City of Culver City, California
Agenda Item Report
Meeting Date: 04/13/2015 Item Number: JC-3
JOINT CITY COUNCIL-SUCCESSOR AGENCY AGENDA ITEM: Adoption of
Resolutions (1) Approving of a Master Agreement regarding Expenditure of Bond
Proceeds between the City of Culver City and Successor Agency to the Culver City
Redevelopment Agency Pursuant to California Health and Safety Code Section
34191.4(c) and (2) Approving Related Actions.
Contact Person/Dept.: Jeff Muir
Finance
Phone Number: 310-253-5865
Fiscal Impact: Yes [X] No [] General Fund []
Public Hearing: [] Action Item: [] Attachments: [X]
Commission Action Required? Yes [] No [X] Date:__________
Public Notification: (E-Mail) Meetings and Agendas – City Council (04/08/15) (E-Mail)
Meetings and Agendas – Successor Agency (04/08/15).
Departmental Approval:
Jeff Muir (04/06/15)
City Attorney/Successor Agency General Counsel
Approval:
Carol Schwab (by H. Baker) (04/07/15)
City/Successor Agency Special Counsel Approval:
Murray Kane (04/07/15)
Chief Financial Officer Approval:
Jeff Muir (04/06/15)
City Manager / Executive Director Approval:
John M. Nachbar (04/08/15)
RECOMMENDATION:
Staff recommends: (1) the Successor Agency to the Culver City Redevelopment Agency
(Successor Agency) Board adopt a resolution approving a proposed Master Agreement
regarding Expenditure of Bond Proceeds between the Successor Agency and the City
pursuant to California Health and Safety Code Section 34191.4(c) (Master Agreement)
and (2) the City Council adopt a resolution approving a proposed Master Agreement.
BACKGROUND:
Pursuant to authority granted under the California Community Redevelopment Law
(CRL), the former Culver City Redevelopment Agency (former CCRA) had responsibility
to implement the Redevelopment Plans (Original Redevelopment Plans) for the Culver
City Redevelopment Project Areas No. 1, 2 and 3 (Original Project Areas).
Subsequently, the Original Redevelopment Plans were merged into a single amended
and restated Redevelopment Plan for the Culver City Redevelopment Project
(Redevelopment Plan), and the Original Project Areas were merged into a single Culver
City Redevelopment Project Area (Project Area).
For the benefit of the former CCRA, the Culver City Redevelopment Financing Authority
(Authority) issued 1993 Tax Allocation Refunding Revenue Bonds, in the principal
amount of $128,070,000 (1993 Bonds). The 1993 Bonds are required to be used to
provide financing for (i) funding loans from the Authority to the former CCRA (1993
Loans) under certain loan agreements (1993 Loan Agreements) and (ii) establishing a City of Culver City, California
Agenda Item Report
reserve fund (Reserve Fund). The final debt service payment on the 1993 Bonds was
made in November 2014, concurrent with the payoff of the 1993 Loans. Pursuant to the
1993 Loan Agreements, the Reserve Fund was transferred to the Successor Agency as
successor in interest to the former Culver City Redevelopment Agency.
The City agreed to serve as the Successor Agency commencing upon dissolution of the
former CCRA on February 1, 2012 pursuant to Assembly Bill No. 26 (2011-2012 1st Ex.
Sess.).
California Health and Safety Code Section 34191.4(c) provides that once a finding of
completion (FOC) has been issued by the California Department of Finance (DOF), a
successor agency is authorized to use bond proceeds for the purposes for which the
bonds were sold. Such successor agency may designate the use of and commit
indebtedness obligation proceeds that were derived from indebtedness issued for
redevelopment purposes on or before December 31, 2010 that remain available after
the satisfaction of enforceable obligations that have been approved on a Recognized
Obligation Payment Schedule and that are consistent with the indebtedness obligation
covenants (Bond Proceeds).
The DOF issued an FOC to the Successor Agency on December 5, 2013.
The Reserve Fund constitutes Bond Proceeds. As of November 1, 2014, the following
amounts of Bond Proceeds are available: 1993 Bonds: $2,310,800.
The Successor Agency and the City desire to enter into the Master Agreement in order
to use the Bond Proceeds for the purposes identified in and consistent with the
applicable indebtedness obligation covenants and the requirements of the CRL by
providing for the Successor Agency to transfer the Bond Proceeds to the City to be used
for such purposes.
DISCUSSION:
If the Successor Agency Board and the City Council adopt the proposed resolutions,
then a similar resolution will be presented for consideration by the Oversight Board at its
regular meeting scheduled for May 14, 2015. If the Oversight Board adopts that
proposed resolution, then the Oversight Board’s resolution will be submitted to the DOF
for review and approval. Upon DOF approval, the Master Agreement would become
effective. The Master Agreement would continue in effect until the date that all Bond
Proceeds are expended in accordance with the requirements of the Master Agreement.
Upon DOF approval of the Master Agreement, the Successor Agency would be
authorized to transfer the Bond Proceeds to the City, and the City would be required to
hold such funds in a separate Bond Proceeds account for the City’s use in accordance
with the terms, conditions and purposes set forth in the Master Agreement. The Bond
Proceeds would be used solely for the purposes identified in the Master Agreement or
for other projects consistent with the indebtedness obligation covenants and the
provisions of the CRL that apply to the expenditure of redevelopment funds.
City of Culver City, California
Agenda Item Report
The Master Agreement would not limit in any manner the discretion of the City in
connection with the issuance of approvals and entitlements for the projects described in
the Master Agreement or avoid legally required processes attendant to project approval
including the undertaking and completion of any required environmental review pursuant
to CEQA and the review and approval of plans and specifications.
Following DOF approval of the Master Agreement, no subsequent DOF approval would
be required in order for the City to expend the Bond Proceeds.
FISCAL ANALYSIS:
Upon final approval of the Master Agreement, the Successor Agency would be
authorized to transfer the Bond Proceeds (approximately $2,310,800) to the City.
ATTACHMENTS:
1. Proposed Successor Agency Board resolution.
2. Proposed City Council resolution.
3. Master Agreement
MOTIONS:
That the Successor Agency Board:
Adopt a resolution approving the Successor Agency’s entry into a proposed Master
Agreement regarding Expenditure of Bond Proceeds between the Successor Agency
and the City pursuant to California Health and Safety Code Section 34191.4(c).
That the City Council:
Adopt a resolution approving the City’s entry into a proposed Master Agreement
regarding Expenditure of Bond Proceeds between the Successor Agency and the
City pursuant to California Health and Safety Code Section 34191.4(c).
MEETING DATE: 04/13/15
AGENDA ITEM: JOINT CITY COUNCIL-SUCCESSOR AGENCY
AGENDA ITEM: Adoption of Resolutions (1) Approving
of a Master Agreement regarding Expenditure of Bond
Proceeds between the City of Culver City and Successor
Agency to the Culver City Redevelopment Agency
Pursuant to California Health and Safety Code Section
34191.4(c) and (2) Approving Related Actions.
ATTACHMENTS
1. Proposed Successor Agency Board resolution
1-7
2. Proposed City Council resolution 8-13
3. Master Agreement (Excluding Exhibits)
14-22
12345678910111213MASTER AGREEMENT
REGARDING EXPENDITURE OF BOND PROCEEDS
This Master Agreement Regarding Expenditure Of Bond Proceeds (this
“Agreement”) is dated as of ______________________, 2015 and is entered into by and
between THE SUCCESSOR AGENCY TO THE CULVER CITY REDEVELOPMENT
AGENCY, a public body, corporate and politic (the “Successor Agency”) and THE
CITY OF CULVER CITY, a municipal corporation (the “City”). The Successor Agency
and the City are hereinafter collectively referred to as the “Parties”.
RECITALS
A. Pursuant to authority granted under the California Community Redevelopment
Law (California Health and Safety Code (“H&S Code”) Section 33000 et seq.) (the
“CRL”), the former Culver City Redevelopment Agency, a public body, corporate and
politic (the “Former CCRA”) had the responsibility to implement the Redevelopment
Plans (collectively, the “Original Redevelopment Plans”) for areas within the City of
Culver City known as the Culver City Redevelopment Project Area No. 1, 2 and 3
(collectively, the “Original Project Areas”), which Original Project Areas were duly
established by the City Council of the City of Culver City (the “City Council”) on July
26, 1971, December 28, 1971, and November 24, 1975, respectively, by Ordinance Nos.
CS-712, CS-729, and CS-862, respectively.
B. Pursuant to a Trust Agreement dated as of November 1, 1993, a true and correct
copy of which is attached hereto as Exhibit A and incorporated herein by this reference,
executed by and between the Culver City Redevelopment Financing Authority (the
“Authority”) and Bank of America National Trust and Savings Association (the
“Trustee”) (the “Trust Agreement”), the Authority issued, for the benefit of the Former
CCRA, 1993 Tax Allocation Refunding Revenue Bonds, in the principal amount of
$128,070,000 (the “1993 Bonds”).
C. Pursuant to the Official Statement for the 1993 Bonds, a true and correct copy of
which is attached hereto as Exhibit B and incorporated herein by this reference, the 1993
Bonds are required to be used to provide financing for, inter alia, (i) funding loans from
the Authority to the Former CCRA (collectively, the “1993 Loans”), true and correct
copies of the loan agreements for which are attached hereto as Exhibit C and incorporated
herein by this reference (collectively, the “1993 Loan Agreements”) and (ii) establishing
a reserve fund to be held by the Trustee (the “Reserve Fund”).
D. Pursuant to authority granted under the CRL, the Original Redevelopment Plans
were merged into a single amended and restated Redevelopment Plan for the Culver City
Redevelopment Project (the “Redevelopment Plan”), and the Original Project Areas
were merged into a single Culver City Redevelopment Project Area (the “Project
Area”), which Project Area was duly established by the City Council on November 23,
1998 by Ordinance Nos. 98-014 and 98-015.
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14E. Assembly Bill No. X1 26 (2011-2012 1st Ex. Sess.) (referred to herein as
“Dissolution Act”) was signed by the Governor of California on June 28, 2011, making
certain changes to the CRL and to the H&S Code including adding Part 1.8 (commencing
with Section 34161) (“Part 1.8”) and Part 1.85 (commencing with Section 34170) (“Part
1.85”) to Division 24 of the H&S Code.
F. On December 29, 2011, the California Supreme Court delivered its decision in
California Redevelopment Association v. Matosantos, finding the Dissolution Act largely
constitutional and reformed certain deadlines set forth in the Dissolution Act.
G. Pursuant to the Dissolution Act, as modified by the California Supreme Court on
December 29, 2011 by its decision in California Redevelopment Association v.
Matosantos, all California redevelopment agencies, including the Former CCRA, were
dissolved on February 1, 2012, and successor agencies were designated and vested with
the responsibility of paying, performing and enforcing the enforceable obligations of the
former redevelopment agencies and expeditiously winding down the business and fiscal
affairs of the former redevelopment agencies.
H. The City Council of the City of Culver City adopted Resolution No. 2012-R001
on January 9, 2012, pursuant to Part 1.85 of the Dissolution Act, accepting for the City
the role of successor agency to the Former CCRA.
I. On February 6, 2012, the Board of Directors of the Successor Agency, adopted
Resolution No. 2012-SA001 naming itself the “Successor Agency to the Culver City
Redevelopment Agency”, the sole name by which it will exercise its powers and fulfill its
duties pursuant to Part 1.85 of the Dissolution Act and establishing itself as a separate
legal entity with rules and regulations that will apply to the governance and operations of
the Successor Agency.
J. The final debt service payment on the 1993 Bonds was made in November 2014,
concurrent with the payoff of the 1993 Loans, and pursuant to Section 7.03 of each of the
1993 Loan Agreements, the Reserve Fund was transferred by the Trustee’s successor-in-
interest to the Successor Agency.
K. H&S Code Section 34191.4(c) provides that once a finding of completion
(“FOC”) has been issued by the California Department of Finance (the “DOF”), a
successor agency is authorized to use bond proceeds for the purposes for which the bonds
were sold. Such successor agency may designate the use of and commit indebtedness
obligation proceeds that were derived from indebtedness issued for redevelopment
purposes on or before December 31, 2010 that remain available after the satisfaction of
enforceable obligations that have been approved on a Recognized Obligation Payment
Schedule and that are consistent with the indebtedness obligation covenants (collectively,
the “Bond Proceeds”).
L. The DOF issued an FOC to the Successor Agency on December 5, 2013.
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15M. The Reserve Fund constitutes Bond Proceeds.
N. As of November 1, 2014, the following amounts of Bond Proceeds are available:
- 1993 Bonds: $ 2,310,800
O. An oversight board has been established for the Successor Agency (“Oversight
Board”) and all 7 members have been appointed to the Oversight Board pursuant to H&S
Code Section 34179. The duties and responsibilities of the Oversight Board are primarily
set forth in H&S Code Sections 34179 through 34181 of the Dissolution Act.
P. Pursuant to H&S Code Section 34180(h), the Successor Agency submitted this
Agreement to the Oversight Board and requested its approval to enter into it.
Q. The City and, having received approval of the Oversight Board and the DOF, the
Successor Agency desire to enter into this Agreement, in order to use the Bond Proceeds
for the purposes identified in and consistent with the applicable indebtedness obligation
covenants and the requirements of the CRL by providing for the Successor Agency to
transfer the Bond Proceeds to the City to be used for such purposes.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
1. Effective Date. This Agreement shall become effective when it is deemed
effective in accordance with H&S Code Section 34179(h) (the “Effective Date”).
2. Term. The term of this Agreement shall commence on the Effective Date and
shall continue in effect until the date that all Bond Proceeds are expended in accordance
with the requirements of this Agreement.
3. Transfer of Bond Proceeds. Upon the Effective Date, the Successor Agency shall
transfer the Bond Proceeds to the City, and the City shall deposit such funds in a separate
Bond Proceeds account for the City’s use in accordance with the terms, conditions and
purposes set forth in this Agreement.
4. Use of Bond Proceeds. The City agrees that it shall use the Bond Proceeds solely
for the purposes identified in the Recitals above or for other projects consistent with the
indebtedness obligation covenants and the provisions of the CRL that apply to the
expenditure of redevelopment funds.
5. Project Approvals; Environmental Review. This Agreement 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 project approval including, without limitation, the
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16undertaking and completion of any required environmental review pursuant to the
California Environmental Quality Act and/or the National Environmental Policy Act, as
applicable, and the review and approval of plans and specifications.
6. Severability. If any term, provision, covenant or condition set forth in this
Agreement is held by the final judgment of a court of competent jurisdiction to be
invalid, void or unenforceable, then 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 modify this Agreement in a manner such that the purpose of
any invalidated or voided provision, covenant or condition can be accomplished to the
maximum extent legally permissible.
7. No Third-Party Beneficiaries. Nothing in this Agreement 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
them, shall be authorized to enforce the provisions of this Agreement.
8. Further Assurances. Each of the Parties 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 contemplated by this
Agreement.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
10. Counterparts. This Agreement 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.
11. Amendments. This Agreement may be modified or amended, in whole or in part,
only by an instrument in writing executed by the Parties.
[signatures on following page]
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17 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
“SUCCESSOR AGENCY”
THE SUCCESSOR AGENCY TO THE CULVER
CITY REDEVLOPMENT AGENCY,
a public body, corporate and politic
Dated: ______________________ By: _________________________________
John M. Nachbar
Executive Director
APPROVED AS TO CONTENT:
By: ______________________________
Sol Blumenfeld
Community Development Director
ATTEST:
By: ______________________________
Secretary
APPROVED AS TO FORM:
By: _________________________________
Carol Schwab
Successor Agency General Counsel
By: _________________________________
KANE, BALLMER & BERKMAN
Successor Agency Special Counsel
[signatures continue on following page]
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18“CITY”
THE CITY OF CULVER CITY,
a municipal corporation
Dated: ______________________ By: _________________________________
John M. Nachbar
City Manager
APPROVED AS TO CONTENT:
By: ______________________________
Sol Blumenfeld
Community Development Director
ATTEST:
By: ______________________________
City Clerk
APPROVED AS TO FORM:
By: _________________________________
Carol Schwab
City Attorney
By: _________________________________
KANE, BALLMER & BERKMAN
City Special Counsel
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19Exhibit A
Trust Agreement
[behind this page]
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20Exhibit B
1993 Bonds Official Statement
[behind this page]
8
21Exhibit C
1993 Loan Agreements
[behind this page]
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