Report Prepared by: Amanda Williams, Economic Development Associate
Title
SUBJECT: Adoption of Resolution of the Successor Agency to the Redevelopment Agency of the City of Merced Approving a Recognized Obligation Payment Schedule for July 1, 2026, Through June 30, 2027 (ROPS 26-27)
REPORT IN BRIEF
Considers approving and adopting a Recognized Obligation Payment Schedule as the Successor Agency to the Redevelopment Agency of the City of Merced for July 1, 2026, through June 30, 2027, which is due to the Department of Finance by February 1, 2026.
RECOMMENDATION
Successor Agency to the Redevelopment Agency - Adopt a motion approving Resolution SA 2026-01, a Resolution of the Successor Agency to the Redevelopment Agency of the City of Merced approving a Recognized Obligation Payment Schedule (ROPS 26-27) including Administrative Budget for July 1, 2026, through June 30, 2027.
Body
ALTERNATIVES
1. Approve, as recommend 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 will be adopted in the FY 26-27 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 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 obligation of the Former Agency. 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, 2026, through June 20, 2027.
The Successor Agency prepares a ROPS to request funding for the following fiscal year beginning July 1. The ROPS includes “enforceable obligations” permitted under the Dissolution Act, including bond payments and administrative expenses.
After approval, the ROPS 26-27 will need to be approved by the Countywide Oversight Board and Department of Finance in accordance with applicable law.
Staff to the Successor Agency desires that the Successor Agency Board approve a Recognized Obligation Payment Schedule for July 1, 2026, through June 30, 2027 (ROPS 26-27) to allow for the payment of the enforceable obligations of the Successor Agency.
DISCUSSION
Submission of ROPS for FY 26-27 is being requested for the following:
Bond Payment
Through the ROPS the Successor Agency requests funding to fulfill the “enforceable obligations” permitted under the Dissolution Act, including bond payments and administrative expenses. The Designated Local Authority completed a bond refunding in 2015 in the amount of $15,740,000. The Successor Agency’s last payment toward the bond debt will be in FY 2038-2039. The debt payment for FY 25/26, reflected in the ROPS, is $1,028,044 which includes principal and interest payments, as well as fiscal agent fees.
Administrative Costs
The Successor Agency is requesting $100,000 for administrative costs through June 30, 2027 to cover the costs for City staff and consulting services which will continue to be provided by the consultants from the former Merced DLA. City staff will complete Successor Agency tasks and provide administrative overview of the Successor Agency records while Price, Paige, and Company assist in the preparation of the ROPS and Leibold McClendon & Mann provides legal guidance for the Successor Agency.
The ROPS 26-27 Administrative Costs are broken out as follows:
City of Merced 75,000
Price, Paige & Co 10,000
Leibold McClendon & Mann 10,000
Miscellaneous Costs 5,000
Total 100,000
IMPACT ON CITY RESOURCES
All Successor Agency obligations listed on the ROPS which includes City administrative costs will be funded by the redevelopment property tax trust funds and other funding received through interest income and property lease revenue. The ROPS will need to be approved by the Merced County Oversight Board and the Department of Finance. Once the ROPS is approved by both entities, the Successor Agency budget will be included in the city-wide budget process and adoption. No budget appropriation is necessary at this time.
ATTACHMENTS
1. Resolution SA 2026-01