DATE:
December 03, 2024
TO:
City Council, as Successor Agency to the Hesperia Community Redevelopment Agency FROM:
Rachel Molina, City Manager
BY:
Casey Brooksher, Assistant City Manager
SUBJECT:
Annual 2025-26 Recognized Obligation Payment Schedule
RECOMMENDED ACTION
It is recommended that the Successor Agency adopt Resolution No. SA 2024-02, approving the Annual 2025-26 Recognized Obligation Payment Schedule (ROPS), including the Successor Agency’s FY 2025-26 Administrative Budget, and authorizing staff to present the ROPS to the Oversight Board for its consideration and approval.
BACKGROUND
Pursuant to Section 34177(l) of the Health and Safety Code (HSC), the Successor Agency to the former Hesperia Community Redevelopment Agency (SA) is required to prepare a Recognized Obligation Payment Schedule (ROPS) for each fiscal year period (commencing each July 1). The ROPS must list the estimated payment amounts for enforceable obligations, as well as sources of funds for each such payment during the fiscal period. Each ROPS must be submitted to the Countywide Oversight Board (the Oversight Board) and the State Department of Finance (the DOF) for approval.
Upon notification of the approval by the DOF, the County Auditor-Controller will prepare the redevelopment property tax trust fund (RPTTF) distribution to the SA. The RPTTF is the funding amount identified on the ROPS to pay enforceable obligations.
ISSUES/ANALYSIS
As mentioned, the ROPS lists the outstanding enforceable obligations to the SA. The SA requires and requests $9,588,930 in enforceable obligations. The following listing discusses the changes to the 2025-26 ROPS:
2018 Bonds (Items 76 and 77) – The ROPS 24-25 requests $8.5 million to make debt service payments on the 2018 Tax Allocation Refunding Bonds, Series A and B (“2018 Bonds”), of which $7.4 million is from RPTTF and $1 million is from Reserve Balance. 2018 Bond Reserve (Item 78) - $1 million in RPTTF is requested in the ROPS 25-26B period to retain as a reserve for a debt service payment due in the ROPS 26-27A period. Dissolution law permits the SA to request a debt service reserve if a shortfall is projected in the following six-month ROPS period. Without the reserve, there will not be enough RPTTF revenues available to make the debt service owed in the ROPS 26-27A period. 2018 Bond Trustee Fees (Items 79 to 80) – $8,000 in RPTTF is requested to pay for bond trustee administration fees on the 2018 Bonds. 2018 Bond Arbitrage (Item 82) - No RPTTF is being requested regarding the bond trustee arbitrage calculation for the 2018 Bonds. An arbitrage calculation is due every five years.
Administrative Cost Allowance (Item 74) – The SA is requesting a $99,524 administrative cost allowance to pay for staffing and professional services necessary to administer ROPS obligations and prepare the ROPS. This is below the $290,273 maximum permitted by law and consistent with the budget for FY 2025-26.
The ROPS 25-26 includes a Report of Cash Balances for Fiscal Year 2022-23. As of June 30, 2023, the SA had a $1.0 million remaining balance, which is committed to ROPS 23-24 and 24-25 obligations.
CITY GOAL SUPPORTED BY THIS ITEM
Financial Health – Maintain a balanced budget and adequate reserves.
FISCAL IMPACT
The adoption of Resolution No. SA 2024-02 (Attachment 1) and ROPS 25-26 (Attachment 2) is the first step in the process to ensure that the Enforceable Obligations of the Successor Agency are paid in full for FY 2025-26.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
Resolution No. SA 2024-02
Exhibit A Annual ROPS Schedule 25-26 (July 1, 2025 – June 30, 2026) Exhibit B FY 2025-26 Administrative Budget (July 1, 2025 – June 30, 2026) City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the City Council, as Successor Agency to the Hesperia Community Redevelopment Agency Annual 2025-26 Recognized Obligation Payment Schedule
December 03, 2024