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Home My WebLink AboutRedevelopment Agency Resolution 383 amending the Agency debt 1 ti Council/Agency Meeting Held:— Deferred/Continued to: P,Approved Con it�nally Approved ❑ Denied Ci Cler 's Signat re 5-6 Ir Council Meeting Date: November 1, 2010 Department ID Number: FN 10-022 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Mayor and City Council Members/ Honorable Chair and Agency Members SUBMITTED BY: Fred A. Wilson, City Administrator/ Executive Director PREPARED BY: Bob Wingenroth, Director of Finance Stanley Smalewitz, Director of Economic Development/ Deputy Executive Director SUBJECT: Adopt Redevelopment Agency Resolution No. 383 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 (HBRP) and the Cooperation Agreement between the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach regarding certain Capital Improvements related to the Southeast Coastal Project (SCRP) Area. 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 Redevelopment Project Area. Financial Impact: Not Applicable Redevelopment Agency Recommended Action: Motion to: Adopt Agency Resolution No. 383, "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" for the Merged Huntington Beach Project Area and the Southeast Coastal Project Area. HB -1 37- Item 6. - 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 11/1/2010 DEPARTMENT ID NUMBER: FN 10-022 The debt at September 30, 2010 will be as follows: Merged Project Area AB 1290 $80,505,311 Southeast Coastal Project Area 7,392,808 Total Debt $87,898,119 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. In 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. Below is a brief description of the changes that occurred during the year: • During the year, the debt was reduced by the budgeted debt repayment of $4,425,000 and the $216,480 lease payment received from the Big O Tire Store. • There were interest charges of $1,987,507, which were calculated using the City Treasurer's rate of return in investments. Based on twenty-year cash flow, it is anticipated that the Redevelopment Agency will repay the total debt over the next twenty years. On September 2, 2003, the City 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. Environmental Status: Not Applicable Strategic Plan Goal: Maintain financial viability and our reserves Enhance economic development Attachment(s): o Des Cro a 1. Resolution No. 383, "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 Area, 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" 2. Merged Project Area, Fund Summary Schedule 3. Southeast Coastal Project Area, Fund Summary Schedule Item 6. - 2 H -138- ATTACHMENT # 1 RESOLUTION NO. 383 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 ("Agency") and the City of Huntington Beach("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 10-2647/53304 1 Agency Resolution No. 383 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 30,2010. 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 10/1/09 $83,159,284 $7,379,146 $901538,430 New Debt $ 881,804 --- $ 881,804 Accrued Interest 10/1/09 to 9/30/10 $ 1,987,507 $ 13,662 $ 2,001,169 Other Reductions of Debt ($ 5,523,284) --- ($ 5,523,284) Total Agency Debt as of 9/30/10 $80,505,311 $7,L9,2808 $87,898,119 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 1 st day of November 2010. Cha' ers REVIEW APPROVED: INITIATED AND APPROVED: l� xe tive Director Director of Finance APPROVED AS TO FORM: gLz Agency Attorney 10-2647/53304 2 Res. No. 383 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, 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 November 1, 2010 and that it was so adopted by the following vote: AYES: Carchio, Green, Bohr, Dwyer, Hansen NOES: None ABSENT: Hardy, Coerper ABSTAIN: None Qr CIV of the Redevelopme61Agency of the City of Huntington Beach, CA ATTACHMENT #2 ATTACHMENT 2 Merged Project Area Pre and Post AB 1290 Agency Debt As of September 30, 2010 DEBT @ ADDITIONAL ADDITIONAL BUDGETED ACCRUED DEBT @ 10/1/09 DEBT* REPAYMENT* REPAYMENTS INTEREST 9/30/2010 Pre AB 1290 Agency Debt: General Fund Direct Advances $ 2,724,117 $ $ (881,804) $ (65,106) $ 65,106 $ 1,842,313 Indirect Advances 6,567,353 (156,960) 156,960 6,567,353 Land Sales 62,213,258 (2,471,817) 1,486,897 61,228,338 Total General Fund 71,504,728 - (881,804) (2,693,883) 1,708,963 69,638,004 Sewer Fund Direct Advances 259,136 - 6,193 265,329 Deferred Development Fees 161,387 - 3,857 165,244 Total Sewer Fund 420,523 10,050 430,573 Drainage Fund Direct Advances 624,517 - 14,926 639,443 Deferred Development Fees 171,794 - 4,106 175,900 Total Drainage Fund 796,311 - - - 19,032 815,343 Park A&D Fund Land Sales 5,144,457 - - 122,953 5,267,410 Park A&D Deferred Dev Fees 381,585 - 9,120 390,705 Total Park A&D 5,526,042 - - - 132,073 5,658,115 Water Fund Direct Advances 3,870,765 - 92,511 3,963,276 Total Water Fund 3,870,765 - 92,511 3,963,276 Total Pre AB 1290 Agency Debt $ 82,118,369 $ - $ (881,804) $ (2,693,883) $ 1,962,629 $ 80,505,311 Post AB 1290 Agency Debt: General Fund Direct Advances $ 1040915 $ 881,804 $ - $ (1,947,567) $ 24,878 $ - Total Post AB 1290 Debt $ 1,040,915 $ 881,804 $ - $ (1,947,567) $ 24,878 $ - Total Merged Project Area Debt $ 83,159,284 $ 881,804 $ (881,804) $ (4,641,450) $ 1,987,507 $ 80,505,311 *Note:On April 5,2010,the City Council approved an action that funded additional projects and council priorities.This action required a debt repayment of$881,804 from the Merged Project Area's Debt Service Fund to the General Fund.The General Fund in turn loaned a like amount to the Merged Project Area Capital Project Fund. ATTACHMENT #3 ATTACHMENT 3 Southeast Coastal Project Area Post AB 1290 Agency Debt As of September 30, 2010 DEBT @ BUDGETED ACCRUED DEBT @ 10/01/2009 REPAYMENTS INTEREST 9/30/2010 Post AB 1290 Agency Debt: General Fund Direct Advances $ 199,946 $ - $ - $ 199,946 Interest On Advances 47,303 - 5,909 53,212 Subtotal Direct Advances 247,249 - 5,909 253,158 Capital Improvement Projects 270,000 - - 270,000 Interest 54,408 - 7,753 62,161 Subtotal Capital Improvement Projects 324,408 - 7,753 332,161 Total General Fund 571,657 - 13,662 585,319 Merged Proiect Area RDA Fund Direct Advances" 302,489 - - 302,489 Total Merged Project Area RDA Fund 302,489 - - 302,489 Total Post AB 1290 Debt $ 874,146 $ - $ 13,662 $ 887,808 Future Capital Projects -General Fund: Capital Improvement Projects $ 6,505,000 $ - $ - $ 6,505,000 Total Southeast Coastal Project Area Debt $ 7,379,146 $ - $ 13,662 $ 7,392,808 "Note: No interest is calculated because the advance is between two agency funds.