THE CITY OF HERCULES AS SUCCESSOR AGENCY TO THE HERCULES REDEVELOPMENT AGENCY DATE: January 9, 2024
TO: The City of Hercules as Successor Agency to the Hercules Redevelopment Agency VIA: Dante Hall, City Manager/Executive Director
SUBMITTED BY: Edwin Gato, Director of Finance
SUBJECT: Recognized Obligation Payment Schedule for the period of July 1, 2024, through June 30, 2025 (ROPS 24-25) RECOMMENDED ACTION:
Adopt a resolution approving the Recognized Obligation Payment Schedule for the period July 1, 2024, through June 30, 2025 (ROPS 24-25); or Provide alternative direction.
DISCUSSION:
Health and Safety Code (HSC) Section 34177 requires that successor agencies must, amongst other things, prepare a Recognized Obligation Payment Schedule (ROPS) for each upcoming fiscal year. A ROPS is the document that sets forth the maximum payment amounts and due dates of payments required by enforceable obligations. Enforceable obligations are defined in HSC Section 34171(d) and include the payment of bonds and loans, payments required by the federal government, judgments or settlements, any legally binding agreement or contract, and contracts or agreements necessary for the administration or operation of the successor agency.
HSC Section 34177(1) requires successor agencies to submit the ROPS to a Countywide Oversight Board and California Department of Finance (DOF) for approval.
The ROPS template used for the ROPS 24-25 includes the following worksheets:
Recognized Obligation Payment Schedule Summary
Recognized Obligation Payment Schedule – ROPS Detail - This worksheet includes a section for ROPS A (July 1, 2024 through December 31, 2024) and a section for ROPS 24-25 B (January 1, 2025 through June 30, 2025).
Recognized Obligation Payment Schedule – Report of Cash Balances Recognized Obligation Payment Schedule – Notes
Summary of Obligations
Hercules ROPS 24-25 requests $8.6 million in obligations, of which $8.6 million is from Redevelopment Property Tax Trust Funds (RPTTF) and $43,719 is from Other Funds. Obligations consist of bond debt service ($6.2 million), payments owed to third parties pursuant to two agreements entered into prior to dissolution ($2.1 million), and an administrative cost allowance ($250,000 for the current year and $250,000 for an unfunded allowance in 2022-23).
Update on County Past-Due Pass-Through Payments
When the Successor Agency refunded its bonds in 2022, the County Auditor-Controller found that $9.3 million was past-due to the County of Contra Costa (County) under a negotiated pass-through agreement. The County had been underpaid since 2018.
The Successor Agency structured its 2022 Bond debt service payments to be lower upfront so the County pass-through payments could be paid off as soon as possible. The County Auditor-Controller began making past-due pass-through payments in June 2022 and paid them off in June 2023.
While the County Auditor-Controller made past-due pass-through payments, it only funded the Successor Agency’s bond debt service and did not fund other obligations. Successor Agency staff anticipates that all past-due obligations will be fully funded in January 2024.
Prior Period Adjustment and Cash Balance
The ROPS 24-25 Report of Cash Balance worksheet shows $415,452 in RPTTF money received for the ROPS 21-22 (July 1, 2021, through June 30, 2022) was not expended and will be applied to pay for ROPS 24-25 obligations as a Prior Period Adjustment. It also shows an available Other Funds balance of $43,719 that will be applied to ROPS 24-25 obligations.
The Recognized Obligation Payment Schedule (ROPS) are posted on the City of Hercules website (www.ci.hercules.ca.us).
ATTACHMENTS:
Resolution approving the Recognized Obligation Payment Schedule (ROPS) for the period July 1, 2024, through June 30, 2025 ROPS 24-25