2014-02-06 Oversight Board MinutesMINUTES OF THE REGULAR MEETING OF THE
OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF VERNON
HELD THURSDAY, FEBRUARY 6, 2014, IN THE
COUNCIL CHAMBER OF THE CITY HALL LOCATED AT
4305 SANTA FE AVENUE, VERNON, CALIFORNIA
MEMBERS PRESENT: W. Michael McCormick, Jonathan S. Fuhrman,
William J. Davis, Steven Reyes, Mary
Gallagher and Alex Cherniss
MEMBERS ABSENT: David Vela
The meeting was called to order at 4:07 p.m. by Chairperson
McCormick; Member Davis led the flag salute.
Legal Counsel Gustavo Lamanna announced that there are no
changes to the agenda.
PUBLIC COMMENT
Chairperson McCormick announced that this was the time allotted
for public comment and inquired whether anyone in the audience
wished to address the Board. No one responded.
MINUTES
1. It was moved by Vice Chairperson Fuhrman and seconded by
Member Davis to receive and file the Minutes of the
Regular Meeting of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of Vernon
held November 7, 2013. Motion carried, 5-0, Member
Gallagher had not yet entered the meeting.
ACTION ITEMS
1. Ratification of Resolutions approved by the Former Vernon
Redevelopment Agency concerning Resolution Nos. RA-396
through RA-406 as part of the winding down of the Former
Vernon Redevelopment Agency as follows:
a. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-396 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on February 1, 2011, RA-396 Appointed
Financial and Legal Consultants in Connection
with the Proposed Issuance of its Tax Allocation
Bonds; Making Certain Determinations Relating
Thereto; and Authorized Certain Other Action in
Connection Therewith.
Oversight Board Regular Meeting Minutes
February 6, 2014
Page 2 of 9
b. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-397 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on February 15, 2011, RA-397 Authorized
the Issuance of its Industrial Redevelopment
Project Tax Allocation Bonds; Approved a Form of
First Supplemental Indenture, a Form of Purchase
Contract, a Form of Continuing Disclosure
Agreement and a Form of Official Statement;
Making Certain Determinations Relating Thereto;
and Authorized Certain Other Actions in
Connection Therewith.
c. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-398 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on March 1, 2011, RA-398 Approved the
Assignment of and Assigning an Existing
Obligation to Purchase and Develop a Certain
Project to the Redevelopment Agency of the City
of Vernon located at 4850 - 5050 Pacific
Boulevard.
d. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-399 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on March 1, 2011, RA-399 Approved the
Assignment By the City of Vernon of Development
Costs in Return for Trading Credits for Property
Located at 3200 Fruitland in the City of Vernon
and Superseding Resolution No. RA-346.
e. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-400 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
Oversight Board Regular Meeting Minutes
February 6, 2014
Page 3 of 9
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on March 7, 2011, RA-400 Approved the
Execution of an Assignment and Assumption
Agreement by and Between the City of Vernon and
the Redevelopment Agency of the City of Vernon to
Convey Rights Under an Option Agreement for the
Purchase of Property Located at 4850 – 5050
Pacific Boulevard, and Authorized the Chairman of
the Board of Directors to Close Escrow on
Property Located at 4850 – 5050 Pacific
Boulevard.
f. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-401 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on March 7, 2011, RA-401 Approved and
Authorized the Expenditure of Development Costs
Regarding Property Located at 4850 – 5050 Pacific
Boulevard in the City of Vernon.
g. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-402 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on June 7, 2011, RA-402 Amended Section
18 of the Joint Exercise of Powers Agreement
Relating to the Vernon Natural Gas Financing
Authority.
h. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-403 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on June 7, 2011, RA-403 Approved and
Authorized a Reimbursement Transfer in the amount
of $13,865,160.10 to the City of Vernon for
Oversight Board Regular Meeting Minutes
February 6, 2014
Page 4 of 9
Funding of Capital Projects for benefit of the
redevelopment project areas for the period 1996
to 2011.
i. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-404 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on June 7, 2011, RA-404 Approved and
Ratified the Execution of an Engagement Letter
Agreement Between the City of Vernon and DLA
Piper LLP Relating to the Property Located at
3200 Fruitland Avenue in the City of Vernon.
j. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-405 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on August 2, 2011, RA-405 found no
present need for future Low- and Moderate-Income
Housing in the City of Vernon.
k. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of
Vernon approving and ratifying the disposition of
assets and properties in Resolution No. RA-406 as
authorized actions under California Health & Safety
Code Sections 34177 and 34181, and ratifying certain
related actions pursuant to AB X1 26, as amended by AB
1484, AB 1585, and SB 341 with instructions to the
Successor Agency to the Redevelopment Agency of the
City of Vernon in conformance with this resolution.
i. Approved on August 16, 2011, RA-406 Adopted a
Budget for the Fiscal Year 2011-2012.
Legal Counsel Gustavo Lamanna explained that there are a number
of resolutions that were approved by the Former Redevelopment
Agency (“RDA”), previous to ABx1 26, from the time period of
January 1, 2011 through approximately August 2011 that may be
subject to challenge under two current cases. He explained that
because the sale of the Angelus Can property has been finalized,
it is staff’s recommendation to make the actions of the RDA
approved under AB46, pursuant to Health and Safety Code 34181,
and formally confirm the actions.
Oversight Board Regular Meeting Minutes
February 6, 2014
Page 5 of 9
In response to Member Reyes, Lamanna advised that there are two
open cases. He reported on the City of Brentwood and Foster
City cases.
In further response to Member Reyes, Lamanna advised that the
judge has issued a tentative ruling in favor of local government
and has asked the Attorney General’s Office for further
briefings. Lamanna explained that the proposed actions are
consistent with what the Board has been doing and would avoid
any potential disruption considering the sale of the Angelus Can
property.
Lamanna reported that no hearing date has been set, in response
to Member Reyes’ inquiry.
Member Gallagher enters the meeting.
In response to Member Reyes, Lamanna reported that Health and
Safety Code Section 34181(a) authorizes the Oversight Board to
ratify the actions taken by the RDA before the effectiveness of
ABx1 26, to confirm the status quo. Gustavo further explained
that any actions taken by the Board will be reviewed by the
Department of Finance.
In response to Member Reyes’ inquiry on the finding of
completion and its role in the referenced cases, Lamanna
explained that it does not insulate an agency from any potential
challenges.
In response to Reyes’ inquiry on the time urgency of the
proposed actions, Lamanna explained that funds from the Angelus
Can sale are in the Real Property Trust fund. Staff would like
to distribute said funds to the taxing agencies, but opined that
it would be prudent to hold on to the funds. To this, Vice
Chairperson Fuhrman noted that it is not required.
Vice Chairperson Fuhrman opined that there is no urgency to
address the items this day. He advised that he is not
comfortable taking action at this time as he would like
additional time to review several items and their ramifications.
Member Reyes additionally advised that he would like to hear
more about the pending cases.
Chairperson McCormick suggested postponing the item until the
next Board meeting, March 6, 2014.
Vice Chairperson Fuhrman concurred as this would allow
sufficient time to address questions with staff.
Member Cherniss inquired whether there were certain items Vice
Chairperson Fuhrman had concerns over. In response Vice
Chairperson Fuhrman advised that he had additional questions on
proposed items 1.d, 1.g, and 1.h as notices on the agenda.
The Board was in agreement to defer the items to the March 6,
2014, meeting. No action on Item No. 1 and its subsequent
subsections was taken.
2. A Resolution of the Oversight Board of the Successor
Agency to the former Redevelopment Agency of the City of
Vernon approving the disposition of 4528 Bandini
Oversight Board Regular Meeting Minutes
February 6, 2014
Page 6 of 9
Boulevard, Vernon, CA 90058 (the Austin Trucking site) as
an authorized disposition of assets and properties of the
Former Redevelopment Agency of the City of Vernon under
California Health & Safety Code Sections 34177 and 34181,
and ratifying certain related actions pursuant to AB X1
26, as amended by AB 1484, AB 1585, and SB 341 with
instructions to the Successor Agency to the Former
Redevelopment Agency of the City of Vernon in conformance
with this resolution.
Legal Counsel Gustavo Lamanna reported on the second property
addressed in the long-range property management plan, Austin
Trucking. This is a vacant parcel which is subject to the
taking by the California Department of Transportation
(“CalTrans”) for their expansion of the I-710 freeway project.
The proposed grant deed will transfer the property to the City
of Vernon to hold in trust. The property will then be “off the
books” for the Successor Agency.
Vice Chairperson Fuhrman sought clarification. As he
understands it, the proposal is to transfer ownership from the
Successor Agency to the City without any consideration; no
payment of funds.
In response, Lamanna explained that it is a restricted grant
deed with a specific covenant that the property will not be
conveyed until the I-710 expansion. The property currently has
no market value as there are no buyers for a property that has
been identified in the CalTrans Environmental Impact Report as
eminent domain.
In response to Vice Chairperson Fuhrman’s concerns, Lamanna
reported that CalTrans counsel was contacted, but that they
declined to take the property as they have not yet made a final
determination on the project.
Vice Chairperson Fuhrman argued that the property has value. In
response Successor Agency Staff Alex Kung explained how a value
could not be obtained, additionally it is not known how much of
the property CalTrans will take. He reported on their I-710
expansion plans.
Vice Chairperson Fuhrman opined that a court would require
CalTrans to compensate an agency for the takeover of a property.
He does not support the recommendation to give the property to
the City, even if the City is constrained on the property use.
He advised that it would be a gift of public funds.
Vice Chairperson Fuhrman noted that it was not clear in the
long-range property management plan that the property would be
given to the City without consideration.
In response to Vice Chairperson Fuhrman, Lamanna advised that it
is currently used as a parking lot. The property was acquired
in 1991 for approximately $800,000. The property generates
approximately $6,000 in rent per month.
In response to Chairperson McCormick, Lamanna confirmed that the
proposed grant deed would hold the property in trust for seven
years.
Oversight Board Regular Meeting Minutes
February 6, 2014
Page 7 of 9
Member Reyes inquired on other options. In response, Lamanna
explained that the decision is up to the Board. The Board could
negotiate terms, but it would be prudent to obtain an appraisal
to determine the property’s value; however, this will be at an
expense and will delay the process. He further noted that it
would also be contrary to the long-range property management
plan already approved and filed with the Department of Finance.
Alternatively, the Board can simply do what was outlined in the
plan.
In response to Member Reyes, Lamanna explained the property’s
government use as 1) being taken by the I-710 freeway expansion,
or 2) its original intent as the location for Vernon Fire
Station No. 2. Kung further noted that the location is
strategic in order to maintain the City’s Class 1 Fire
Department rating.
Member Gallagher inquired on the time needed to conduct the
appraisal. In response, Lamanna reasoned that it would be a
similar timeline as that of the appraisal conducted for the
Angelus Can property. He advised that a request for proposals
(“RFP”) would need to be conducted.
Vice Chairperson Fuhrman advised that the template for the RPF
was already available.
Member Gallagher motioned to postpone discussions and reschedule
the item to the March 6, 2014, meeting. It was seconded by
Davis. Motion does not carry, 3-3, with Fuhrman, Reyes, and
Cherniss in opposition.
Member Cherniss directed staff to obtain the appraisal for the
Austin Trucking property. Vice Chairperson Fuhrman added that
it should be a dual appraisal, one for a standalone value where
there is no eminent domain issue, and one for the value that the
state would pay if it were to take the property.
All were in agreement; Lamanna is to conduct the RFP process.
No action on the proposed grant deed; the disposition of 4528
Bandini Boulevard, Vernon, CA 90058 (the Austin Trucking site)
was taken.
3. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of Vernon
directing the commencement of a refunding of Series 2005
and 2011 bonds with the Los Angeles County Dissolution
Refunding Program.
Legal Counsel Gustavo Lamanna reported on the County of Los
Angeles’ upcoming deadline in order to participate in the
dissolution refunding program.
Lamanna explained that the proposed is slightly modified. The
program is a straight refund for cost savings; savings that are
passed on to the Successor Agency. However, staff recommends
that the County assume the responsibility of the bonds. This
will allow the Agency to further wind down, and conclude
activities. However, staff’s intents have not been vetted
through the County; Lamanna sought Member Reyes’ guidance on
whom to contact.
Oversight Board Regular Meeting Minutes
February 6, 2014
Page 8 of 9
Successor Agency Staff Alex Kung further explained that the
Agency has made much more progress than most and if all that is
left is bond payments on the Recognized Obligation Payment
Schedule, then this is something the County could take over.
Member Reyes advised that he would be able to provide staff the
appropriate contact information.
In response to Vice Chairperson Fuhrman’s inquiry on the
outstanding balance, Lamanna advised that the two bond series
have an estimated $58 million remaining.
Lamanna further explained that there are certain limitations to
what can be done with the bonds.
The Board directed staff to interface with Member Reyes to
obtain an appropriate contact at the County. No action on the
proposed resolution for the commencement of a refunding of
Series 2005 and 2011 bonds with the Los Angeles County
Dissolution Refunding Program was taken.
4. A Resolution of the Oversight Board of the Successor
Agency to the Redevelopment Agency of the City of Vernon
adopting, approving, and ratifying the Recognized
Obligation Payment Schedule for the period July 1, 2014
through December 31, 2014, and approving legally required
related actions and notification to other government
entities pursuant to California Health & Safety Code
Sections 34177(l), 34177(m) and 34180(g).
Legal Counsel Gustavo Lamanna advised that the proposed
Recognized Obligation Payment Schedule (“ROPS”) is consistent
with previously approved schedules.
Successor Agency Staff Alex Kung reported on a correction to the
utilities payment for the period of July 2013 through December
2013.
Lamanna reported that staff received a communication from the
County requesting an interface for a prior period adjustment.
Staff is seeking approval to make the modifications and bring
back to the Board for ratification.
It was moved by Member Gallagher and seconded by Member Davis to
approve the proposed resolution approving Recognized Obligation
Payment Schedule for the period July 1, 2014 through December
31, 2014, and authorizing staff to make modifications. Motion
carried, 6-0.
ORAL REPORTS
Successor Agency Staff Alex Kung reported on the close of sale
on the Angelus Can property. Demolition will be commencing
within the month; a new building will be up soon.
Kung reported on the communication and visit from the State
Auditor-Controller’s Office to the City. A number of documents
were requested and provided. Finance Director William Fox
interfaced with the representatives on behalf of the Successor
Agency.
Oversight Board Regular Meeting Minutes
February 6, 2014
Page 9 of 9
With no further business, at 5:11 p.m., Chairperson McCormick
adjourned the meeting.
________________________
W. Michael McCormick
Chairperson
ATTEST:
_________________________
Ana Barcia
Secretary