Loading...
RES-2013-028 RESOLUTION NO. 2013 -028 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING A COOPERATION AGREEMENT (LOAN AGREEMENT PURSUANT TO HEALTH & SAFETY CODE SECTION 34173(h)) BY AND BETWEEN THE CITY OF ANAHEIM AND THE SUCCESSOR AGENCY TO THE ANAHEIM REDEVELOPMENT AGENCY, INCREASING THE COMMUNITY DEVELOPMENT DEPARTMENT BUDGET AND MAKING CERTAIN FINDINGS IN ACCORDANCE THEREWITH WHEREAS, the City is a municipal corporation and charter city organized and operating under the laws of the State of California; and WHEREAS, the Successor Agency is a public entity corporate and politic, organized and operating under Part 1.85 of Division 24 of the Dissolution Act (as defined below); and WHEREAS, the Anaheim Redevelopment Agency ( "former Agency ") previously was a California public body, corporate and politic, duly formed by the City Council of the City ( "City Council ") and organized, existing and exercising the powers of a community redevelopment agency under the California Community Redevelopment Law, Health & Safety Code Section 33000, et seq.; and WHEREAS, Assembly Bill xl 26 ( "AB xl 26 ") chaptered and effective on June 27, 2011 added Parts 1.8 and 1.85 to Division 24 of the California Health & Safety Code and which laws were modified, in part, and determined constitutional by the California Supreme Court in the petition California Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. S 194861 ( "Matosantos Decision "), which laws and court opinion caused the dissolution of all redevelopment agencies and winding down of the affairs of former redevelopment agencies; thereafter, such laws were amended further by Assembly Bill 1484 ( "AB 1484 ") that was chaptered and effective on June 27, 2012 (together AB xl 26, the Matosantos Decision, and AB 1484 are referred to as the "Dissolution Act ") WHEREAS, all statutory references herein are to the Dissolution Act unless otherwise stated; and WHEREAS, as of February 1, 2012, the former Agency became a dissolved community redevelopment agency pursuant to the Dissolution Act; and WHEREAS, as of and on and after February 1, 2012, the Successor Agency is performing its functions as the successor agency under the Dissolution Act to administer the enforceable obligations of the former Agency and is engaged in activities necessary and appropriate to wind down the activities of the former Agency's Anaheim Merged Redevelopment Project that was originally adopted and amended by ordinances of the City Council, and otherwise unwind the former Agency's affairs, all subject to the review and approval by a seven - member Oversight Board formed thereunder; and WHEREAS, former Agency and LAB Holding, LLC ( "Developer ") entered into that certain Disposition and Development Agreement ( "LAB DDA "), dated as of October 26, 2010, prior to the effective date of the Dissolution Act; and WHEREAS, Section 34171(d)(1)(E) of the Dissolution Act defines "enforceable obligation" to include "any legally binding and enforceable agreement or contract that is not otherwise void as violating the debt limit or public policy." The LAB DDA is a legally binding and enforceable agreement that does not violate the debt limit or public policy and is therefore an "enforceable obligation" properly included a recognized obligation payment schedule (each a "ROPS "), in particular on the ROPS for the period January 1, 2013 to June 30, 2013 (herein, ROPS III "); and WHEREAS, by operation of law, the Successor Agency has assumed and is the successor in interest to the former Agency under the LAB DDA and is subject to all performance and other contractual obligations thereunder; and WHEREAS, failure by the Successor Agency to perform its contractual obligations under the LAB DDA would constitute a default under the LAB DDA, potentially subjecting the Successor Agency to damages and liability to LAB Holding, LLC; and WHEREAS, pursuant to Section 34177(a) of the Dissolution Act, the Successor Agency is required to "continue to make payments due for enforceable obligations." Further, Section 34177(c) of the Dissolution Act requires the Successor Agency to "perform obligations required pursuant to any enforceable obligation "; and WHEREAS, Section 34171(d)(1)(E) of the Dissolution Act defines "enforceable obligation" to include "any legally binding and enforceable agreement or contract that is not otherwise void as violating the debt limit or public policy "; and WHEREAS, Section 301 of the LAB DDA requires the Successor Agency to construct certain "Agency Improvements" (at the Successor Agency's expense) on certain real property now owned by the Successor Agency. The Agency Improvements are described in the Scope of Development, Attachment No. 7 to the LAB DDA, and include buildings and all required improvements to support the project and satisfy all conditions of approval imposed by the City of Anaheim, specifically including parking and alley improvements necessary to comply with the approved Water Quality Management Plan for the development ( "Parking and Alley Improvements "). Upon completion of construction of the Agency Improvements and satisfaction of certain other conditions, the Successor Agency is required to lease specified real property to LAB Holding, LLC; and WHEREAS, Section 34177.3(a) of the Dissolution Act, which provides that "successor agencies shall lack the authority to, and shall not, create new enforceable obligations ... or begin new redevelopment work, except in compliance with an enforceable obligation that existed prior to June 28, 2011," shows that the California legislature understood that successor agencies would be required to, in some cases, execute new enforceable obligations and perform redevelopment work in order to comply with and perform contractual duties under valid enforceable obligations such as the LAB DDA; and 2 WHEREAS, pursuant to Section 34177(m) of the Dissolution Act, the Successor Agency prepared ROPS III and submitted such ROPS III to the Oversight Board, the County of Orange, Auditor Controller, and the State of California, Department of Finance ( "DOF ") for approval. The ROPS III, as submitted by the Successor Agency, contained a line item for an expenditure of $1,200,000 for the construction of the Parking and Alley Improvements ( "Item No. 88 "); and WHEREAS, Notwithstanding that the LAB DDA is an enforceable obligation and the Successor Agency is required to construct the Agency Improvements thereunder, in a letter dated December 18, 2012 from Mr. Steve Szalay, Local Government Consultant to the DOF, to the Successor Agency, attention Ms. Sheryl Montgomery ( "December 18 Letter "), the DOF rejected Item No. 88. However, by way of explanation for this rejection, the December 18 Letter from the DOF states: "Additional review of the [LAB DDA] indicates the parking and alley construction were specifically intended as evidenced by Recital C of the DDA and a Planning Commission Report dated June 21, 2010, demonstrating the need for the parking construction. In addition, per Section 301.2 of the DDA, "Cost of Construction," the former Redevelopment Agency (RDA) is responsible for the costs related to the parking and alley construction. We note, however, no contracts are in place for the construction and the Agency did not provide documentation that supports the property has been transferred to the developer. Unless and until the property has been transferred and a contract is awarded for these costs, the Agency is not eligible for funding from Redevelopment Property Tax Trust Fund (RPTTF) for this item." WHEREAS, in the quoted language of the December 18 Letter, the DOF acknowledges that the construction of the Parking and Alley Improvements constitutes an enforceable obligation of the Successor Agency under the LAB DDA, but that DOF requires a contract for construction of the Parking and Alley Improvements to be in place before DOF will approve the expenditure for this work on a subsequent ROPS. This presents a logistical challenge for the Successor Agency, by requiring the Successor Agency to enter into a construction contract without prior authorization from the DOF to make the payments required by such contract; and WHEREAS, Section 34173(h) of the Dissolution Act authorizes the City to "loan or grant funds to [the Successor Agency] for administrative costs, enforceable obligations, or project - related expenses at the [City's] discretion, but the receipt and use of these funds shall be reflected on the Recognized Obligation Payment Schedule or the administrative budget and therefore are subject to the oversight and approval of the oversight board. An enforceable obligation shall be deemed to be created for the repayment of those loans "; and WHEREAS, as authorized by and pursuant to Section 34173(h) of the Dissolution Act, the City desires to assist the Successor Agency by providing a loan to the Successor Agency pursuant to the Agreement (defined in Section 2 below) in an amount not to exceed the Parking and Alley Construction Amount (defined below), to enable the Successor Agency to enter into the Parking and Alley Construction Contract (defined below) at this time and to pay for the construction of the Parking and Alley Improvements, all as required by the LAB DDA; and 3 WHEREAS, the Agreement shall be subject to approval by the Oversight Board to the Successor Agency and shall be included on the ROPS for the period from July 1, 2013 to December 31, 2013 ( "ROPS 13 -14A ") and, as such, shall be subject to the approval of the DOF; and WHEREAS, provided that the Agreement is approved as an enforceable obligation on ROPS 13 -14A (also referred to as "ROPS IV "), the Successor Agency shall repay all amounts disbursed by the City to or on behalf of the Successor Agency from Redevelopment Property Tax Trust Fund ( "RPTTF ") moneys received by the Successor Agency pursuant to ROPS 13- 14A; and WHEREAS, concurrently with the Agreement and at this meeting, the Successor Agency and City, on one hand, desire to enter into a construction contract with Spiess Construction Co. Inc. ( "Contractor "), as the lowest responsible bidder, on the other hand, for the Parking and Alley Improvements, specifically including construction of three parking lots (including a total of 117 new parking stalls and security lighting) and reconstruction of the public alley directly adjacent to the Citrus Packinghouse and Farmers Park facility, which are currently under construction, all as required by the LAB DDA ( "Parking and Alley Construction Contract "); and WHEREAS, the Parking and Alley Construction Contract will be for a total price of $925,918.50. In addition, pursuant to Resolution No. 88R -124 approved by the City Council on March 29, 1988, the Director of Public Works has the authority to approve change orders up to a total, cumulative amount of $185,183.70 (being 20% of the contract price of $925,918.50). Thus, the total potential expenditure authorized for the Parking and Alley Construction Contract shall be $1,111,102.20 ( "Parking and Alley Construction Amount "); and WHEREAS, the City Council desires to approve the Agreement and the Successor Agency desires to transmit such Agreement to the Oversight Board and the DOF. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANAHEIM AS FOLLOWS: Section 1. The foregoing recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. Section 2. The City Council hereby approves the Cooperation Agreement (Loan Agreement pursuant to Health & Safety Code Section 34173(h)) by and between the City and the Successor Agency ( "Agreement "), with such changes as may be mutually agreed upon by the Community Development Director (or his duly authorized representative), the Executive Director of the Successor Agency and the City Attorney, as are minor and in substantial conformance with the form of the Agreement which has been submitted herewith. The Community Development Director and the City Clerk are hereby authorized to execute and attest the Agreement on behalf of the City. In such regard, the Community Development Director (or his duly authorized representative) is authorized to sign the final version of the Agreement after completion of any such non - substantive, minor revisions. Copies of the final form of the Agreement, when duly executed and attested, shall be placed on file in the office of the City Clerk. Further, the Community Development Director (or his duly authorized representative) is 4 authorized to implement the Agreement and take all further actions and execute all documents referenced therein and /or necessary and appropriate to make the City Loan (defined in the Agreement) and otherwise carry out the transaction contemplated by the Agreement. The Community Development Director (or his duly authorized representative) is hereby authorized to the extent necessary during the implementation of the Agreement to make technical or minor changes and interpretations thereto after execution, as necessary to properly implement and carry out the Agreement, provided any and all such changes shall not in any manner materially affect the rights and obligations of the City or the maximum City Loan amount provided under the Agreement approved hereby. Section 3. In addition to the authorization of Section 2 above, the Community Development Director is hereby authorized, on behalf of the City, to sign all other documents necessary or appropriate to carry out and implement the Agreement, including causing the issuance of warrants in implementation thereto, and to administer the City's obligations, responsibilities and duties to be performed under the Agreement. Section 4. The City Council recognizes that the Agreement is and will be subject to review and approval by the Oversight Board to the Successor Agency and the State of California, Department of Finance pursuant to the Dissolution Act, in this regard the City Council authorizes transmittal of the Agreement and any other related documentation required and the posting of a true copy of Agreement on the Successor Agency website a copy pursuant thereto. Section 5. The City Council hereby provides for a one -time increase in the current fiscal year budget of the Community Development Department in the amount of the Parking and Alley Construction Amount, which shall be the source of the proceeds of the City Loan. Section 6. The City Clerk shall certify to the adoption of this Resolution. (Remainder of page intentionally left blank; signatures on next page) 5 THE FOREGOING RESOLUTION is approved and adopted by the City Council of the City of Anaheim this 5th day of February , 2013, by the following roll call vote: AYES: Mayor Tait, Council Members Eastman, Brandman, Kring and Murray NOES: None ABSENT: None ABSTAIN: None By: MAYO OF THE CI OF ANAHEIM ATTEST: LAI OLilltioth,4 CITY CLERK OF THE CITY OF NAHEIM 93529 /TReynolds 6