Agenda packet, special meeting — Hawthorne City Council, December 10, 2024

Alex Vargas, Mayor
Katrina Manning, Mayor Pro Tem
Angie Reyes English, Councilmember
Alex Monteiro, Councilmember
L. David Patterson, Councilmember
Dayna S. Williams-Hunter, City Clerk
Marie Poindexter-Hornback, City Treasurer

CITY OF HAWTHORNE

CITY COUNCIL SUCCESSOR AGENCY SPECIAL MEETING
AGENDA FOR DECEMBER 10, 2024 6:00 PM

COUNCIL CHAMBER AT CITY HALL
4455 W. 126th STREET, HAWTHORNE, CALIFORNIA

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MEETING

RESOLUTIONS

1. RESOLUTION NO. 2024-02
APPROVING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE ("ROPS") FOR THE TWELVE-MONTH FISCAL PERIOD FROM JULY 1, 2025 THROUGH JUNE 30, 2026 ("ROPS 25- 26") AND TAKING CERTAIN RELATED ACTIONS.

RECOMMENDED MOTION:

Staff recommends that the City Council adopt SA Resolution 2024-02 approving ROPS 25-26, a Recognized Obligation Payment Schedule for the twelve-month fiscal period from July 1, 2025 through June 30, 2026 and taking certain related actions.

ADJOURNMENT

CERTIFICATION

STATE OF CALIFORNIA )

COUNTY OF LOS ANGELES ) SS

CITY OF HAWTHORNE )
I, DIANA CUCALON, Deputy City Clerk for the City of Hawthorne, certify that a true and correct copy of the foregoing City Council Special Meeting Agenda was posted not less than 24 hours before the City Council Meeting to be held on Tuesday, ___________, 2024
_______________________________________

DIANA CUCALON, HAWTHORNE DEPUTY CITY CLERK
AGENDA ITEM NO. 1.

CITY OF HAWTHORNE
City Council

AGENDA BILL
For the meeting of 12/10/2024
Originating Department: Finance
City Manager: Department Head:

SUBJECT:

RESOLUTION NO. 2024-02
APPROVING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE ("ROPS") FOR THE TWELVEMONTH FISCAL PERIOD FROM JULY 1, 2025 THROUGH JUNE 30, 2026 ("ROPS 25-26") AND TAKING CERTAIN RELATED ACTIONS.

RECOMMENDED MOTION:

DISCUSSION:

BACKGROUND:

Assembly Bill ("AB") x1 26, AB 1484, and Senate Bill 107 (collectively, the "Dissolution Act") dissolved Redevelopment agencies and require the Successor Agency to the Hawthorne Redevelopment Agency ("Successor Agency") to wind down the obligations of the former Hawthorne Redevelopment Agency ("Former Agency"). The wind down is accomplished, in large part, through the preparation of an annual ROPS, covering the upcoming fiscal year. The ROPS lists the obligations to be funded and serves as a request for an allocation of property tax increment revenue deposited by the Auditor-Controller in the Redevelopment Property Tax Trust Fund ("RPTTF").

The ROPS must be approved by the Oversight Board to the Successor Agency ("Oversight Board") and submitted to the State Department of Finance ("DOF"). Pursuant to Health and Safety Code ("HSC") Section 34177(l), DOF provides the ROPS form for successor agencies to use to report enforceable obligations. Pursuant to HSC Section 34177(l)(2)(C), a copy of the ROPS must also be submitted to the Los Angeles County Auditor-Controller ("Auditor-Controller") and State Controller's Office.

DISCUSSION:

The Successor Agency has already paid off several of the Former Agency's obligations. Remaining obligations include the 2016 Tax Allocation Refunding Bonds and related costs, Oceangate Owner Participation Agreement ("OPA") rebates, Gateway Disposition and Development Agreement rebates, as well as administrative expenses. The ROPS Detail page lists each of the remaining obligations, including the amount requested in the current year and an estimate of the total debt or obligation remaining for each item.

In total, the Successor Agency requests approval for $4,585,321 in expenditures, including $1,370,625 from a reserve balance set aside in the prior fiscal year and $3,214,696 in funds from the RPTTF. This represents a decrease from the amount requested on the prior year's ROPS, mostly due to the lower debt service payment (item 38) and an adjustment to the calculation of the OPA rebate (item 35) as detailed in the OPA. There are no new items on the ROPS.

On the Report of Cash Balances, the Successor Agency identifies any available funds that can be used to pay enforceable obligations. After all available funds are allocated or exhausted, which they have been, the Successor Agency can request funding for enforceable obligations from RPTTF.

ECONOMIC DEVELOPMENT STRATEGIC PLAN:
.

FISCAL IMPACT:

ROPS 25-26 must be approved by the Hawthorne Successor Agency's Oversight Board and submitted to DOF for the Successor Agency to receive RPTTF, administered by the Los Angeles County AuditorController ("Auditor-Controller"), and to pay enforceable obligations during the ROPS 25-26 period. In total, the Successor Agency requests approval for $4,585,321 in expenditures, including $1,370,625 from a reserve balance set aside in the prior fiscal year and $3,214,696 in funds from the RPTTF.

NOTICING PROCEDURE:

None.

ATTACHMENTS
ROPS Reso 25-26
ROPS 25-26
SA Admin Budget 25-26
RESOLUTION NO. 2024-02

A RESOLUTION OF THE SUCCESSOR AGENCY TO THE HAWTHORNE

REDEVELOPMENT AGENCY APPROVING A RECOGNIZED OBLIGATION

PAYMENT SCHEDULE FOR THE TWELVE-MONTH FISCAL PERIOD FROM JULY 1, 2025 THROUGH JUNE 30, 2026 AND TAKING CERTAIN RELATED

ACTIONS
WHEREAS, the City of Hawthorne elected to serve as the Successor Agency to the former Hawthorne Redevelopment Agency (“Successor Agency”) pursuant to Assembly Bill x1 26 (“ABx1 26”) as codified in the California Health & Safety Code (“HSC”); and WHEREAS, ABx1 26 was amended by Assembly Bill 1484 and Senate Bill 107 (collectively, the “Dissolution Act”); and
WHEREAS, among the duties of successor agencies under the Dissolution Act as amended is the preparation of an annual Recognized Obligation Payment Schedule (“ROPS”), per HSC Section 34177 (l), that includes the ensuing two six-month periods for consideration by a consolidated oversight board and the California Department of Finance (“DOF”) for purposes of administering the wind-down of financial obligations of the former Redevelopment Agency; and WHEREAS, HSC Section 34177 (l) further requires that the proposed ROPS be transmitted to the County Oversight Board, after which time the County Oversight Board may approve the ROPS and the Successor Agency’s transmittal of the adopted ROPS to DOF, the County Auditor-Controller, and the State Controller’s Office for their consideration; and WHEREAS, the proposed ROPS 25-26 for the six-month periods from July 1, 2025 through December 31, 2025 and January 1, 2026 through June 30, 2026, attached hereto as Exhibit “A”, has been prepared and is consistent with the provisions of the Dissolution Act and in the format made available by DOF; and
WHEREAS, the Successor Agency is required to prepare an annual administrative budget and submit it to the Oversight Board per HSC Section 34177 (j); and WHEREAS, the Successor Agency prepared the Fiscal Year 2025-26 Administrative Budget in accordance with the Dissolution Act, attached hereto as Exhibit “B”; and WHEREAS, the Oversight Board will review the ROPS 25-26 and the Fiscal Year 2025- 26 Administrative Budget on January 21, 2025; and
WHEREAS, the Successor Agency desires to approve the ROPS 25-26, along with the Fiscal Year 2025-26 Administrative Budget, and transmit it to various parties as required by the Dissolution Act.

NOW, THEREFORE, the Successor Agency to the Hawthorne Redevelopment Agency does hereby resolve as follows:

Section 1. The above recitals are true and correct and are a substantive part of this Resolution, incorporated herein by this reference.

Section 2. The Successor Agency hereby approves and adopts the ROPS 25-26 covering the period of July 1, 2025 to June 30, 2026 in substantially the form attached hereto as Exhibit “A”, as required by the Dissolution Act. The Successor Agency accepts changes made by the Consolidated Oversight Board in advance in order to enable the Successor Agency to submit the ROPS 25-26 to DOF by the deadline of February 1, 2025.

Section 3. Pursuant to the Dissolution Act, the Successor Agency approves the Fiscal Year 2025-26 Administrative Budget for the period July 1, 2025 to June 30, 2026 submitted herewith as Exhibit “B”, which is incorporated herein by this reference.

Section 4. The City Manager or another representative of the Successor Agency is hereby authorized and directed to post a copy of the ROPS 25-26 on the City’s website and transmit a copy of the ROPS 25-26 to the offices of the Los Angeles County Auditor-Controller, the State Controller’s Office, and the State of California Department of Finance.

PASSED AND ADOPTED by the Successor Agency at a meeting held on the 10th day of December, 2024.

ALEX VARGAS,

CHAIR, SUCCESSOR AGENCY TO THE

HAWTHORNE REDEVELOPMENT AGENCY
ATTEST:

DAYNA S. WILLIAMS-HUNTER,

SECRETARY, SUCCESSOR AGENCY
ATTEST:

APPROVED AS TO FORM:

ROBERT KIM,

LEGAL COUNSEL

EXHIBIT A
ROPS 25-26
Recognized Obligation Payment Schedule (ROPS 25-26) - Summary Filed for the July 1, 2025 through June 30, 2026 Period Successor Agency: Hawthorne
County: Los Angeles
Current Period Requested Funding for Enforceable
Obligations (ROPS Detail)
25-26A Total
(July -
December)
25-26B Total
(January -
June)
ROPS 25-26
Total
A Enforceable Obligations Funded as Follows (B+C+D) $ 1,370,625 $ - $ 1,370,625 B Bond Proceeds - - -
C Reserve Balance 1,370,625 - 1,370,625
D Other Funds - - -
E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ 590,254 $ 2,624,442 $ 3,214,696 F RPTTF 477,754 2,511,942 2,989,696
G Administrative RPTTF 112,500 112,500 225,000
H Current Period Enforceable Obligations (A+E) $ 1,960,879 $ 2,624,442 $ 4,585,321 Certification of Oversight Board Chairman:

Name Title
Pursuant to Section 34177 (o) of the Health and Safety
code, I hereby certify that the above is a true and
accurate Recognized Obligation Payment Schedule for
the above named successor agency. /s/
Signature Date
Alex Vargas Mayor/Chair
Hawthorne
Recognized Obligation Payment Schedule (ROPS 25-26) - ROPS Detail July 1, 2025 through June 30, 2026

OPA/DDA/
Construction
06/23/
2001
11/25/2034 Oceangate
Properties
Tax Increment
Payments Due
to Oceangate
Properties per
6th
Implementation
Agreement
Project
Area
No. 2
1,737,797 N $174,578 - - - 174,578 - $174,578 - - - - - $- 9 Successor
Agency
Administrative/
Employee
Costs
Admin
Costs
02/01/
2012
09/01/2036 City of
Hawthorne
Employees
and
Various
Vendors
Payroll cost for
Successor
Agency
employees,
consultants,
salaries,
insurance, and
benefits,
supplies,
equipment,
and other
operational
supplies.

All
Project
Areas
3,012,500 N $225,000 - - - - 112,500 $112,500 - - - - 112,500 $112,500 31 Gateway DDA
Tax Increment
Payment

OPA/DDA/
Construction
09/07/
2000
09/13/2029 US Bank Tax increment
payments into
Special Fund
required by the
Gateway
Center
Disposition
and
Development
Agreement
Project
Area
No. 2
2,008,530 N $303,176 - - - 303,176 - $303,176 - - - - - $- 35 Tax Rebates -
Oceangate
OPA Sales
Tax
Component
Business
Incentive
Agreements
07/01/
1992
11/25/2034 Oceangate
Properties
Tax rebates for
Oceangate
Properties
Project
Area
No. 2
12,777,083 N $737,192 - - - - - $- - - - 737,192 - $737,192 36 2016 Tax
Allocation
Refunding
Bonds
Refunding
Bonds
Issued After
6/27/12
01/28/
2016
09/01/2036 US Bank Principal and
Interest
payments on
bond
Project
Area
No. 2
20,764,625 N $1,736,750 - 1,370,625 - - - $1,370,625 - - - 366,125 - $366,125 37 Fiscal Agent
Fees
Fees 01/28/
2016
09/01/2036 US Bank Trustee Fees
for 2016 Bonds
Project
Area
No. 2
30,000 N $2,500 - - - - - $- - - - 2,500 - $2,500
38 2016 Tax Reserves 01/28/ 09/01/2036 US Bank Reserve Project 1,396,125 N $1,396,125 - - - - - $- - - - 1,396,125 - $1,396,125

A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired
ROPS
25-26
Total
ROPS 25-26A (Jul - Dec)
25-26A
Total
ROPS 25-26B (Jan - Jun)
25-26B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds
RPTTF
Admin
RPTTF
Allocation
Refunding
Bond Reserve
2016 required per
bond indenture
Area
No. 2
39 Continuing
Disclosure
Professional
Services
12/01/
2016
09/01/2036 Harris &
Associates
Continuing
Disclosure
reports for
2001 and 2016
TAB's
Project
Area
No. 2
120,000 N $10,000 - - - - - $- - - - 10,000 - $10,000
Hawthorne
Recognized Obligation Payment Schedule (ROPS 25-26) - Report of Cash Balances July 1, 2022 through June 30, 2023
(Report Amounts in Whole Dollars)
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.

A B C D E F G H
ROPS 22-23 Cash Balances
(07/01/22 - 06/30/23)
Fund Sources
Comments
Bond Proceeds Reserve Balance Other Funds RPTTF
Bonds issued
on or before
12/31/10
Bonds issued
on or after
01/01/11
Prior ROPS
RPTTF and
Reserve
Balances retained
for future
period(s)
Rent, grants,
interest, etc.

Non-Admin
and Admin
1 Beginning Available Cash Balance (Actual 07/01/22)
RPTTF amount should exclude "A" period distribution
amount.
3,038,329 358 455,591 E: Includes $2,165,125 requested as reserve in 20-21 for 21-22 expenditures, plus 20-21
PPA of $772,212, plus 21-22 PPA of
$100,992. F: Other funds are positive
following the ROPS 22-23 cash balance
correction. G: 19-20 PPA, which reduced the
RPTTF distribution for ROPS 22-23.
2 Revenue/Income (Actual 06/30/23)
RPTTF amount should tie to the ROPS 22-23 total
distribution from the County Auditor-Controller
26,869 4,340,417 F: Interest earnings in FY 22-23 G: RPTTF received for ROPS 22-23.
3 Expenditures for ROPS 22-23 Enforceable Obligations
(Actual 06/30/23)
2,165,123 2,405,059 E: Expenditure of reserves on 2016 Bonds debt service, per DOF approval. G: Based on
the ROPS 22-23 PPA CAC reported actuals
for RPTTF non-administration and
administration less $2,204,000 held as
reserve to pay 2016 TABs.
4 Retention of Available Cash Balance (Actual 06/30/23) RPTTF amount retained should only include the amounts
distributed as reserve for future period(s)
873,206 27,227 2,204,000 E: 20-21 PPA of $772,212, 21-22 PPA of $100,992, plus $2 unspent reserve F: Interest
Revenue on hand G: Reserve for 2016 TABs
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.

Non-Admin
and Admin
debt service payment in ROPS 22-23.
5 ROPS 22-23 RPTTF Prior Period Adjustment
RPTTF amount should tie to the Agency's ROPS 22-23 PPA
form submitted to the CAC
No entry required 186,949 G: 22-23 requested PPA of $186,949. 6 Ending Actual Available Cash Balance (06/30/23)
C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5)
$- $- $- $- $-
Hawthorne
Recognized Obligation Payment Schedule (ROPS 25-26) - Notes July 1, 2025 through June 30, 2026
Item # Notes/Comments
8 The requested amount is calculated assuming a standard 2% increase in property values, with a 10% buffer added to the resulting payment calculation in case a property increases in value more significantly due to improvements or a transfer of ownership. 9 31 The rebate is based on 50% of the incremental property tax revenue generated by the DDA properties, less a pro rata share of County administrative fees, the former 20% low & moderate income housing set aside, pass through payments, and debt service on the 1998, 2004, and 2006 Bonds (refunded by the 2016 Bonds). The requested amount is the greater of the projection from prior year's actual payment amount or $200,000. Due to the item needing adjustments with Amended ROPS 22-23 and 24-25, the higher threshold buffer is necessary to avoid more adjustments and reduce SA Admin-related costs for adjustments.
35 Payment is based on sales taxes, which are difficult to predict. As of Fiscal Year 2023-24, a sales tax rebate is paid only for Parcel 1 sales taxes above a threshold. Applying recent annual growth provides a projected rebate amount of $670,175. Adding a 10% buffer to projected sales tax revenues suggests an appropriate estimate of $737,193.
36 37
38 39

EXHIBIT B
Fiscal Year 2025-26 Administrative Budget

EXHIBIT B

HAWTHORNE SUCCESSOR AGENCY
ADMINISTRATIVE BUDGET FY 2025-26
FOR JULY 1, 2025 to JUNE 30, 2026
Expense Category Responsibilities
FY 2025-26
Proposed
Budget

AGENCY STAFF
Finance
 Process payment of enforceable obligations
 Maintain documentation of Agency records
 Coordinate with consultant to answer questions and provide documentation as requested by Oversight Board, County Auditor-Controller, and Department of Finance
$60,000
Legal  Provide general legal services as needed $40,000 City Manager  Provide direction to other staff and consultants as needed $30,000 Other  Administration and implementation of Agency wind-down $20,000 AGENCY STAFF TOTAL $150,000

CONTRACTS
Administrative services
 Prepare ROPS, PPA, staff reports, and resolutions
 Assist with administration of the Owner Participation Agreement (“OPA”) and other reporting
 Coordinate with and answer questions for Oversight Board, County Auditor -Controller, and Department of Finance
 Attend Oversight Board meeting
 Monitor and project cash flow to ensure sufficient revenues for obligations and to inform Agency staff of expected revenues
$45,000
Legal services  Provide special legal services as needed $30,000 CONTRACTS TOTAL $75,000
TOTAL BUDGET $225,000

Hawthorne City CouncilDecember 10, 2024

Hawthorne City Council
December 10, 2024