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Home My WebLink AboutImplement Redevelopment Agency's - RDA - mid-year budget app Council/Agency Meeting Held: Deferred/Continued to: `d1 A pr ved ,Conditionall p, red ❑ Denied Cif Cle k S nature Council Meeting Date: 5/4/2009 Departme NO 4, mber: ED 09-22 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Chariman and Me er of the Redevelopment Agency SUBMITTED BY: Fred A. Wilson, Executive D' PREPARED BY: Stanley Smalewitz, Deputy E c tive Director C SUBJECT: REDEVELOPMENT AGENCY BUDGET APPROPRIATION ADJUSTMENTS Statement of issue,Funding Source, Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Since adoption of the Redevelopment Agency's (RDA) budget in September 2008, there have been changes in legislative directives, contractual obligations and spending priorities that impact the RDA budget. Due to these changes, it is necessary to increase appropriations to three funds managed by the RDA. Funding Source: Unreserved/Undesignated fund balance in the Merged Project Area Capital Projects Fund (305), Merged Project Area Debt Service Fund (407) and the Low-Income Housing Fund (306). Recommended Action: Motion to: Increase appropriations in the respective Redevelopment Agency (RDA) funds for specified expenditures. Alternative Action(s): Do not approve the increase in appropriations for the Redevelopment Agency and provide direction to staff. REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 5/4/2009 DEPARTMENT ID NUMBER: ED 09-22 Analysis: Several expenditures for FY 2008/09 — which were not anticipated during the budget development process— require appropriation. The table below outlines each of these additional expenditures and the total amount each obligation will cost. In addition, the table presents how the expenditures are proposed to be funded using Unreserved/Undesignated fund balance from the respective funds: Redevelopment Agency Proposed Budget Appropriation Adjustments FY 2008109 Merged Project Merged Project Area Capital Area Debt Low Income Projects Fund Service Fund Housing (305) (407) Fund (306) Total State of California ERAF IV Shift - 885,178 221,295 1,106,473 CIM/The Strand Shorebreak Hotel Upgrades 1,300,000 1,100,000 - 2,400,000 CIM/The Strand Parking Structure - 450,000 - 450,000 City Attorney/Legal Expenditures - - 280,000 280,000 Emerald Cove Senior Apartments Debt Service - - 1 405,000 405,000 1,300,000 1 2,435,178 1 906,295 1 4,641,473 State of California ERAF IV Shift: Adoption of the City's FY 2008/09 budget occurred while the State of California was still involved in deliberations on how to balance their budget. On October 1, 2008, the Governor approved the FY 2008/09 State budget. Part of the State budget package — AB 1389 — authorized a one-time taking of redevelopment funds from redevelopment agencies in the State. Due to the late passage of the State Budget, the Agency was unaware of this new obligation. Therefore, it is necessary to appropriate $1,106,473 to make this payment to the State. This ERAF IV shift amount will be split between the Merged Project Area Debt Service (407) and Low-Income Housing Funds (306) as noted in the table above. CIM/The Strand Sixth Implementation Agreement Payments The Sixth Implementation Agreement between the RDA and CIM/Huntington, LLC for development of The Strand was adopted on November 3, 2008. Due to the timing of negotiations, it was unclear during FY 2008/09 budget development what the total RDA commitment for funding the Sixth Implementation Agreement would be. Therefore, as detailed in the Sixth Implementation Agreement, the Agency must allocate $2,400,000 for upgrades to The Shorebreak Hotel and an additional $450,000 for additional parking. These expenditures are proposed to be funded through U ndesignated/U n reserved fund balance in the Merged Project Area Capital Projects (305) and Debt Service Funds (407) as detailed in the table above. -2- 4/28/2009 10:53 AM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 5/4/2009 DEPARTMENT ID NUMBER: ED 09-22 Cityttorney/Legal Expenditures During the first half of the 2008/09 fiscal year, the City Attorney's Office has been working closely with the Economic Development Department's Housing Division. To more adequately budget for the appropriate attorney coverage, 50% of a Senior Deputy City Attorney as well as outside legal counsel is proposed to be allocated from the Low-Income Housing Fund (306). The additional appropriations required for these expenditures for FY 2008/09 total $280,000. Emerald Cove Senior Apartments Debt Service The RDA will be pursuing the sale of Emerald Cove Senior Apartments from the City of Huntington Beach to the Redevelopment Agency by the end of the 2008/09 fiscal year. As part of the sale of Emerald Cove, the Low-Income Housing Fund (306) will assume responsibility for the debt service on the Emerald Cove bond. Therefore, Fund 306 will need an additional appropriation of $405,000 in FY 2008/09 to meet these debt serve payments. The Emerald Cove program budget (fund 503) will be reduced by $405,000. Strategic Plan Goal: Financial: Fully understand the financial implications of financial decisions before they are made, and recognized and disclose financial impacts. City Services: Provide quality public services with the highest professional standards to meet community expectations and needs. Environmental Status: Not applicable. Attachment(s): F�okqq Nov M-imprRoi ® - o 0 1. FIS -3- 4/23/2009 3:07 PM ATTACHMENT # 1 CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION ` FINANCE DEPARTMENT TO: FRED A. WILSON, CITY ADMINISTRATOR FROM: BOB WINGENROTH, DIRECTOR OF FINANCE SUBJECT: FIS 2008-09-13 Redevelopment Agency Appropriations Adjustments DATE: APRIL 22, 2009 As required by Resolution 4832, this Fiscal Impact Statement has been prepared for "Redevelopment Agency Appropriations Adjustments." If the City Council approves this action the effect on the budgetary available fund balance for the various Agency funds is described below: Estimated Additional Available Fund Fund Fund Description Available Fund Additional Appropriations Equity after # Equity-Prior to Revenues Requested Council Approval Council Action 305 Merged Project Area Capital Projects Fund 1,319,000 1,550,000 (2,850,000) 19,000 306 Low Income Housing Fund 2,500,000 (906,295) 1,593,705 407 Merged Project Area Debt Service Fund 3,120,000 (2,435,178) 684,822 Total 6,939,000 1,550,000 (6,191,473) 2,297,527 BW/rs A ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: REDEVELOPMENT AGENCY BUDGET APPROPRIATION ADJUSTMENTS COUNCIL MEETING DATE: May 4, 2009 CA ATTACHMENTS 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 Contract/Agreement (w/exhibits if applicable) Attached ❑ (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached Not Applicable ❑ Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable IE Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable IE Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPLANATION FORMISSING TT T REVIEWED RETURNED FORW R`DED Administrative Staff Deputy City Administrator (Initial) City Administrator (Initial) ( ) ( ) City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: Wi RCA Author: Fritzal CITY OF HUNTINGTON BEACH Interdepartmental Memo TO: Honorable Mayor and Member e City Council VIA: Fred A. Wilson, City Administ FROM: Stanley Smalewitz, Director of conomic Development DATE: May 1, 2009 SUBJECT: Late Communication — Consent Calendar Item 13 — Redevelopment Agency Budget Appropriation Adjustment As part of the State budget package, AB 1389 authorized the State one-time taking of Redevelopment Agency funds. The California Redevelopment Association (CRA) challenged the taking as unconstitutional. On April 30, 2009, Sacramento Superior Court ruled in CRA's favor and found unconstitutional the required transfer by redevelopment agencies statewide of $350 million to be used to fund State obligations. The Court held that petitioners are entitled to declaratory and injunctive relief invalidating and enjoining Health and Safety Code Section 33685 - the section which created the ERAF payment obligation for redevelopment agencies for fiscal year 2008-09. It is expected that the State Department of Finance will appeal the decision. Therefore, the Redevelopment Agency will maintain the request to allocate funds to transfer the $1,106,473 in the event that the State should file and prevail in an appeal, thus obligating the Agency to pay the money. If you have any questions, please call me at extension 5909. /'A00 ED 09-22 Late Communication -1- 5/1/2009 11:27:00 AM