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2012 06 05 SACITY AS SUCCESSOR ACIENCY TO THE LAQUINTA REDEVELOPMENT ACIENCY Agendas and staff reports are available on the City's web page: www.la-quinta.org AGENDA CITY COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting TUESDAY, JUNE 5, 2012 AT 4:00 P.M. Beginning Resolution No. SA 2012-007 CALL TO ORDER ROLL CALL Successor Agency Members: Evans, Franklin, Henderson, Osborne and Chairperson Adolph CLOSED SESSION - NONE PUBLIC COMMENT At this time members of the public may address the City Council acting as the legislative body for the City as Successor Agency to the La Quinta Redevelopment Agency on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. CONFIRMATION OF AGENDA APPROVAL OF MINUTES 1 . APPROVAL OF MINUTES OF MAY 15, 2012 CONSENT CALENDAR NOTE: Consent Calendar items are routine in nature and can be approved by one motion. CITY AS SUCCESSOR AGENCY TO RDA 1 JUNE 5, 2012 APPROVAL OF DEMAND REGISTER DATED JUNE 5, 2012 2. ADOPTION OF FISCAL YEAR 2012/2013 PRELIMINARY BUDGET 3. RATIFICATION OF MUTUAL TERMINATION OF AGREEMENT WITH ROSENOW SPEVACEK GROUP RELATING TO WASHINGTON STREET APARTMENT REHABILITATION BUSINESS SESSION CONSIDERATION OF A RESOLUTION APPROVING THE IMPLEMENTATION OF THE WASHINGTON STREET APARTMENT REHABILITATION PROJECT, APPROVING THE USE OF 2004 TAX-EXEMPT HOUSING BOND PROCEEDS AND 2011 TAXABLE HOUSING BOND PROCEEDS TO FUND THE PROJECT, CONFIRMING THE STATUS OF THE HOUSING BOND PROCEEDS AS HOUSING ASSETS TRANSFERABLE TO THE LA QUINTA HOUSING AUTHORITY, AND AMENDING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE TO REFLECT THE PROJECT AND PAYMENTS STUDY SESSION — NONE ADJOURNMENT The next regular meeting of the City as Successor Agency to the La Quinta Redevelopment Agency will be held on June 19, 2012 commencing with closed session at 3:00 p.m. and open session at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING 1, Susan Maysels, Interim City Clerk of the City as Successor Agency to the La Quinta Redevelopment Agency, do hereby declare that the foregoing agenda was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 111, on June 1, 2012. DATED: May 31, 2012 SUSAN MAYSELS, Int m City Clerk City of La Quinta, California CITY AS SUCCESSOR AGENCY TO RDA 2 JUNE 5. 2012 " 4 002 Public Notices The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired, please call the City Clerk's Office at 777-7103, twenty- four (24) hours in advance of the meeting and accommodations will be made. If special electronic equipment is needed to make presentations to the City Council, arrangements should be made in advance by contacting the City Clerk's Office at 777-7103. A one (1) week notice is required. • If background material is to be presented to the City Council during a City Council meeting, please be advised that eight (8) copies of all documents, exhibits, etc., must be supplied to the City Clerk for distribution. It is requested that this take place prior to the beginning of the meeting. • Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at the City Clark counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during normal business hours. CITY AS SUCCESSOR AGENCY TO RDA 3 JUNE 5, 2012 ' 003 C&t9v 4 4 ash& CITY MSA HA / FA MEETING DATE: J une 5, 2012 ITEM TITLE: Consideration of a Resolution Approving the Implementation of the Washington Street Apartment Rehabilitation Project, Approving the Use of 2004 Tax -Exempt Housing Bond Proceeds and 2011 Taxable Housing Bond Proceeds to Fund the Project, Confirming the Status of the Housing Bond Proceeds as Housing Assets Transferable to the La Quinta Housing Authority, and Amending the Recognized Obligation Payment Schedule to Reflect the Project and Payments RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: _L CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Adopt a Resolution (1) approving the implementation of the Washington Street Apartment Rehabilitation Project, (2) approving the expenditure of $3,006,360 in 2004 tax-exempt housing bond proceeds and $15,523,220 in 2011 taxable housing bond proceeds, (3) confirming that the housing bond proceeds are "Housing Assets" that are to be transferred to the Housing Authority pursuant to Health & Safety Code Section 34176(b), (4) amending the Recognized Obligation Payment Schedule to reflect the Project/Bond obligations and the payments, and (5) appropriating $ 7,008,718 in 2011 taxable housing bond proceeds to fund the Project. FISCAL IMPLICATIONS: The total remaining Washington Street Apartment ("WSA") Rehabilitation Project cost is estimated to be $18,529,580. If the rehabilitation moves forward, the funding sources would be as follows: (1) $3,006,360 in 2004 tax-exempt housing bond proceeds, and (2) up to $15,523,220 of 2011 taxable housing bond proceeds. Some of these funds were appropriated previously. However, an additional appropriation is needed. The following table summarizes the funding that is proposed: If 004 Amount Funding Source Previous Appropriation $3,006,360 2004 Tax -Exempt Housing Bond Proceeds Previous Appropriation $8,514,502 2011 Taxable Housing Bond Proceeds Additional Appropriation $7,008,718 2011 Taxable Housing Bond Proceeds Proje t Total $18,529,580 1 The $7,087,718 additional appropriation will come from a previous $7,000,000 appropriated for the Dune Palms Road Mobile Home Project and $8,718 will come from a previous allocation for the Testa property. The bond documentation for the 2004 and 2011 housing bonds requires that these bond proceeds be used for affordable housing purposes. An analysis and discussion of the bondrequirements is set forth below in Section D. BACKGROUND AND OVERVIEW: In order to verify that the WSA Rehabilitation Project may proceed, staff is requesting that the Successor Agency and Housing Authority adopt the proposed Resolutions. If the Resolutions are adopted, this item will be taken up by the Oversight Board on June 6, 2012. The following sections outline the history of WSA; the project scope and status; EOPS and ROPS status; and the requirements set forth by the housing bond documents. A. Summary of the WSA Purchase, Annexation, USDA -Rural Development Subsidy, and Property Ownership When redevelopment existed in California, the California Community Redevelopment Law ("CRL") required that a designated percentage of all housing units developed within a redevelopment project area be affordable to very -low, low -and moderate -income households. Based on past and projected housing development within the redevelopment project areas in La Quinta, the number of affordable units required to be developed in La Quinta was projected to be 2,307. Prior to its dissolution, the La Quinta Redevelopment Agency ("LQRDA") was working diligently to meet that number. In addition to producing new affordable housing units, the LQRDA had made one of its top priorities the rehabilitation of existing affordable housing units. Implementation of that goal not only provided affordable housing, but also helped to eliminate blight in the community. Consistent with that goal, in HE 2006, the LQRDA began negotiations to purchase the WSA, a 72-unit very low-income senior (age 62+) and disabled adult affordable housing complex located on the east side of Washington Street at Hidden River Road (see Attachment 1 — vicinity map.) The WSA is over 30 years old and is in need of substantial rehabilitation, including significant upgrades to meet current handicap accessibility and energy -efficiency standards. During that same timeframe, the LQRDA also began pursuing the acquisition of the adjacent 6.83 acre vacant parcel to expand the project and create additional affordable housing. At the time, both properties were adjacent to, but outside, the City limits. In 2007, the City processed the annexation through LAFCO, and in December 2007, the WSA and the adjacent vacant land were annexed into the City. Escrow closed on the vacant land in October 2007 (the LQRDA paid $4,644,206 for the 6.83 acres). Due to various issues, including issues related to two loans on the WSA, the WSA closing was delayed until October 2008. The WSA property was purchased for a total of $6,120,000, which included the assumption of the two loans totaling $2,400,000, for a net outlay of $3,720,000. Tax exempt bond proceeds were used for both purchases. This precludes the properties from being sold to private interests, but they can be given away to an affordable housing nonprofit without violating the tax code. The existing WSA complex receives a rent subsidy from the United States Department of Agriculture -Rural Development Division C' R D ") o f approximately $37,000 per month. This subsidy allows the rents to be affordable to very -low and low-income residents. The two loans mentioned above also facilitate the RD rent subsidy. There was an extensive and lengthy RD application process to allow the LORDA to acquire ownership of the property and assume the loans. The LQRDA was required to commit to RD, in writing, that it would complete the rehabilitation using redevelopment agency housing funds. (See Attachment 2 - letter dated June 9, 2008.) In a letter from RD, dated March 23, 2012 (Attachment 3), RD reconfirmed that RD's 2008 approval of the LORDA's application to purchase the apartments was predicated on the LORDA's commitment to rehabilitate the property. It should be noted that WSA has been included in the City's General Plan Housing Element since 2007, currently identified as a Pending Residential Project in Chapter 7.0, Housing Resources. As such, this project is counted towards La Quinta's housing production goals as set forth by the Regional Housing Needs Assessment, which is mandated by State housing law. In regards to ownership of WSA, as redevelopment dissolution became imminent, in June 2011, with RD's consent, the Housing Authority became - 4 � 006 a 50% owner of the WSA. With the February 1, 2012 dissolution of the LQRDA, control of the LORDA's remaining 50% interest in the WSA was transferred to the Successor Agency pursuant to Health and Safety Code section 34175(b), added by ABx1 26 [unless otherwise specified, all subsequent statutory references are to the Health and Safety Code, as added by ABx1 261. Because the WSA is a housing asset, section 34176(b)(2) provides that it is to be transferred to the Housing Authority. The Oversight Board approved the transfer of this property to the Housing Authority on April 18, 2012, in Resolution No. OB 2012-008. The Department of Finance ("DOV) did not request a review of that action. B. Outline of the WSA Rehabilitation Project Design and Entitlement LQRDA staff and consultants have fully completed the design and entitlement process to substantially rehabilitate the WSA, which rehabilitation includes the construction of 24 new dwellings to avoid any long-term displacement during the rehabilitation ("Rehabilitation Project"). The Rehabilitation Project will be completed in two phases. The following is a summary of the WSA Rehabilitation Project: Existing Condition: > 30 year -old apartment complex (see Attachment 4 - photos) > 72 one -bedroom units, plus one manager's unit > Commons building includes an office, manager's unit, recreation room, laundry room, restrooms, and storage areas > Rented to very -low income seniors (age 62 +) and disabled adults > USDA Rural Development provides rent subsidies Phase. 1: (Duration is approximately IS months) > Complete construction drawings and bid project > Demolish existing commons building and manager's unit > Construct site and utility improvements (new sewer line, grading, etc.) > Construct new main drive aisle and parking areas > Construct retention basin > Construct 24 new one -bedroom units on the site for same population > Construct 2 additional units to house manager & maintenance person > Construct new commons building with office, recreation room, storage, laundry, restrooms; outdoor swimming pool > Improve existing wall along Washington Street (see Attachment 5 - photo) to create a sound wall, which will attenuate traffic noise for the residents > Utility undergrounding along Washington Street, which will allow for the sound wall to be constructed, and the installation of an improved sidewalk for pedestrian use > Re -landscape Washington Street frontage n . I Phase 2: (Duration is approximately 15 months) > Relocate 24 residents at a time to new units; substantially rehabilitate old units; continue process until all 72 existing units have been rehabilitated > Work with Rural Development to add the new units to its rental subsidy program > When completed, total unit count, including manager & maintenance units = 98 (15.3 units per acre) The project has completed the design and entitlement process — a site plan is included as Attachment 6. On February 14, 2012, the La Quinta Planning Commission approved a negative declaration of environmental impact, a conditional use permit, and a site development permit. The next steps would include preparation of construction drawings and bidding the project. C. Treatment of the WSA Rehabilitation Project on the EOPS and Current ROPS The WSA Rehabilitation Project was first identified on the LORDA's Enforceable Obligation Payment Schedule ("EOPS"). The DOF questioned this item because no construction contract had been awarded. DOF requested that it be removed from further listings of enforceable obligations. The Successor Agency disputed this determination in a letter dated March 29, 2012, but agreed to temporarily remove the monthly payments while leaving the item itself on the list of enforceable obligations (see Attachment 7 - SA's response letter.) The DOF never responded to this letter, In order to preserve the Successor Agency's position that the WSA Rehabilitation Project is an enforceable obligation, the item was carried forward onto the subsequent Recognized Obligation Payment Schedule ("ROPS"). It was listed as Project Area No. 2, Item 6, on the January - June 2012 and the July — December 2012 ROPS * On both sets of ROPS, it is described as an $18,906,474 obligation consisting of a "Written commitment to US Department of Agriculture Rural Development to Rehabilitate and Construct Improvements to [WSAI." The DOF has now formally approved the two sets of ROPS with that description (see Attachment 8 - letter from DOF dated May 30, 2012.) If the Successor Agency, Housing Authority, and Oversight Board approve moving forward with the WSA project, the July -December 2012 ROPS will be amended to include a monthly payment schedule. Staff estimates $40,000 per month will be needed for the upcoming tasks. In addition, the ROPS identified two funding sources — bond proceeds and property tax. The ROPS will be amended to identify bond proceeds as the sole funding source for WSA. 008 Descriptions of the Obligations Arising From the HousinA Bonds Housing bond proceeds will be utilized for the completion of the WSA project as follows: Amount Funding Source $3,006,360 2004 Tax -Exempt Housing Bond Proceeds $15,523,220 2011 Taxable Housing Bond Proceeds These funds are currently held by the bond trustee, U. S. Bank. Section 34171(d) defines "enforceable obligations" to include bonds, indentures, and similar documents governing the issuance of outstanding bonds. The bond obligations, then, are enforceable obligations under ABx1 26. As such, the City, as Successor Agency, has the mandatory duty to perform and honor the covenants required by the bonds. (Section 34177(c) ["Successor agencies are required to... Perform obligations required pursuant to any enforceable obligation."].) Additionally, successor agencies are required to: Continue to oversee development of properties until the contracted work has been completed or the contractual obligations of the former redevelopment agency can be transferred to other parties. Bond proceeds shall be used for the purposes for which bonds were sold unless the purposes can no longer be achieved, in which case, the proceeds may be used to defease the bonds. (Section 34177(i) [Emphasis added].) It is a long-standing canon of statutory construction that the word "shall" is construed as "mandatory" (as opposed to "discretionary"). (Tarrant Beff Property, LLC v. Superior Court (2011) 51 Cal.4th 538, 542.) Accordingly, if the purposes for which bonds were sold can be achieved, the bond proceeds must be used for those purposes. Such is the situation with the housing bond proceeds here. The express purpose of the bonds, as explained in the Indentures and Official Statements, was to fund redevelopment housing activities in the Project Area. Those purposes certainly still can be achieved. The following is a summary of the covenants, promises, representations and warranties relating to the use of the bond proceeds that must be honored by the Successor Agency. 009 1 . 2004 Tax Exempt Housing Bonds On June 1, 2004, the LQRDA, the City, and the La Quinta Finance Authority ("LQFA") held a joint public hearing and approved issuance of the 2004 tax exempt housing bonds. The staff report identified that the funds were for "investment in affordable housing initiatives." More specifically, it stated: "The Loan proceeds will be used for the Avenue 48th and Adams Street [Watercolors], Vista Dunes [Vista Dunes Courtyard Homes], and Hammer property [Wolff Waters Place] developments, and to fund other affordable housing projects and programs." The resolutions authorizing the bond issuance each stated that the purpose of the issuance was to raise funding "to aid in the financing of certain housing related redevelopment activities." (City Council Resolution No. 2004-062, Section 2; LQRDA Resolution 2004-010, Section 1; and LOFA Resolution No. FA 2004-02, 6t' Recital and Section 1 .) Further, the Indenture of Trust (the contract between the issuer, the LQFA, and U.S. Bank National Association) requires that the LQFA take no action that causes the interest on the bond to become taxable. (Indenture, Section 5.6, p. 31.) The 2004 Official Statement ("2004 OS") is also very explicit as to the use of the funds. It states: "The Bonds are being issued to provide a loan from the Authority to the Agency to finance projects benefiting low and moderate income housing in La Quinta Project Area No. 1 ... and ... Project Areas Nos. 2 ...... (2004 OS, cover sheet.) On page 1, under Financing Purpose, the OS states that the proceeds will be used to "assist the Agency in the financing and refinancing of housing activities, benefitting one or more of the Agency's redevelopment project areas ...... Similarly, in the Purchase Contract between the LQFA and Wedbush Morgan Securities, the following limitation is placed upon the use of the bond proceeds: The net proceeds of the Bonds will be used to finance low and moderate income housing redevelopment activities of the Agency with respect to the Agency's Redevelopment Project Areas (the "Project Areas") described in the Redevelopment Plans.... Purchase Contract, p. 2. 1 010 2. 2011 Taxable Housing Bonds: On March 15, 2011, the LQRDA, the City, and the LQFA held a joint public hearing and approved issuance of the 2011 taxable housing bonds. The staff report identified that $25,370,000 of the funds were for to be used for low and moderate income housing in both of the LQRDA's project areas. The resolutions authorizing the bond issuance stated that the purpose of the issuance was "to aid in the financing of certain housing related redevelopment activities in Redevelopment Project Areas Nos. 1 and 2, and for other purposes related thereto" (City Council Resolution No. 2011-024, Section 2); "to provide funds for expansion of certain housing related redevelopment projects" (LQRDA Resolution No. 2011-015, Section 1); and "to finance certain low and moderate income housing projects" (LQFA Resolution No. FA 2011-002, 6" "WHEREAS" clause). The 2011 Official Statement ("2011 OS") provides "The Bonds are being issued to provide a loan from the Authority to the Agency to finance projects benefiting, low and moderate income housing in [Project Area No. 1 and Project Area No. 21" (2011 OS, cover sheet). On page 1 of the 2011 OS, under Financing Purpose, the OS states that the proceeds will be used to "assist the Agency in the financing and refinancing of housing activities, benefitting one or more of the Agency's redevelopment project areas ...... In the Bond Purchase Contract with Wedbush Securities for this issuance, the LOFA ratified the Official Statement, and further covenanted that the proceeds from the sale of the bonds would be used for the purposes specified in the Indenture. (June 9, 2012 Bond Purchase Contract, pages 2 and 4.) These covenants and commitments are binding, enforceable obligations. ,'The above -referenced bond documents are available in the City Manager's office for review. E. Housina Bond Proceeds are Housing Assets It should also be noted that the proceeds of both the 2004 tax-exempt bonds and the 2011 taxable housing bonds are "housing assets" of the former LQRDA that are to be transferred to the Authority pursuant to Section 34176(b)(1). As further discussed in Section D of this report above, the covenants in the bond documents require that the bond proceeds be used on 4 - Oil affordable housing within or benefitting the LQRDA's project areas. As such, the proceeds are "funds that are encumbered by an enforceable obligation to build or acquire low and moderate income housing as low and moderate income housing is defined by the Community Redevelopment Law," therefore meeting the definition of "housing asset" as set forth in the DOF's Questions and Answers section of its website, and further meeting the definition of "housing asset" proposed by the DOF to be codified as Section 34176(d)(2) in the Redevelopment Agencies Dissolution Clean-up and Liquid Asset Provisions, May Revision prepared by the DOF. Thus, based upon (i) the commitment the LQRDA made to RD to rehabilitate the WSA, (ii) the fact that the covenants in the bond documents require that the bond proceeds be used on affordable housing projects within or benefiting the LQRDA's project areas, and (iii) the fact that the 2004 tax- exempt bond proceeds and the 2011 taxable housing bond proceeds are "housing assets" that must be transferred to the Authority, the Successor Agency staff recommends that the Successor Agency adopt the proposed resolution. FINDINGS AND ALTERNATIVES: The alternatives available to the Successor Agency include: 1 Adopt a Resolution (1) approving the implementation of the Washington Street Apartment Rehabilitation Project, (2) approving the expenditure of $3,006,360 in 2004 tax-exempt housing bond proceeds and $15,523,220 in 2011 taxable housing bond proceeds, (3) confirming that the housing bond proceeds are "Housing Assets" that are to be transferred to the Housing Authority pursuant to Health & Safety Code Section 341 76(b), (4) amending the Recognized Obligation Payment Schedule to reflect the Project/Bond obligations and the payments, and (5) appropriating $7,008,718 in 2011 taxable housing bond proceeds to fund the Project; or 2. Do not adopt the proposed Resolution; or 3. Provide staff with alternative direction. Respectfully submitted, Debbie Powell Economic Development/Housing Manager 4 012 Approved for submission by: Mark Weiss, Interim Executive Director Attachments: 1 . Vicinity Map 2. June 9, 2008 Letter from LQRDA 3. March 23, 2012 Letter from USDA-RD 4. Photos of Existing Project 5. Photos of Existing Wall along Washington Street 6. Site Plan 7. March 29, 2012 Letter to DOF 8. May 30, 2012 Letter from DOF 013 RESOLUTION NO. SA 2012 - A RESOLUTION OF THE CITY OF LA QUINTA ACTING AS THE SUCCESSOR AGENCY TO THE DISSOLVED LA QUINTA REDEVELOPMENT AGENCY APPROVING THE IMPLEMENTATION OF THE WASHINGTON STREET APARTMENT REHABILITATION PROJECT, APPROVING THE USE OF 2004 TAX-EXEMPT HOUSING BOND PROCEEDS AND 2011 TAXABLE HOUSING BOND PROCEEDS TO FUND THE PROJECT, CONFIRMING THE STATUS OF THE HOUSING BOND PROCEEDS AS HOUSING ASSETS TRANSFERABLE TO THE LA QUINTA HOUSING AUTHORITY, AMENDING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE TO REFLECT THE PROJECT AND PAYMENTS, AND APPROPRIATING $7,008,718 IN 2011 TAXABLE HOUSING BOND PROCEEDS TO FUND THE PROJECT WHEREAS, the City Council of the City of La Quinta ("City" or "City Council," as applicable) has established the La Quinta Housing Authority (the "Housing Authority") to function in the City of La Quinta in accordance with the California Housing Authorities Law (Health and Safety Code Section 34200 et seq.); and WHEREAS, prior to its dissolution, the former La Quinta Redevelopment Agency ("LQRDA") operated within the territorial jurisdiction of the City to eliminate blight and to increase, improve, and preserve the supply of low- and moderate -income housing in the City; and WHEREAS, in fulfilling its purpose of increasing, improving, and preserving the supply of low- and moderate -income housing in the City, in 2008 the LQRDA expended tax-exempt bond proceeds to acquire a 72-unit very low-income senior and disabled adult affordable housing complex located on the east side of Washington street, at Hidden River Road and commonly known as the Washington Street Apartments ("WSA"); and WHEREAS, the LQRDA acquired the WSA with the intent of expending bond proceeds from a 2004 tax-exempt housing bond issuance to substantially rehabilitate the development, including the construction of additional units to avoid the long-term displacement of any of the tenants at the development, for purposes of preserving the units and affordability of the WSA; and 0 , 014 Resolution No. SA 2012- Washington Street Apartments Rehabilitation Adopted: June 5, 2012 Page 2 of 5 WHEREAS, the WSA was developed in the 1970s, with assistance from the U.S. Department of Agriculture, Rural Development Division ("RD"), and is subject to an outstanding RD loan ("RD Loan"); and WHEREAS, after an extensive application process, during which the LQRDA represented and committed to RD that it would complete the planned rehabilitation; RD permitted the LORDA to assume the RD Loan; and WHEREAS, in June 2011, to ensure that the rehabilitation of the WSA would continue without delay in the event of the dissolution of the LQRDA, the LQRDA added the Authority to the title of the WSA; and WHEREAS, on January 2, 2012, the City Council adopted City Council Resolution No. 2012-002, affirmatively electing to be the "successor agency" to the LQRDA; and WHEREAS, on January 17, 2012, the Authority adopted Housing Authority Resolution No. 2012-02, electing to be the "housing successor" to the LQRDA; and WHEREAS, on April 18, 2012, the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency adopted Oversight Board Resolution No. 2012-008 affirming that certain housing properties, including the WSA, are "housing assets" of the LQRDA, as that term is used in Health and Safety Code Sections 34176(a) and 34177(g) and approving the transfer of the "housing assets," to the Authority; and WHEREAS, Health and Safety Code Section 34177, which contains a comprehensive list of successor agency obligations, provides in subdivision (i), "bond proceeds shall be used for the purposes for which bonds were sold unless the purposes can no longer be achieved"; and WHEREAS, the bond documents for the 2004 tax-exempt housing bonds and 2011 taxable housing bonds expressly state that the bonds were issued to finance low- and moderate -income housing projects benefiting the former LQRDA's project areas; and WHEREAS, the purpose for which the bonds were sold may still be achieved, through the rehabilitation and improvement of the WSA. NOW, THEREFORE, BE IT RESOLVED by the City of La Quinta Acting as the Successor Agency to the Dissolved La Quinta Redevelopment Agency ("Successor Agency"), as follows: . 015 Resolution No. SA 2012- Washington Street Apartments Rehabilitation Adopted: June 5, 2012 Page 3 of 5 SECTION 1. The above recitals are true and correct. SECTION 2. The purposes for which the 2004 tax-exempt housing bonds and 2011 taxable housing bonds were issued — to finance low- and moderate -income housing in the City — can still be achieved. The bond documents, including the indenture, the official statement, the bond purchase agreement, and other related documents for the 2004 and 2011 housing bond issuances require that the net bond proceeds be used for affordable housing. SECTION 3. The Successor Agency hereby approves the WSA rehabilitation project, and consents to the Authority's authorization and direction to its Executive Director to administer and implement the WSA rehabilitation project, including, without limitation, entering into the agreements necessary to affect the same. SECTION 4. The Successor Agency hereby approves the expenditure of $3,006,360 in 2004 tax-exempt housing bond proceeds and $15,523,220 in 2011 taxable housing bond proceeds (collectively, the "WSA Bond Proceeds") to fund the WSA rehabilitation project. SECTION 5. The Successor Agency hereby confirms that the 2004 tax-exempt housing bond proceeds and the 2011 taxable housing bond proceeds are "housing assets" and that the WSA Bond Proceeds are to be transferred to the Authority pursuant to Health & Safety Code Section 34176(b)(1) for implementation of the WSA rehabilitation project. The Successor Agency further confirms that the 2004 and 2011 housing bond proceeds are funds that are encumbered by an enforceable obligation to build or acquire low- and moderate -income housing as defined in the Community Redevelopment Law, and therefore the funds meet the definition of the term "Housing asset" set forth in the Department of Finance's Questions and Answers section of its website, and further meeting the definition of "Housing asset" proposed by DOF to be codified as Health & Safety Code Section 341 76(d)(2) in the Redevelopment Agencies Dissolution Clean-up and Liquid Asset Provisions, May Revision. SECTION 6. The Successor Agency hereby approves an amendment to Item 6 of the Recognized Obligation Payment Schedule for the July 2012 through December 2012 time period, relating to the WSA rehabilitation project, to (i) add, under Project Name/Debt Obligation, "and Implementation of 2004 and 2011 Housing Bond Covenants," 00 revise the Description to read as follows: "Implementation of written commitment to US Department of Agriculture Rural Development to Rehabilitate & Construct Improvements to Washington Street Apartments and 016 Resolution No. SA 2012- Washington Street Apartments Rehabilitation Adopted: June 5, 2012 Page 4 of 5 Implementation of covenants in 2004 and 2011 housing bond documents to utilize bond proceeds for affordable housing", and (iii) add the amount of $40,000 to each of July '12, August '12, September '12, October '12, November '12, and December '12. SECTION 7. The Successor Agency hereby appropriates $7,008,718 in 2011 taxable housing bond proceeds to fund the project, and consents to the Authority's appropriation of such funds for the project, conditioned upon the Authority's receipt of the funds from the Successor Agency and/or the trustee. PASSED, APPROVED, and ADOPTED at a regular meeting of the Successor Agency held on this 5th day of June, 2012, by the following vote: AYES: NOES: ABSENT: ABSTAIN: DON ADOLPH, Chairperson City of La Quinta Acting as Successor Agency to the Dissolved La Quinta Redevelopment Agency ATTEST: SUSAN MAYSELS, Interim City Clerk City of La Quinta Acting as Successor Agency to the Dissolved La Quinta Redevelopment Agency (AUTHORITY SEAL) 4 oil Resolution No. $A 2012- Washington Street Apartments Rehabilitation Adopted: June 5, 2012 Page 5 of 5 APPROVED AS TO FORM: M. KATHERINE JENSON, Attorney City of La Quinta Acting as Successor Agency to the Dissolved La Quinta Redevelopment Agency BE' At IA(-HMLN 1 2 4 a" 9(�ek it C91"ne-If P.O. Box 1504 78-495 CALLF. TAMPICO 7 6 0) 7 7 7 - 7 0 0 0 LA QUJNTA� CALIFORNIA 92253 FAX (760) 777-7101 June 9, 2008 Ms. Judy Twilley USDA -Rural Development 22690 Cactus Avenue Ste. 280 Moreno Valley, CA 92553 La Quinta Washington Street Apartments Rehabilitation Plans Dear Ms. Twilley: The La Quinta Redevelopment Agency will do a complete investigation and study of the Washington Street Apartments site and improvements after the close of escrow. Safety, site accessibility, street noise, and condition of buildings and infrastructure will be some of the items studied. From this the Agency will develop rehabilitation and site improvement plans. It is our intention to share the findings from the studies and to then submit plans to Rural Development for review, comment, and approval. All of the expenses associated with these endeavors as well the construction of future improvements will be funded with 100% Redevelopment Agency funds. Should you have any additional questions, please' contact our consultant, Suzy Kim, at (714) 541-4585 x 116 or skim@webrsg.com. Sincerely, Thomas P. Genovese Executive Director 020 C94 ORIN d P.0, Box 1504 78-495 CALLi, TAMPICO LA QUINTA, CALIFORNIA 92253 June 9, 2008 Ms. Judy Twilley USDA -Rural Development 22690 Cactus Avenue, Ste. 280 Moreno Valley, CA 92553 (7 6 0) 7 7 7 - 70 00 FAX (760) 777-7101 La Quinta Washington Street Apartments Application — Response to Comments Dear Ms. Twilley: Thank you for your comments sent on May 12, 2008 resulting from your review of the La Quinta Redevelopment Agency's application for transferring property ownership of the Washington Street Apartments. We have noted your comments and listed our responses below. 1. RD 3560-20 Multi -Family Housing Transfer and Assumption Review and Recommentation which should include (1) description of the transaction (2) description of the new entity structure. The completed form is attached. 2, Document from the lRS evidencing the Tax identification Number Please see attached IRS Form 8038-G, "Information Return for Tax -Exempt Governmental Obligations," for the La Quinta Financing Authority, Supporting documentation is attached showing that the La Quinta Financing Authority is a Joint Powers Authority of the City of La Quinta and the La Quinta Redevelopment Agency. All three entities share the same federal tax identification number. 3. Attorney opinion letter stating that the RDA is legally constituted and in good standing to do business in California. The letter should state the public body's full legal name. Please see attached letter. 021 4. While there is no rehab plan with this application, there was some conversation about major rehab in the future utilizing City funds, Please provide a proposalldraft to reflect these intentions. Please see attached letter. 5. Management documents - will need to be provided after selection of a managment firm and after the transfer has been completed to reflect the new owner's name and management's name. Will be provided as soon as a property management firm isselected. 6, Attachment 7-B-3 makes reference to a new rates and terms transfer This will require an appraisal outlining what the remaining useful life of the project will be. The appraisal provided was completed January 2006 (over one year old) and does not indicate what the remaining useful life of the project is. Our loan term is 30 years amortized over 50 years but only if the appraisal supports this. If the appraisal does not support a 50 year amortization period, the mortgage payments could increase which could cause a rent increase and our policy is not to exceed CRCU (comparable rents for comparable units). If we stayed with same rates and terms, an appraisal is not required. We will not be changing rates or terms, thus there is no need for a new appraisal, 7. Currently, the existing owner receives a return on investment of 8% of their contribution which is included in the budget. Because RDA is a public entity, they are not entitled to this and would only be able to collect up to $7,500 in oversight fees. This will be reflected in the new Loan Agreement. Thank you, this will be noted. 8. Attachment 7-B-3 also states that the funds in the reserve account, general opera I ting account and the tax and insurance escrow account will not remain in the project after the transfer. Please note that these are project funds and if it is negotiated that these funds will go to the seller, the buyer must replace these funds in total. These funds will go to the seller, The Agency will replace these funds in total. Sincerely, Thomas P. Genovese Executive Director -'11 " 1`�)2 ATTACHMENT 3 USDA.milml- R—ur—al---= Development � , , ; -, I, , � , � � , , I � � 4 , , , , � . , ; , r ' - " " I 'j', , �'j I I , United States Department of Agriculture Rural Development California vvvmr.rurrdev.u&da.gov/c8 March 23, 2012 MS. DEBBIE POWELL ECONOMIC DEVELOPMENT/ HOUSING MANAGER 78-495 CALLE TAMPICO LA QUINTA, CA 92253 RE: WAS HINGTON STREET APARTMENTS Dear Ms. Powell: o, ,A On October 31, 2008, the above referenced property was transferred and assumed by the La Quinta Redevelopment Agency. My review of the proposed application and subsequent recommendation for approval was contingent upon the rehab of the property. On June 9, 2008, Mr. Genovese indicated that the Agency would develop a rehab and site improvement plan and the cost would be funded 100% from Redevelopment Agency funds. Several meetings have been held and various communications between the Agency and RD as well as site visits, to discuss the rehab of the this property. It is our hope that the Agency, and/ or its successors, will honor their commitment to preserving this complex as safe and affordable for eligible tenants. We took forward to work with you towards this common goal. Should you have any questions regarding the above, please feel free to contact me at this office at (951) 656-6800 ext. 103 or at judy.twilley@ca.usda.gov Sincerely, DY T LLEY Rural Development Specialist 22690 Cactus Ave., Suite 280 a Moreno Valley, CA 92553-9035 Phone: (951) 656-6800 * Fax: (951) 656-0094 * TOD: (530) 792-5848 Committed to the future of rural eommunitieS Rural Development is an Equal Opportunity Lender, Provider, and Employer. Complaints of discrimination should be sent to USDA, Director, office of Civil Rights, Washington, D, C. 20250-9410 0.23 ATTACHMENT 6 1EMB STUDIO I Site Plan A R C H I T E C T S Washington Street Apartments - La Quinta, California ... G26"', ATTACHMENT 7 P.O. Box 1504 [_� Qt �)22,17-1501 7 8 - 195 Y,� \P r i c o (760) 777-7000 1, \ QL I\ i x, C \i i ro it N i \ 92 2 5 3 VA X ( 7 60) 7 7 7 - 7 10 1 March 29, 2012 Mr. Mark Hill Program Budget Manager Department of Finance 915 L Street Sacramento, CA 95814-3706 RE: Enforceable Obligation Payment Schedule (EOPS) for the Former La Quinta Redevelopment Agency Dear Mr. Hill: Thank you for your review of the EOPS prepared by the former La Quinta Redevelopment Agency (the "Agency"). As you indicated in your March 2, 2012 letter, the City of La Quinta is the Successor Agency to the former Agency. We would like to take this opportunity to respectfully respond to the concerns you raised on behalf of the California Department of Finance, which are reproduced in the bulleted items below. Please see our responses, which are in italics. Project 1 , page 1 , line item 3 in the amount of $3.2 million for the home purchase and rehabilitation program. It is our understanding the city has the right but not the obligation to enforce the provisions of the agreement. Since the agreement is not legally binding, it should not be listed as an Enforceable Obligation. Successor Agency Response — The Successor Agency believes the Agreement for Home Purchase and Rehabilitation Program ("Home Purchase Agreement") is an enforceable obligation. The Home Purchase Agreement is between the former Agency and La Quinta Palms Real Estate Co., Inc. ('10 Palms"), a private entity. The Home Purchase Agreement increases, preserves, and improves the supply of affordable housing in the City, As such, it is a housing asset of the former Agency. Pursuant to Health and Safety Code Section 34176(b)(2) -and La Quinta Housing Authority ("Authority"J Resolution No. 2012-002, adopted on January 1Z 2012, the Authority is the "housing successor" to the former Agency, and the Home Purchase Agreement has therefore been transferred to the Authority. The Home El n 2 7 Mark Hill Department of Finance March 29, 2012 Page 2 Purchase Agreement obligates the Authority, in its capacity as the housing successor, to provide certain payments to LO Palms, for LO Palms' acquisition, rehabilitation, and resale, as affordable housing units, unoccupied and dilapidated single family homes in the City. Although you are correct that the Home Purchase Agreement does not obligate the City to perform any tasks thereunder, it does obligate the Authority to perform tasks. The Home Purchase Agreement is binding against the Authority, and thus we believe it is properly listed as an Enforceable Obligation. The Oversight Board has not yet had the opportunity to review the Home Purchase Agreement - it is scheduled for their April 3, 2012 meeting. In the meantime, the Successor Agency intends to list the Home Purchase Agreement on its ROPS, but will remove the payments shown on the current schedule pending your response to this letter, I Project 1, page 2, line item 7 in the amount of $14.8 million payable to the Coachella Valley Water District. HSC section 341 63(b) prohibits a redevelopment agency from entering into a contract with any entity after June 29, 2011. It is our understanding that a binding construction contract for these future infrastructure improvements has not been awarded. Successor Agency Response - The Domestic Water and Sanitation System Installation and Irrigation Service Agreement between the Coachella Valley Water District ('CVWD") and the former Agency ('CVWD Agreement") was executed on June 11, 2005. The CVWD Agreement relates to the development of real property located in the City and referred to as the "SilverRock Resort" area ("SRR Area"). The CVWD Agreement requires the City, in its capacity as the Successor Agency, to perform a series of waterlsewerlinfrastructure improvements (as listed in Exhibit A to the CVWD Agreement) in exchange for CVWD's agreement to provide water service to the SRR Area. The improvements are to be performed as the SRR Area is developed over time; therefore, as you noted, there are no current construction contracts in place for these improvements. The SRR Area has been master planned and zoned for golf course, tourist commercial, and public uses. The Successor Agency anticipates that the SRR Area will be developed as,the economy improves, at which time the Successor Agency's obligations pursuant to the CVWD Agreement will be triggered, and the Successor Agency will need. to enter into contracts for the construction of the improvements. It is our understanding that successor agencies may enter into contracts if necessary to fulfill enforceable obligations. Health and Safety Code Section 34177(c) provides that Successor Agencies are required to "Perform obligations required pursuant to any enforceable obligafion",, and Health and Safety Code Section 34177(i) provides that Successor Agencies are required to "Continue to oversee development of properties until the contracted work has been completed or the contractual obligations of the former r�28 Mark Hill Department of Finance March 29, 2012 Page 3 redevelopment agency can be transferred to other parties, " The Successor Agency contends that the CVWO Agreement is an enforceable obligation, and thus intends to list the CVWD Agreement on its ROPS. A copy of the Agreement is attached. Project 2, page 4, line item 6 in the amount of $3.75 million payable to RSG. ft is our understanding that binding construction contracts for the rehabilitation and construction improvements to Washington Street apartments have not been awarded. Successor Agency Response - The agreements listed in line items 5 and 6 relate to the rehabilitation of the Washington Street Apartments development, a rental housing development restricted to extremely -low and very -low income senior and disabled tenants (the "Development"), as well as the development of certain site improvements at the Development. The former Agency inadvertently listed "RSG" as the Payee under line item 6 (the "USDA-RD Commitment Agreement"), That line item should instead state "To be determined, " as the entity that will perform the actual construction work has not yet been determined. The former Agency acquired the Development in 2008, for the express purpose of substantially rehabilitating the Development and developing site improvements at the Development. The Development was constructed with financial assistance from the United States Department of Agriculture -Rural Development ("USDA -RD"), In addition, the USDA-RD provides a rent subsidy for the tenants of the Development. The approval process for transferring the ownership of a USDA-RD assisted housing development is onerous, lengthy, and strictly scrutinized by the USDA-RD. The former Agency's application to the USDA-RD (the "Application") expressly stated that the Agency's purpose for acquiring the Development was to rehabilitate the Development and to develop site improvements, and the USDA-RD approved the former Agency's acquisition of the Development based on the Application. We have included with this letter a copy of the Agency's June 9, 2008 letter to the USDA-RD, which letters comprised a part of the Application, and a letter from the USDA-RD dated March 23, 2012 confirming that the USDA-RD's approval of the transfer of ownership of the Development was based on the Application and the former Agency's commitment therein to perform the rehabilitation, and to develop site improvements, It is the Successor Agency's opinion that upon USDA-RD's acceptance and approval of the Application, the Application became a binding agreement between the USDA-RD and the former Agency, which obligates the Authority, as the "housing successor" to the former Agency, to perform the rehabilitation, and to develop the site improvements, including executing the necessary agreements to effect all of the same, Therefore, the Successor Agency intends to list the USDA—RD Commitment Agreement on the ROPS but will , 0 029 Mark Hill Department of Finance March 29, 2012 Page 4 remove the payments listed on the current schedule pending your response to this letter. Projects 1 and 2, page 6, line item 13 in the amount of $13.6 million.for statutory housing fund set -asides. The requirement to set aside 20 percent of a redevelopment agency's tax increment for low and moderate -income housing purposes ended with the passing of the redevelopment dissolution legislation. HSC section 34177(d) requires that all unencumbered balances in the Low and Moderate -Income Housing Fund be remitted to the county auditor controller for distribution to the taxing entities, Successor Agency Response — This was placed on the EOPS in error and has been removed from the ROPS. Please feel free to contact Debbie Powell, Economic Devel opm ent/H o using Manager at (760) 777-7073 should you have further questions or need additional information, Thank you again for your consideration. Sincerely, X. Mark Weiss Interim Executive Director of Successor Agency DP/lil cc: Debbie Powell, Economic Development/Housing Manager M. Katherine Jenson, Successor Agency Counsel Frank Spevacek, RSG Inc. Enclosures 030 ATTACHMENT 8 ��DEPARTMENT OF FOMUND G. BROWN JR. - GOVERNOR FINANCE 915 L 8M9ZT N BACRAMENTO CAN 95a74-3706 0�.oar.c^.aov May 30, 2012 Debbie Powell, Economic Development/Housing Manager City Managers Office City of La QuInta PO Box 1504 La Quinta, CA 92247-1504 Dear Ms. Powell: Subject: Recognized Obligation Payment Schedule Approval Letter Pursuant to Health and Safety Code (HSC) section 34177 (1) (2) (C), the City of Le Quinta Successor Agency submitted Recognized Obligation Payment Schedules (ROPS) to the California Department of Finance (Finance) on May 3. 2012 for the period of January to June 2012 and July to December 2012. Finance is assuming oversight board approval. Finance has completed its review of your ROPS which may have Included obtaining clarification for various items. Based on our review, we are approving all of the items listed on your ROPS at this time. This letter supersedes Finance's letter dated April 17, 2012 wherein we questioned administrative expenses for both periods. The Agency submitted revised ROPS to correct the disallowed administrative costs. This is our determination With respect to any items funded from the Redevelopment Property Tax Trust Fund (RPTTF) for the June 1, 2012 property tax allocations. In addition, items not questioned during this review are subject to subsequent review if they are included on a future ROPS. If an item Included on a future ROPS is not an enforceable obligation, Finance reserves the right to remove that item from the future ROPS, even If it was not removed from the preceding ROPS. Please refer to Exhibit 12 at hftr)://www.dof.ca.govfassembly bills 26-27/view.phy for the amount of RPTTF that was approved by Finance. As you are, aware the amount of available RPTTF Is the same as the property tax increment that was available prior to ABx1 26. This amount is not and never was an unlimited funding source. Therefore as a practical matter, the ability to fund the items on the ROPS with property tax is limited to the amount of funding available in the RPTTF. Please direct inquiries to Evelyn Suess, Supervisor or Mindy Patterson, Lead Analyst at (916) 322-2985. Sincerely, MARK HILL Program Budget Manager cc: On folloviting page 031 Ms. Powell May 30, 2012 Page 2 cc: Ms. Pam Elias, Chief Accountant Property Tax Division, Riverside County Auditor -Controller Ms. Jennifer Baechel, Business Process Analyst 11, Riverside County Auditor -Controller Ms. April Nash, Supervising Accountant, Riverside County Auditor -Controller 0 1 3 2 Taf 4 4 a" CITYQHA/FA MEETING DATE: June 5, 2012 AGENDA CATEGORY: ITEM TITLE: Adoption of Fiscal Year 2012/2013 BUSINESS SESSION: Preliminary Budget CONSENT CALENDAR: 21 STUDY SESSION: PUBLIC HEARING: RECOMMENDATION: Adopt the Fiscal Year 2012/2013 Preliminary Budget and direct staff to prepare a Fiscal Year 2012/2013 Final Budget for the July 3, 2012 Successor Agency to the La Quinta Redevelopment Agency Meeting. FISCAL IMPLICATIONS: All Preliminary Fiscal Year 2012/2013 revenues, operational appropriations and debt service funding are included in this Preliminary Budget. The Fiscal Year 2012/2013 budget totals $26,698,095 in appropriations and transfers of which* $22,524,279 is budgeted from PA 1 and $4,173,816 is budgeted from PA 2, and $21,217,434 in estimated revenues and transfers of which $17,034,318 is budgeted from PA 1 and $4,183,116 from PA 2, as reflected on C-1 of the Preliminary Budget. CHARTER CITY IMPLICATIONS: None. BACKGROUND AND OVERVIEW: Introduction The purpose of the Successor Agency to the La Quinta Redevelopment Agency budget is threefold: 1) account for the debt service payments on outstanding debt the Agency has incurred and, 2) account for capital projects that the Agency will construct from the funds obtained from the debt issues, and 3) account for the construction of low and moderate housing projects. is 033 Since the Successor Agency to the La Quinta Redevelopment Agency has two project areas (PA 1 & PA 2), a separate set of funds has been established to account for each of the aforementioned activities. - For Fiscal Year 2012/2013, the expenditure budget for PA 1 is $22,493,479 and $ 3,941,940 f or PA 2 as ref lected on Page C- 1 of the Fiscal Year 2012/2013 Budget. The following chart is a breakdown of the major expenditure categories: Purpose Project Area 1 2 FY 2012r2O13 Debt Service: Tax Allocation Bonds 10,273,472 932,646 11,206,118 Low and Moderate: HousingBonds 6,227,990 2,665,855 8,893,845 WOPS Project County of Riverside 5,499,961 5,499,961 ROPS Adm in Contract Services 184,595 192,000 Reimbursements: 307,461 151 439 458,900 SubtDtal 492,056 343,439 835,495 Totals 22,493,479 3,,941�,,940 26,435,419 Tax Allocation Bonds (TABS) During Fiscal Year 2011/2012, no TABS were issued. Debt service payments in Fiscal Year 2012/2013 are $11.21 million for non -housing bond and $8.89 million for housing bonds. Contract Services Contract services consist of professional services for audit, fiscal agent, and legal services. In addition, a payment to the County of Riverside of $5.5 million is estimated to be made from the PA 1 ROPS Project Fund, with no payment in the PA 2 ROPS Project budgeted. Pass -Through Payments to Others The SA will no longer make pass through payments to other agencies. Beginning in May 2012 and for all of Fiscal Year 2012/2013 the County of Riverside will be making these payments. lq� 034 Transfers Out — Capital Projects Fund PA No. 1 The Fiscal Year 2012/2013 preliminary budget contains a $15,400 transfer out from the PA No. 1 Capital Projects Fund to the SA ROPS Project No. 1 Fund. This amount represents interest income from the Park and Library Developer Impact Fee loans. This amount is then transferred out of the ROPS Project No. 1 Fund to the SA No. 1 ROPS Administration Fund to reduce the amount of payments required by the County of Riverside Transfers Out — Capital Projects Fund PA No. 2 The Fiscal Year 2012/2013 preliminary budget contains a $19,500 transfer out from the PA No. 2 Capital Projects Fund to the SA ROPS Project No. 2 Fund. The amount represents interest income from the Transportation Developer Impact Fee loan. This amount is then transferred out of the ROPS Project No. 2 Fund to the SA No. 2 ROPS Administration Fund to reduce the amount of payments required by the County of Riverside Transfers Out — ROPS Projects No. 2 Fund The Fiscal Year 2012/2013 preliminary budget contains a $192,876 transfer out from the ROPS PA No. 2 Project Fund to the Housing Authority PA 1 Fund for the debt service costs related to the Washington Street Apartment loans with the USDA and Provident Bank. CAPITAL PROJECT FUNDS For Fiscal Year 2012/2013, no capital projects are budgeted for as the SA is winding down the activities of the former Redevelopment Agency. Staff is investigating the future possible use of housing and non -housing bond proceeds for projects. REVENUES The total revenue for the Successor Agency for Fiscal Year 2012/2013 is estimated to be $21.15 million, of which the County of Riverside totals over $2 1.10 million as detailed on the following chart: 0 035 Project Area 1 E.n. Type �bt Serme Capital Projects I LOW/Mod te 1.7 ROPS AdInnin ROP5 Promwot 1211111w&ng Bond FY2012J2013 T.I.1 County of PWemlda Interest $10,273.412 15,400 $ 6.227,MO 1 $ 476.&% 1 $ - 10,000 1 $16,978.118 25 ' 400 9 Total _L_ 10273., 1 15.4 It 476,6561 It 3 10" 3 17003518 PmjectAma2 R�. Ttpe DbI Balm Ott'" Projects I LO IMMODd"we's ROPS I Admin I ROPS Pirdect 1 201 I.T:&Ie d 20�110.sng on [FY2012/2013 Total Cocinty of Rverside Interest $641'W 19'5W 1 $ 2.665,05 1$ 323,939 $ 192,876 I 1 $4,124,616 1 19.500 Total 19,�I$ 2,665,8551$ 323,9391 1 3 4,144,116 Prolect Areas I & 2 Revt,nue Type Debt Seroce I PC111:11a., LOW/Mod te I Incool"O ROPS AcInno ROPS Protect 2011�11ousing I.d 2011 Tax,ue B 20D,111�ingl I FY2012=13 Total County of Rverside Interest $11,216,418 =34 900 38.m 1 M.595 $192,876 $ 10'W - 0 $ $ $ 21,102.734 44,900 Total It 11 �215,418 1 $ 34,9001 S 8,893,845 1 $ 10,000 1 $ 1 21 147,634 Major changes from last year include a reduction of $68 million in tax increment property taxes. FINDINGS AND ALTERNATIVES: Staff is requesting: 1 Review and comment on the Fiscal Year 2012/2013 Successor Agency to the La Quinta Redevelopment Agency Preliminary Budget and provide direction regarding any proposed changes to the document; or 2. Approval of the Fiscal Year 2012/2013 Fiscal Year Successor Agency to the La Quinta Redevelopment Agency Preliminary Budget as amended at the June 5, 2012, Successor Agency to the La Quinta Redevelopment Agency Meeting. (Any approved changes by the Agency will be incorporated into the Final Budget for adoption on July 3, 2012.); or 3. Provide staff with alternative direction. Respectfully submitted, �ohn M. �Falcon�erFina�nceDirector 1. it 036 Approved for submission by: Mark Weiss, Interim Executive Director 037 Tar 4 4 a" FA MEETING DATE: June 5, 2012 ITEM TITLE: Ratification of Mutual Termination of Agreement with Rosenow Spevacek Group Relating to Washington Street Apartment Rehabilitation RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: 3 STUDY SESSION: PUBLIC HEARING: Ratify the Acknowledgement of Completion of Services and Mutual Termination of Agreement with Rosenow Spevacek Group ("RSG") relating to Washington Street Apartment Rehabilitation. FISCAL IMPLICATIONS: The total contract amount was $1,471,000 (which included $773,200 for RSG's time for implementation and construction management, and $698,000 for sub -consultants). As of March 2012, a total of $292,429.23 has been expended, which includes $74,723.27 for RSG services and $217,705.96 for sub -consultants. Therefore, a total of $1,178,570.77 remains unspent. The agreement was included as part of the 2009/2010 Capital Improvement Program and funded with a combination of 2004 tax- exempt housing bond proceeds, Project Area No. 2 Low/Moderate Income Housing Funds, and 2011 taxable housing bond proceeds. In a separate item on today's agenda, the Successor Agency and Housing Authority will review the Washington Street Apartment Rehabilitation project and re -appropriate funds to complete the project, pending Department of Finance approval to proceed with the project. That matter does not relate to RSG or the contract which is the subject of this staff report. CHARTER CITY IMPLICATIONS: None. it 038 BACKGROUND AND OVERVIEW: In March 2011, the City and former La Quinta Redevelopment Agency entered into a contract with RSG to develop and implement the Washington Street Apartment Rehabilitation Project. The contract included RSG's time to implement and manage project design and construction, and the hiring of design and engineering sub - consultants. The project has been completed through the entitlement process, including approval of a site development permit. However, due to the State actions ending redevelopment, and the Department of Finance's preliminary determination that the project is not an enforceable obligation, the project has been placed on hold. The former principal of RSG, Inc., Frank Spevacek, has been hired as La Quinta's City Manager. Mr. Spevacek has resigned from RSG. In order to insure there was no conflict of interest, RSG and the Interim City Manager terminated the RSG contract on May 14, 2012. The proposed action is to ratify the "Acknowledgement of Completion of Services and Mutual Termination of Agreement Relating to Washington Street Apartment Rehabilitation," which is included as Attachment 1. FINDINGS AND ALTERNATIVES: The alternatives available to the Successor Agency include: Ratify the Acknowledgement of Completion of Services and Mutual Termination of Agreement with Rosenow Spevacek Group relating to Washington Street Apartment Rehabilitation; or 2. Do not ratify the Acknowledgement of Completion of Services and Mutual Termination of Agreement with Rosenow Spevacek Group relating to Washington Street Apartment Rehabilitation; or 3. Provide staff with alternative direction. Respectfully submitted, Debbie P6well Economic Development/Housing Manager 039 Approved for submission by: Mark Weiss, Interim Executive Director Attachment: 1 Acknowledgement of Completion of Services and Mutual Termination of Agreement with Rosenow Spevacek Group Relating to Washington Street Apartment Rehabilitation ..so , - r4o ATTACHMENT I I ACKNOWLEDGEMENT OF COMPLETION OF SERVICES AND MUTUAL TERMINATION OF AGREEMENT RELATING TO WASHINGTON STREET APARTMENT REHABILITATION WHEREAS, on March 17, 2011, the City of La Quinta ("City'), the former La Quints Redevelopment Agency C'Agency'�, and Rosenow Spevarek Group ("RSGI� entered into a Professional Services Agreement ("Agreement") for consulting services related to the rehabilitation of the senior affordable housing project commonly known as the Washington Streets Apartment development (the "Project'�; AND WHEREAS, those services that could be completed were completed and a Site Development Permit for the Project has been issued; AND WHEREAS, the Agency was dissolved effective February 1, 2012, and the City is now acting as the Successor Agency to the former Agency; AND WHEREAS, pursuant to Section 9.3 of the Agreement, the parties wish to formally terminate the Agreement, effective this date, May 14,2012; AND WHEREAS, to the extent the Agreement became an asset of the La Quints Housing Authority, that Authority concurs with the termination of the Agreement. THEREFORE, the parties agree to a mutual termination of the Agreement, effective May 14,2012. CITY OF LA QUINTA a California municipal corporation; CITY OF LA QUINTA AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY Mark Weiss, Interim City Manager LA QUINTA HOUSING AUTHORITY V.,J— �� Q--i1^1 Mark Weiss, interim Executive -Director APPROVED AS TO FORM: M. KathMne Jenson,�ity Attorney ' ' 9MIM10-0048 3391455. 005VI 4112 -!;- -/V -/ Z Date ��— /L/— I ?— Date 041 Dated: W A4L,4 c2012- 119MJ$610-� 339145il NOM4/12 -2- ROSENOW SPEVACEK GROUP 042 A cedy� 4 4 a" CITYBMEETING DATE: June 5, 2012 ITEM TITLE: Approval of Demand Register Dated June 5, 2012 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: It is recommended the Successor Agency of the La Quinta Redevelopment Agency: Receive and File the Demand Register Dated June 5, 2012 of which $112,523.89 Represe ts Successor Agency Expenditures as detailed below: Vendor: Account #: Amount: Purpose: Riverside County Sup 301-9001-437.82-70 $56,500.79 Pass Thru CV Public Cemetery 301-9001-437.82-71 $4,690.22 Pass Thru CV Resource Desert Recreation Dist Rosenow Spevacek Group Rosenow Spevacek Group Rosenow Spevacek Group Rosenow Spevacek Group 301-9001-437.82-72 $484.08 301-9001-437.82-76 $28,583.80 231-9001-702.32-07 $12,980.00 232-9002-702.32-07 / $595.00 237-9001-702.32-07 $5,822.30 238-9002-702.32-07 $2,867.70 Pass Thru Pass Thru Housing Compliance Torre Nissan Admin SA I Admin SA 2 043 By adoption of Resolution No. 2012-002, the City of La Quinta has affirmatively elected to be the Successor Agency of the La Quinta Redevelopment Agency. Pursuant to Health and Safety Code Section 34177(a), the Successor Agency of the La Quinta Redevelopment Agency shall continue to make payments required pursuant to an adopted enforceable obligations payment schedule. The payments above are required pursuant to the enforceable obligations payments schedule adopted by the La Quinta Redevelopment Agency on January 17, 2012. Pursuant to Health and Safety Code Seciton 34173(e), the liability of the Successor Agency of the La Quinta Redevelopment Agency, when acting pursuant to the powers granted under ABX1 26, are limited to the extent of the total sum of property tax revenues it receives pursuant to part 1.85 of ABX1 26 (e.g., Health and Safety Code Sections 34170 — 374190) and the value of assets transferred to it as Successor Agency forthe dissolved La Quinta Redevelopment Agency. Respectfully submitted, (g0' �� o h nM' Approved for submission by: Mark Weiss, Interim Executive Director TIA CA