor Agency to consider in developing an Asset (property and other assets) Disposition Strategy/Plan. Among its duties, the Oversight Board has the fiduciary responsibility to the former Agency s holders of enforceable obligations; as well as the taxing entities that benefit from the distribution of property tax and other revenues. In doing so, one of the Oversight Board s responsibilities is to direct the Successor Agency to dispose of the former Agency s assets, per Section 34181(a) of the AB1X 26: The oversight board shall direct the successor agency to do all of the following: (a) Dispose of all assets and properties of the former Redevelopment Agency that were funded by tax increment revenues of the dissolved Redevelopment Agency; provided, however, that the oversight board may instead direct the successor agency to transfer ownership of those assets that were constructed and used for a governmental purpose, such as roads, school buildings, parks, and fire stations, to the appropriate public jurisdiction pursuant to any existing agreements relating to the construction or use of such an asset. Any compensation to be provided to the successor agency for the transfer of the asset shall be governed by the agreements relating to the construction or use of that asset. Disposal shall be done expeditiously and in a manner aimed at maximizing value. (emphasis added) Asset Disposition Strategy/Plan Policies: As stated above, AB1X 26 language provides only broad language to guide the Oversight Board on how to dispose of the former Agency s properties. While considering policies and philosophies for property disposition, the Oversight Board must strike the appropriate balance between expeditious and maximizing value. In order to do so, staff is seeking Oversight Board direction on the overall objectives of the disposition process which will serve as a framework for a Strategy/Plan that achieves this balance, provides for a good public process, and ultimately benefits the taxing entities. Staff is seeking direction on a number of topics, including (but not limited to): Timing: Although AB1X 26 requires the former Redevelopment Agency s assets and properties be sold in an expeditious manner, it does not mean a massive fire sale of properties is required. AB1X 26 allows for a more methodical and strategic approach to be implemented, which will in turn ensure greater monetary distribution to each of the taxing entities. Timing of sales may take into account: Analysis of the market including current/future market demand, Whether there are encumbrances or complex development or other agreements on a property, Whether properties are vacant/occupied, public use, etc., Potential for revenue generation through interim uses, and Pending legislation.
The Oversight Board discussed timing of the disposition of assets during its April meeting, but may want to provide additional direction. Community Outreach and Information Sharing: Staff will be setting up meetings with individuals, businesses, and/or groups that will be directly impacted by the disposition process. However, because AB1X 26 does not provide guidance on community outreach beyond compliance with the Brown Act, staff seeks input on what forms of outreach, public noticing, and information sharing with the community is desired. In considering a public process for former Agency asset disposal, the Oversight Board should keep in mind the obligation to market the properties at a fair price versus gift of public funds while considering the net value to the public if a specific type of development is solicited. Outreach should consider the varying ways a property may best be sold which can include, but is not limited to: Public auction, Request for proposal, Direct negotiations, Use of existing staff expertise or outside agency/business, etc. Additionally, as the owner of the former Agency s properties, the Successor Agency will be asked to approve any sales, which will provide one form of public participation. Consideration of Pending Legislation: Legislation is pending that may impact how, and for what purpose, former Agency assets may be disposed. While legislation is presently being held up during the budget (and trailer bill process) staff is seeking input on whether the Asset Disposition Strategy/Plan should include components of that pending legislation. SB 1151 (Steinberg) specifically provides the framework for forming a Community Development and Joint Housing Authority that is responsible for developing an asset management plan to maximize the long-term social and monetary value of former Redevelopment Agency properties, to govern the disposition of former Redevelopment Agency assets and the use of the proceeds generated. The State Department of Finance (DOF) proposed budget trailer bill related to Dissolution Act clean-up may also impact asset disposal which would mandate that public parking lots be sold regardless of their use/location. The DOF proposal would also limit the Oversight Board s authority to approve property sales. As proposed, every action of the Oversight Board would be required to be approved by resolution of the board and would be subject to DOF approval prior to being effective. Asset Disposition Strategy/Plan Framework: As presently envisioned, staff is proposing the following framework for developing an Asset Disposition Strategy/Plan: 1. Inventory and analyze real property assets Completed Former Agency Property Binder distributed to Oversight Board, May 14, 2012 sspecial meeting Oversight Board reviewed the first series of properties, May 14, 2012 sspecial meeting Oversight Board to complete second/final series of properties tonight 2. Establish Policies regarding Asset Disposition Strategy/Plan Underway Oversight Board to provide direction to staff on timing; outreach desired, impact of pending legislation, process desired, etc. 3. Determine potential value of assets and current marketability Underway 4. Prioritize assets to be disposed (for example public purpose uses to be transferred to City, vacant, encumbered, etc.)
5. Determine disposition process, as well as parameters of sales such as buyer/seller responsibility for closing costs, and whether a property will be sold in as is condition 6. Evaluate costs and timeline to implement strategy/plan and incorporate into future Recognized Obligation Payment Schedule 7. Finalize and present Strategy/Plan for approval of the Successor Agency and Oversight Board 8. Implement Asset Disposition Strategy/Plan In order to complete the framework, staff will work to incorporate the Board s policy direction related to timing, community outreach and information sharing, and pending legislation into the overall strategy/plan to be brought back for formal consideration and approval for implementation. Costs to implement the plan will be determined and added to future Recognized Obligation Payment Schedules. RECOMMENDATION: To provide policy direction to staff regarding the developing the Asset Disposition Strategy/Plan.