City of Culver City, California
Agenda Item Report
Meeting Date: 04/02/2012 Item Number: JC-2
JOINT CITY COUNCIL AND SUCCESSOR AGENCY TO THE CULVER CITY
REDEVELOPMENT AGENCY AGENDA ITEM: (1) City Council Adoption of a
Resolution Approving the Execution of a Cooperative Agreement for Advance and
Reimbursement of Administrative, Overhead, and Other Expenses by and Between
the City and the Successor Agency, and (2) Successor Agency Board Adoption of
a Resolution Approving Proposed Administrative Budgets and Approving the
Execution of a Cooperative Agreement for Advance and Reimbursement of
Administrative, Overhead, and Other Expenses by and Between the City and the
Successor Agency and Taking Certain Other Actions.
Contact Person/Dept.:
Jeff Muir/Finance
Phone Number:
(310) 253-5865
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Meetings and Agendas – City Council (03/30/2012); (E-Mail)
Meetings and Agendas – Successor Agency (03/30/12)
Department Approval:
Jeff Muir (03/28/12)
City Attorney/Successor Agency General
Counsel Approval:
Carol Schwab (by H. Baker) (03/28/12)
City and Successor Agency Special
Counsel Approval:
Murray Kane (03/30/12)
Chief Financial Officer Approval:
Jeff Muir (03/28/12)
City Manager Approval:
John Nachbar (03/30/12)
RECOMMENDATION:
Staff recommends the following:
1. That the City Council adopt a Resolution approving the execution of a
Cooperative Agreement for Advance and Reimbursement of Administrative,
Overhead and Other Expenses by and between the City and the Successor
Agency; and
2. That the Board of Directors of the Successor Agency to the Culver City
Redevelopment Agency adopt a Resolution approving proposed administrative
budgets and approving the execution of a Cooperative Agreement for Advance
and Reimbursement of Administrative, Overhead, and Other Expenses by and
between the City and the Successor Agency and taking certain other actions.
City of Culver City, California
Agenda Item Report
BACKGROUND:
Upon dissolution of the Culver City Redevelopment Agency (CCRA) on February 1,
2012 pursuant to AB X1 26 (AB 26), the Successor Agency to the Culver City
Redevelopment Agency (Successor Agency) was constituted and is governed by a
board of directors consisting of the members of the City Council.
Pursuant to AB 26, the Successor Agency is required to undertake a number of
actions, including winding down the affairs of the former CCRA. For example, the
Oversight Board for the Successor Agency may direct the staff of the Successor
Agency to perform work in furtherance of the Oversight Board’s duties and
responsibilities under AB 26, and the Successor Agency must pay for all of the costs
of meetings of the Oversight Board. In addition, the Successor Agency will have a
number of ongoing responsibilities, such as paying debt service on enforceable
obligations of the former CCRA and preparing an administrative budget and
Recognized Obligation Payment Schedule (ROPS) for each six-month fiscal period.
The Successor Agency also must ensure compliance with agreements and
covenants of existing contracts and obligations.
DISCUSSION:
Each proposed administrative budget must include all of the following: (1) estimated
amounts for Successor Agency administrative costs for the applicable six-month
fiscal period; (2) proposed sources of payment for the administrative costs; and (3)
proposals for arrangements for administrative and operations services provided by
the City or other entity.
AB 26 provides that the Successor Agency may include the cost of Oversight Board
meetings in its administrative budgets, but otherwise does not specify which
expenses are appropriate for including in the administrative budget. However,
allowable administrative expenses likely include, among others, the costs associated
with City staff performing duties on behalf of the Successor Agency, including
employee retirement and other benefits, necessary for the administration and
operations of the Successor Agency; and the cost of other resources of the City
necessary for the administration and operations (including legal expenses and other
consultant costs) of the Successor Agency, such as office space, supplies,
equipment, utilities, and insurance. Staff recommends that the Successor Agency
and the City enter into an agreement whereby the City will provide these services to
the Successor Agency and then invoice the Successor Agency for the associated
costs.
AB 26 provides for an “Administrative Cost Allowance” to be paid annually to the
Successor Agency of up to 5 percent of the property tax allocated to the successor City of Culver City, California
Agenda Item Report
agency for the 2011/2012 fiscal year and up to 3 percent of the property tax
allocated to the Redevelopment Obligation Retirement Fund for each fiscal year
thereafter, but not less than $250,000 a year. However, in the event there are
insufficient funds to pay the former CCRA’s enforceable obligations, some or all of
the Administrative Cost Allowance will be used to pay for the enforceable
obligations, and these funds will not be available for administrative expenses of the
Successor Agency.
The Administrative Cost Allowance will exclude any administrative costs that can be
paid from bond proceeds or from sources other than property tax. However, the use
of bond proceeds to pay administrative expenses is subject to certain limitations.
The first administrative budget is for the six-month fiscal period commencing on
January 1, 2012 and ending on June 30, 2012, and the second administrative
budget is for the six-month fiscal period commencing on July 1, 2012 and ending on
December 31, 2012. The Successor Agency is required to submit each proposed
administrative budget to the Oversight Board for its approval. The Successor Agency
is also required to provide administrative cost estimates from its approved
administrative budget that are to be paid from property tax revenues deposited in the
Redevelopment Property Tax Trust Fund of the County to the County Auditor-
Controller for each six-month fiscal period.
AB 26 and the California Department of Finance are unclear as to timing, but staff
recommends that the Successor Agency Board approve the administrative budgets
for the first two six-month fiscal periods for submittal to the Oversight Board (as soon
as that Board has a quorum of members appointed) for its approval.
Should the Successor Agency Board adopt the attached Successor Agency
Resolution, the proposed administrative budgets for the first two six-month fiscal
periods, which are attached as Exhibits A and B to the proposed resolution, would
be approved.
The attached Successor Agency Resolution also approves the Cooperative
Agreement for Advance and Reimbursement of Administrative, Overhead and Other
Expenses between the City and the Successor Agency attached as Exhibit C. As
discussed above, the proposed administrative budgets must include proposals for
arrangements for administrative and operations services provided by the City or
another entity. The Cooperative Agreement provides for the Successor Agency to
use the City’s staff, facilities, other resources and legal and other consultants, for the
administration and operations of the Successor Agency and for the Successor
Agency to reimburse the City for such advances. The Administrative Budget and
Cooperative Agreement must also be approved by the Oversight Board.
City of Culver City, California
Agenda Item Report
FISCAL ANALYSIS:
As discussed above, AB 26 provides for the Successor Agency to receive an annual
Administrative Cost Allowance of up to 5 percent of the property tax allocated to the
successor agency for the 2011/2012 fiscal year and up to 3 percent of the property
tax allocated to the Redevelopment Obligation Retirement Trust Fund of the County
for each fiscal year thereafter, but not less than $250,000 a year. The County’s
current position, as represented to staff, is that it will not be providing funding to the
Successor Agency for the January through June period and expects these costs to
be funded by prior tax increment or other sources. Staff does not agree with this
position, and has prepared an administrative budget for this period. To estimate
what the maximum 3% Administrative Cost Allowance might be, staff looked at the
last year of former tax increment receipts. Adjusting for pass-through payments now
being made by the County, staff estimates the maximum available to the Successor
Agency for the Administrative Cost Allowance for Fiscal Year 2012/2013 and
thereafter is slightly over $1 million. However, the allowances are subject to
reduction if there are insufficient funds to pay the former Redevelopment Agency’s
enforceable obligations. This is significantly less than the former Redevelopment
Agency’s costs for administration, and the proposed administrative budget has been
adjusted accordingly. The administrative budget does not include funding for
specific project work, and staff time associated with such project-specific work will be
paid for as part of the project budget.
ATTACHMENTS:
1. Proposed City Council Resolution with Exhibit ‘A’.
2. Proposed Successor Agency Resolution with Exhibits ‘A’, ‘B’ and ‘C’.
MOTION:
That the City Council:
Adopt a Resolution approving the Cooperative Agreement for Advance and
Reimbursement of Administrative, Overhead, and Other Expenses by and
Between the City and the Successor Agency.
AND
That the Successor Agency Board:
Adopt a Resolution approving proposed Administrative Budgets and a
Cooperative Agreement for Advance and Reimbursement of Administrative,
Overhead, and Other Expenses between the City and the Successor Agency and
taking certain other actions.
MEETING DATE: April 2, 2012
AGENDA ITEM: (1) City Council Adoption of a Resolution Approving the
Execution of a Cooperative Agreement for Advance and
Reimbursement of Administrative, Overhead, and Other
Expenses by and Between the City and the Successor
Agency, and (2) Successor Agency Board Adoption of a
Resolution Approving Proposed Administrative Budgets and
Approving the Execution of a Cooperative Agreement for
Advance and Reimbursement of Administrative, Overhead,
and Other Expenses by and Between the City and the
Successor Agency and Taking Certain Other Actions.
ATTACHMENTS
Pages
1. Proposed City Council Resolution with Exhibit ‘A’ ............................... 1 – 5
2. Proposed Successor Agency Resolution with Exhibits ‘A’, ‘B’ and ‘C’ . 6 – 15
Page 1 Page 2 Page 3 Page 4 Direct Staff Costs FTE
FY 11-12
(Jan-June)
Redevelopment Administrator 0.70 58,917
Economic Development Manager 0.84 54,583
Mgmt Analyst 0.50 32,083
Project Manager 0.75 48,125
Project Manager 0.75 48,125
Associate Analyst 1.00 42,083
CDD Director 0.25 21,950
Sr. Mgmt Analyst 0.75 45,938
Mgmt Analyst 0.75 47,917
City Manager 0.15 18,954
Assistant City Manager - City Clerk 0.10 10,583
CFO 0.15 13,974
Sr. Mgmt Analyst-Finance 0.15 9,375
6.84 452,607
Direct O&M
Contractual Services (Legal, Consulting) 125,000
Successor Agency/Oversight Board Meeting Costs 2,500
Office Supplies 5,000
132,500
Total Direct Costs 585,107
Indirect Cost Allocation (25%) 146,277
Total Cost 731,383
Exhibit 'A' Culver City Successor Agency Administrative Budget
January 1, 2012 through June 30, 2012
Page 5Page 6 Page 7 Page 8 Page 9 Page 10 Direct Staff Costs FTE
FY 11-12
(Jan-June)
Redevelopment Administrator 0.70 58,917
Economic Development Manager 0.84 54,583
Mgmt Analyst 0.50 32,083
Project Manager 0.75 48,125
Project Manager 0.75 48,125
Associate Analyst 1.00 42,083
CDD Director 0.25 21,950
Sr. Mgmt Analyst 0.75 45,938
Mgmt Analyst 0.75 47,917
City Manager 0.15 18,954
Assistant City Manager - City Clerk 0.10 10,583
CFO 0.15 13,974
Sr. Mgmt Analyst-Finance 0.15 9,375
6.84 452,607
Direct O&M
Contractual Services (Legal, Consulting) 125,000
Successor Agency/Oversight Board Meeting Costs 2,500
Office Supplies 5,000
132,500
Total Direct Costs 585,107
Indirect Cost Allocation (25%) 146,277
Total Cost 731,383
Exhibit 'A' Culver City Successor Agency Administrative Budget
January 1, 2012 through June 30, 2012
Page 11Direct Staff Costs FTE
FY 12-13
(July-Dec)
Ecnomic Development Administrator 0.70 70,700
Economic Development Manager 0.70 54,583
Project Manager 0.70 53,900
CDD Director 0.30 31,608
Sr. Mgmt Analyst 0.60 44,100
Mgmt Analyst 0.70 53,667
City Manager 0.15 22,744
Assistant City Manager - City Clerk 0.10 12,700
CFO 0.15 16,769
Sr. Mgmt Analyst-Finance 0.15 11,250
4.25 372,021
Direct O&M
Contractual Services (Legal, Consulting) 75,000
Successor Agency/Oversight Board Meeting Costs 7,500
Office Supplies 4,000
86,500
Total Direct Costs 458,521
Indirect Cost Allocation (25%) 114,630
Total Cost 573,151
Exhibit 'B'
Culver City Successor Agency Administrative Budget
July 1 through December 31, 2012
Page 12 -1-
81000-0172\1435839v1.doc
COOPERATIVE AGREEMENT FOR ADVANCE AND REIMBURSEMENT OF
ADMINISTRATIVE, OVERHEAD AND OTHER EXPENSES
This COOPERATIVE AGREEMENT FOR ADVANCE AND REIMBURSEMENT OF
ADMINISTRATIVE, OVERHEAD AND OTHER EXPENSES (this “Agreement”) is entered
into as of February 1, 2012, by and between the City of Culver City the “City”) and the
Successor Agency to the Culver City Redevelopment Agency (the “Successor Agency”).
R E C I T A L S:
A. The Successor Agency is required to undertake a number of actions pursuant to Part 1.85
of the Community Redevelopment Law (commencing with Health and Safety Code
Section 34170) (“Part 1.85”), including winding down the affairs of the former Culver
City Redevelopment Agency (“Agency”) pursuant to Health and Safety Code Section
34177(h).
B. Pursuant to Health and Safety Code Section 34171(d)(1)(F), contracts or agreements
necessary for the administration or operation of the Successor Agency are enforceable
obligations.
C. Pursuant to Health and Safety Code Sections 34178(a) and 34180(h), with the approval of
the oversight board, the Successor Agency may enter into agreements with the City.
D. In connection with the administration and operations of the Successor Agency, the
Successor Agency is and will be utilizing the staff, facilities, and other resources of the
City.
E. The City Manager of the City serves as Executive Director of the Successor Agency, the
Chief Financial Officer serves as Finance Officer of the Successor Agency, and the City
Clerk serves as Secretary to the Successor Agency. Community Development, Finance,
Public Works, and other City departments devote and are expected to devote substantial
time with respect to the administration and operations of the Successor Agency, including
gathering information relating to the Agency’s enforceable obligations, conferring with
public officials representing governmental agencies, and undertaking other activities in
connection with winding down the affairs of the Agency.
F. By providing and making available to the Successor Agency the staff, facilities, services,
and other resources of the City, including, without limitation, consultants, legal counsel,
office space, equipment, supplies, and insurance, necessary to the administration and
operations of the Successor Agency, the City has advanced and will continue to advance
the cost of the foregoing to the Successor Agency.
G. The City and the Successor Agency desire to enter into this Agreement to acknowledge
the foregoing recitals and to provide for an appropriate method of reimbursement of such
advances by the Successor Agency to the City.
Page 13 -2-
81000-0172\1435839v1.doc
NOW, THEREFORE, THE PARTIES DO HEREBY AGREE AS FOLLOWS:
Section 1. The City shall make available to the Successor Agency its staff,
facilities, services, and other resources, including, without limitation, consultants, legal counsel,
office space, equipment, supplies, and insurance, necessary to the administration and operations
of the Successor Agency. The Successor Agency shall have access to the foregoing staff,
facilities, services, and other resources of the City.
Section 2. The value of the City staff, including all employee retirement and
other benefits, facilities, services, and other resources of the City, including, without limitation,
office space, equipment, supplies, and insurance, necessary to the administration and operations
of the Successor Agency made, and to be made, available to the Successor Agency for each six-
month fiscal period beginning with the fiscal period commencing on January 1, 2012 and ending
on June 30, 2012, determined in accordance with Section 3 hereof, shall constitute an advance to
the Successor Agency by the City for each six-month fiscal period, to be repaid in accordance
with Section 4 of this Agreement.
Section 3. The City Manager has caused to be prepared a cost accounting
plan attached hereto as Exhibit A and incorporated herein by reference, based upon reasonable
allocations and generally accepted cost accounting principles, documenting the value of the City
staff, including all employee retirement and other benefits, and the facilities, services, and other
resources of the City made, or to be made available, to the Successor Agency pursuant to Section
1 hereof for each six-month fiscal period beginning with the fiscal period commencing on
January 1, 2012 and ending on June 30, 2012. For each six month fiscal period, or such other
times as the City Manager deems appropriate, the City Manager shall review or cause to be
reviewed the cost accounting plan for its accuracy in reflecting the value of City staff and
resources advanced to the Successor Agency. The City Manager shall revise the cost accounting
plan as he or she determines is necessary based on such periodic review.
Section 4. Within 60 days following the end of each six month fiscal period,
beginning with the fiscal period commencing on January 1, 2012 and ending on June 30, 2012,
the Successor Agency shall pay the City the amount of the reimbursement set forth in Exhibit A
from available funds of the Successor Agency.
Section 5. The parties hereto agree to take all appropriate steps and execute
any documents which may reasonably be necessary or convenient to implement the intent of this
Agreement. The Successor Agency shall ensure the value of staff and resources advanced by the
City is listed on each Recognized Obligation Payment Schedule.
Section 6. Each party shall maintain books and records regarding its duties
pursuant to this Agreement. Such books and records shall be available for inspection by the
officers and agents of the other party at all reasonable times.
Section 7. This Agreement is made in the State of California under the
Constitution and laws of the State of California, and is to be so construed.
Section 8. This Agreement will be become effective upon approval of the
Oversight Board to the Successor Agency.
Page 14 -3-
81000-0172\1435839v1.doc
Section 9. This Agreement may be amended at any time, and from time to
time, if such amendment is in writing, duly executed by both parties to this Agreement and
approved by the Oversight Board to the Successor Agency.
SUCCESSOR AGENCY TO THE CULVER CITY
REDEVELOPMENT AGENCY
By
Executive Director
ATTEST:
Secretary
CITY OF CULVER CITY
By
City Manager
ATTEST:
City Clerk
I hereby certify that pursuant to an action taken by the Oversight Board to the Successor Agency
to the Culver City Redevelopment Agency in a duly noticed and public meeting that this
Agreement was approved by said Oversight Board by the following vote on __________, 2012:
Ayes:
Noes:
Abstain:
Absent:
CERTIFICATION OF APPROVAL BY OVERSIGHT BOARD:
______________________________ ___________________________________
Secretary to the Oversight Board Dated
to the Successor Agency to the
Culver City Redevelopment Agency
Page 15