Redevelopment Successor
Agency Report
City Council Meeting: December 9, 2025
Agenda Item: 4.H
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To: Redevelopment Successor Agency
From: Jing Yeo, Director, Administration
Subject: Approval of Annual Recognized Obligation Payment Schedule (ROPS) and Administrative Budget
Recommended Action
Staff recommends that the Redevelopment Successor Agency:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, and
2. Adopt resolutions approving the Santa Monica Redevelopment Successor Agency’s recognized obligation payment schedule and administrative budget for July 1, 2026 through June 30, 2027.
Summary
The Santa Monica Redevelopment Successor Agency (Successor Agency) is required to prepare and adopt an annual Recognized Obligation Payment Schedule (ROPS) and Administrative Budget, which is subject to approval by the Third Supervisorial District Consolidated Oversight Board prior to being submitted to the California Department of Finance (DOF) and the Los Angeles County Auditor-Controller no later than February 1 of each year. The DOF-approved ROPS and Administrative Budget for fiscal year 2026- 27 provides the basis for the County Auditor-Controller to remit Redevelopment Property Tax Trust Funds (RPTTF) to the Successor Agency and authorize the Successor Agency to make scheduled payments for enforceable obligations for the period July 1, 2026 through June 30, 2027.
Discussion
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Following the elimination of Redevelopment Agencies in 2012, under California Health and Safety Code (HSC) Section 34177, the City of Santa Monica elected to serve as the Successor Agency to the Redevelopment Agency, established the Santa Monica Redevelopment Successor Agency (Successor Agency) to administer outstanding enforceable obligations and comply with necessary state regulations, and designated the City Council as the Governing Board of the Successor Agency. Additionally, per ABX1 26, the Santa Monica Redevelopment Successor Agency Oversight Board was established to oversee certain fiscal management matters and assets of the former redevelopment agency, except for affordable housing. Per SB 107, on July 1, 2018, each of the 71 Oversight Boards in Los Angeles County were consolidated into five Consolidated Oversight Boards organized by supervisorial district. The Third Supervisorial District Consolidated Oversight Board has jurisdiction over the Santa Monica Successor Agency.
In compliance with the statewide elimination of all Redevelopment Agencies in 2012, the Successor Agency is required to prepare a ROPS and corresponding administrative budget on a yearly basis. The ROPS identifies the former redevelopment agency’s enforceable obligations and the agency’s administrative costs. The ROPS also identifies the sources of payment for the obligations, including bond proceeds, interest income, and distributions of tax increment revenue from the State’s Redevelopment Property Tax Trust Fund (RPTTF). Before submission to the California Department of Finance (DOF) and the Los Angeles County Auditor-Controller, no later than February 1 of each year, both the Successor Agency and the Third Supervisorial District Consolidated Oversight Board must approve the ROPS and Administrative Budget.
The ROPS 2026-27 includes Successor Agency enforceable obligations of $16,843,374, which includes an Administrative Budget of $80,322 covering July 1, 2026 to June 30, 2027. All proposed enforceable obligations have been listed and approved for payment on a previous ROPS. In addition, all enforceable obligations have received final and conclusive determinations from the DOF. Staff recommends that the Successor Agency adopt the proposed resolutions (Attachments A and B) authorizing 3 of 5
the submission of the ROPS 2026-27 and Administrative Budget to both the DOF and the County Auditor-Controller.
One of the enforceable obligations included in the ROPS, the Bank of America Term Loan, is subject to semi-annual payments based on floating interest rates. On November 21, 2014, DOF issued a letter notifying the Successor Agency of its final and conclusive approval of the Bank of America Term Loan as an enforceable obligation (Attachment C). Pursuant to a November 7, 2024 letter from Bank of America (Attachment F), the 6-month LIBOR Rate previously used to set interest payments is no longer available. Therefore, interest will be reset at a fluctuating rate of interest equal to the Federal Funds Rate plus 1.7% per annum. Payments will continue to be due on January 15 and July 15 of each year. As interest rates are uncertain, the payments are estimated based on the actual Federal Funds Rate published on October 20, 2025 plus a two percent escalation in order to ensure sufficient funding is available to make the next payments. Should the final interest payment be less than forecasted, any excess RPTTF would be recovered through the prior period adjustment process.
Under AB 26 and SB 107, the Agency may receive an administrative cost allowance (ACA) of up to three percent of the property tax allocated to the Agency the prior fiscal year less the prior year administrative cost allowance. Furthermore, the ACA shall not exceed fifty percent of the RPTTF distributed to pay enforceable obligations in the preceding year and shall be based upon an approved Administrative Budget which justifies the ACA. Based on the estimated property tax allocation to the Successor Agency, the ACA of $80,322 is within the cap of $403,892 for fiscal year 2026-27 and is included as an enforceable obligation on the ROPS 2026-27 (see Attachment A, Exhibit 1, Item 30).
Next Steps
The Third Supervisorial District Consolidated Oversight Board (Consolidated Oversight Board), which has jurisdiction over the Santa Monica Successor Agency, is meeting on January 13, 2026 and will be asked to approve the Successor Agency’s ROPS 2026-27 4 of 5
and administrative budget, for the period July 1, 2026 through June 30, 2027, and authorize the transmittal to the Department of Finance for approval. The ROPS 2026- 27, as approved by the Consolidated Oversight Board, must be sent to the State Controller’s Office and the Department of Finance and posted on the Successor Agency’s website no later than February 1, 2026. The Department of Finance must make its determination regarding the ROPS 2026-27 no later than April 15, 2026.
Environmental Review
The ROPS is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The ROPS is administrative in nature, and therefore, it can be seen with certainty that there is no possibility that the FY 2026-27 ROPS will have any significant effect on the environment and as such is exempt from CEQA.
Financial Impacts and Budget Actions
On June 1, 2026 and January 2, 2027, the Los Angeles County Auditor-Controller will transfer property taxes into the Successor Agency’s cash account from which the Agency will pay enforceable obligations listed on the approved ROPS 2026-27. Before the distributions take place, the DOF must issue a determination letter with the total RPTTF revenues to be disbursed for enforceable obligations along with a final administrative cost allowance cap amount.
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Prepared By: Denise Smith, Principal Administrative Analyst Approved Forwarded to Council
Attachments:
A. SA Attachment A - ROPS 26-27
B. SA Attachment B - ROPS 26-27 - Admin Budget
C. SA Attachment C - Letter from DOF
D. SA Attachment D - Credit Agreement
E. SA Attachment E - BofA Letter (2022)
F. SA Attachment F - BofA letter (2024)