AB 26 Compliance

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As part of the 2011-2012 State Budget, the California Legislature enacted companion bills ABx1 26 and ABx1 27, which were signed by the Governor on June 29, 2011. In combination, these bills required that each redevelopment agency in California be dissolved unless the community that created the agency enacted an ordinance committing it to making certain payments to the State. ABx1 26 prohibits agencies from taking numerous actions, effective immediately and purportedly retroactively, and additionally provides that agencies are deemed dissolved as of October 1, 2011. The companion bill, ABx1 27, provided that a community could participate in a “Voluntary Alternative Redevelopment Program” (VARP) in order to enable a redevelopment agency within that community to remain in existence and continue operations consistent with State redevelopment law. AB 26 and AB 27 were challenged in the California Supreme Court. The Court upheld AB 26 but invalidated AB 27. 

Pursuant to ABx1 26, as modified by the Supreme Court, redevelopment agencies are dissolved as of February 2012 and their affairs are to be wound down by the City as the “successor agency”. The legislation defines which obligations are eligible to continue being paid with former tax increment funds following the dissolution of the agency. Obligations that are to be honored by the successor agency going forward (enforceable obligations) include bond or loan payments, payments required by the federal government, judgments or settlements, legally binding contracts (including those necessary for operation of the agency, e.g. rent), and others. The Redevelopment Agency is required to prepare an Enforceable Obligations Payment Schedule (EOPS) listing all of the obligations identified by the Agency as enforceable obligations that would continue to be paid. After February 2012, only expenditures listed in the EOPS may continue to be made by the successor agency; any remaining funds from the former tax increment flow are to be returned to other county taxing entities pursuant to their respective shares in the underlying property tax formula.

Long-Range Property Management Plan

Under AB1x 26 (HSC Section 34177 [e]), successor agencies are required to “dispose of assets and properties of the former redevelopment agency” and to do so “expeditiously and in a manner aimed at maximizing value.” Upon determination of the Oversight Board, proceeds from the sale of former Redevelopment Agency assets can be used to fund approved development projects or to fund other wind-down activities. If no such activities exist, the funds are to be transferred to the county auditor-controller for distribution to taxing entities.

On June 27, 2012, the Governor approved a follow-up bill to AB1x 26, AB 1484. AB 1484 altered the Oversight Board’s role in real property disposition. The Oversight Board’s new role is to approve a long- range property management plan (“LRPMP”), which, pursuant to the law, must contain a detailed inventory of all real property assets and a set of recommendations regarding how and to whom the assets should be disposed or distributed. AB 1484 specifies that the Plan must be approved and submitted within six months of the issuance of a finding of completion, which the Successor Agency received May 16, 2013.

On August 16, 2012, the Oversight Board heard a presentation from staff regarding the required elements of the LRPMP and staff’s proposed strategy for preparing the LRPMP. On March 6, 2013, staff presented a report that contained a more detailed discussion of the LRPMP along with a proposed Oversight Board resolution establishing operational definitions of key real estate terms necessary to complete the LRPMP. The Successor Agency recommended to the Oversight Board adoption of OB Resolution 13-3, which the Oversight Board adopted on March 14, 2013.

On June 18, 2013, staff presented the recommendations contained within the draft LRPMP to the City Council/Successor Agency for its review and comments. The City Council supported staff’s proposed approach to the disposition of the former agency properties.

Based on the draft recommendations presented on June 18, 2013, on August 7, 2013, the City Council/Successor Agency approved appraisal instructions for the two properties it will consider retaining for future development. This approach is consistent with the process outlined in OB Resolution 13-3. On August 8, 2013, staff presented the same recommendations and appraisal instructions previously provided to the City Council/Successor Agency to the Oversight Board. The Oversight Board approved the draft recommendations and appraisal instructions. The Oversight Board also authorized staff to proceed with the selection of an appraiser to prepare the appraisal reports for the properties that may be retained for future development under the LRPMP.

On October 23, 2013, the Oversight Board adopted Resolution 13-15 approving the LRPMP.

LRPMP Document

Enforceable Obligation Payment Schedule

On May 10, 2012, the West Sacramento Redevelopment Agency Oversight Board (“Oversight Board”) unanimously approved the Amended Recognized Obligation Payment Schedule (Amended ROPS) for the period covering July 1, 2012 through December 31, 2012.

As requested by the Department of Finance in its letter dated April 27, 2012, the July through December 2012 ROPS presented to and approved by the Oversight Board did not include the following four line items identified by DOF (see previous ROPS transmitted April 13, 2012) as not qualifying as Enforceable Obligations:

  1. Form A, line item 4, Port Capital Reserve Funding Agreement, outstanding amount of $9,774,000; and
  2. Form A, line item 6, Bridge District Infrastructure Agreement, outstanding amount of $144,733,389; and
  3. Form A, line item 16, Port of West Sacramento, outstanding debt amount of $155,165.85; and
  4. Form A, line item 17, Stone Lock ENA, outstanding debt amount of $155,165.85.The

Successor Agency does not agree with DOF's determination that these four items are not enforceable obligations. Accordingly, the Successor Agency hereby: a) requests that DOF reconsider its determination concerning these four items; and b) expressly reserves all rights to pursue legal and equitable relief as it deems necessary and proper in order to ensure that these four items be treated as Enforceable Obligations for all purposes.

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