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CC RES 2014-013 RESOLUTION NO. 2014-13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES APPROVING THE EXECUTION OF A REESTABLISHMENT AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY AND THE CITY. RECITALS: A. Pursuant to AB X1 26 (enacted in June 2011), as modified by the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal.4th 231(2011), the Rancho Palos Verdes Redevelopment Agency (the "Former Agency") was dissolved as of February 1, 2012, the Successor Agency was established, and an oversight board to the Successor Agency (the "Oversight Board") was established. B. Pursuant to Health and Safety Code Section 34171(d)(2), enforceable obligations of the Former Agency do not include the Consolidated Loan Agreement between the City of Rancho Palos Verdes and the Former Agency, on file in the office of the Successor Agency Secretary (the "Original Loan Agreement" or "Original Loan"). C. Pursuant to the Health and Safety Code Section 34191.4(b)(1), notwithstanding Health and Safety Code Section 34171(d)(2), the Original Loan Agreement shall be deemed to be an enforceable obligation provided the State Department of Finance (the "DOF") has issued a finding of completion to the Successor Agency pursuant to Health and Safety Code Section 34179.7 (the "Finding of Completion") and the Oversight Board makes a finding that the Original Loan Agreement was for legitimate redevelopment purposes. D. The DOF issued a Finding of Completion to the Successor Agency on April 26, 2013. E. By its Resolution No. OB 2013-09, the Oversight Board found that the Original Loan Agreement was for legitimate redevelopment purposes. F. By its letter dated January 27, 2014, the DOF approved Oversight Board Resolution No. 2013-09, and stated that the Successor Agency may now place the Original Loan Agreement on a Recognized Obligation Payment Schedule ("ROPS") commencing with ROPS 14-15A, provided that the repayment of the Loan Agreement is subject to the repayment formula outlined in Health and Safety Code Section 34191.4. G. Pursuant to Health and Safety Code Section 34191.4(b)(2), the accumulated interest on the remaining principal amount of the Original Loan shall be recalculated from origination at the interest rate earned by funds deposited in the Local Agency Investment Fund ("LAIF"). The Original Loan shall be repaid to the City in accordance with a defined schedule over a reasonable term of years at an interest rate not to exceed the interest rate earned by funds deposited into the LAIF; the maximum repayment amount authorized each fiscal year shall be equal to one-half of the increase between the amount distributed to taxing entities pursuant to Health and Safety Code Section 34183(a)(4) in that fiscal year and the amount distributed to taxing entities pursuant to Section 34183(a)(4) in the 2012-13 base year; and twenty percent of each Original Loan Agreement repayment shall be deducted and transferred to the Low and Moderate Income Housing Asset Fund established by the City as the successor to the housing functions and assets of the Former Agency. H. By its Resolution No. OB 2014-01, the Oversight Board (i) found that the Original Loan Agreement, as modified in accordance with the provisions of Health and Safety Code Section 34191.4, is reestablished and constitutes an enforceable obligation; (ii) approved the repayment of the Original Loan Agreement in accordance with a repayment schedule which meets the requirements of Health and Safety Code Section 34191.4 and which provides for the inclusion on each ROPS, commencing with ROPS 14-15A, of up to the maximum repayment amount, calculated in accordance with Health and Safety Code Section 34191.4, until the Original Loan Agreement has been paid in full, including all accumulated and accrued interest thereon; and (iii) found that repayment of the Original Loan Agreement in accordance with such repayment schedule provides for repayment over a reasonable term of years. I. The Successor Agency and the City desire to enter into an agreement to evidence the reestablishment of the Original Loan in accordance with the requirements of Health and Safety Code Section 34191.4. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Reestablishment Agreement, in the form attached hereto as Exhibit A, is hereby approved. Each of the Mayor (or, in the Mayor's absence, the Mayor Pro Tem) and the City Manager (each, an "Authorized Officer"), acting individually, is hereby authorized to execute and deliver, for and in the name of the City, the Reestablishment Agreement, in substantially such form, with changes therein as the Authorized Officer executing the Agreement may approve (such approval to be conclusively evidenced by the Authorized Officer's execution and delivery thereof). Resolution No. 2014-13 Page 2 of 3 Section 3. The Authorized Officers and all other officers of the City are hereby authorized, jointly and severally, to execute and deliver any and all necessary documents and instruments and to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution and the Reestablishment Agreement. PASSED, APPROVED, AND ADOPTED this 4th day of March 2014. 1111".4 IVA ApMayor ATTEST: City Clerk State of California ) County of Los Angeles ) ss City of Rancho Palos Verdes ) I, Carla Morreale, City Clerk of The City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2014-13 was duly and regularly passed and adopted by the said City Council at regular meeting thereof held on March 4, 2014. Af2a,e_gi City Clerk Resolution No. 2014-13 Page 3 of 3 REESTABLISHMENT AGREEMENT This REESTABLISHMENT AGREEMENT (this "Reestablishment Agreement"), dated as of March 4, 2014, is entered into by and between the CITY OF RANCHO PALOS VERDES (the "City") and the SUCCESSOR AGENCY TO THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY (the "Successor Agency," and together with the City, the "Parties," with each being a "Party"). RECITALS: A. Pursuant to AB X1 26 (enacted in June 2011), as modified by the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal.4th 231(2011), the Rancho Palos Verdes Redevelopment Agency (the "Former Agency") was dissolved as of February 1, 2012, the Successor Agency was established, and an oversight board to the Successor Agency(the"Oversight Board") was established. B. Pursuant to Health and Safety Code Section 34171(d)(2), enforceable obligations of the Former Agency do not include the Consolidated Loan Agreement between the City of Rancho Palos Verdes and the Former Agency, on file in the office of the Successor Agency Secretary (the "Original Loan Agreement" or "Original Loan"). C. Pursuant to the Health and Safety Code Section 34191.4(b)(1), notwithstanding Health and Safety Code Section 34171(d)(2), the Original Loan Agreement shall be deemed to be an enforceable obligation provided the State Department of Finance (the "DOF") has issued a finding of completion to the Successor Agency pursuant to Health and Safety Code Section 34179.7 (the "Finding of Completion") and the Oversight Board makes a finding that the Original Loan Agreement was for legitimate redevelopment purposes. D. The DOF issued a Finding of Completion to the Successor Agency on April 26, 2013. E. By its Resolution No. OB 2013-09, the Oversight Board found that the Original Loan Agreement was for legitimate redevelopment purposes. F. By its letter dated January 27, 2014, the DOF approved Oversight Board Resolution No. 2013-09, and stated that the Successor Agency may now place the Original Loan Agreement on a Recognized Obligation Payment Schedule ("ROPS") commencing with ROPS 14-15A, provided that the repayment of the Loan Agreement is subject to the repayment formula outlined in Health and Safety Code Section 34191.4. G. Pursuant to Health and Safety Code Section 34191.4(b)(2), the accumulated interest on the remaining principal amount of the Original Loan shall be recalculated from origination at the interest rate earned by funds deposited in the Local Agency Investment Fund ("LAIF"). The Original Loan shall be repaid to the City in accordance with a defined schedule over a reasonable term of years at an interest rate not to exceed the interest rate earned by funds deposited into the LAIF; the maximum repayment amount authorized each fiscal year shall be equal to one-half of the increase between the amount distributed to taxing entities pursuant to Health and Safety Code Section 34183(a)(4) in that fiscal year and the amount distributed to taxing entities pursuant to Section 34183(a)(4) in the 2012-13 base year; and twenty percent of each Original Loan Agreement repayment shall be deducted and transferred to the Low and Moderate Income Housing Asset Fund established by the City as the successor to the housing functions and assets of the Former Agency. H. As of the dated date of this Reestablishment Agreement, the remaining principal amount of the Original Loan is $6,742,776. I. By its Resolution No. OB 2014-01, the Oversight Board (i) found that the Original Loan Agreement, as modified in accordance with the provisions of Health and Safety Code Section 34191.4, is reestablished and constitutes an enforceable obligation; (ii) approved the repayment of the Original Loan Agreement in accordance with a repayment schedule which meets the requirements of Health and Safety Code Section 34191.4 and which provides for the inclusion on each ROPS, commencing with ROPS 14-15A, of up to the maximum repayment amount, calculated in accordance with Health and Safety Code Section 34191.4, until the Original Loan Agreement has been paid in full, including all accumulated and accrued interest thereon; and (iii) found that repayment of the Original Loan Agreement in accordance with such repayment schedule provides for repayment over a reasonable term of years. J. The Successor Agency and the City are entering into this Reestablishment Agreement to evidence the reestablishment of the Original Loan in accordance with the requirements of Health and Safety Code Section 34191.4. NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Reestablishment Agreement. Section 2. This Reestablishment Agreement shall not become effective until it has been approved by the Oversight Board by resolution and the Department of Finance has approved such resolution or the resolution is deemed approved by the Department of Finance pursuant to Health and Safety Code Section 34179(h). Section 3. The Parties acknowledge and agree that the Original Loan is reestablished in accordance with the requirements of Health and Safety Code Section 34191.4 and the provisions of this Reestablishment Agreement. Section 4. The Successor Agency agrees to repay the Original Loan in accordance with the requirements of Health and Safety Code Section 34191.4, and as described herein, until the Original Loan has been paid in full, including all accumulated and accrued interest on the Original Loan. The Successor Agency agrees to include up to the maximum authorized repayment amount, as described herein for the repayment of Resolution No. 2014-13 Exhibit A Page 2 of 4 the Original Loan on each Recognized Obligation Payment Schedule ("ROPS"), commencing with ROPS 14-15A, and to remit to the City such amounts within a reasonable time after each distribution of moneys to the Successor Agency from the Redevelopment Property Tax Trust Fund. Section 5. The Parties agree to take all appropriate steps and execute any documents which may reasonably be necessary or convenient to implement the intent of this Reestablishment Agreement. Section 6. The Parties shall maintain records of all the repayments of the Original Loan made by the Successor Agency to the City and the City shall maintain records of all deductions from the City Loan repayments transferred to the Low and Moderate Income Housing Asset Fund. Such records will be available for inspection by the Parties at all reasonable times. Section 7. This Reestablishment Agreement may be amended at any time, and from time to time, in writing by the Parties. Section 8. This Reestablishment Agreement shall terminate when the Original Loan has been paid in full, including all accumulated and accrued interest thereon. Section 9. Except as expressly set forth herein or as required by Health and Safety Code Section 34191.4, the provisions of the Original Loan Agreement remain in full force and effect. In the event of a conflict between the provisions of the Original Loan Agreement and Health and Safety Code Section 34191.4, the provisions of Section 34191.4 shall prevail. Section 10. If any one or more of the covenants or agreements provided in this Reestablishment Agreement on the part of the City or the Successor Agency to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Reestablishment Agreement. Section 11. All the covenants, promises and agreements in this Reestablishment Agreement contained by or on behalf of the Successor Agency or the City shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. Section 12. This Reestablishment Agreement is made in the State of California under the Constitution and laws of the State of California, and is to be so construed. IN WITNESS WHEREOF, the Parties have caused this Reestablishment Agreement to be executed by their duly authorized representatives. Resolution No. 2014-13 Exhibit A Page 3 of 4 CITY OF RANCHO PALOS VERDES ik ayor Attest: �i C-71/ By: L City Clerk SUCCESSOR AGENCY TO THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY 4_ Air law Chair Attest: (<1i By: ,t //atiaA, Secretary APPROVED: OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY By - /C�u.r.�-- (__1& air Date: 9-2s-f ,'(--- Resolution No. 2014-13 Exhibit A Page 4 of 4