EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: June 7, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Tomohito Oku, Finance Director
SUBJECT: Adoption of Fiscal Year 2022-23 Successor Agency Budget Recommendation
Adopt a Resolution adopting the Fiscal Year 2022-23 Successor Agency Budget.
Background
Redevelopment agencies in California were dissolved effective February 1, 2012, under ABx1 26 enacted June 2011 and held by the California Supreme Court to be constitutional (“Dissolution Statutes”). The Dissolution Statutes were further amended by AB 1484 enacted June 2012, AB 471 enacted February 2014, and SB107 enacted September 2015. Under the Dissolution Statutes, on January 10, 2012, the City Council elected to serve as the Successor Agency to the Former Redevelopment Agency of the City of East Palo Alto (the “Successor Agency”).
City staff performs key day-to-day functions for the Successor Agency, primarily assuring that the existing obligations of the former Redevelopment Agency are properly paid, and that all properties and other assets are disposed of in an appropriate manner. Under Health and Safety Code §34179 (j), effective July 1, 2018, a Countywide Oversight Board staffed by the County Auditor-Controller was established to provide direction and oversight to successor agencies regarding the wind-down of the former Redevelopment Agencies. Each related period, the Finance Department prepares a Recognized Obligation Payment Schedule (“ROPS”) which provides the basis for receiving Redevelopment Property Tax Trust Fund (“RPTTF”) monies utilized to pay the authorized obligations of the former Agency. On January 10, 2022 as required by the Dissolution Statues, the Countywide Oversight Board approved the obligation payments for the Fiscal Year (FY) 2022-23 ROPS period.
The City maintains all accounting, financial, and debt activity for the Successor Agency in a fund referred as the “Successor Agency Trust.” As such, staff is seeking Successor Board approval of the FY 2022-23 Successor Agency Budget.
Analysis
The following analysis provides an overview of the FY 2022-23 Budget for the Successor Agency Trust Fund:
Revenues Expenditures In Out
705 Successor Operating $ 3,959,000 $ (114,110) $ - $ - $ - $ 3,844,890 706 Successor Debt Service $ 1,552,430 $ (1,550,310) $ - $ - $ - $ 2,120 Successor Agency $ 5,511,430 $ (1,664,420) $ - $ - $ - $ 3,847,010 FY 2022-23 Successor Agency Budget Summary
Operating Transfers Net Change
Fund Balance
Fund Description
Operating Capital
Improvement
Plan
Budgeted revenues and expenditures total $5.5M and $1.7M, respectively. The net change in fund balance totals $3.8M and consists of the following activity:
· Total budgeted revenues of $5.5M equal the total estimated RPTTF distribution requests by staff and approved by the Oversight Board and the Department of Finance (for ROPS 22-23) or estimated by staff (ROPS 23-24).
The Successor Agency only receives funds required to pay authorized and approved obligations.
· Total budgeted expenditures of $1.7M consist of 2015 Refunding Bonds debt service ($1.55M); Sponsoring Entity Loan Interest, Bay Road Loan Advances, and Administrative Overhead $ ($0.11M).
· Surplus RPTTF funds of $2.5M are utilized to repay estimated Sponsoring Entity loans in FY 2022-23 ($2.2M) and provide reserve for FY 2023-24 ROPS estimated loan repayment.
Fiscal Impact
The adoption of the FY 2022-23 Budget primarily serves as local appropriation authority for obligation payments from the Successor Trust.
Public Notice
The public was provided notice of City budget hearings by publishing a notice of the hearing dates in “Mercury News” and, also, posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website.
Environmental
The action being considered by the City Council is exempt from the California Environmental Quality Act (CEQA) because it is not a “project” pursuant to 15378(b)(4) because it is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant impact on the environment.
Attachments
1. Resolution - SA budget 22-23