2017-05-16 Oversight Board Agenda Packet (Special)California Public Records Act ("PRA"): In compliance with the PRA, the documents pertaining to agenda
items, including attachments, which are presented to the Oversight Board in open session are available for
public inspection. They may be inspected during regular business hours in the Office of the City Clerk at
Vernon City Hall, 4305 Santa Fe Avenue, Vernon, California 90058, no prior appointment necessary, and on the City’s website at www.cityofvernon.org.
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Agenda
Special Meeting of the
Oversight Board of the Successor Agency
to the Redevelopment Agency of the City of Vernon
Tuesday, May 16, 2017, 1:00 p.m.
Council Chamber, City Hall
4305 Santa Fe Avenue
Vernon, California
Jonathan S. Fuhrman, Chairperson
William J. Davis, Board Member
Mary Gallagher, Board Member David Vela, Board Member Kelly Nguyen, Board Member
Vacant, Board Member
Vacant, Board Member
CALL TO ORDER & FLAG SALUTE
CHANGES TO THE AGENDA
PUBLIC COMMENT - At this time the public is encouraged to address the Oversight Board on any matter
that is within the subject matter jurisdiction of the Board. The public will also be given a chance to comment
on matters which are on the posted agenda during the Board’s deliberation on those specific matters.
ACTION ITEMS
1. A Resolution of the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of Vernon, approving an agreement regarding expenditure of excess bond proceeds between
the Successor Agency and the City of Vernon [2005 Tax Allocation Bonds]
/ / /
Oversight Board of the Successor Agency to the Redevelopment Agency
Special Meeting Agenda May 16, 2017
Page 2 of 2
Recommendation: A. Find that adoption of the proposed resolution for approval of the Agreement Regarding
Expenditure of Excess Bond Proceeds [2005 Tax Allocation Bonds] is exempt under the California
Environmental Quality Act (“CEQA”) because it is a government fiscal activity that will not result
in any change to the environment and, therefore, is not a “project” as defined by CEQA Guidelines Section 15378. Even assuming the activity were a “project”, it would be exempt from CEQA
review in accordance with CEQA Guidelines Section 15061(b)(3), the general rule that CEQA
only applies to projects that may have an effect on the environment; and
B. Adopt a resolution to approve an Agreement Regarding Expenditure of Excess Bond Proceeds [2005 Tax Allocation Bonds]; and
C. Authorize Successor Agency staff, City Attorney and special counsel to take any necessary steps
to assure the provisions of said resolution are appropriately effectuated.
ORAL REPORTS
2. Brief reports on activities, other brief announcements, and directives to staff.
ADJOURNMENT
I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda was
posted on the bulletin board at the main entrance of the City of Vernon City Hall, located at 4305 Santa Fe Avenue,
Vernon, California, on the City’s website not less than 24 hours prior to the meeting set forth on this agenda.
Dated this 11th day of May, 2017.
By: ________________________________
Maria E. Ayala, Secretary
RECEIVED
MAY 10 2017
CITY CLERK'S OFTICE
RECEIVED
toY r0ar
CITY AI)fTISIISTRAII()il
STAFF REPORT @S'ro-t't
OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY FOR THE
FORNIER VERNON REDEVELOPMENT AGENCY
DATE:
TO:
FROM:
RE:
May 16,2017
Honorable Chairperson and Members of the Oversight Board of the Successor
Agency to the Former Vernon Redevelopment Agency
\ illiam Fox, Successor Agency StalT Membe , ttT
Originator: Outside Counsel, Iris Yang of Best Best & Krieger
A Resolution Approving an Agreement Regarding Expenditure of Excess Bond
Proceeds [2005 Tax Allocation Bonds]
Recommendation
A. Find that adoption of the proposed resolution for approval of the Agreement Regarding
Expenditure of Excess Bond Proceeds [2005 Tax Allocation Bonds] is exernpt under the
Califomia Environmental Quality Act ('CEQA") because it is a government fiscal activity
that will not result in any change to the environment and, therefore, is not a'project" as
defined by CEQA Guidelines Section 15378. Even assuming the activity were a *project",
it would be exempt from CEQA review in accordance with CEQA Guidelines Section
15061(bX3), the general rule that CEQA only applies to projects that may have an effect on
the environment; and
B. Adopt a resolution to approve an Agreernent Regarding Expendittre of Excess Bond
Proceeds [2005 Tax Allocation Bonds]; and
C. Authorize Successor Agarcy staff, City Attomey and special counsel to take any necessary
steps to assure the provisions of said resolution are appropriately effectuated.
Backsround
Health and Safety Code Section 34191.4(c) provides that after the Successor Agency to the
Redevelopment Agency has received a Finding of Completion from the state Department of Finance
(*DOF"), the Successor Agorcy is authorized to use the bond proceeds from bonds issued on or
before December 31, 2010, in a manner consistent with the original bond covenants. Further, the
Successor Agency may designate the use ofand commit indebtedness obligation proceeds that were
Page I of2
derived from indebtedness issued for redevelopment purposes after January l, 201 l, and that rernain
available after the satisfaction of enforceable obligations that have been approved on a Recogrized
Obligation Payment Schedule C'ROPS") and that are consistent with the indebtedness obligation
covenants (hereafter "Excess Bond Proceeds").
The Successor Agency received its Finding of Completion from DOF on April 17, 2013.
The Successor Agency and City previously approved an Agreernart Regarding Expenditure of
Excess Bond Proceeds [2005 Tax Allocation Bonds] ("Agreernent") to transfer all the excess bond
proceeds from the Excess Bond Proceeds from the Redevelopment Agency's Industrial
Redevelopment Project Tax Allocation Bonds, Series 2005, dated October 4, 2005 (the "2005
Bonds") held by the Successor Agency to the City to be expended in a manner consistent with the
applicable bond covenants. The Agreernent was approved by the Oversight Board by Resolution
No. 42 on January 17, 2017, and submitted to the State Departrnent of Finance C'DOF) for review
as required by Health and Safety Code Section 34179(h).
By letter dated March 10,2017, DOF notified the Successor Agency that it did not approve
Oversight Board Resolution No. 42 because the amount of excess bond proceeds specified to be
transferred to the City included bond reserves and tax revenue. DOF returned Resolution No.42 to
the Oversight Board for reconsideration.
The City and Successor Agency have revised the Agreement to revise the amount of 2005 bond
proceeds eligible for transfer to the City pursuant to Health and Safety Code Section 34191.4(c).
The revised Agreement must be approved by the Oversight Board, and is subject to review by DOF.
DOF has approved similar agreernents transferring bond proceeds from a Successor Agency to the
City. If the Agreement is approved by the Oversight Board, the Successor Agency may list the
Agreement as an enforceable obligation on the Recognized Obligation Payment Schedule
c'RoPS).
The proposed Agreernent Regarding Expenditure of Excess Bond Proceeds between the City and
Successor Agency (which has been approved as to form by outside counsel) would permit all
Excess Bond Proceeds from the 2005 Bonds to be transferred from the Successor Agency to the
City, which in tum must use the proceeds in accordance with the bond covenants. As of June 30,
2016, the Successor Agency had 522,892,149.60 in Excess Bond Proceeds available from the 2005
Bonds. The exact amount of the Excess Bond Proceeds shall be determined by the Successor
Agency, and as agreed to by the DOF.
Fiscal Imoact
Approval of the revised Agre€ment would allow the transfer of the rernaining proceeds from the
2005 Tax Allocation Bond issuance to the City for the City to administer. These agreernents have
been approved by the Department ofFinance for other successor agencies and their cities.
Attachment(s)l. Resolution Approving the Agreernent Regarding Expenditure ofExcess Bond Proceeds
[2005 Tax Allocation Bonds]
Page 2 of 2
RESOLUTION NO. OB-
A RESOLUTION OF THE OVERSTGHT BOARD OF THE
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE
CITY OF VERNON, APPROVING AN AGREEMENT REGARDING
EXPENDTTI'RE OF EXCESS BOND PROCEEDS BETWEEN THE
SUCCESSOR AGENCY AND THE CITY OF VERNON
[2005 TAX AILOCATION BONDS]
WHEREAS, pursuant to Assembly Bill xL 26, enacE.ed on ,June 28,
201L, Assembly Bill l-484, enacted on June 27, 2072, and other
subsequent legistat,ion (co11ectively, the "DissoluEion Law"), the
Redevelopment Agency of the CiEy of vernon ( "Redevelopment Agency" ) was
dissol-ved on February l, 2ol2; and
WHEREAS, pursuant to Healch and SafeEy Code Seccion 34173,
Ehe City of vernon elected to serve as lhe Successor Agency to the
Redevelopment Agency and pursuant to Health and Safety Code Section
34173 (g) , the Successor Agency is a separate public entity from tshe
CiEy; and
WHEREAS, pursuant to Hea1tsh and Safety Code Sect.ion
3419L.4 (c), after a successor agency has received a finding of
compleEion from the stsatse DeparE.menE of Finance ("DoF"), a successor
agency, hriEh the approval of ics oversight board, may lisE enforceable
obligations to expend excess bond proceeds on iEs Recognized Obligation
PaymenE Schedule ("ROPS"), so long as such expenditures are consistent
with Ehe bond covenant.s; and
WHEREAS, the Successor Agency received a Finding of
CompleEion from DOF on April L7, 2013; and
WHEREAS, t.he successor Agency has excess bond proceeds from
the Redevel-opment Agency's IndusErial Redevelopments Project Tax
AllocaEion Bonds, Series 2005 ("2005 Bonds" ) ; and
WHEREAS, t.he Successor Agency and CiEy previousfy approved an
Agreement Regarding Expenditure of Excess Bond Proceeds [2005 Tax
Allocation Bondsl ( "Agreement" ) to have all the excess bond proceeds
from the 2OO5 Bonds held by Ehe Successor Agency t.ransferred to the
city to be expended in a manner consistent with t.he applica-bIe bond
covenants, which Agreement was approved by the Oversight Board by
Resolution No. 42 on ,January 17, 2OL7 i ar.d
vlHEREAs, by letter dated March 1-0, 20L7, the California
DepartmenE of Finance ("DoF" ) notified the successor Agency that it was
not approving Oversighc Board Resolution No. 42 because Ehe amounE of
excess bond proceeds specified to be transferred to the City included
2OO5 bond reserves and Eax revenue, and DOF retsurned Resolution No. 42
to the OversighE Board for reconsideration; and
WHEREAS, the Citsy and Successor Agency revised the Agreements
to revise the amounE of 2005 bond proceeds eligible for transfer to the
city pursuant Eo Health and safety code secEion 34]-91 .4 (c), and
submiEted said revised AgreemenE t,o the Oversight Board for
reconsideration; and
WHEREAS, the Successor Agency had, as of June 30, 2016,
approximately $22,892,349.50 in bond proceeds, wiEh the exact amount to
be transferred to the City to be approved by the DOF.
NOW, THEREFORE, BE IT RESOLVED BY THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF VERNON AS
FOLLOWS:
SECTION 1: The oversight Board of lhe Successor Agency to
E.he Redevelopment Agency
determines Ehat the above
of Ehe City of Vernon hereby finds and
recitals are true and correct.
Oversights Board of tshe Successor Agency to
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SECTION 2: The
the Redevelopment Agency of Ehe City of Vernon hereby finds Ehat Ehis
action is exempt under the California Envj-ronmentsal Oualitsy Act
("CEQA") because it is a government fiscal actsivity thaE will not
result. in any change to Ehe environment. and, t.herefore, is not a
"projecE" as defined by CEOA Guidelines Section 15378. Even assuming
the activity were a "project", it would be exempt from CEoA review in
accordance with CEQA Guidelines Section 15051(b) (3), Che general rule
that CEQA only applies tso projecEs EhaE may have an effect on t.he
environment.
SECTION 3: The OversighE Board of Ehe Successor Agency Co
the Redevelopment. Agency of the CiEy of Vernon hereby approves Ehe
revised Agreement Regarding Expenditure of Excess Bond Proceeds [2005
Tax Allocacion Bondsl , in subsEantially the same form as the copy
which is atstsached hereEo as Exhibit A.
SECTION 4: SubjecE to Ehe conditions set forth in Sectsion
5, below, Ehe Successor Agency is hereby authorized and directed to
execuEe the AgreemenE Regarding Expenditure of Excess Bond Proceeds
[2005 Tax Allocation Bonds] , subject. to any minor, t.echnical and
clarifying changes as may be approved by the Successor Agency Counsel.
The Successor Agency is further authorized and directed Eo take such
aclions as are necessary and appropriaEe Eo implement said AgreemenE on
behalf of Ehe Successor Agency.
SECTION 5:The approvals and authorizations set fortsh in
Sections 3 and 4 of this ResoluCion are conditioned upon approval by
DOF of the Oversight Board's acEion under this Resolution to approve
Ehe revised Agreement Regarding Expenditure of Excess Bond Proceeds, or
if DOF does not request a review within five business days, che
Oversight Board's action becomes effective .in accordance with said
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secEion 34179 (h) .
SECTION 5: The Secretary of Ehe Oversight Board, eha11
certify to the passage, approval and adoption of this reeolution, and
the Secretary ehall cause EhiB reBolution and the Secretary,s
certification t.o be properly fi1ed.
APPROVED AND ADOPTED this 16th day of May, 20:-7.
Name :
Title: Chairman / Vice Chairman
ATTEST :
Iris-Ying, Esq.Best Beat C Krieger LLy',
Special eounBel to the OveraighE. Board
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STATE OF CALI FORNIA
COUNTY OF LOS ANGELES
I, Maria E. Aya1a, acting on behalf of the Oversight Board as j.ts
Secretary, do hereby certify that E.he foregoing Resolutsion, being
Resolution No. OB- , was duly passed, approved and adopted by E.he
Oversight. Board of the Successor Agency to the Redevelopment Agency of
the City of Vernon at a special meeting of the Oversighc Board duly
held on ylay ]-6, 201,7, and thereafEer was duly signed by the Chairman or
Vice Chairman of Ehe Oversight Board.
Executed this day of ylay, 2017, at Vernon, Cal-ifornia.
Maria E. Ayala, secreEary
(SEAL)
5
EXHIBIT A
Exhibit A
AGREEMENT REGARDING
EXPENDITURE OF EXCESS BOND PROCEEDS
[2005 Tax Allocation Bonds]
-5-
AGREEMENT REGARDING
EXPENDITURE OF EXCESS BOND PROCEEDS
[2005 Tax Allocation Bondsl
This Agreernant Regarding Expenditure of Excess Bond Proceeds ("Agreernent") is
entered into this 16th day of May, 2017, by and between the Successor Agency to the
Redevelopment Agency of the City of Vernon ("Successor Agency'') and the City of Vernon, a
charter city ("City"). The Successor Agency and the City are hereinafter collectively referred to
as the "Parties."
RECITALS
A. Pursuant to the Community Redevelopment Law (Health & Saf. Code $33000 et
a/.) ("CRL"), the former Redevelopment Agency of the City of Vernon ("Redevelopment
Agency'') was responsible for implernenting the Redevelopment Plan for the Industrial Project
Area (the "Redevelopment Project Area"), originally adopted by the City Council of the City of
Vemon ("City Council").
B. Pursuant to an lndentue ofTrust Agreernent, dated October 1, 2005, executed by
and between the Redevelopment Agency and the Bank of New York Trust Company, N.A., as
Trustee, (the '"Trust Agreements"), the Redevelopment Agency issued Tax Allocation Bonds as
more fully described below (collectively, the "2005 Bonds").
C. Following dissolution of the Redevelopment Agency on February 1, 2012,
pursuant to Assernbly Bill lX 26, the City elected to serve as the Successor Agency to the
Redevelopment Agency. Pursuant to Health and Safety Code Section 3alTG), the Successor
Agency is a separate public entity from the City.
D. Health and Safety Code Section 34191.4(c) provides that once the Successor
Agency has been issued a Finding of Completion by the Califomia Department of Finance
('DOF"), the Successor Agency is authorized to use bond proceeds from bonds issued on or
before Decernber 3l, 2010, in a manner consistent with the original bond covenants. Further, the
Successor Agency may designate the use of and commit indebtedness obligation proceeds that
were derived from indebtedness issued for redevelopment purposes after January l, 201l, and
that rernain available after the satisfaction of enforceable obligations that have been approved on
a Recogdzed Obligation Payment Schedule ('ROPS) and that are consistent with the
indebtedness obligation covanants (hereafter "Excess Bond Proceeds").
E. The DOF issued a Finding of Completion to the Successor Agency on April 17,
2013.
F. Health and Safety Code Section 34191.4(c) further provides that the expenditure
ofExcess Bond Proceeds must be listed separately on the applicable ROPS.
Agt to Expend Excess Bond Proceeds [2005 Bonds]
t l r 76 00003\29484 r02.2
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G. The Parties desire to enter into this Agreernent to use the Excess Bond Proceeds
for the purposes identified in and consistent with the covenants contained in the Trust Agreernent
and related documents (the "Bond Covenants") and the requirernents of the CRL, and to provide
for the Successor Agency to transfer the Excess Bond Proceeds to the City to be used for such
purPoses.
H. The execution of this Agreernent was approved in a public meeting of the City
Council and the Successor Agency on March 21,2017 .
I. This Agreement was approved by the Oversight Board for the Successor Agency
in a public meeting on May 16,2017 .
J. The Oversight Board's action to approve this Agreement was submitted to DOF
pursuant to Health and Safety Code Section 34179(h), and DOF approved this Agreement on
2017.
NO% THEREFOR-E, in consideration of the murual covenants, conditions and
promises herein contained, the Parties hereby agree as follows:
l.
reference.
Recitals. The Recitals above are true and correct and are incorporated herein by
2. Term. The term of this Agreement shall commence on the Effective Date, and
shall continue in effect until the date that all Excess Bond Proceeds arc expendd in accordance
with the requirernents of this Agreernent.
3. 2005 Bonds. The following bonds were issued by the Redevelopment Agency:
Redevelopment Agency of the City of Vemon Industrial Redevelopment Project Tax Allocation
Bonds, Series 2005, in the amount of $49,420,000, dated October 4,2005, to be used to finance
various public improvernents within or benefiting the Redevelopment Project Area. As of June
30,2016, the Successor Agency had approximately 522,892,349.60 in Excess Bond Proceeds
available from the 2005 Bonds. The exact amount of Excess Bond Proceeds shall be determined
by the Successor Agency, and as agreed to by the DOF.
4. Use of Excess Bond Proceeds. The City agrees that it shall use the Excess Bond
Proceeds available from the 2005 Bonds identified above solely for the purposes identified in
Recital G., above, or for other projects consistent with the 2005 Bond Covenants and the
provisions of the CRL, as may be amended from time to time, that apply to the expenditure of
such Excess Bond Proceeds.
5. Transmittal of Excess Bond Proceeds. Subject to the last sentence of Section 3,
above, upon the Effective Date, the Successor Agency shall transfer the Excess Bond Proceeds
(including any interest accrued thereon as of the Effective Date) to the City, and the City shall
deposit such funds into a separate 2005 Excess Bond Proceeds Account for the City's use in
accordance with the terms, conditions and purposes set forth in this Agreement.
Agt to Expend Excess Bond Proceeds [2005 Bonds]
8l t 76.00003u%E4102.2
2
6. Proiect Approvals: Environmental Review. This Agreernent is not intended to
limit in any manner the discretion of the City in connection with the issuance of approvals and
entitlements for the projects described in this Agreement, nor to avoid legally required processes
attendant to Foject approval, including, without limitation, the undertaking and completion of
any required environmental review pursuant to the Califomia Environmental Quality Act and the
National Environmental Protection Act, as applicable, and the review and approval of plarx and
specifications.
7. Severabilitv. If any term, provision, @venant, or condition set forth in this
Agreernent is held by the final judgnent of a court of competent jurisdiction to be invalid, void
or unenforceable, the remaining provisions, covenants, and conditions shall continue in full force
and effect to the extent that the basic intent of the Parties as expressed herein can be
accomplished. In addition, the Parties shall cooperate in good faith in an effort to amend or
modifr this Agreement in a manner such that the purpose ofany invalidated or voided provision,
covenant or condition can be accomplished to the maximum extent legally permissible.
8. No Third-Party Beneficiaries: Assimments. Nothing in this Agreernent is
intended to create any third-party beneficiaries to this Agreement, and no person or entity other
than the Successor Agency and the City, and the permitted successors and assigns of either of
thern, shall be authorized to enforce the provisions of this Agreement.
9. Further Assurances. Each Party agrees to execute, acknowledge and deliver all
additional documents and instruments, and to take such other actions as may be reasonably
necessary to carry out the intent of the transactions conternplated by this Agreernent.
10. Governinq Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Califomia.
11. Counteroarts. This Agreernent may be executed in counterparts, each of which
shall be deemed an original and all of which shall constitute but one and the same instrument.
12. Amendment. This Agreernent may be modified or amended, in whole or in part,
only by an instrument in writing, executed by the Parties.
13. Effective Date. This Agreernent shall be effective when sigrred by both parties,
and approved by the Oversight Board and DOF.
Agt to Expend Excess Bond Proceeds [2005 Bonds]
8l | 76.m003u94E4102.2
3
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
CITY OFVERNON SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF VERNON
By:
City Admini strator Chairperson
Attest:Attest:
Maria E. Ayala, City Clerk
Approved as to Form:
Agt to Expend Excess Bond Proceeds [2005 Bonds]
E l r 76 00003\29484 | 02 2
Secretary
Approved as to Form:
Brian Byun, Deputy City Attorney Legal Counsel
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