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HomeMy Public PortalAboutA 2012-06-05OB_LSAThis Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603 -0220, ext. 200. DEVELOPMENT A( AGENDA REGULAR MEETING JUNE 5, 2012 3:00 P.M. RECEIVED MAY 3 1 2012 COUNCIL CHAMBERS LYNWOOD CITY HALL 11330 BULLIS ROAD, LYNWOOD, CA 90262 LUIS VALENZUELA CHAIR DR. KEITH CURRY VICE CHAIR MALCOLM BENNETT BOARD MEMBER SARAH MAGANA WITHERS BOARD MEMBER OPENING CEREMONIES 1 2. 3. CALL TO ORDER CERTIFICATION OF AGENDA POSTING BY CITY CLERK ROLL CALL OF BOARD MEMBERS Michelle Banks - Ordone Malcolm Bennett Bruno Naulls Sarah Magana Withers Peter Wong Dr. Keith Curry Luis Valenzuela PLEDGE OF ALLEGIANCE CITY OF LYNWOOD CITY CLERKS OFFICE IV\ A f � U Q. N 4` ' C ; },, cl« k sn G.o- MICHELLE BANKS - ORDONE BOARD MEMBER BRUNO NAULLS BOARD MEMBER PETER WONG BOARD MEMBER 5. PRESENTATIONS PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) NON - AGENDA PUBLIC ORAL COMMUNICATIONS THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE OVERSIGHT BOARD ON ITEMS WITHIN THE JURISDICTION OF THE OVERSIGHT BOARD AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY THE BOARD, BUT THE BOARD MAY REFER THE MATTER TO THE STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).) NEW BUSINESS 6. MINUTES OF PREVIOUS MEETINGS: Regular Meeting —April 23, 2012 Special Meeting — May 2, 2012 LEGAL STATUS AND ROLE OVERVIEW Comments: The Redevelopment Dissolution Act, ABx1 26 requires that each successor agency have an Oversight Board, but does not make any provision for hiring separate legal counsel for the Board. No funding is provided under the Dissolution Act for payment for either the Successor Agency's costs related to Oversight Board meetings or for separate legal counsel. Recommendation: Staff recommends the Oversight Board receive an overview from Successor Agency legal counsel regarding the legal status, immunity and role of the Oversight Board for informational purposes only. No legal advice will be given to, or shall be deemed to be given to the Oversight Board. Upon conclusion, the Oversight Board will determine need of outside legal counsel and take action as deemed necessary. OVERSIGHT BOARD ITEMS NONE ADJOURNMENT THE NEXT REGULAR OVERSIGHT BOARD MEETING WILL BE HELD ON JUNE 19, 2012 AT 3:00 P.M. IN THE COUNCIL CHAMBERS OF THE CITY HALL, 11330 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA. Page 2 AGEN ST REP o, �fre,:cu�a� \v DATE: June 5, 2012 TO: Honorable Chair and Members of the O rsight Board APPROVED BY: Roger L. Haley, City Manage PREPARED BY: Rhonda Rangel, County Clerk to the Lynwood Oversight Board SUBJECT: Notification of First Oversight Board Meeting Recommendation: Staff recommends the Lynwood Oversight Board approve the following minutes: • Regular Meeting - April 23, 2012 • Special Meeting - May 2, 2012 Background: N/A Discussion & Analysis: N/A Fiscal Impact: N/A Coordinated With: N/A ITEM A OVERSIGHT BOARD TO THE SUCCESSOR AGENCY TO THE DISSOLVED LYNWOOD REDEVELOPMENT AGENCY MINUTES MONDAY, APRIL 23, 2012 3:00 P.M. COUNCIL CHAMBERS LYNWOOD CITY HALL 11330 BULLIS ROAD, LYNWOOD, CA 90262 1. CALL TO ORDER The meeting was called to order at 3:15 p.m. 2. CERTIFICATION OF AGENDA POSTING BY CITY CLERK Ms. Kristina Santana, Deputy City Clerk confirmed that the Agenda was posted correctly. 3. ROLL CALL OF BOARD MEMBERS Board Members Present Bruno Naulls Sarah Magana Withers Luis Valenzuela Peter Wong Dr. Keith Curry (joined the meeting at 3:32 p.m.) 4. PLEDGE OF ALLEGIANCE Board Member Valenzuela led the Pledge of Allegiance 5. PRESENTATIONS Board Members Naulls, Valenzuela, Withers, Wong, and Curry provided brief introductions and the following staff members were also introduced: • Roger Haley, City Manager • Robert Torrez, Assistant City Manager • Fred Galante, City Attorney • Lorry Hempe, Budget & Intergovernmental Relations Manager, City of Lynwood • Olivia Segura, Deputy Director of Community Development. • Regina Brooks, Executive Assistant, Community Development. • Susan Trejo, Administrative Assistant, Community Development. • Annette Potts, Deputy Director of Administrative Services Lynwood Oversight Board 4 -23 -12 Page 2 PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) There were no public comments. NEW BUSINESS OVERVIEW OF LEGAL STATUS AND PURPOSE OF OVERSIGHT BOARD Fred Galante, City Attorney, provided an overview of the legal status and purpose of the oversight board. The following information was presented: ABX1 26, passed in June 2011, effectively dissolved all of the redevelopment agencies throughout California and also set forth legal requirements that the successor agencies have to perform during the wind -down process. On February 1, 2012, the Matosantos case adjusted most of the deadlines by about four months. • ABX1 26 also has very specific parameters on who will serve on the Oversight Board. The LA County has three appointments, there is one appointment for the Chancellor of the Community College, one from the city's unified school district, and lastly there are two appointments from the Mayor. • Under ABX1 26, the Successor Agency is given the charge to wind down any operations created by the former redevelopment agency. They are supposed to dispose assets in a manner that would maximize value. T; eFe are alsa tornelines due that will help the S ,eeessGr AgeRGy de what they a suppe to e efficiently a poss On motion of Board Member Wong, seconded by Board member Naulls, unanimously carried, the report was received and filed. 7. ADOPTION OF RULES OF PROCEDURE OF THE OVERSIGHT BOARD On motion of Board Member Withers, seconded by Board Member Wong, the Board unanimously approved to adopt Robert's Rules of Order as the Board's rules of parliamentary procedure. 8. ELECTION OF OVERSIGHT BOARD CHAIR AND VICE CHAIR AND APPOINTMENT OF A SECRETARY Lorry Hempe, Budget and Intergovernmental Relations Manger, reported that ABX1 26 requires the Oversight Board to appoint a Chair for the Board and to provide information to the Department of Finance. Therefore, a Chair and a Vice Chair must be appointed as well as a direct contact person for the Department of Finance. The County has already provided a clerk to serve as a secretary to the Board. Lynwood Oversight Board 4 -23 -12 Page 3 Board Member Withers recommended that an alternate secretary be assigned from the City of Lynwood such as the City Clerk. Ms. Rhonda Rangel, County Board of Supervisors, Executive Office, stated that the Board has the option to decide what functions of the County clerk will be needed at meetings. On Motion of Board Member Withers, seconded by Board Member Dr. Curry, the Board approved to appoint the County Clerk as the main secretary for the Board and the City Clerk or designee as the alternate with the following vote: Ayes: Board Member Valenzuela, Board Member Withers, Board Member Dr. Curry, Board Member Naulls, Board Member Wong. Noes: None Abstentions: None Nominations were opened from the floor for Chair. Board Member Valenzuela was elected as Chair of the Oversight Board by the following vote: Ayes: Board Member Valenzuela, Board Member Withers, Board Member Dr. Curry, Board Member Naulls, Board Member Wong. Noes: None Abstentions: None Nominations were opened from the floor for Vice Chair. Board Member Curry was elected as Vice Chair of the Oversight Board by the following vote: Ayes: Board Member Valenzuela, Board Member Withers, Board Member Dr. Curry, Board Member Naulls, Board Member Wong. Noes: None Abstentions: None 9. ADOPTION OF A FIRST RECOGNIZED OBLIGATION PAYMENT SCHEDULE AND SCHEDULING A SPECIAL MEETING PRIOR TO MAY 4, 2012 TO ADOPT A SECOND RECOGNIZED OBLIGATION PAYMENT SCHEDULE Lorry Hempe, Budget and Intergovernmental Relations Manger, provided an overview of the Staff Report "Adoption of a First Recognized Obligation Payment Schedule (ROPS) and Scheduling a Special Meeting Prior to May 4, 2012 to adopt a Second Recognized Obligation Payment Schedule." The ROPS is a schedule of payments and is divided by several six month periods. The timing for Lynwood Oversight Board 4 -23 -12 Page 4 the deadlines is off because of the time that his bill spent in the Supreme Court causing these deadlines to be extended by four months. The ROPS is prepared by the Successor Agency and then approved by the Oversight Board, and finally, submitted to the Department of Finance, the County Auditor - Controller, and the State Controller office for approval. The staff recommends that a special meeting be called on May 4 so that the ROPS for the next six month can be prepared in a timely manner. Fred Galante, City Attorney, also reiterated the importance of adhering to the timelines and answered questions posed by the Board. Board Member Naulls clarified the definition of the EOPS and the ROPS. He explained that the EOPS are the "master plan" of the Successor Agency and that it shows obligations that are needed to be paid during the wind -down process of the Redevelopment Agencies (RDA's). The ROPS are the disbursements of the funds that are needed to pay the obligations in the EOPS. Lorry Hempe, City staff, further clarified that the ROPS does take over the EOPS. The purpose of the EOPS is a road map of needs to be paid by the ROPS. Eventually the ROPS will take over the EOPS and the EOPS will cease to exist. Board Member Wong asked for clarification if the items listed in the ROPS were all inherited from the former RDA. Ms. Hempe explained that the items on the ROPS were inherited from the former RDA and that the Successor Agency has not entered into any new agreements. However, the RDA is entitled to receive funds for their administrative budget and that is the reason why the Board will see items based on the staffing of the Successor Agency. On Motion of Board Member Withers, seconded by Board Member Naulls, the item was approved with the following vote: Ayes: Chair Valenzuela, Vice Chair Dr. Curry, Board Member Withers, Board Member Naulls, Board Member Wong. Noes: None Abstentions: Board Member Withers for Line Item 49 and Board Member Naulls for all line items representing staffing costs. 10. APPROVAL OF THE ADMINISTRATIVE BUDGET FOR FY 2011 -12 Lorry Hempe, City Staff, provided information regarding the ABX1 26 and administrative costs. It is the Successor Agency's responsibility to create and present an administrative budget and that there is a minimum of $250,000 in addition to the 5 % tax increment that the County Auditor will be providing. Lynwood Oversight Board 4 -23 -12 Page 5 Board Member Wong asked for clarification regarding the costs of the Oversight Board as to whether or not they are included in the budget since the items are dated June 2011 through December 2011. Ms. Hempe explained that although though the Oversight Board was just formed, former RDA staff and City staff have been performing Administrative services since the passing of ABX1 26 in June 2011. Chair Valenzuela asked for clarification regarding the Administrative Budget amount of $352, 744 as to whether or not it was the amount allotted by ABX 1 26. Ms. Hempe clarified that the amount is the allotted 5 %. She added that that the actual costs for administrative services is closer to $500,000 and , due to this administrative cap, the City will have to find a way to fund the gap. On Motion of Board Member Wong, seconded by Board Member Withers the item was approved with the following vote: Ayes: Chair Valenzuela, Vice Chair Dr. Curry, Board Member Withers, Board Member Naulls, Board Member Wong. Noes: None Abstentions: Board Member Withers for items related to Line Item 49 of the 1 5t ROPS and Board Member Naulls for all line items representing staffing costs. 11. DESIGNATING OF CONTACT PERSON FOR DEPARTMENT OF FINANCE INQUIRIES Lorry Hempe, City Staff, introduced Roger Haley, City Manger and Robert Torrez, Assistant City Manager and recommended that the Oversight Board designate the Lynwood City Manager as the official who shall serve as the contact person to respond to the State Department of Finance inquiries regarding Oversight Board actions. On Motion of Board member Withers, seconded by Board Member Naulls the item was approved with the following vote: Ayes: Chair Valenzuela, Vice Chair Dr. Curry, Board Member Withers, Board Member Naulls, Board Member Wong. Noes: None Lynwood Oversight Board 4 -23 -12 Page 6 12. ESTABLISHING THE DATE, TIME, AND LOCATION FOR REGULAR MEETINGS OF THE OVERSIGHT BOARD Lorry Hempe, City Staff, recommended that the meetings be set for the first and third Tuesday of the month and reminded the Board that the second meeting will only be necessary during the first few months. Vice Chair Curry requested that meeting notifications be sent out three to four weeks in advance if the meeting scheduled will or will not take place. On motion of Board Member Withers, Seconded by Vice Chair Curry, the Board approved to schedule a Special Meeting on May 2, 2012 and reserved the first and third Tuesday of August to approve the second half of the Fiscal Year 2012- 2013 ROPS and reserved the first and third of each month as needed, with the following vote: Ayes: Chair Valenzuela, Vice Chair Dr. Curry, Board Member Withers, Board Member Naulls, Board Member Wong. Noes: None 13. ADOPTION OF RESOLUTION ADOPTING A CONFLICT OF INTEREST CODE FOR THE OVERSIGHT BOARD Fred Galante, City Attorney, provided a brief explanation regarding the need for a conflict of interest code. Each Board member and the secretary of the Board would need to file a 700 form to disclose if they have any financial interest in the jurisdiction of this Oversight Board. On Motion of Board Member Wong, seconded by Board Member Withers, the item was approved with the following vote: Ayes: Chair Valenzuela, Vice Chair Dr. Curry, Board Member Withers, Board Member Naulls, Board Member Wong. Noes: None OVERSIGHT BOARD ITEMS The Staff reassures the Board that the staff of the City of Lynwood is very organized and that if they have any questions regarding the Oversight Board duties or the ROPS, they are free to email the staff at any time. Chair Valenzuela requested the information from ABX1 26 that indemnifies each Lynwood Oversight Board 4 -23 -12 Page 7 Board member of their actions in the Oversight Board to be shared with each member. The staff reminded the Board that even if the City Attorney assists with the process of gathering information for the Board, he will not represent them legally because the Oversight Board is a separate entity altogether. Board Member Withers added that the Oversight Board does not have a final say since everything they approve will be under the review of the State Department of Finance. ADJOURNMENT On motion Board Member Wong, seconded by Board Member Withers, the meeting adjourned at 4:29 p.m. NEXT MEETING A Special Meeting to approve the 2 nd ROPS is scheduled for May 2, 2012 at 3:00 p.m. at Lynwood City Hall, Council Chambers,11330 Bullis Road, City of Lynwood, California. OVERSIGHT BOARD TO THE SUCCESSOR AGENCY TO THE DISSOLVED LYNWOOD REDEVELOPMENT AGENCY MINUTES WEDNESDAY, May 2, 2012 3:00 P.M. COUNCIL CHAMBERS LYNWOOD CITY HALL 11330 BULLIS ROAD, LYNWOOD, CA 90262 1. CALL TO ORDER The meeting was called to order at 3:09 p.m. 2. CERTIFICATION OF AGENDA POSTING BY CITY CLERK Ms. Kristina Santana, Deputy City Clerk confirmed that the Agenda was posted correctly. 3. ROLL CALL OF BOARD MEMBERS Board Members Present Bruno Naulls Sarah Magana Withers Luis Valenzuela Dr. Keith Curry Michelle Banks - Ordone Malcolm Bennett Peter Wong (joined the meeting at 3:17 p.m.) 4. PLEDGE OF ALLEGIANCE Chair Valenzuela led the Pledge of Allegiance 5. PRESENTATIONS Board Members Banks - Ordone and Bennett provided a brief introduction of themselves. Chair Valenzuela also welcomed Roger Haley, City Manager. PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) There were no public comments. Lynwood Oversight Board 5 -2 -12 Page 2 NEW BUSINESS 6. ADOPTION OF A SECOND RECOGNIZED OBLIGATION PAYMENT SCHEDULE AND AMENDMENT TO THE FIRST RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) Lorry Hempe, City Staff, reported to the Board that the Department of Finance requested that the ROPS be in their suggested format which was different from the ROPS that were reviewed at the April 23, 2012 Board meeting. Ms. Hempe also refreshed the Board on the timeline and pertinent deadlines since the passing of ABX1 26. (Board Member Wong arrived at 3:17 p.m.) Board Member Naulls pointed out that the Line Item 59 on the July 1, 2012 to December 31, 2012 ROPS has an incorrect amount of $350,000 in the 'Total FY13 (Jul -12 to Jun13)" column. The correct amount should be $323, 011 which matches the amount in the 'Total Due During Fiscal Year (FY13)" Column. Staff was instructed to make the correction. Board Member Bennett and Wong asked for clarification as to whether the amendments made to the first ROPS were just the formatting changes. Fred Galante, City Attorney, responded that there have also been changes to the dollar amounts on the ROPS and Ms. Hempe added that the Successor Agency has adopted the First and Second ROPS and is asking for the Boards approval as continues to go through the review process by the County and Department of Finance. Board Member Banks- Ordone, requested a detailed description of the vendors and projects referenced in Line 57 'Bond Funded Projects" of the Second ROPS. Mr. Galante, City Attorney, provided an example, referencing Line 26 of the Second ROPS, stating that there has been extensive remediation on the project and the bond document lists all of the various improvements. Board Member Banks - Ordone requested to view the documents. She is also requesting that a categorized listing of administration and staffing and how the relationship to the projects. Additionally, Staff was instructed to breakdown the vendors /projects specifically for the bond funded projects. Chair Valenzuela voiced concerns that legal counsel is something that the Board needs to consider and that a line item should be added to the ROPS for Legal Counsel. Board Member Withers recommended that a discussion on adding a line for Legal Counsel on the next ROPS be added to the next meeting agenda. Board Member Wong suggested that staff be directed to start the process on researching options for legal counsel for the Board. Lynwood Oversight Board 5 -2 -12 Page 3 Board Member Dr. Curry also suggested that an item be place on the next agenda to amend the first ROPS and that the Board should do research regarding legal counsel and then they can go back and amend the First ROPS. On Motion of Board Member Withers, seconded by Board Member Wong, the Board approved the Second ROPS and the First ROPA with the following amendments, directives, and vote: Correct line item 59 in the First ROPS to reflect the Total FY13 (Jul -12 to Jun13) as being $323, 011; Instruct the Chair to certify the Cover Sheet for Exhibit A and B with his signature 3. Note that the approval of the First and Second ROPS by the Oversight Board is pending final review by the County, State Controller and Department of Finance. 4. Instruct the Staff to agendize a discussion item regarding legal counsel for Oversight Board on the May 24, 2012. Ayes: Chair Valenzuela, Vice Chair Dr. Curry, Board Member Withers, Board Member Naulls, Board Member Wong, Board Member Banks - Ordone, Board Member Bennett Noes: None Abstentions: Board Member Withers for items related to Line Item 49 of the First ROPS, Board Member Naulls for all line items representing staffing costs in both ROPS and Board Member Bennett for items 21, 24, 29, and 30 in both ROPS. 7. APPROVAL OF THE SUCCESSOR AGENCY PROPOSED ADMINISTRATIVE BUDGET FOR FY 2012 -13 Lorry Hempe, staff member, provided a summary of the staff report regarding this item. Staff recommends an Administrative Budget of $323, 011 for FY 2012- 2013 which is a reduced amount from what staff estimates the actual costs would be. Staff also ensured that the 3% allowable funding cap for FY 2012 -13 has not been exceeded. The current proposed budget is a bear minimum amount that does not include items such as rent and audit fees for the preparation of the ROPS. The staffing costs on the proposed Administrative Budget for FY 2012- 2013 are related to administration only. The Board suggested that the item be amended to include that the approval of the Administrative Budget is pending the final review by the County and the State Department of Finance. Lynwood Oversight Board 5 -2 -12 Page 4 On Motion of Board Member Bennett, seconded by Board Member Wong the item was approved, as amended, with the following vote: Ayes: Chair Valenzuela, Vice Chair Dr. Curry, Board Member Withers, Board Member Naulls, Board Member Wong, Board Member Banks - Ordone, Board Member Bennett Noes: None Abstentions: Board Member Withers for items related to Line Item 49 of the 1st ROPS and Board Member Naulls for all line items representing staffing costs. OVERSIGHT BOARD ITEMS There were none. ADJOURNMENT On motion of Chair Valenzuela, and by common consent, there being no objection, the meeting was adjourned at 4:10 p.m. NEXT MEETING The next regular meeting is scheduled for May 24, 2012 at 3:00 p.m. at Lynwood City Hall, Council Chambers, 11330 Bullis Road, City of Lynwood, California. e AGENDA STAFF REPORI z:,kiv DATE: June 5, 2012 TO: Honorable Chair and Members of the Ov rsight Board APPROVED BY: Roger L. Haley, City Manag PREPARED BY: Olivia Segura, Deputy Director 0 SUBJECT: Legal Status and Role Overview Recommendation: Staff recommends the Oversight Board receive an overview from Successor Agency legal counsel regarding the legal status, immunity and role of the Oversight Board for informational purposes only. No legal advice will be given to, or shall be deemed to be given to the Oversight Board. Upon conclusion, the Oversight Board will determine need of outside legal counsel and take action as deemed necessary. Background: The Redevelopment Dissolution Act, ABx1 26 requires that each successor agency have an Oversight Board, but does not make any provision for hiring separate legal counsel for the Board. In fact, no funding is provided under the Dissolution Act for payment of either the Successor Agency's costs related to Oversight Board meetings or for separate legal counsel. For your reference, attached is California Health and Safety Code section 34179 through 34181 which regulates the formation and composition of oversight boards, the public meeting process, and fiduciary responsibilities of oversight boards. Actions taken by the Oversight Board are largely protected from legal action. Indeed, Section 34179 (d) clarifies that "Oversight board members shall have personal immunity from suit for their actions taken within the scope of their responsibilities as oversight board members." A copy of Section 34179 (d) of the Health and Safety Code is being provided as part of this agenda. ITEM -7- Discussion & Analysis: At the May 2, 2012, meeting of the Oversight Board to the Successor Agency, the board requested that the hiring of outside legal counsel be placed on a future agenda for consideration. As explained above, members of the Oversight Board are protected by the indemnity clause found at Section 34179 (d) of the Health and Safety Code for all actions taken within the scope of their duties. Accordingly, the Dissolution Act expressly protects the individual members of the board. Furthermore, given that the Dissolution Act does not provide any funding for the actions and operations of the Oversight Agency for any item, including the preparation of agendas, meeting minutes, travel, staff services, legal services or any other function, there is no funding in place or available for the retention of separate legal counsel. Should this Oversight Board seek such services, the funding would be a direct reduction in funding available for the Successor Agency or Oversight Board to perform its functions. Because these funds are already strained, as further explained in the Successor Agency Budget and Administrative Staff agenda items discussed at the meeting held on May 2, 2012, paying for separate legal counsel will use up the already limited funding to perform all functions necessary to the wind down of the former Lynwood Redevelopment Agency Health and Safety Code Section 34171(b) establishes a $250,000 annual floor for the Administrative Cost Allowance. It also establishes a ceiling calculated as 3% in FY 13 of property tax revenues. There is no guarantee that the Successor Agency will receive even the floor based on the hierarchy on how the County Auditor Controller must allocate property tax revenues. As such there is a direct relationship between the Successor Agency Administrative Budget and Cost Allowance and the City's General Fund. If less revenue is received by the City to fund staff salaries and benefits from the Administrative Cost Allowance there will be inadequate funds to pay for such costs. For example based on the funding the County Auditor Controller indicated it will provide to the Successor Agency from July — December 2012 there will not be sufficient revenue to cover the administrative costs, project costs, and payments to vendors listed on the ROPS and to make the first of the two bond payments that is due in the fall of FY 2012- 13. Additionally, on May 3, 2012 the County Auditor Controller issued a memo to all Oversight Board Members referencing the use of independent counsel. Among other details the memo states that if the OS Board legal fees exceed the administrative budget, the fees will not be allowed. The memo is attached for reference. Moreover, at this time, the Successor Agency does not foresee any legal disputes or controversies between itself and the Oversight Board. As such, there does not seem to be any pressing or foreseeable matters requiring attention or action by a separate legal representative. Any legal questions about procedure and the like may be clarified r 2 through the help of the Successor Agency's legal counsel. Obviously, if a controversy arises, the Oversight Board may revisit this matter. For this Board's reference, we attach some key legal provisions from the Dissolution Act so that the Board may understand the legal requirements applicable to its functions. Fiscal Impact: Any action by this Oversight Board to retain separate legal counsel will have the fiscal impact described above on the Successor Agency and Oversight Board. Coordinated With: City Attorney Finance Department Attachment ABx1 26 May 3, 2012 County Auditor Memo "Miscellaneous Clarifications' 3 KEY COMPONENTS OF AB1X 26 REGARDING LEGAL STATUS AND ROLE OF THE OVERSIGHT BOARD: • Oversight Boards are deemed a local governmental entity for purposes of the Brown Act, Political Reform Act, and Public Records Act. • All notices (including agendas) required by law for proposed Oversight Board actions are to be posted on the Successor Agency's website. • A majority of the total membership of the Oversight Board (i.e., 4 members) shall constitute a quorum for the transaction of business. • A majority of the total membership of the Oversight Board (i.e., 4 members) is required for the Oversight Board to take action. • Oversight Board members have personal immunity from suit for their actions taken within the scope of their responsibilities as Oversight Board members. • Oversight Board members receive no compensation or reimbursement for expenses for service on the Oversight Board. • Oversight Board members serve at the pleasure of the entity that made the appointment. • Oversight Board members may serve on up to five (5) Oversight Boards. • Notwithstanding Section 1099 of the Government Code, or any other law, any individual may simultaneously be appointed to an oversight board and hold an office in a city, county, city and county, special district, school district, or community college district. • The Successor Agency serves as the staff for the Oversight Board and Oversight Board may direct the staff of the Successor Agency to perform work in furtherance of the Oversight Board's duties and responsibilities. The cost for noticing and holding Oversight Board meetings are to be borne by the Successor Agency and may be included in the Successor Agency's administrative cost allowance. • Oversight Board must report the names of Chair, Vice Chair, and other members of the Oversight Board to the Department of Finance ( "DOF ") by May 1, 2012. The reporting will be done by the Board Secretary. • DOF may review the actions /decisions of the Oversight Board. • All Oversight Board actions shall not be effective for three (3) business days, pending a request for review by the DOF. In the event DOF requests review of a given Oversight Board action /decision, the DOF shall have ten (10) calendar N days from the date of its request to approve the action or reject it and return it to the Oversight Board for reconsideration and resubmittal to DOF. The modified Oversight Board action shall not be effective until approved by DOF. • Oversight Board terminates the earlier of (i) when all of the indebtedness of the former redevelopment agency has been repaid, or (ii) July 1, 2016. • If outstanding indebtedness of the former redevelopment agency still needs to be repaid as of July 1, 2016, on that date the existing Oversight Board terminates and a new Oversight Board takes over. As of that date there is one Oversight Board for all of the Successor Agencies within a county. The members of that replacement Oversight Board are: 1) one member appointed by the county board of supervisors; 2) one member appointed by the city selection committee; 3) one member appointed by the independent special district selection committee; 4) one member appointed by the county superintendent of education; 5) one member appointed by the Chancellor the California Community Colleges; 6) one member of the public appointed by the county board of supervisors; and 7) one member appointed by the recognized employee organization representing the largest number of successor agency employees in the county. • Oversight Board has a fiduciary responsibility to holders of enforceable obligations and the taxing entities that benefit from distributions of property tax and other revenues pursuant to Health and Safety Code Section 34188 (distribution from the Redevelopment Property Tax Trust Fund). • Oversight Board must approve Successor Agency actions set forth in Health & Safety Code Section 34180 (see Attachment). • Oversight Board is to direct the Successor Agency to perform the functions set forth in Health & Safety Code Section 34181 (see Attachment). 5 COUNTY OF LOS ANGELES DEPARTMENT OF AUDITOR - CONTROLLER KENNETH HAHN HALL OF ADMINISTRATION 500 WEST TEMPLE STREET, ROOM 525 LOS ANGELES, CALIFORNIA 90012 -3873 PHONE: (213) 974 -8301 FAX: (213) 6265427 May 3, 2012 ALL OVERSIGHT BOARD MEMBERS MISCELLANEOUS CLARIFICATIONS ASST. AUDITOR- CONTROLLERS ROBERT A DAMS JOHN NAIMO JAMES L. SCHNEIDERMAN JUDI E. THOMAS In order to expedite the process of the approval of the Recognized Obligation Payment Schedules (`BOPS ") by Oversight Boards ( "OS Board "), and in anticipation of the June 1, 2012 distribution of taxes to the taxing entities, we are sharing the following information, provided by the Department of Finance ( "DOF "), on specific issues that have been raised by Oversight Boards or the DOR BOPS Which Do Not Include January 2012 The DOF has returned to the OS Board a ROPS as incomplete if it does not contain January 2012 in the schedule. Thus, in order to prevent further delays, please ensure that the first ROPS approved includes the months of January through June of 2012. 2. Independent Counsel For Oversight Boards We understand certain OS Boards are making arrangements to hire independent legal counsel. A common question is where the independent counsel legal fees for the OS Board should appear on the ROPS. The DOF has informed us informally that these legal counsel fees are part of the 5% or 3% administrative fees of the Successor (, Agency and, as such, should be listed in that category. We further inquired as to whether the DOF will line out those fees if listed as a separate line item on the ROPS and the DOF has indicated that the DOF will line out the legal fees, to the extent that they exceed the allowable administrative budget Thus, should the OS Board legal fees exceed the 5% or 3% administrative budget, the fees will not be allowed. Conversely, if they are within the administrative budget allowed, the legal fees will be allowed to remain as a separate line item on a ROPS. 3. Housing Set -Aside Is Not A Continuina Obligation The low- moderate income housing set -aside is not a continuing obligation. Therefore, payments that would have been made for this purpose (if the redevelopment agency had continued to exist) should not appear on the ROPS. However, funds which RECEIVED Help Conserve Paper— Print Double -Sided MAy 0 9 2012 "To Enrich Lives Through Effective and Caring Service" CITY OF IRWINOALE 1.�A.XIrc n5-PT. All Oversight Board Members May 3, 2012 Page 2 would have been deposited into the Low -Mod Housing Fund to pay for enforceable housing obligations, such as payments for housing bond debt service, should be placed on the ROPS. Thank you for your cooperation in ensuring the ROPS approval proceeds in a timely manner. Very truly yours, Wendy L. VManabe Auditor- Controller WLW:JN:mv c: Each Supervisor All Cities/Successor Agencies in the County of Los Angeles