December 17, 2024
SUCCESSOR AGENCY TO THE
RICHMOND COMMUNITY
REDEVELOPMENT AGENCY
Community Development
DATE: December 17, 2024
TO: Chairperson Martinez and Members of the Successor
Agency Board
FROM: Shasa Curl, Executive Director
Lina Velasco, Director of Community Development
Rita Martinez, Finance Manager II
Subject: Approval of the Recognized Obligation Payment
Schedule (ROPS 25-26) and the Administrative Budget
for the period July 1, 2025 through June 30, 2026
FINANCIAL IMPACT: Adoption of the Recognized Obligation Payment Schedule including the administrative budget is
necessary for the Successor Agency to expend former
Richmond Community Redevelopment Agency funds on
certain financial obligations of the Agency. Residual tax revenues not obligated on ROPS 25-26 are distributed to local taxing entities. ROPS for the period July 1, 2025 through June 30, 2026 totals $21,062,974
(Redevelopment Property Tax Trust Fund (RPTTF) totals
$10,764,456 and restricted reserves are $10,298,519).
PREVIOUS COUNCIL
ACTION:
n/a
STATEMENT OF THE
ISSUE:
The Successor Agency to the Richmond Community
Redevelopment Agency (Agency) is required to approve
a Recognized Obligation Payment Schedule (“ROPS”)
and an administrative budget annually pursuant to
California Health and Safety Code sections 34177(O) and 34171(A),(B), and 34177(J), respectively.
AGENDA
REPORT
December 17, 2024
RECOMMENDED ACTION:
ADOPT a Resolution approving the Recognized
Obligation Payment Schedule (ROPS 25-26) and the
Administrative Budget for the of period July 1, 2025,
through June 30, 2026 – Community Development
Department (Lina Velasco 510-620-6706).
DISCUSSION:
Background
ABx1 26 (“Dissolution Act”) suspended all new redevelopment activities and incurrence of indebtedness by terminating virtually all otherwise legal functions of redevelopment agencies and mandating a liquidation of any assets for the benefit of local taxing agencies. Some debts are allowed to be repaid, but any such remittances are to be managed by a successor agency that functions primarily as a debt repayment administrator. The successor agency cannot initiate any new redevelopment projects or programs. The activities of the successor agency are overseen by a countywide oversight board, comprised primarily of representatives of other taxing agencies throughout the county, until such time as the remaining debts of the former redevelopment agency are paid off, all former agency assets are liquidated, and all property taxes redirected to local taxing agencies.
Under the Dissolution Act, the portion of property tax revenues collected in the Redevelopment Agency (“RDA”) Project Areas, which were considered Tax Increment prior to RDA dissolution, are now called Redevelopment Property Tax and are deposited by the County Auditor-Controller into the Redevelopment Property Tax Trust Fund (“RPTTF”). The County Auditor-Controller distributes the funds in the RPTTF with the following priority:
1. County Auditor-Controller’s administrative costs;
2. Pass-through payments to the taxing entities affected by the Redevelopment Plan for the Project Area, calculated the same as prior to RDA dissolution;
3. Distribution to the Successor Agency to retire the former RDA’s obligations; and
4. Distribution of residual funds to taxing entities.
A budget trailer bill drafted by the State Department of Finance (“DOF”) purportedly to “clean up” certain conflicting and confusing provisions of ABx1 26 was signed by Governor Jerry Brown on June 27, 2012. This bill, AB 1484, made several substantive changes to ABx1 26 including a provision that successor agencies that do not submit an approved Recognized Obligation Payment Schedule (“ROPS”) by the statutory deadlines will be assessed a $10,000 per day penalty for lateness.
On September 22, 2015, Governor Jerry Brown signed SB 107, which made several significant changes to the redevelopment dissolution process, including modification of the ROPS submittal cycle from six month to 12-month intervals.
December 17, 2024
Under Health and Safety Code section 34177(o), a ROPS must be prepared and submitted on February 1st of every year and list all of the “enforceable obligations” of the former agency. The ROPS is subject to approval by the Countywide Oversight Board and DOF before the County Auditor-Controller disburses funding for payments on the approved ROPS. “Enforceable obligations” include: bond payments; loans legally required to be repaid pursuant to a payment schedule with mandatory repayment terms; payments required by the federal government; preexisting obligations to the state or obligations imposed by state law; judgments, settlements or binding arbitration decisions that bind the agency; legally binding and enforceable agreements or contracts; and contracts or agreements necessary for the continued administration or operation of the successor agency, including agreements to purchase or rent office space, equipment and supplies.
After submittal, DOF has until April 15th to review the ROPS and approve or disapprove of any items. The Successor Agency can request additional review by DOF and an opportunity to meet and confer on disputed items. The Successor Agency must make a request within five business days of receiving a DOF determination. DOF is required to notify the Successor Agency and County Auditor-Controller of its final determination of the approved payments at least 15 days prior to the first distribution date of RPTTF for the ROPS, which is June 1st. RPTTF is distributed twice annually, on June 1st and January 2nd of each year. The annual ROPS can be amended once per year as long as the amendment is received by DOF before October 1st of the applicable fiscal year.
Summary
Recognized Obligation Payment Schedule (ROPS 25-26)
ROPS 25-26 is Exhibit A to the attached Successor Agency resolution. It includes: 1) a summary of the funding request; 2) an itemized listing of obligations (“ROPS Detail”); and 3) a report of cash balances. This ROPS covers payments due during the period of July 1, 2025 through June 30, 2026.
The following is a summary of ROPS 25-26 Obligations submitted for approval. RPTTF total $10,764,456 and restricted reserves are $10,298,519.
December 17, 2024
Successor Agency Administrative Budget July 1, 2025 through June 30, 2026 Pursuant to Health and Safety Code sections 34171(a), (b), and 34177(j), the Successor Agency must prepare a budget for administrative expenses each fiscal year (“Administrative Budget”). In accordance with the Dissolution Act, the Successor Agency’s RPTTF administrative cost allowance cap is the greater of 3% of the prior year RPTTF distribution or $250,000 annually. For the period July 1, 2025 through June 30, 2026, the RPTTF administrative cost allowance cap is $304,760.
Upon the Successor Agency Board’s approval, staff will submit ROPS 25-26 and the Administrative Budget to the Oversight Board for their consideration and approval. Upon receiving the Oversight Board’s approval, staff will submit ROPS 25-26 to the County Auditor-Controller, the State Controller, and the DOF. The approved ROPS 25-26 is required to be submitted to DOF by February 1, 2025 to avoid daily penalties.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution
Attachment 2 – Exhibit A to Resolution (ROPS 25-26)
Attachment 3 – Exhibit B to Resolution (Administrative Budget)