Agenda Report
Fullerton City Council
MEETING DATE: January 16, 2024
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: SUNAYANA THOMAS, DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT PREPARED BY: TAYLOR SAMUELSON, SENIOR ADMINISTRATIVE ANALYST SUBJECT: RECOGNIZED OBLIGATION PAYMENT SCHEDULE 2024-25 AND ADMINISTRATIVE BUDGET ALLOWANCE PER ASSEMBLY BILL 1X26 AND 1484 AND SENATE BILL 107
SUMMARY
Staff requests the Fullerton Successor Agency (Successor Agency), approve the proposed Recognized Obligation Payment Schedule for Fiscal Year 2024-25 (ROPS 2024-25) and Administrative Budget Allowance for July 1, 2024 through June 30, 2025, per Assembly Bills 1X 26 (AB26) and 1484 (AB 1484) and Senate Bill 107 (SB 107)
RECOMMENDATION
Adopt Resolution No. SA 2024-XX.
RESOLUTION SA 2024-XX – A RESOLUTION OF THE SUCCESSOR AGENCY OF THE CITY OF FULLERTON, CALIFORNIA, APPROVING AND ADOPTING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE 2023-24 AND ADMINISTRATIVE BUDGET ALLOWANCE (PERIOD COVERING JULY 1, 2024 – JUNE 30, 2025)
CITY MANAGERS RECOMMENDATION
The City Manager requests authorization of the Resolution on the Recognized Obligation Payment Schedule.
PRIORITY POLICY STATEMENTS
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
The City will make all approved payments on ROPS 2024-25 from property tax increment revenue allocated by the Orange County Auditor-Controller to the Fullerton Successor Agency Redevelopment Property Tax Trust Fund (RPTTF) per the State Mandated dissolution process.
DISCUSSION
The Recognized Obligation Payment Schedule (ROPS) identifies funds needed to complete the former Fullerton Redevelopment Agency dissolution process and set forth payment amounts and due dates for all existing financial obligations. Staff prepares the ROPS annually until the Agency has fulfilled its obligations and repaid all debt. Staff has attached the proposed ROPS 2024-25 for July 1, 2024 through June 30, 2025. Staff must submit ROPS 2024-25 to the Orange County Oversight Board and then to the State Department of Finance (DOF) for review and approval by February 1, 2024.
The ROPS 2024-25 includes the enforceable obligations of the Successor Agency requiring payments during Fiscal Year 2024-25. These obligations include bond debt service payments, leases, development agreement obligations, a purchase and sale agreement, administering ongoing affordable housing and loan programs, a stipulated judgment and an administrative cost allowance. Staff continued to list previously denied items per the advice of legal counsel in prior years. This ROPS lists only two items related to affordable housing with previous denials. Relevant lawsuits and/or proposed legislation may cause the DOF to change their determination to continue to deny these items. Staff will complete all currently approved Successor Agency enforceable obligations in FY 2027-28.
The administrative cost allocation (ACA) covers the costs associated with ROPS administration including former redevelopment agency loans, bond disclosure, continuing disclosure, clearing titles for seismic and rehabilitation loans and work on relevant long-term covenants. State dissolution law limits the ACA to 3% of RPTTF revenue received in the preceding fiscal year or $250,000, whichever is greater, not to exceed 50% of the RPTTF distributed in the preceding fiscal year. The work encompasses staff across various departments including Community and Economic Development and Administrative Services.
The ROPS FY24-25 incorporates a request for $6,000,000 RPTTF distribution for the potential acquisition of the Ronald F. Miller Trust property located at 127 West Chapman Avenue, in addition to existing redevelopment agency obligations. The site is a 1.2-acre parking lot subject to a redevelopment purchase agreement from 2004, based on conducting a market-rate assessment at the time of sale. The Fullerton Redevelopment Agency entered the agreement and it has remained an enforceable obligation on the ROPS since dissolution.
Staff recommends City Council, acting as the Fullerton Successor Agency, adopt the draft resolution approving ROPS 2024-25 for July 1, 2024 through June 30, 2025. Staff will forward the ROPS 2024-25 to the County Oversight Board for consideration, if approved. The Successor Agency becomes subject to a $10,000 per day civil penalty for every day the Agency does not submit the schedule to the DOF, if a Successor Agency does not submit their ROPS by the February 1, 2024 deadline. Additionally, the maximum administrative cost allowance for that period shall reduce by 25 percent if a Successor Agency does not submit their ROPS by the February 1, 2024 deadline.
Attachments:
Attachment 1 – Resolution No. SA 2024-XXX
Attachment 2 – ROPS Budget 2024-25 Summary
cc: City Manager Eric J. Levitt
Recognized Obligation Payment Schedule and Administrative Budget Allowance January 16, 2024 - Page 4