Report Prepared by: Venus Rodriguez, Finance Officer
Title
SUBJECT: Adoption of Resolution of the Successor Agency to the Redevelopment Agency of the City of Merced Approving an Amended Recognized Obligation Payment Schedule for January 1, 2024 Through June 30, 2024 (Amended ROPS 23-24B)
REPORT IN BRIEF
Considers approving and adopting an amended Recognized Obligation Payment Schedule as the Successor Agency to the Redevelopment Agency of the City of Merced for January 1, 2024 through June 30, 2024 which is due to the Department of Finance by October 1, 2023.
RECOMMENDATION
Successor Agency - Adopt a motion:
A. Approving Resolution SA 2023-02, a Resolution of the Successor Agency to the Redevelopment Agency of the City of Merced approving the Amended Recognized Obligation Payment Schedule (ROPS 23-24B) for January 1, 2024 through June 30, 2024; and,
B. Authorizing the Finance Officer to make any necessary budget adjustments in order to establish a Fiduciary Fund for the Successor Agency with revenue and expense increases per the Amended Recognized Obligation Payment Schedule.
City Council - Adopt a motion:
A. Authorizing the Finance Officer to make any necessary budget adjustments in order to establish a Fiduciary Fund for the Successor Agency with revenue and expense increases per the Amended Recognized Obligation Payment Schedule.
Body
ALTERNATIVES
1. Approve as recommended by Staff; or
2. Approve, subject to conditions as specified by the City Council; or,
3. Refer to staff for reconsideration of specific items as requested by the City Council; or
4. Defer action until a specific date; or
5. Deny the request.
AUTHORITY
Charter of the City of Merced, Section 200; and Health and Safety Code Section 34177.7(o)(1)(E)
CITY COUNCIL PRIORITIES
As adopted in the FY 23-24 Budget
BACKGROUND
Pursuant to Assembly Bill No. 1X 26, as modified by Assembly Bill No. 1484 and as further modified by Senate Bill No. 107, which added Parts 1.8 and 1.85 to Division 24 of the Health and Safety Code (“Dissolution Act”), the former Redevelopment Agency of the City of Merced (“Former Agency”) was dissolved on February 1, 2012. Because the City of Merced (“City”) declined to serve as the successor agency, the Merced Designated Local Authority, acting as Successor Agency to the Redevelopment Agency for Merced (“DLA”),was vested with all authority, rights, powers, duties and obligations of the Former Agency.
The Successor Agency to the Redevelopment Agency of the City of Merced (the “Successor Agency”) is charged with implementation of recognized enforceable obligations and winding down of the affairs of the Former Agency in accordance with the California Health and Safety Code.
The City of Merced elected to act as the Successor Agency effective September 17, 2023, thereby terminating the DLA.
Senate Bill (SB) 107 added Health and Safety Code Section 34177(o) requiring the Successor Agency to prepare and adopt a “Recognized Obligation Payment Schedule” (“ROPS”) that lists all obligations of the former Agency that are enforceable within the meaning of subdivision (d) of Section 34171 for twelve- month periods, including July 1, 2023 through June 30, 2024.
The DLA, acting in its capacity as the Successor Agency, approved ROPS 23-24 in January of 2023 for the period July 1, 2023 through June 30, 2024. The ROPS 23-24 was approved by the Countywide Oversight Board and Department of Finance in accordance with applicable law.
Health and Safety Code Section 34177.7(o)(1)(E) states that once per ROPS period, the Successor Agency may submit an amendment to the ROPS, provided that (a) the amendment is approved by the Oversight Board, (b) the amendment is submitted in accordance with applicable law no later than October 1 (or the next business day if October 1 is a Sunday), and (c) the Oversight Board makes a finding that a revision to the ROPS is necessary for the payment of enforceable obligations during the second half of the ROPS period
Staff to the Successor Agency desires that the Successor Agency Board approve an Amended Recognized Obligation Payment Schedule for January 1, 2024 through June 30, 2024 (Amended ROPS 23-24B) to allow for the payment of the enforceable obligations of the Successor Agency.
DISCUSSION
Amendments to the original ROPS is being requested for the following:
R Street Remediation
The Successor Agency is requesting additional funds for the R Street remediation project (ROPS Item 76). The project is an ongoing remediation project started by the Former Agency that has been approved by both the Countywide Oversight Board and the Department of Finance on the Successor Agency’s prior ROPS. The ongoing remediation is performed by Provost & Pritchard.
ROPS 23-24 included an initial request for remediation funds in the amount of $151,143 for the R Street (ROPS Item 76) remediation project. Since the ROPS 23-24 was prepared in January of 2023, Provost & Pritchard was contacted by the Central Valley Regional Water Quality Control Board (“RWQCB”) (the governmental agency overseeing the remediation) indicating that free product (gasoline) was found at the site and requesting additional remedial action (See attached RWQCB letter dated August 29, 2023). As a result, Provost & Pritchard is requesting additional funds (for a total for the the period ending June 30, 2024, of $486,500) to perform free product assessment and prepare a removal plan in compliance with the RWQCB letter (See attached Provost & Pritchard memorandum dated September 7, 2023). Funds requested to be expended in the ROPS 23-24B period are necessary to continue remediation of the R Street project during the ROPS 23-24B period without interruption.
Administrative Costs
The Successor Agency is requesting additional funds for administrative costs through June 30, 2024. Additional costs are expected to be incurred as a result of the City taking over the Successor Agency, and though existing DLA staff will remain on for a time to assist with the transition to the City, City staff will need to carefully review all work product prepared by DLA staff and take additional steps to incorporate the obligations of the Successor Agency into the City’s books and records for the Successor Agency. Staff estimates that an additional $30,000 will be sufficient to cover such additional costs.
IMPACT ON CITY RESOUCES
All required expenses on the ROPS will be funded by redevelopment property tax trust funds. The City of Merced will require internal staff to complete tasks and provide administrative overview. The City is able to recover administrative costs from redevelopment property tax trust funds which is included on the ROPS. In future years, budget will be part of the city-wide budget process and adoption.
ATTACHMENTS
1. Resolution SA 2023-02 with Amended ROPS 23-24B
2. Memorandum from Provost & Pritchard dated September 7, 2023
3. Letter from RWQCB dated August 29, 2023