EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: June 20, 2023
TO: Honorable Mayor and Members of the City Council
VIA: Melvin E. Gaines, City Manager
BY: Tomohito Oku, Finance Director
SUBJECT: Adoption of Fiscal Year 2023-24 Successor Agency Budget Recommendation
Adopt a Resolution adopting the Fiscal Year 2023-24 Successor Agency Budget.
Background
Redevelopment agencies in California were dissolved effective February 1, 2012, under ABx1 26 enacted June 2011 (codified at section 34172(a) of the California Health and Safety Code) and held by the California Supreme Court to be constitutional. The Dissolution Statutes were further amended by AB 1484 enacted June 2012, AB 471 enacted February 2014, and SB107 enacted September 2015 (collectively, “Dissolution Statutes”). 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 9, 2023 as required by the Dissolution Statues, the Countywide Oversight Board approved the obligation payments for the Fiscal Year (FY) 2023-24 ROPS period.
The Successor Agency accounts for, and transacts, the revenues and disbursements authorized by the Oversight Board and the Department of Finance, including authorizing budget appropriations for the same, including maintaining 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 2023-24 Successor Agency Budget.
Analysis
The following analysis provides an overview of the FY 2023-24 Budget for the Successor Agency Trust Fund:
Revenues Expenditures In Out
705 Successor Operating $ 2,020,662 $ (2,100,670) $ - $ - $ - $ (80,008) 706 Successor Debt Service $ 1,555,000 $ (1,538,863) $ - $ - $ - $ 16,137 Successor Agency $ 3,575,662 $ (3,639,533) $ - $ - $ - $ (63,871) Operating Transfers Net Change
Fund Balance Fund Description
Operating Capital
Improvement
Plan
FY 2023-24 Proposed Successor Agency Budget Summary
Budgeted revenues and expenditures total $3,575,662 and $3,639,533, respectively. The net change in fund balance totals $64,871 and consists of the following activity:
· Total budgeted revenues of $3.6M equal the total estimated RPTTF distribution requests by staff and approved by the County Oversight Board and the Department of Finance (for ROPS 23-24) or estimated by staff (ROPS 24-25). The Successor Agency only receives funds required to pay authorized and approved obligations. · Total budgeted expenditures of $3.6M consist of 2015 Refunding Bonds debt service ($1.54M); Sponsoring Entity Loan debt service ($2.0M), Bay Road Loan Advances ($60K), and Administrative Overhead $ ($40K).
Fiscal Impact
The adoption of the FY 2023-24 Budget primarily serves as local appropriation authority for obligation payments from the Successor Trust.
Public Notice
Notice of this agenda item by publishing a notice of the hearing dates in “San Mateo County Times” 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.
Environmental
The proposed action does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines sections 15378(b)(4) and (5) in that it is a governmental fiscal, organizational or administrative activity that will not result in direct or indirect changes in the environment.
Attachments
1. Resolution