HomeMy Public PortalAboutA 2019-11-19 LHAThis 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.
Procedures for Addressing the Members of the Authority
IN ORDER TO EXPEDITE LYNWOOD HOUSING AUTHORITY BUSINESS, WE ASK THAT ALL PERSONS WISHING
TO ADDRESS THE COMMISSIONERS FILL OUT A FORM PROVIDED AT THE PODIUM, AND TO TURN IT IN TO
THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUR SUCH A FORM WILL
PROHIBIT YOU FROM ADDRESSING THE COMMISSIONERS IN THE ABSENCE OF THE UNANIMOUS CONSENT
OF THE COMMISSIONERS.
AGENDA
Lynwood Housing Authority
TO BE HELD ON
November 19, 2019
Duly Posted 11/14/19 by E.S. for M.Q
COUNCIL CHAMBERS - 11350 BULLIS RD. LYNWOOD, CA. 90262
6:00 PM
1.CALL TO ORDER
2.CERTIFICATION OF AGENDA POSTING BY SECRETARY
3.ROLL CALL OF MEMBERS
Jose Luis Solache, Chair
Aide Castro, Vice Chair
Salvador Alatorre, Commissioner
Jorge Casanova, Commissioner
Marisela Santana, Commissioner
PUBLIC ORAL COMMUNICATIONS
(Regarding Agenda Items Only)
NON-AGENDA PUBLIC ORAL COMMUNICATIONS
THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD HOUSING
AUTHORITY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD HOUSING AUTHORITY AND NOT
LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL
DISCUSSION OF THE ISSUE BY LYNWOOD HOUSING AUTHORITY, BUT LYNWOOD HOUSING AUTHORITY MAY
REFER THE MATTER TO STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The
Ralph M. Brown Act, Government Code Section 54954.2 (a).)
CONSENT CALENDAR
ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION
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AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON
THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC
ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION.
4.PREVIOUS MEETINGS MINUTES
Comments:
N/A
Recommendation:
Staff recommends the Lynwood Housing Authority approve the following minutes:
Regular Meeting November 5, 2019
5.APPROVAL OF AGREEMENT FOR A SETTLEMENT ADMINISTRATOR TO SATISFY
THE TERMS OF A SETTLEMENT AGREEMENT RELATING TO THE CONSTRUCTION
OF AFFORDABLE HOUSING
Comments:
The Lynwood Housing Authority will consider engaging Kealoha Consulting Corp to provide
administrative, monitoring, and reporting services for the development of affordable housing
project to satisfy Rogel I Obligations mandated by the Rogel Settlement Agreement (the
“Settlement Agreement”), which was entered into on February 10, 2017. Pursuant to the Rogel I
Judgment, until all Rogel I Obligations have been satisfied in full, the Agency shall engage a mutually
agreed upon third party Administrator to monitor all Rogel activity and report its findings to all parties
involved. (CD)
Recommendation:
Staff recommends that the City of Lynwood Housing Authority Board adopt the attached
resolution entitled "A RESOLUTION OF THE LYNW OOD HOUSING AUTHORITY AS
HOUSING SUCCESSOR TO THE LYNWOOD REDEVELOPMENT AGENCY APPROVING
THE ENGAGEMENT OF KEALOHA CONSULTING CORP, AS THE SETTLEMENT
ADMINISTRATOR, TO SATISFY THE TERMS OF A SETTLEMENT AGREEMENT RELATING
TO ROGEL, ET AL. V. STATE OF CALIFORNIA DEPARTMENT OF FINANCE, ET AL. AND
AUTHORIZE THE ALLOCATION OF UNAPPROPRIATED LOW MOD INCOME HOUSING
ASSET FUND (LMIHAF) BALANCE IN THE AMOUNT OF $150,000 TO COVER COST OF SAID
AGREEMENT", by a 4/5 vote.
ADJOURNMENT
THE LYNWOOD HOUSING AUTHORITY MEETINGS WILL BE POSTED AS NEEDED. THE
NEXT MEETING WILL BE HELD IN THE COUNCIL CHAMBERS OF THE CITY HALL ANNEX,
11350 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA.
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Agenda Item # 4.
AGENDA STAFF REPORT
DATE: November 19, 2019
TO: Honorable Mayor and Members of the City Council
APPROVED BY: Jose E. Ometeotl, City Manager
PREPARED BY: Maria Quinonez, City Clerk
Eduardo Sarmiento, Deputy City Clerk
SUBJECT: PREVIOUS MEETINGS MINUTES
Recommendation:
Staff recommends the Lynwood Housing Authority approve the following minutes:
Regular Meeting November 5, 2019
Background:
N/A
Discussion and Analysis:
N/A
Fiscal Impact:
N/A
Coordinated With:
N/A
ATTACHMENTS:
Description
LHA Regular Meeting November 5, 2019
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Lynwood Housing Authority Meeting
Meeting Minutes
November 5, 2019
01. CALL TO ORDER
The Lynwood Housing Authority Meeting - LHA of the City of Lynwood met in the Council
Chambers, 11350 Bullis Road, Lynwood, CA on the above date at 6:12 p.m.
Mayor Solache presiding.
02. CERTIFICATION OF AGENDA POSTING BY CITY CLERK
City Clerk Quinonez announced the Agenda had been duly posted in accordance with the
Brown Act.
03. ROLL CALL OF COUNCIL MEMBERS
PRESENT: COUNCIL MEMBERS ALATORRE, CASANOVA, SANTANA, MAYOR
PRO TEM CASTRO AND MAYOR SOLACHE
STAFF PRESENT: City Manager Ometeotl, City Attorney Tapia, City Treasure
Camacho, City Clerk Quinonez, Community Development Director
Ramirez, Human Resources Director Stafford, Interim Public Works
Director Godinez, Recreation Director Flores and Technology
Director Han.
• City Council Members Reporting on Meetings Attended (Gov. Code Section
53232.3 (D)).
PUBLIC ORAL COMMUNICATIONS
(Regarding Agenda Items Only)
NONE
NON-AGENDA PUBLIC ORAL COMMUNICATIONS
NONE
CITY COUNCIL ORAL AND WRITTEN COMMUNICATION
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NEW/OLD BUSINESS
04. JOINT PUBLIC MEETING OF LYNWOOD CITY COUNCIL AND LYNWOOD
HOUSING AUTHORITY FOR APPROVAL CONSIDERATION OF AN
AMENDMENT TO AN EXISTING AMENDED AND RESTATED DISPOSITION
AND DEVELOPMENT AGREEMENT
Staff requested item 4 be pulled from the agenda.
05. BUDGET APPROPRIATION – CLEANUP OF AFFORDABLE HOUSING
PROJECT SITE (ALAMEDA TRIANGLE)
MOTION: It was moved by Mayor Pro Tem Castro, seconded by Council Member
Casanova to approve staff recommendation. Motion carried by unanimous consent.
ROLL CALL:
AYES: MEMBERS ALATORRE, CASANOVA, SANTANA, VICE PRESIDENT
CASTRO, AND PRESIDENT SOLACHE
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
ADJOURNMENT
Having no further discussion, it was moved by Mayor Pro Tem Castro seconded by
Council Member Santana, to adjourn the City of Lynwood Housing Authority meeting at
6:13 p.m. Motion passed by unanimous consent.
ROLL CALL:
AYES: MEMBERS ALATORRE, CASANOVA, SANTANA, VICE PRESIDENT
CASTRO, AND PRESIDENT SOLACHE
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
_____________________ _____________________
Maria Quinonez, City Clerk Jose Luis Solache, Mayor
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Agenda Item # 5.
AGENDA STAFF REPORT
DATE: November 19, 2019
TO: Honorable Chair and Members of the Authority Board
APPROVED BY: Jose E. Ometeotl, City Manager
PREPARED BY: Michelle Ramirez, Director of Community Development
SUBJECT: APPROVAL OF AGREEMENT FOR A SETTLEMENT ADMINISTRATOR TO SATISFY
THE TERMS OF A SETTLEMENT AGREEMENT RELATING TO THE
CONSTRUCTION OF AFFORDABLE HOUSING
Recommendation:
Staff recommends that the City of Lynwood Housing Authority Board adopt the attached resolution entitled "A
RESOLUTION OF THE LYNWOOD HOUSING AUTHORITY AS HOUSING SUCCESSOR TO THE
LYNWOOD REDEVELOPMENT AGENCY APPROVING THE ENGAGEMENT OF KEALOHA CONSULTING
CORP, AS THE SETTLEMENT ADMINISTRATOR, TO SATISFY THE TERMS OF A SETTLEMENT
AGREEMENT RELATING TO ROGEL, ET AL. V. STATE OF CALIFORNIA DEPARTMENT OF FINANCE, ET
AL. AND AUTHORIZE THE ALLOCATION OF UNAPPROPRIATED LOW MOD INCOME HOUSING ASSET
FUND (LMIHAF) BALANCE IN THE AMOUNT OF $150,000 TO COVER COST OF SAID AGREEMENT", by a 4/5
vote.
Background:
In 2006, an action (“Rogel I”) was brought against the former Lynwood Redevelopment Agency (the “Former
Agency”), by a group of taxpayers and affordable housing advocates (the “Plaintiffs”). The Plaintiffs alleged that
the Former Agency had failed to ensure the development of affordable housing in the City of Lynwood by not
making deposits into the Former Agency’s Low and Moderate Income Housing Asset Fund (the “LMIHAF”) as
required by Section 33334.3 of the California Health and Safety Code. A settlement was reached in 2009, which
set forth the obligations of the Former Agency to construct affordable housing units by making the necessary
deposits into the LMIHAF.
In 2013, after passage of the redevelopment dissolution law (the “Dissolution Law”), the Plaintiffs secured a
judgment (the “Rogel I Judgment”) that specifically required the construction of affordable income housing units. In
addition, the Rogel I Judgment required the Successor Agency to the Lynwood Redevelopment Agency (the
“Successor Agency”) make payments into the LMIHAF in order to cover the cost of constructing the housing units
and to pay the legal expenses incurred by the Plaintiffs (the “Rogel I Obligations”). The Rogel I Judgment also
required the Successor Agency to report these obligations to the California Department of Finance (the “DOF”)
on its Recognized Obligation Payments Schedule (“ROPS”) 14-15A (the “Rogel I ROPS Items”).
In 2014, the DOF issued a determination letter that stated the Rogel I ROPS Items were not Enforceable
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Obligations under the Dissolution Law. In response, the Plaintiffs filed an action against the DOF, the California
Director of Finance, the Auditor-Controller of Los Angeles County, the City of Lynwood in its capacity as
Successor Agency, the Oversight Board to the Successor Agency, and the Lynwood Housing Authority to, among
other things, enforce the Rogel I Obligations. Because of this action, on February 10, 2017, the Rogel Settlement
Agreement (the “Settlement Agreement”) was entered into by all defendants in the case declaring that the Rogel I
Obligations were an enforceable obligation and that certain amounts would be paid to the Successor Agency for
deposit into the LMIHAF.
Pursuant to the terms of the Settlement Agreement, the DOF has agreed to approve all future ROPS items with
respect to the Rogel I Obligations until the Rogel I Obligations are satisfied in full. Furthermore, the DOF agreed
to not refuse to approve future ROPS items submitted by the Successor Agency so long as there is adequate
documentation to support the need of said funds to fulfill obligations associated with the Rogel I Judgment and
Settlement Agreement.
Pursuant to the Rogel I Judgment, until all Rogel I Obligations have been satisfied in full, the Agency shall engage
a mutually agreed upon third party Administrator to monitor all Rogel activity and report its findings to all parties
involved.
Discussion and Analysis:
Staff is proposing that the Lynwood Housing Authority authorize Kealoha Consulting Corp to provide
administrative, monitoring, and reporting services for the development of affordable housing project (known as
the "Atlantic Housing Development Project") to satisfy Rogel I Obligations mandated by said Settlement
Agreement. The chosen Consultant has been mutually approved by both Defendants and Plaintiff’s to the Rogel
Settlement Agreement. As all parties mutually agreed with the selected Consultant, staff believes it is in the best
interest of the City to bypass the RFP process and contract directly with Kealoha Consulting Corp, which would require
a 4/5 majority vote.
The project site is located at 12001 - 12035 South Atlantic Avenue and 4347 Lavinia Avenue and consist of ten properties
(Assessor Parcel Numbers 6186-001-900, 6186-001-901, 6186-001-902, 6186-001-903, 6186-001-904, 6186-001-905,
6186-001-906, 6186-001-907, 6186-001-908, and 6186-001-909) that makeup 0.88 acres (38,332 square feet). The
Atlantic Housing Development Project will be a four-story, multi-family building consisting of sixty-six affordable housing
units plus one management unit. It will include a mix of forty-seven (47) one-bedroom units, eighteen (18) two-bedroom
units, and two (2) three-bedroom units, for a total construction cost of approximately $17,000,000.
The Consultant will provide the following services:
Participate in all relevant meetings
Review various historical documents
Verify through public documents and exterior inspections completed replacement units
Review building plans, specs and budgets for proposed Development
Review credentials of Contractors
Verify existence and maintenance of Rogel funds
Monitor Progress of Construction
Monitor placing developed units into service
Maintain detailed records
Verify qualifying covenants are recorded
Prepare bi-monthly reports
The Consultant is requesting a $7,500 retainer, which will be held and applied to their final invoice. Richard
Hollowell is the managing shareholder and will be responsible for supervising and completing the engagement.
Mr. Hollowell may also use the services of paraprofessionals and a third party accounting firm to undertake certain
tasks. The hourly rate for service is as follows:
Managing Shareholder $375
Paraprofessionals $ 65
Accounting firm (Not to exceed $200)
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In order to engage the consultant, staff recommends that the Housing Authority allocate funds for said service from
the LMIHAF Rogel I account. Proposed services are consistent with eligible use of said funds, as it is directly
related to Rogel Settlement oversight compliance. Subject to DOF approval, this service may be approved for
funding in the Successor Agency’s 20-21 Recognized Obligation Schedule (ROPS), which will be available July
2020. If the DOF determines said services are eligible for funding, the funding for this service will be transferred to
the Successor Agency. At this juncture, the Housing Authority is the only practical funding source.
Pursuant to the Rogel I Judgment, all parties to the Rogel case shall mutually agree to the approval of the
Settlement Administrator prior to engagement.
Fiscal Impact:
There will be no impact to the General Fund. Funds for Settlement Administrator service will come from the
Housing Authority’s LMIHAF and/or the Rogel 1 Fund. In the event said services become approved by the DOF
for inclusion on the ROPS, funding will be transferred to the Successor Agency in the following ROPS 20-21
period.
Coordinated With:
Executive Director's Office
Authority Counsel
Department of Finance & Administration Services
ATTACHMENTS:
Description
Exhibit A - Attachment to Resolution
Attachment B - Judgment
Attachment C - Settlement Agreement
Attachment A - Resolution
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1 STIPULATION FOR ENTRY OF JUDGMENT; [PROPOSED] JUDGMENT Case No. 34-2014-80001977
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SACRAMENTO
ESPERANZA ROGEL; JAIME TORRES;
AND GERARDO ESPINOZA, as individuals
and as taxpayers,
Plaintiffs and Petitioners, v. STATE OF CALIFORNIA DEPARTMENT OF FINANCE; MICHAEL COHEN, in his official capacity as Director of the State of California Department of Finance; JOHN NAIMO, in his official capacity as the Auditor-Controller of the County of Los Angeles; and DOES 1-100, Respondents and Defendants ______________________________________
CITY OF LYNWOOD, in its capacity as
Successor to Lynwood Redevelopment
Agency; LYNWOOD HOUSING
AUTHORITY, in its capacity as Housing
Successor to the Lynwood Redevelopment
Agency, OVERSIGHT BOARD TO THE
SUCCESSOR AGENCY TO THE
DISSOLVED LYNWOOD
REDEVELOPMENT AGENCY; and DOES
102-200,
Real Parties in Interest
Case No. 34-2014-80001977
STIPULATION FOR ENTRY OF
JUDGMENT; [PROPOSED] JUDGMENT
Dept: 24
Judge: Hon. Shellyanne W. L. Chang
Action Filed: November 14, 2014
Hearing Date: February 17, 2017
Hearing Time: 10:00 a.m.
SHASHI HANUMAN (SBN 198522)
NISHA N. VYAS (SBN 228922)
PUBLIC COUNSEL LAW CENTER
610 South Ardmore Avenue
Los Angeles, California 90005
Tel: (213) 385-2977
Fax: (213) 385-9089
shanuman@publiccounsel.org
nvyas@publiccounsel.org
Attorneys for Petitioners and Plaintiffs
ESPERANZA ROGEL, JAIME TORRES,
and GERARDO ESPINOZA
Additional counsel listed on following page.
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2 STIPULATION FOR ENTRY OF JUDGMENT; [PROPOSED] JUDGMENT Case No. 34-2014-80001977
MICHAEL F. RAWSON (SBN 95868)
CRAIG CASTELLANET (SBN 176054)
CALIFORNIA AFFORDABLE HOUSING LAW
PROJECT, OF THE PUBLIC INTEREST LAW PROJECT
449 15th Street, Suite 301
Oakland, California 94612
Tel: (510) 891-9794
Fax: (510) 891-9727
mrawson@pilpca.org
ccastellanet@pilpca.org
MARCELLUS A. MCRAE (SBN 140308)
ADAM L. YARIAN (SBN 281040)
GIBSON, DUNN & CRUTCHER LLP
333 S. Grand Avenue, Los Angeles, CA 90071
Tel: (213) 229-7000
Fax: (213) 229-6675
mmcrae@gibsondunn.com
SCOTT VOELZ (SBN 181415)
CYNTHIA A. MERRILL (SBN 254571)
O’MELVENY & MYERS LLP
400 South Hope Street
Los Angeles, CA 90071-2899
Tel: (213) 430-6000
Fax: (213) 430-6407
svoelz@omm.com
cmerrill@omm.com
RICHARD ROTHSCHILD (SBN 67356)
S. LYNN MARTINEZ (SBN 164406)
WESTERN CENTER ON LAW & POVERTY
3701 Wilshire Boulevard, Suite 208
Los Angeles, CA 90010-2826
Tel: (213) 235-2637
Fax: (213) 487-0242
rrothschild@wclp.org
Attorneys for Petitioners and Plaintiffs
ESPERANZA ROGEL, JAIME TORRES,
and GERARDO ESPINOZA
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3 STIPULATION FOR ENTRY OF JUDGMENT; [PROPOSED] JUDGMENT Case No. 34-2014-80001977
STIPULATION FOR ENTRY OF JUDGMENT
WHEREAS:
A. Petitioners Esperanza Rogel, Jaime Torres, and Gerardo Espinoza (collectively,
“Petitioners”) filed a Verified Petition for Writ of Mandate and Complaint for Declaratory and
Injunctive Relief (“Petition”) on November 14, 2014.
B. The California Department of Finance (“DOF”) and Michael Cohen, in his official
capacity as the Director of the California Department of Finance (collectively, “DOF
Respondents”) filed an Answer to the Petition on December 17, 2014.
C. Real Parties in Interest, the City of Lynwood, in its capacity as Successor to Lynwood
Redevelopment Agency (“Successor Agency”), and Lynwood Housing Authority, in its capacity
as the Housing Successor to the Lynwood Redevelopment Agency (“Housing Successor”) jointly
filed a Statement of No Position on December 22, 2014.
D. Respondent John Naimo, in his official capacity as the Auditor-Controller of the
County of Los Angeles (the “Auditor-Controller”), filed an Answer to the Petition on February 3,
2015.
E. Petitioners filed their Opening brief in Support of Petition for Writ of Mandate on
February 10, 2015.
F. DOF Respondents filed their Opposition brief on July 6, 2015.
G. Petitioners filed an Amended Complaint on July 14, 2016, substituting for Doe Real
Party in Interest 101 the Oversight Board to the Successor Agency to the Dissolved Lynwood
Redevelopment Agency (“Oversight Board”).
H. Petitioners filed a Supplemental Memorandum in Support of their Petition for Writ of
Mandate and Complaint for Declaratory and Injunctive Relief on August 9, 2016.
I. DOF Respondents filed an Answer to the Amended Complaint on August 10, 2016.
J. The Auditor-Controller filed an Answer to the Amended Complaint on August 16,
2016.
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4 STIPULATION FOR ENTRY OF JUDGMENT; [PROPOSED] JUDGMENT Case No. 34-2014-80001977
K. DOF Respondents filed a Response to Petitioners’ Supplemental Memorandum in
Support of their Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief
on August 29, 2016.
L. Petitioners filed a Reply in Support of their Petition for Writ of Mandate and
Complaint for Declaratory and Injunctive Relief on September 8, 2016.
M. Real Party in Interest Oversight Board filed an Answer to the Amended Petition and a
Statement of No Position on September 22, 2016.
N. A hearing on the Petition for Writ of Mandate and Complaint for Declaratory and
Injunctive Relief has been set for February 17, 2017 at 10:00 a.m., in Department 24 of the
Sacramento Superior Court, the Honorable Shellyanne W. L. Chang presiding.
O. All Parties—Petitioners, the DOF Respondents, the Auditor-Controller, the
Successor Agency, the Housing Successor, and the Oversight Board—have agreed on the terms of
a settlement resolving all issues in this litigation and have executed in writing a settlement
agreement (the “Settlement Agreement’) setting forth those terms.
THEREFORE, PETITIONERS, DOF RESPONDENTS, THE AUDITOR-CONTROLLER,
AND REAL PARTIES IN INTEREST SUCCESSOR AGENCY, HOUSING SUCCESSOR
AND OVERSIGHT BOARD (the “PARTIES”), BY AND THROUGH THEIR COUNSEL OF
RECORD, STIPULATE AS FOLLOWS:
1. That the hearing in this matter currently scheduled for February 17, 2017, at 10:00
a.m., in Department 24 of the Sacramento Superior Court, the Honorable Shellyanne W. L. Chang
presiding, shall be taken off calendar.
2. That the Court shall enter the Proposed Judgment attached hereto in accordance with
the terms of the Settlement Agreement and pursuant to its powers under California Code of Civil
Procedure section 664.6.
IT IS SO STIPULATED.
// // //
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[PROPOSED] JUDGMENT Case No. 34-2014-80001977
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SACRAMENTO
ESPERANZA ROGEL; JAIME TORRES;
AND GERARDO ESPINOZA, as individuals
and as taxpayers, Plaintiffs and Petitioners, v. STATE OF CALIFORNIA DEPARTMENT OF FINANCE; MICHAEL COHEN, in his official capacity as Director of the State of California Department of Finance; JOHN NAIMO, in his official capacity as the Auditor-Controller of the County of Los Angeles; and DOES 1-100, Respondents and Defendants ______________________________________
CITY OF LYNWOOD, in its capacity as
Successor to Lynwood Redevelopment
Agency; LYNWOOD HOUSING
AUTHORITY, in its capacity as Housing
Successor to the Lynwood Redevelopment
Agency, OVERSIGHT BOARD TO THE
SUCCESSOR AGENCY TO THE
DISSOLVED LYNWOOD
REDEVELOPMENT AGENCY; and DOES
102-200, Real Parties in Interest
Case No. 34-2014-80001977
[PROPOSED] JUDGMENT
Dept: 24 Judge: Hon. Shellyanne W. L. Chang Action Filed: November 14, 2014
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[PROPOSED] JUDGMENT Case No. 34-2014-80001977
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:
1. The Settlement Agreement executed in writing by Petitioners Esperanza Rogel,
Jaime Torres, and Gerardo Espinoza; Respondents State of California Department of Finance,
Michael Cohen, in his official capacity as Director of the State of California Department of
Finance, and John Naimo, in his official capacity as the Auditor-Controller of the County of Los
Angeles; and Real Parties in Interest City of Lynwood, in its capacity as Successor to Lynwood
Redevelopment Agency, Lynwood Housing Authority, in its capacity as Housing Successor to
Lynwood Redevelopment Agency, and Oversight Board to the Successor Agency to the
Dissolved Lynwood Redevelopment Agency (collectively, the “Parties”) (“Settlement
Agreement”), which is attached hereto as Exhibit A, is incorporated herein as the Judgment of
this Court. This Judgment expressly incorporates all of the terms of the attached Settlement
Agreement as if set forth herein.
2. At the request of the Parties, this Court shall retain jurisdiction to enforce the
Settlement Agreement and this Judgment pursuant to California Code of Civil Procedure section
664.6 until full performance of the terms of the Settlement Agreement and this Judgment.
Dated: ________________ ________________________________ HON. SHELLYANNE W. L. CHANG JUDGE OF THE SUPERIOR COURT
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EXHIBIT A
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SETTLEMENT AGREEMENT
Rogel, et al. v. State of California Department of Finance, et al.
Sacramento Superior Court, Case No. 34-2014-80001977
PARTIES
This Settlement Agreement (“Agreement”) is entered into by the following parties: (1)
petitioners Esperanza Rogel, Jaime Torres, and Gerardo Espinoza, as individuals and as
taxpayers (“Petitioners”); (2) the California Department of Finance (“Finance”); (3) Michael
Cohen, in his official capacity as California State Director of Finance (“Director of Finance”);
(4) John Naimo, in his official capacity as the Auditor-Controller of the County of Los Angeles
(“Auditor-Controller”); (5) the City of Lynwood, in its capacity as Successor Agency to the
Lynwood Redevelopment Agency (“Successor Agency”); (6) the Lynwood Housing Authority,
in its capacity as Housing Successor to the Lynwood Redevelopment Agency (“Housing
Successor”); and (7) the Oversight Board to the Successor Agency to the Dissolved Lynwood
Redevelopment Agency (“Oversight Board”) (collectively, the “Parties”) with regard to Rogel,
et al. v. State of California Department of Finance, et al., Sacramento Superior Court Case No.
34-2014- 80001977.
RECITALS
A. In addition to the terms defined above in the identification of the parties, the Agreement
uses the following defined terms:
1. “SB 107” is Senate Bill 107 of the 2015-16 Regular Session of the California
Legislature.
2. “AB 1484” is Assembly Bill 1484 of the 2011-12 Regular Session of the
California Legislature.
3. “ABx1-26” is Assembly Bill 26 of the 2011-12 First Extraordinary Session of the
California Legislature.
4. The “Action” is Rogel, et al. v. State of California Department of Finance, et al.,
Sacramento Superior Court Case No. 34-2014-80001977.
5. “Construct[ed]” refers to building and/or substantially rehabilitating a unit of real
property.
6. The “Dissolution Law” encompasses the statutes enacted by ABx1-26, as amended
by AB 1484, as further amended by the California Legislature as of the date of the filing of
the Action, and as amended by SB 107, contained in division 24, parts 1.8 and 1.85, of the
Health and Safety Code.
7. The “Effective Date” is the date on which the last counterpart executes this
Agreement.
8. An “Enforceable Obligation” is an obligation that is deemed to fall within the
meaning of the term “Enforceable Obligation” as that term is described in Health and
Safety Code section 34171, subdivision (d).
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9. The “Rogel I ROPS 14-15A Items” consist of the following items
(collectively, and/or, as appropriate, individually):
a. “Item 20” is item 20 as listed on ROPS 14-15A (term defined below).
b. “Item 21” is item 21 as listed on ROPS 14-15A.
c. “Item 22” is item 22 as listed on ROPS 14-15A.
10. “LMIHAF” is the Low and Moderate Income Housing Asset Fund created
pursuant to Health and Safety Code section 34176, subdivision (d).
11. “LMIHF” is the Low and Moderate Income Housing Fund described in Health
and Safety Code section 33334.3.
12. The “LMIHF Debt” is the amount that was ultimately determined in Rogel I (term
defined below) as having been owed to the RDA’s (term defined below) LMIHF, prior to
the RDA’s dissolution, to account for the shortfall in funds that resulted from: (1) the
RDA’s failure to deposit 20% of tax increment received (with interest) between 1994-1995
and the date on which the judgment issued in Rogel I; and (2) prior use of RDA’s LMIHF
funds in a manner that was not compliant with redevelopment laws governing the use of
those funds.
13. The “Pre-Contract Reserve Cap” is $17 million.
14. “RDA” is the Lynwood Redevelopment Agency.
15. “RPTTF” is the Redevelopment Property Tax Trust Fund established pursuant to
Health and Safety Code section 34170.5, subdivision (b).
16. The “Rogel I Action” or “Rogel I” is Rogel, et al. v. Redevelopment Agency of the
City of Lynwood, et al., an action brought by Petitioners and others against the RDA in the
Los Angeles Superior Court (Los Angeles Superior Court Case No. BS106592).
17. The “Rogel I Attorneys’ Fees Order” is a March 17, 2014 order entered by the Los
Angeles Superior Court in the Rogel I Action.
18. The “Rogel I Defendants” are the RDA, the Successor Agency, and the Housing
Successor.
19. The “Rogel I Fund” is the fund within the Successor Agency’s LMIHAF that will be
used to pay for the construction of the Rogel I Units (term defined below), as further
described in Agreement Term 1(c).
20. The “Rogel I Judgment” is the judgment entered in Rogel I on April 23, 2013,
against the Rogel I Defendants.
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21. The various obligations encompassed in the term “Rogel I Obligations” include:
a. The “Rogel I Attorneys’ Fees Obligation,” i.e., the amount that the
Successor Agency is required to pay to cover the Rogel I petitioners’ attorneys’
fees according to the terms of the Rogel I Attorneys’ Fees Order, as further
described in recital E of this Agreement and listed as item 22 on ROPS 14-15A.
b. The “Rogel I LMIHAF Payment Obligation,” i.e., the amount that the
Rogel I Defendants are required to deposit into the LMIHAF pursuant to the
Rogel I Judgment, as further described in recital E of this Agreement and
listed as item 21 on ROPS 14-15A.
c. The construction of “Rogel I Units,” i.e., the 66 remaining new housing
units that the Rogel I Judgment requires the Rogel I Defendants to construct to
satisfy the terms of that judgment, as further described in recital E of this
Agreement and listed as item 20 on ROPS 14-15A.
22. The “Rogel I Settlement” is the settlement agreement entered in 2009 by the
parties to Rogel I.
23. A “ROPS” is a Recognized Obligations Payment Schedule as described in Health
and Safety Code section 34177, subdivision (l).
24. “ROPS 14-15A” is the ROPS submitted for the time period covering July 1, 2014
through December 31, 2014.
25. “ROPS 15-16A” is the ROPS submitted for the time period covering July 1, 2015
through December 31, 2015.
26. “ROPS 15-16B” is the ROPS submitted for the time period covering January 1,
2016 through June 30, 2016.
27. The “Specialist’s Report” is the report prepared by the redevelopment specialist
hired by the RDA pursuant to the terms of the Rogel I Settlement, as further described in
recital D of this Agreement.
B. The litigation resolved by this Agreement relates to the wind down of the RDA pursuant
to the Dissolution Law.
C. In 2006, before the Dissolution Law was enacted, Petitioners and others brought the
Rogel I Action. The petitioners in Rogel I alleged that the RDA had, for many years, failed to:
(1) ensure that a certain number of housing units constructed within the community were made
affordable to, and were in fact occupied by, families with low or moderate incomes, as required
by Health and Safety Code section 33413, subdivision (b); (2) construct sufficient replacement
units when dwelling units occupied by low and moderate income households were destroyed, as
required by Health and Safety Code section 33413, subdivision (a), and provide priority in
occupancy of such units to those displaced; (3) deposit into its LMIHF the full 20% of tax
increment that was required; and (4) expend LMIHF funds on low and moderate income
housing, as required by Health and Safety Code section 33334.2, et seq.
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D. In 2009, before the Dissolution Law was enacted, the parties in Rogel I entered into the
Rogel I Settlement, which was incorporated into a stipulated order issued by the Los Angeles
Superior Court. Under the terms of the Rogel I Settlement, the RDA undertook the following
obligations:
• Construct a specific minimum number of units for use by low and moderate income
residents;
• Deposit funds in the RDA’s LMIHF that were ultimately determined in the Rogel I
Action as being owed to satisfy the LMIHF Debt; and
• Hire a redevelopment specialist to prepare a Specialist’s Report providing an opinion
quantifying the first two points (i.e., calculating the RDA’s outstanding housing
obligations, and the LMIHF Debt), which would serve as a basis for entering a final
judgment.
The Rogel I Settlement anticipated that following the preparation of the Specialist’s Report, the
Rogel I parties would meet and confer regarding the specialist’s findings of the Specialist’s
Report, and at that time would either enter into a stipulated judgment or submit their comments
and objections regarding the Specialist’s Report to the court, which would then enter a judgment.
E. In 2013, after the Dissolution Law was enacted and following the preparation of the
Specialist’s Report, the Rogel I petitioners secured the Rogel I Judgment against the Rogel I
Defendants. Without specifying which Rogel I defendant is responsible for performing which
act, the Rogel I Judgment imposes the following obligations on the Rogel I Defendants:
• Construct a total of 200 low to moderate income housing units—due to credit provided
for 134 units, the total number of units left to construct is 66 (“Rogel I Units”); and
• Deposit $3,282,850.00, plus accrued interest at a rate of 2.533% per year beginning on
July 1, 2009, and continuing until all amounts owing have been paid, into the LMIHAF
(“Rogel I LMIHAF Payment Obligation”).
Following the entry of the Rogel I Judgment, in March 2014, the Los Angeles Superior Court
also issued an order that required the Successor Agency to pay the Rogel I petitioners’ attorneys’
fees in the amount of $2,000,000, plus interest at the rate of 3.5% per year (“Rogel I Attorneys’
Fees Obligation”).
F. Following the entry of the Rogel I Judgment, and as required by the Dissolution Law, the
Successor Agency prepared a ROPS 14-15A. Among the items listed on ROPS 14-15A were the
Rogel I ROPS 14-15A Items, which arose from the Rogel I Obligations:
• Item 20 listed a total outstanding cost obligation of $13,000,000 to construct the Rogel I
Units, with $200,000 in reserves and $200,000 from RPTTF ($400,000) being sought in
the ROPS 14-15A cycle;
• Item 21 listed a total outstanding obligation due to the LMIHAF of $3,282,850 to satisfy
the Rogel I Payment Obligation, with $277,920 to be paid from reserves and another
$100,000 to be paid from RPTTF, during the ROPS 14-15A cycle; and
• Item 22 listed a total outstanding obligation of $2,000,000 to cover attorneys’ fees and
costs for the Rogel I petitioners, and sought $83,333 in RPTTF for payment on this item
during the ROPS 14-15A cycle.
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G. On May 16, 2014, Finance issued a letter which included, among other things, a final
determination that the Rogel I ROPS Items, constituting an approximate total outstanding
obligation of $18,282,850, with $383,333 of requested RPTTF and $477,920 in proposed
expenditure of reserves for disbursement during the ROPS 14-15A cycle, were not Enforceable
Obligations.
H. In response, Petitioners filed this Action. Petitioners named Finance, Michael Cohen in
his official capacity as California State Director of Finance, and John Naimo in his official
capacity as the Auditor-Controller as Defendants and Respondents to the Action. The Successor
Agency, the Housing Successor, and the Oversight Board were also named as real parties in
interest.
I. Without admission of fault or wrongdoing, the Parties have agreed to completely resolve
any and all disputes between the Parties pertaining to, or in any way relating to, the
aforementioned Action by entering into this Agreement.
AGREEMENT TERMS
Accordingly, in consideration of the mutual promises contained herein, the Parties hereby
agree as follows:
1. Principal Terms: The Parties agree to the following resolution of the litigation:
(a) Finance hereby determines that Items 20, 21, and 22 are Enforceable Obligations
of the Successor Agency. As described herein, Finance and the Oversight Board will approve,
and the County Auditor-Controller shall not object to, future ROPS items for allocation of
funding consistent with that determination and subject to Health and Safety Code section 34177
subdivision (l), paragraph (1). Parties recognize that due to the limited RPTTF available to the
Successor Agency, payment on the Rogel I Obligations will occur over a period of time until the
Rogel I Obligations are satisfied in full. The parties also agree that the Rogel I Units may be
constructed at any time; however, this Agreement does not diminish or limit the time obligations
of the Rogel I Judgment.
(b) The County Auditor-Controller shall, within 30 days from the Effective Date of
this Agreement release to the Successor Agency amounts for disputed items listed on ROPS 15-
16A hereto sequestered pursuant to the Court’s Order dated March 3, 2015, and amounts for
disputed items listed on ROPS 15-16B hereto sequestered pursuant to the Court’s Order dated
October 13, 2015. The Successor Agency shall deposit sequestered amounts for items 20, 21, and
22 on ROPS 15-16A and ROPS 15-16B with the Housing Successor to be maintained by the
Housing Successor in the manner outlined in Paragraph 1(c), below.
(c) The Housing Successor shall maintain sequestered funds released by the County
Auditor-Controller pursuant to Paragraph 1(b) above, including amounts for items 20, 21, and
22 listed on ROPS15-16A and ROPS 15-16B, and all funds that are received for future ROPS
in order to satisfy the Rogel I LMIHAF Payment Obligation and/or pay for the construction of
the Rogel I Units within a separate account to be created in its existing LMIHAF: the “Rogel I
Fund.” The Successor Agency shall pay amounts received for future ROPS to satisfy the Rogel I
Attorneys’ Fees Obligation to Petitioners’ counsel in the manner set forth in the Rogel I
Attorneys’ Fee Order (described in Paragraph E of the Recitals above). All RPTTF funds held in
the Rogel I Fund that were previously sequestered, as described in Paragraph 1(b) above, or
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were received for the Rogel I LMIHAF Payment Obligation and/or the obligation to construct
the Rogel I Units listed on the ROPS shall be used for the purpose of satisfying the enforceable
obligation of developing the Rogel I Units, consistent with Health & Safety Code section
34176.1, subdivision (a).
(d) Future ROPS shall reflect that the Rogel I LMIHAF Payment Obligation has been
reduced by an amount equal to the sum of sequestered funds released by the County Auditor-
Controller and deposited into the Rogel I Fund as pursuant to Paragraphs 1(b) and 1(c) above.
(e) The Housing Successor shall deposit into the Rogel I Fund all funds received to
satisfy the Rogel I LMIHAF Payment Obligation, before seeking additional funding from the
Successor Agency for the Rogel I Units. Once the Housing Successor has deposited into the
Rogel I Fund an amount equal to the Rogel I LMIHAF Payment Obligation for the construction
of the Rogel I Units, the duty to provide the additional funds necessary to build the Rogel I
Units shall be treated as an Enforceable Obligation of the Successor Agency.
(f) The Parties recognize that the development of multifamily housing may require
the accumulation of a reserve of funds in order to leverage housing subsidies that require
expenditure of funds in a limited period of time. In light of this practical consideration, Finance
shall approve ROPS items that request RPTTF amounts to pay for the construction of the Rogel
I Units, subject to Health and Safety Code section 34177 subdivision (l), paragraph (1), up to an
amount of the Pre-Contract Reserve Cap over the life of the obligation, without requiring the
Successor Agency or the Housing Successor to produce a contract that demonstrates that these
funds are going to be expended on a specific project. If other sources of funds are used to
satisfy the Rogel I LMIHAF Payment and Unit Obligations, the Pre-Contract Reserve Cap shall
be reduced by an amount equal to the amount of funds from other sources that are used.
(1) If an amount beyond the Pre-Contract Reserve Cap is required to fund the
construction of the Rogel I Units, then the Successor Agency may at any time, within the
limitation set forth in 1(f) above, seek funding for the full amount to construct the Rogel I
Units from the RPTTF, through the ROPS process.
(2) Finance shall also approve amounts above the Pre-Contract Reserve Cap
through the ROPS process for the construction of the Rogel I Units, provided that the cost of
construction is demonstrated by a construction contract, or other appropriate documentation
submitted for Finance’s review.
(g) Upon identifying a housing development project that proposes to construct Rogel
I Units utilizing funds deposited into the Rogel I Fund, the Housing Successor shall provide
notice to Finance and Petitioners. The Housing Successor shall provide notice to Finance and
Petitioners no later than 30 days in advance of making the first payment for any housing project
utilizing funds in the Rogel I Fund.
(h) The Housing Successor shall carefully account for the expenditure of all funds
deposited into the Rogel I Fund. The Housing Successor shall maintain copies of the documents
needed to support their accounting (e.g., without limitation and by way of illustration, contracts,
work orders, bills, cancelled checks, evidence of wire transfers as payment, bank account
statements, etc.), and, if Finance or the Auditor-Controller requests verification that the funds
deposited into the Rogel I Fund in satisfaction of the Rogel I LMIHAF Payment Obligation are
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being used to construct the Rogel I Units, the Housing Successor shall provide an explanation of
expenditures and supporting documentation within 10 business days of receipt of a written
request. In the event that Finance or the Auditor-Controller makes a written request to the
Housing Successor pursuant to this paragraph, the requesting Party shall also serve a copy of its
request on Petitioners. The Housing Successor shall likewise serve a copy of its responses to
Petitioners.
(i) The Successor Agency shall verify that any housing construction listed on ROPS
that includes low and moderate income housing is counted towards satisfaction of its obligation
to build Rogel I Units.
(j) (1) In the event the Successor Agency and/or Housing Successor and/or Oversight
Board fail to comply with terms (a) through (i) of this paragraph, either Finance or the Petitioners
may require compliance with those terms by written demand followed by seeking judicial
enforcement of terms (a) through (i) of this paragraph by means of specific performance,
injunction, and/or any other remedies and relief available under applicable law without any
requirement to post a bond or any other security. The Successor Agency and Housing Successor
shall respond to any such written demand for compliance within 10 days of receipt of the
demand. At the time of making the demand, Finance or Petitioners must also make a demand for
records as described in term (h).
(2) Notwithstanding any demands for compliance and records made under this
subdivision, Finance shall not refuse to approve ROPS items satisfying the Rogel I Payment
Obligation or the Rogel I Attorneys’ Fees Obligation so long as the total amount expended for
prior ROPS cycles and the amount requested on the ROPS cycle that Finance is reviewing does
not exceed the amounts identified in the Rogel I Judgment as being required to satisfy those
obligations.
(3) If, after receiving responses to its demands for compliance and records,
Finance believes that the amount of funds being requested to satisfy the Successor Agency’s
obligation to fund the additional cost of constructing the Rogel I Units exceeds the reasonable
cost of constructing the remaining units, Finance or Petitioners may file a request with the
Sacramento Superior Court for a temporary restraining order to prohibit improper expenditure of
funds until such costs are justified.
(k) This Agreement is contingent on there being no material change to the Rogel I
Judgment. This Agreement (inclusive of all terms and conditions contained herein) shall not
itself be construed as materially changing the Rogel I Judgment. Parties agree that the adoption
of an annual ROPS or a Last and Final ROPS by the Successor Agency is not a material change
to the Rogel I Judgment, in the event that amendments to the Rogel I Judgment are required to
conform to any revised ROPS period or process. The Parties note that the Rogel I Judgment
includes timelines for completion of certain obligations, including making some of the Rogel I
Units available for occupancy on or before March 31, 2015, with the balance of the units due to
be made available for occupancy in April 2017, and depositing amounts in the LMIHAF no later
than August 1, 2016. Parties agree that any alteration(s) to the schedule for completion of any
obligations by the Successor Agency or the Housing Successor (including, without limitation,
the three dates referenced in this paragraph) do not constitute material change(s) to the Rogel I
Judgment.
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(l) Parties agree that the terms of this Agreement resolve this Action, and that the
Sacramento Superior Court shall retain jurisdiction over this Agreement pursuant to California
Code of Civil Procedure section 664.6. Nothing herein shall be construed to restrict the Parties
from seeking enforcement of the Rogel I Judgment in the Los Angeles Superior Court.
2. Claims Disputed: The Agreement does not constitute, nor shall it be construed as, an
admission or concession by any of the Parties regarding the allegations asserted in the Action for
any purpose. This Agreement is a compromise settlement of the Action, and by executing this
Agreement, none of the Parties admits any wrongdoing, liability, or fault in connection with
either the Action or the allegations asserted in the Action.
3. Mutual Release: The Parties specifically and mutually release and discharge each other,
including their respective officers, directors, commission members, trustees, agents, employees,
representatives, attorneys, insurers, departments, divisions, sections, successors and assigns from
all obligations, damages, costs, expenses, liens, whether known or unknown, suspected or not
suspected to exist, claimed or not claimed, disputed or undisputed, pertaining to the Action
except for any obligations set forth in this Agreement. This release also does not extend to any
obligations, damages, costs, expenses, or liens that arise from or may separately arise in relation
to the approval or funding of the Rogel I ROPS Items in the future, or any obligations, damages,
costs, expenses or liens that arise from or may in future arise from the underlying Rogel I
Judgment. Each Party represents it has not assigned, transferred, or purported to assign or transfer
to any persons or entity any matter released herein.
4. Successors and Assigns: This Agreement shall be binding upon the Parties’ respective
officers, directors, commission members, trustees, agents, employees, representatives,
departments, divisions, sections, successors and/or assigns.
5. Assumption of Risk: The Parties each represent that they fully understand that if the
facts pertaining in any way to the Action are later found to be different from the facts now
believed to be true by any Party, each of them expressly accepts and assumes the risk of such
possible differences in facts, and hereby agrees that this Agreement shall still remain effective
notwithstanding any such differences in facts. The Parties also each represent that this
Agreement was entered into under the laws current as of the Effective Date, and agree that this
Agreement shall remain effective notwithstanding any future changes in the law.
6. Independent Advice of Counsel: The Parties each represent that they know and
understand the contents of the Agreement and that they have executed this Agreement
voluntarily. The Parties each further represent that they have had an opportunity to consult with
an attorney of their choosing and that they have been fully advised by the attorney with respect
to their rights and obligations under this Agreement and with respect to the execution of this
Agreement.
7. Entire Agreement: No promise, inducement, understanding, or agreement not expressed
within this Agreement has been made by or on behalf of the Parties. This Agreement contains
the entire agreement between the Parties related to the Action and the subject matter contained
herein, and supersedes all prior and contemporaneous agreements, representations, and
understandings of the Parties, whether oral or written.
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8. Amendments in Writing: This Agreement may not be altered, amended, modified, or
otherwise changed in any respect except by a writing duly executed by all of the Parties. The
Parties agree that they will make no claim at any time or place that this Agreement has been
orally altered or modified or otherwise changed by oral communication of any kind or character.
9. Construction: The Parties agree that this Agreement is to be construed and interpreted
without regard to the identity of the party drafting this Agreement.
10. Additional Acts: The Parties agree to take such actions and to execute such documents as
are necessary to carry out the terms and purposes of this Agreement.
11. Attorneys’ Fees: Finance shall pay a total of $120,000 to the Petitioners’ counsel for
attorneys’ fees and costs. This payment shall completely and finally resolve any and all
obligations of Finance to make payment of attorneys’ fees in this Action. Except as provided
here, the Parties shall bear their own attorneys’ fees and costs.
12. Choice of Law and Jurisdiction: This Agreement shall be governed by the laws of the
State of California. If any Party to this Agreement brings a lawsuit to enforce or interpret this
Agreement, the lawsuit shall be filed in the Superior Court for the County of Sacramento,
California.
13. Counterparts: This Agreement may be executed by facsimile and in one or more
counterparts, each of which is deemed an original, and all of which shall constitute this
Agreement.
14. Effective Date: The date on which the last counterpart of this Agreement is executed
shall be the effective date of this Agreement.
15. Authority to Execute: Each Party represents that they have the authority to enter into and
perform the obligations necessary to provide the consideration described in this Agreement. Each
person signing this Agreement represents and warrants that they have the authority to sign on
behalf of the Party for which they sign.
16. Notice: All notice to be provided pursuant to this Agreement shall be given to:
FOR PETITIONERS AND PLAINTIFFS: Nisha N. Vyas, Public Counsel, 610 S Ardmore
Avenue, Los Angeles, CA 90005, (213) 385-2977 ext. 178, nvyas@publiccounsel.org
FOR THE SUCCESSOR AGENCY: Royce Jones and Gustavo Lamanna, Kane, Ballmer &
Berkman, 515 South Figueroa St., Suite 780, Los Angeles, CA 90071-3301, (213) 617-0480,
Royce@kbblaw.com, Gustavo@kbblaw.com, glamanna@usa.net
FOR THE HOUSING SUCCESSOR: Royce Jones and Gustavo Lamanna, Kane, Ballmer &
Berkman, 515 South Figueroa St., Suite 780, Los Angeles, CA 90071-3301, (213) 617-0480,
Royce@kbblaw.com, Gustavo@kbblaw.com, glamanna@usa.net
FOR THE OVERSIGHT BOARD: Guillermo Frias, Best Best & Krieger, 300 South Grand
Avenue, 25th Floor, Los Angeles, CA 90071, (213) 617-8100, guillermo.frias@bbklaw.com
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FOR AUDITOR CONTROLLER: Michael S. Buennagel, Deputy County Counsel, Government
Services Division, Office of the Los Angeles County Counsel, 500 W. Temple St., Room 653, Los
Angeles, CA 90012, (213) 974-1833, MBuennagel@counsel.lacounty.gov
FOR FINANCE: Manager, Financial & Performance Evaluator, Local Government Unit,
Department of Finance, 915 L Street, Sacramento, CA 95814, (916) 322-2985
FOR DIRECTOR OF FINANCE: Manager, Financial & Performance Evaluator, Local
Government Unit, Department of Finance, 915 L Street, Sacramento, CA 95814, (916) 322-2985
This Agreement consists of Recital Paragraphs A - I and Paragraphs 1 - 16.
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RESOLUTION NO.
RESOLUTION OF THE LYNWOOD HOUSING AUTHORITY AS
HOUSING SUCCESSOR TO THE LYNWOOD REDEVELOPMENT
AGENCY APPROVING THE ENGAGEMENT OF KEALOHA
CONSULTING CORP, AS THE SETTLEMENT ADMINISTRATOR, TO
SATISFY THE TERMS OF A SETTLEMENT AGREEMENT RELATING
TO ROGEL, ET AL. V. STATE OF CALIFORNIA DEPARTMENT OF
FINANCE, ET AL. AND AUTHORIZE THE ALLOCATION OF
UNAPPROPRIATED LOW MOD INCOME HOUSING ASSET FUND
(LMIHAF) BALANCE IN THE AMOUNT OF $150,000 TO COVER COST
OF SAID AGREEMENT
WHEREAS, in 2006, an action (“Rogel I”) was brought against the former Lynwood
Redevelopment Agency (the “Former Agency”) by a group of taxpayers and affordable
housing advocates (the “Plaintiffs”). The Plaintiffs alleged that the Former Agency had
failed to ensure the development of affordable housing in the City of Lynwood by not
making deposits into the Former Agency’s Low and Moderate Income Housing Asset
Fund (the “LMIHAF”) as required by Section 33334.3 of the California Health and Safety
Code. A settlement was reached in 2009 which set forth the obligations of the Former
Agency to construct affordable housing units by making the necessary deposits into the
LMIHAF; and
WHEREAS, in 2013, after passage of the redevelopment dissolution law (the
“Dissolution Law”), the Plaintiffs secured a judgment (the “Rogel I Judgment”) that
specifically required the construction of affordable income housing units, required the
Successor Agency to the Lynwood Redevelopment Agency (the “Successor Agency”) to
make payments into the LMIHAF in order to cover the cost of constructing the housing
units, and required payment of legal expenses incurred by the Plaintiffs (the “Rogel I
Obligations”). In addition, the Rogel I Judgment required the Successor Agency to report
these obligations to the California Department of Finance (the “DOF”) on its Recognized
Obligation Payments Schedule (“ROPS”) 14-15A (the “Rogel I ROPS Items”); and
WHEREAS, in 2014, the DOF issued a letter, which determined that the Rogel I
ROPS Items were not Enforceable Obligations under the Dissolution Law. In response,
the Plaintiffs filed an action against the DOF, the California Director of Finance, the
Auditor-Controller of Los Angeles County, the City of Lynwood in its capacity as
Successor Agency, the Oversight Board to the Successor Agency and the Lynwood
Housing Authority to, among other things, enforce the Rogel I Obligations. Because of
this action, on February 10, 2017, the Rogel Settlement Agreement (the “Settlement
Agreement”) was entered into by all defendants in the case declaring that the Rogel I
Obligations were an enforceable obligation and that certain amounts would be paid to the
Successor Agency for deposit into the LMIHAF; and
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WHEREAS, pursuant to the terms of the Settlement Agreement, the DOF has
agreed to approve all future ROPS items with respect to the Rogel I Obligations until the
Rogel I Obligations are satisfied in full. Furthermore, the DOF agreed to not refuse to
approve future ROPS items submitted by the Successor Agency so long as there is
adequate documentation to support the need of said funds to fulfill obligations associated
with the Rogel I Judgment and Settlement Agreement; and
WHEREAS, pursuant to the Rogel I Judgment, until all Rogel I Obligations have
been satisfied in full, the Agency shall engage a mutually agreed upon third party
Administrator to monitor all Rogel activity and report its findings to all parties involved;
and
WHEREAS, it is proposed that the Lynwood Housing Authority engage Kealoha
Consulting Corp, as Settlement Administrator, to provide administrative, monitoring, and
reporting services for the development of an affordable housing Project to satisfy Rogel I
Obligations mandated by said Settlement Agreement; and
WHEREAS, in order to engage the consultant, staff recommends that the Housing
Authority allocate funds for said service from the LMIHAF (“Rogel I”) fund in an amount
not to exceed $150,000; and
WHEREAS, the Consultant is requesting $7,500 retainer, with the Scope of Work,
hourly rates, and fees detailed in the attached Exhibit A; and
WHEREAS, proposed services are consistent with eligible use of said funds as it
is directly related to Rogel Settlement oversight compliance; and
WHEREAS, a vote of four-fifths (4/5) majority will be required to by-pass the RFP
process and as requisite, the chosen consultant has been mutually approved both
Defendants and Plaintiff’s to the Rogel Settlement Agreement; and
WHEREAS, the Administrator services outlined in consultant scope are a required
element in the fulfillment of the Rogel Settlement Obligation, therefore funding for an
agreement for said services is in order.
NOW, THEREFORE, THE HOUSING AUTHORITY BOARD OF THE CITY OF
LYNWOOD DOES HEREBY FIND, DETERMINE, ORDER AND RESOLVE AS
FOLLOWS:
Section 1. The Lynwood Housing Authority Board hereby authorizes the Chair to
execute a Professional Service Agreement (in a form approved by the Authority Counsel)
with Kealoha Consulting Corp, as the Settlement Administrator, to provide administrative,
monitoring, and reporting services for the development of an affordable housing Project
to satisfy Rogel I Obligations mandated by said Settlement Agreement.
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Section 2. The Lynwood Housing Authority Board herby authorizes the appropriation
of a $7,500 retainer from the unappropriated LMIHAF (“Rogel I”) fund balance for
Settlement Administrator services related to the Rogel Settlement Agreement pursuant
to the Rogel I Judgment, and additional payments as needed for said services at the
hourly rates further described in the attached Exhibit A in an amount not to exceed
$150,000.
Section 3. The Lynwood Housing Authority Board hereby directs the Department of
Finance and Administration Services to take the necessary steps to adjust the budget to
reflect the authorized appropriation for use of said unappropriated LMIHAF balance as
follows:
Fund Dept. Div. Object Description Amount
1013 51 216 62015
Professional/Contr.
Services $150,000
1013 Budgetary Fund Balance ($150,000)
Section 4. Consistent with Lynwood Municipal Code Section 6-3.13(a)(3) and by a vote
of not less than four-fifths (4/5) of its members, the Lynwood Housing Authority Board
finds that contracting directly with Kealoha Consulting Corp to satisfy the terms of the
Rogel I Judgment and Rogel Settlement Agreement would be more efficient than
conducting an RFP process.
Section 5 The Secretary shall certify to the adoption of this resolution and hereafter
the same shall be in full force and effect.
PASSED, APPROVED and ADOPTED this 19th day of November 2019.
Jose Luis Solache’
Chair
ATTEST:
Maria Quinonez
Secretary
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
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Noel Tapia Jose Ometeotl
Authority Counsel Executive Director
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