HomeMy WebLinkAboutApprove Resolution 358 of the Redevelopment Agency of the Ci Z., r
Council/Agency Meeting Held: J, ECEE
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Council Meeting Date: 1/17/2006 Depart ent ID Number: A 0�ls
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CITY OF HUNTINGTON BEACH `
REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIUREDEVELOPMENT
AGENCY MEMBERS
SUBMITTED BY: PENE P�CURETH
-�GFTDPA,
ADMINISTRATOR/EXECUTIVE DIRECTOR
PREPARED BY: DAN VILLELLA, CPA, FINANCE OFFICER P/
STANLEY SMALEWITZ, DIRECTOR OF ECONOMIC
DEVELOPMENT/DEPUTY EXECUTIVE DIRECTOR
SUBJECT: Approve Resolution .358 of the Redevelopment Agency of the City
of Huntington Beach Amending the Agency Debt Pursuant to the
Operative Agreement Between the City of Huntington Beach and the
Redevelopment Agency of the City of Huntington for the Huntington
Beach Redevelopment Project (Merged Project Area) and Southeast
Coastal Project Area
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue: The Redevelopment Agency of the City of Huntington Beach incurs
debt that allows it to receive tax increment revenue in accordance with California Community
Redevelopment law. The Agency is required to file an annual statement to document this
debt with the County of Orange Auditor/Controller. This statement is also needed for audit
purposes and to keep the City Council informed of the changes in the debt owed the City by
the Redevelopment Agency for the merged Huntington Beach Project Area and the
Southeast Coastal Project Area.
Funding Source: N/A
Recommended Action: Motion to adopt Resolution 3S8 of the Redevelopment Agency
of the City of Huntington Beach amending the Agency Debt pursuant to the Operative
Agreement between the City of Huntington Beach and the Redevelopment Agency of the City
of Huntington Beach for the merged Huntington Beach Project Area and the Southeast
Coastal Project Area. The debt at September 30, 2005 will be as follows:
Merged Project Area $86,867,913
Southeast Coastal Project Area 7,294,186
Total Debt $94 162,099
REQUEST FOR ACTION
MEETING DATE: 1/17/2006 DEPARTMENT ID NUMBER:FN 06-001
Alternative Action(s):
1. Do not adopt the resolution, which would result in no updating of the Agency debt to
the City.
2. Adopt the agreement with modifications that the City Council would specify.
Analysis: To receive tax increment revenue, the Redevelopment Agency must have
sufficient debt on its books each year. It is common practice for cities to book all possible
eligible expenditures within a redevelopment project area, such as capital projects, as a debt
of the Redevelopment Agency. These capital projects have been undertaken as part of the
normal course of business through a number of the City's specialized funds, such as the
Water Fund and the Sewer Fund. 1n addition, interest accrues on this debt, based on the
City's annual rate of investment return, which further assures the Agency's ability to collect
tax increment revenue in the future. There have been no increases in the debt other than the
interest accrual for the merged project area. There is no change in the debt for the
Southeast Coastal Project Area.
Merged Project Area:
The City charged the Agency 2.81% on all outstanding advances for October 1st to
September 30t", which is approximately the average yield earned by the City Treasurer on
investments for the year through June 30t", 2005. The total interest accruals were
$2,508,878.
The City Council/Agency originally approved $7,424,921 of debt repayment for the
2004/2005 FY. However, a proposal to defer $2.5million of the total amount, which was not
needed for FY 2004/2005, to FY 2005/2006 in order to cover a revenue loss of the same
amount in the General Fund has been approved by the City Council, bringing the total debt
repayment amount in fiscal year 2004/2005 to $4,924,921.
Cash Debt Repayment—Original Budget $7,424,921
One-time Deferment to FY 2005/2006 to Cover a Revenue Loss in General Fund (2,500,000)
FY 2004/2005 Debt Repayment $4.924921
The schedule on the following page shows the breakdown of the operative agreement debt
by fund and the changes during the year for the merged project area. It does not include
debt incurred with entities other than the City such as bonds, mortgages, and debt owed
through Disposition and Development Agreements and Owner Participation Agreements with
private parties.
GARNANCE OFFICE\RCA\RCA-Economic Development\rca operative update 2004-2005.doc -2-
1/3/2006 2:48 PM
REQUEST FOR ACTION
MEETING DATE: 1/17/2006 DEPARTMENT ID NUMBER:FN 06-001
Merged Project Area
Pre AB 1290 Agency Debt
As of September 30, 2005
DEBT @ BUDGETED ACCRUED DEBT @
General Fund 10/1/2004 REPAYMENTS INTEREST 9/30/2005
Direct Advances $ 4,597,352 $ (1,032,320) $ 3,565,032
Interest On Direct Advances - (129,186) 129,186 -
Total Direct Advances 4,597,352 (1,161,506) 129,186 3,565,032
Indirect Advances 6,567,353 6,567,353
Interest On Indirect Advances 3,481,055 (3,763,415) 282,360 -
Total Indirect Advances 10,048,408 (3,763,415) 282,360 6,667,363
Land Sales 32,833,417 32,833,417
Interest On Land Sales 32,520,586 1,836,447 34,357,033
Total Land Sales 65,354,003 - 1,836,447 67,190,450
Total General Fund 79,999,763 (4,924,921) 2,247,993 77,322,835
Sewer Fund
Direct Advances 130,560 - 130,560
Interest On Direct Advances 84,032 6,030 90,062
Total Direct Advances 214,592 - 6,030 220,622
Deferred Development Fees 37,888 - 37,888
Interest On Deferred Development Fees 95,758 3,755 99,513
Total Deferred Development Fees 133,646 - 3,755 137,401
Total Sewer Fund 348,238 - 9,785 358,023
Drainage Fund
Direct Advances 250,000 - - 250,000
Interest On Direct Advances 267,168 - 14,532 281,700
Total Direct Advances 517,168 - 14,532 531,700
Deferred Development Fees 53,650 - 53,650
Interest On Deferred Development Fees 88,614 3,998 92,612
Total Deferred Development Fees 142,264 - 3,998 146,262
Total Drainage Fund 659,432 - 18,530 677,962
Park A & D Fund
Deferred Land Sale 1,740,834 - - 1,740,834
Interest On Deferred Land Sale 2,519,331 - 119,711 2,639,042
Total Land Sales 4,260,165 - 119,711 4,379,876
Deferred Development Fees 247,664 - 247,664
Interest On Deferred Development Fees 68,330 8,879 77,209
Total Park A& D Deferred Dev Fees 315,994 - 8,879 324,873
Total Park A& D 4,576,159 - 128,690 4,704,749
Capital Improvement Fund
Direct Advances 200,000 - - 200,000
Interest On Direct Advances 294,953 - 13,908 308,861
Total Capital Improvement Fund 494,953 - 13,908 508,861
Water Fund
Direct Advances 1,138,000 - - 1,138,000
Interest On Direct Advances 2,067,411 - 90,072 2,157,483
Total Water Fund 3,205,411 - 90,072 3,295,483
Total Pre AB 1290 Debt-All Funds $ 89,283,956 $ (4,924,921) $ 2,508,878 $ 86,867,913
G:\FINANCE OFFICE\RCA\RCA- Economic Development\rca operative update 2004-2005.doc -3-
12/28/2005 9:44 AM
REQUEST FOR ACTION
MEETING DATE: 1/17/2006 DEPARTMENT ID NUMBER:FN 06-001
The Agency is now classifying debt as "Pre AB 1290" and "Post AB 1290." AB 1290 was a
sweeping Redevelopment reform bill enacted in 1993 that placed time limits on incurring debt
within Redevelopment project areas. Under the terms of AB 1290, debt incurred prior to
January 1, 1994 can continue to be repaid after the project area has expired. Staff is
recommending that all debt repayments be applied first to debt incurred after January 1,
1994, then to debt incurred prior to that date. All of the debt at year-end is considered pre
AB 1290 debt.
Southeast Coastal Proiect Area:
On September 2, 2003 the Council/Agency approved a Cooperation Agreement Regarding
Capital Improvements in the project area. The debt in this project area is recorded on a
prospective basis. The amount identified as debt is the entire Conceptual Five Year Capital
Improvement Program for the project area totaling $6,775,000. The debt is activated as
projects are begun. A total of $270,000 from the General Fund has been used to fund the
Conservancy Grant in fiscal year 2004/2005. Additionally, the project advanced operating
expenses from the General Fund and the Merged Project Area Redevelopment Fund in fiscal
year 2003/2004. These advances were not included in the prior year operative agreement.
Interest will be charged on the advances from the General Fund but not on the advances
from the Merged Project Area Redevelopment Fund. Because the debts were incurred after
January 1, 1994, the entire amount is classified as post AB 1290.
The schedule on the following page shows the breakdown of the operative agreement debt
by fund and the changes for the Southeast Coastal Project Area.
G:\FINANCE OFFICE\RCA\RCA-Economic Development\rca operative update 2004-2005.doc -4-
12/28/2005 9:44 AM
REQUEST FOR ACTION
MEETING DATE: 1/17/2006 DEPARTMENT ID NUMBER:FN 06-001
Southeast Coastal Project Area
Post AB 1290 Agency Debt
As of September 30, 2005
ORIGINAL
DEBT ADJUSTMENTS REVISED CURRENT ACCRUED
BALANCE @ TO ORIGINAL BEGINNING YEAR INTEREST DEBT @
General Fund 9/30/2004 DEBT BALANCE DEBT ACTIVITY FY 04-05 9/30/2005
Direct Advances $ 199,946 $ 199,946 $ 199,94
Interest On Advances 4,939 4,939 $ 5,618 10,55
Total Direct Advances - 204,885 204,885 - 5,618 210,50
Capital Improvement Projects $ 270,000 270,00
Interest - 6,194 6,19
Total Capital Improvement Projects - - - 270,000 6,194 276,19
Total General Fund - 204,885 204,885 270,000 11,812 486,69
Merged Proiect Area RDA Fund
Direct Advances 302,489 302,489 302,48
Interest On Advances - N/A
Total Merged Project Area RDA Fund - 302,489 302,489 - - 302,48
Subtotal Post AB 1290 Debt-All Funds - 507,374 507,374 270,000 11,812 789,18
General Fund
Future Capital Improvement Projects $ 6,775,000 6,775,000 (270,000) 6,505,00
Total Post AB 1290 Debt-All Funds $ 6,775,000 $ 507,374 $ 7,282,374 $ - $ 11,812 $ 7,294,18
Environmental Status: N/A
Attachment(s):
City Clerk's
. - Number No. Description
1 A Resolution 3-"M of the Redevelopment Agency of the City of
Huntington Beach Amending the Agency Debt Pursuant to the
Operative Agreement between the City of Huntington Beach and the
Redevelopment Agency of the City of Huntington Beach for the
Huntington Beach Redevelopment Project Area and the Southeast
Coastal Project Area.
G:\FINANCE OFFICE\RCA\RCA-Economic Development\rca operative update 2004-2005.doc -5-
12/28/2005 9:44 AM
ATTACHMENT 1
RESOLUTION NO. 358
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON
BEACH AMENDING THE AGENCY DEBT PURSUANT TO THE OPERATIVE
AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND THE
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH FOR THE
HUNTINGTON BEACH REDEVELOPMENT PROJECT, AND THE COOPERATION
AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND THE
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH REGARDING
CERTAIN CAPITAL IMPROVEMENTS WITHIN OR OF BENEFIT TO THE SOUTHEAST
COASTAL REDEVELOPMENT PROJECT
WHEREAS,the City Council of the City of Huntington Beach(the"City Council")
adopted Ordinance Nos. 2576, 2577,2578, 2582,and 2743 approving and adopting the
Redevelopment Plan for the Yorktown-Lake Redevelopment Project, the Redevelopment Plan
for the Talbert-Beach Redevelopment Project,the Redevelopment Plan for the Main-Pier
Redevelopment Project,the Redevelopment Plan for the Oakview Redevelopment Project,and
the Redevelopment Plan for the Huntington Center Commercial District Redevelopment Project,
respectively,and
The Redevelopment Agency of the City of Huntington Beach(the "Agency") and the City
of Huntington Beach(the"City")entered into a Cooperative Agreement, dated June 20, 1983, by
which the City agreed to provide to the Agency certain assistance and to otherwise cooperate
with the Agency in carrying out redevelopment projects; and
Pursuant to the Cooperative Agreement, the Agency and City Council entered into
Operative Agreements for the Yorktown-Lake, Talbert-Beach, Main-Pier,Oakview and
Huntington Center Redevelopment Projects(the"Constituent Projects"), by which the City
provided the Agency with both administrative and/or technical services, constructed required
public improvements and facilities as appropriate and necessary,and provided funds to carry out
the Constituent Projects; and
Said Operative Agreements also identified the terms under which the Agency would
reimburse the City for the associated costs of such services, improvements, facilities and funds;
and
The City Council adopted Ordinance No. 3343 on December 16, 1996 amending and
merging the Constituent Projects into the Redevelopment Plan for the Huntington Beach
Redevelopment Project(the"HBRP"); and
The City Council adopted Ordinance No. 3561 on June 17, 2002, approving and adopting
the Redevelopment Plan for the Southeast Coastal Redevelopment Project("SCRP"); and
The Agency and the City entered into a Cooperation Agreement, dated September 2, 2003
(the "SCRP Cooperation Agreement"),regarding redevelopment projects and capital
improvements to be carried out in the SCRP Area; and
05reso/agency debt2005 1
It is now necessary and appropriate that the City Council and the Agency amend the
Operative Agreements pursuant to the Cooperative Agreement and the SCRP Cooperation
Agreement, to reflect the Agency's total debt as of September 30, 2005,
NOW, THEREFORE,the Redevelopment Agency of the City of Huntington Beach does
hereby resolve as follows:
SECTION 1. That the Operative Agreements between the Redevelopment Agency and
the City of Huntington Beach for the implementation of the HBRP, and the SCRP Cooperation
Agreement, are still in effect as previously approved.
SECTION 2. That,pursuant to such Operative Agreements and the SCRP Cooperation
Agreement,the Agency debt to the City,which is to continue to be carried forward for the HBRP
and the SCRP, is hereby amended as follows:
HBRP SCRP Total
Operative Agreement Debt 10/1/04 $89,283,956 $6,775,000 $96,058,956
Accrued Interest 10/1/04 to 9/30/05 2,508,878 11,812 2,520,690
Other adjustments -- 507,374 507,374
Other Reductions of Debt (4,924,921) -- (4,924,921)
Total Agency Debt as of 9/30/05 $86,867,913 17,29,4186 $94,162,099
SECTION 3. The Chairperson is hereby authorized and directed to amend the Agency
debt to the City as approved hereby.
PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington
Beach at a regular meeting thereof held on the t 7th day of .Tanuary 2006.
Chairperson
REVIEWED AND APPROVED: APPROVED AS TO FORM:
6-4 -
, -
E ecutive Director Agency Attorney Z?In
INITIATED AND APPROVED:
Finance Officer
05reso/agency debt2005 2
Res. No. 358
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF HUNTINGTON BEACH )
1, JOAN FLYNN, Clerk of the Redevelopment Agency of the
City of Huntington Beach, California, DO HEREBY CERTIFY that the
foregoing resolution was duly adopted by the Redevelopment Agency of
the City of Huntington Beach at a regular meeting of said Redevelopment
Agency held on the 17th day of January, 2006 and that it was so adopted
by the following vote:
AYES: Bohr, Green, Coerper, Sullivan, Hardy, Hansen, Cook
NOES: None
ABSENT: None
ABSTAIN: None
Cle of the RedevelopmerIVAgency
of the City of Huntington Beach, CA
RCA ROUTING SHEET
INITIATING DEPARTMENT: Finance Office
SUBJECT: Approve Resolution of the Redevelopment
Agency of the City of Huntington Beach Amending the
Agency Debt Pursuant to the Operative Agreement
Between the City of Huntington Beach and the
Redevelopment Agency of the City of Huntington for the
Huntington Beach Redevelopment Project(Merged
Project Area) and Southeast Coastal Project Area
COUNCIL MEETING DATE: I January 17, 2006
RCA ATTACHMtNTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Attached ❑
Not Applicable
Resolution (w/exhibits & legislative draft if applicable) Attached
Not Applicable ❑
Tract Map, Location Map and/or other Exhibits Attached ❑
Not Applicable
Attached ❑
Contract/Agreement (w/exhibits if applicable) Not Applicable
(Signed in full by the City Attorney)
Attached ❑
Subleases, Third Party Agreements, etc. Not Applicable
(Approved as to form by City Attorney)
Certificates of Insurance (Approved y A roved b the City Attorney) Attached El
Applicable
Attached ❑
Fiscal Impact Statement (Unbudget, over $5,000) Not Applicable
Attached ❑
Bonds (If applicable) Not Applicable
Attached ❑
Staff Report (If applicable) Not Applicable
Commission, Board or Committee Report If applicable) Attached: ❑
p ( pp ) Not Applicable
Find in s/Conditions for Approval and/or Denial Attached ❑
g pp Not Applicable
EXPLANATION P61k,NSSING ATTACHMENTS
REVIEWED RETURNED FORWARDED
Administrative Staff ( ) ( )
Assistant City Administrator (Initial) ( ) ( )
City Administrator (Initial) ( ) ( )
City Clerk ( )
EXPLANATION FOR RETURN OF ITEM':
Only)(Below Space For City Clerk's Use