CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
12/13/2022
AGENDA ITEM
TO:
HONORABLE CHAIR
AND MEMBERS OF THE SUCCESSOR AGENCY
FROM:
SHARON DEL ROSARIO
FINANCE DIRECTOR
SUBJECT:
ADOPT RECOGNIZED OBLIGATION PAYMENT SCHEDULE - JULY 1, 2023 TO JUNE 30, 2024 (ROPS FY 23-24AB)
Summary:
Pursuant to AB1x 26, codified as Health and Safety Code Section 34172, the Signal Hill Redevelopment Agency was dissolved effective February 1, 2012. Per Health and Safety Code Section 34177, the Recognized Obligation Payment Schedule (ROPS) process requires submission of an annual budget. ROPS Fiscal Year (FY) 23-24AB covers the period from July 1, 2023 to June 30, 2024.
Recommendation:
Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL AS SUCCESSOR AGENCY OF THE CITY OF SIGNAL
HILL, CALIFORNIA, ADOPTING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) FY 23-24AB PURSUANT TO HEALTH AND SAFETY CODE §34177 AND TRANSMITTING THE ROPS FY 23-24AB TO THE LOS ANGELES COUNTY 4TH SUPERVISORIAL DISTRICT CONSOLIDATED
OVERSIGHT BOARD FOR ITS REVIEW AND APPROVAL
Fiscal Impact:
The anticipated total funding for the ROPS FY 23-24AB covering July 1, 2023 to June 30, 2024, is $17,516,538. The expenditures for the year cover $3,300,000 for contractual obligations. The budget includes an administrative cost allowance of $306,336. The budget includes the third payment on the City-Agency loan of $1,878,886. Bond payments, reserves for bonds, continuing disclosure, and trustee fees total $12,031,316.
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Background and Analysis:
Pursuant to AB1x 26, the City Council is the designated Successor Agency (SA) to the former Signal Hill Redevelopment Agency (SHRA). Under the revised schedule provided by the Supreme Court in upholding the constitutionality of AB1x 26, the dissolution of the SHRA was effective February 1, 2012. With the dissolution of the SHRA, the SA becomes responsible for payment of all enforceable obligations of the former SHRA and for disposal of the SHRA’s assets.
SB 207 was approved on September 22, 2015. As amended, SB 207 requires SAs to submit an Oversight Board (OB) approved ROPS on an annual basis, beginning with ROPS FY 16-17 and for each fiscal year thereafter. The State Department of Finance (DOF) reviews and approves the budget. If the SA needs to amend the budget for the payment of an enforceable obligation, HSC §34177.7(o)(1)E allows for the SA to amend the budget once during the period, but no later than October 1 of the given year.
Commencing July 1, 2016, the administrative cost allowance changed from 5 percent to 3 percent of the actual property tax distributed to the SA by the County Auditor Controller (CAC) in the preceding fiscal year for payment of approved enforceable obligations. The amount is then reduced by the SA’s administrative cost allowance and loan repayments made to the City during the preceding fiscal year, subject to a minimum of $250,000, unless such amount is reduced by the OB or by agreement between the SA and the DOF. For ROPS FY 23-24AB, the administrative cost allowance is $306,336.
This money is used to cover staff costs associated with SHRA dissolution activities.
Upon approval of ROPS FY 23-24AB, the budget will be forwarded to the Los Angeles County 4th Supervisorial District Consolidated Oversight Board for its review and approval at its meeting on January 17, 2023.
An approved ROPS is required to be submitted to the DOF by February 1, 2023. The DOF will make its determinations on enforceable obligations no later than April 15, 2023. Funds will be distributed on June 1, 2023 and January 3, 2024.
The ROPS is required to be posted on the City’s website. SA staff is also required to provide the County Administrator, CAC, and the DOF the adopted ROPS.
If the ROPS is not filed within the specified time frame, legal actions can be taken by the creditors of the SA, DOF, and affected taxing entities to file suit for writ of mandate to compel the SA to adopt a ROPS. In addition, the SA may be subject to civil fines of $10,000 per day. If the SA does not submit the ROPS within 10 days of the deadline, it may result in a 25% reduction of a SA’s maximum administrative cost allowance for the period covered by the delinquent ROPS. The DOF may also direct the CAC to withhold payments to enforceable obligations.
Under AB 1484, the DOF has five days to request to review an enforceable obligation listed on the ROPS and must make a determination of the enforceable obligations and the amounts and funding sources no later than 45 days after the ROPS was submitted by a SA. In addition, AB 1484 gives the SA a five-day window to request an opportunity to meet and confer on additional disputed items once the SA has received the DOF determination.
Previously under the dissolution bill (AB1x26), the CAC was required to “certify” the ROPS. Under AB 1484, the CAC is authorized to review the ROPS and may object to any item or funding source. The CITY OF SIGNAL HILL Page 2 of 3 Printed on 12/9/2022
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1484, the CAC is authorized to review the ROPS and may object to any item or funding source. The CAC is required to submit notice to the DOF, the SA and the OB 60 days prior to the distribution date for money. If the SA and OB dispute the rejected item, then the DOF is responsible for determining what will be included on the applicable ROPS.
Approved:
__________________________
Joe Hoefgen
Attachment
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