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OSB 14-002 RESOLUTION NO. OSB 14-002 A RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE POWAY REDEVELOPMENT AGENCY APPROVING A FEBRUARY 22, 1991 SEWER FUND LOAN BETWEEN THE CITY OF POWAY AND THE FORMER POWAY REDEVELOPMENT AGENCY AND MAKING FINDINGS RELATING THERETO WHEREAS, pursuant to the provisions of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.), the City Council of the City of Poway ("City") activated the Poway Redevelopment Agency ("Redevelopment Agency") and adopted, and subsequently amended, the Redevelopment Plan for the Paguay Redevelopment Project Area ("Redevelopment Plan"); and WHEREAS, in furtherance of its redevelopment activities, the City and Redevelopment Agency completed a loan, dated February 22, 1991 (February 22, 1991 Sewer Fund Loan; Exhibit A), whereby the City lent to the Redevelopment Agency an amount equal to $874,308 from the City's Sewer Fund, of which a principal balance of $854,771 remains, for the purpose of completing public improvement projects; and WHEREAS, Assembly Bill (AB) X1 26, enacted June 2011, and AB 1484, enacted June 2012 (collectively, the "Dissolution Act") required the dissolution of redevelopment agencies and established certain procedures and requirement for the wind-down of their activities; and WHEREAS, the Successor Agency to the Poway Redevelopment Agency ("Successor Agency") is the successor entity to the Redevelopment Agency and, pursuant to the Dissolution Act, is responsible for the wind-down affairs of the former Redevelopment Agency, including without limitation the performance and repayment of all enforceable obligations of the former Redevelopment Agency; and WHEREAS, the Oversight Board is the oversight board to the Successor Agency and, pursuant to the Dissolution Act, is responsible to oversee the actions of the Successor Agency in the wind-down affairs of the former Redevelopment Agency, including without limitation the performance and repayment of all enforceable obligations of the former Redevelopment Agency; and WHEREAS, Health and Safety Code Section 34171(d)(2) provides, with a few exceptions, that "enforceable obligation" does not include any agreements, contracts, or arrangements between the city, county, or city and county that created the redevelopment agency and the former redevelopment agency; and WHEREAS, the Dissolution Act further provides that after a successor agency receives a finding of completion from the Department of Finance ("DOF") pursuant to Health and Safety Code Section 34179.7, loan agreements entered into between the redevelopment agency and the city, county, or city and county that created the redevelopment agency shall be deemed to be enforceable obligations provided that the oversight board makes a finding that the loan was for legitimate redevelopment purposes; and Resolution No. OSB 14-002 Page 2 WHEREAS, the Successor Agency has received a finding of completion from the DOF on May 24, 2013; and WHEREAS, in addition to establishing when a loan agreement between the city and redevelopment agency shall be deemed to be an enforceable obligation, Health and Safety Code Section 34191.4 further establishes certain restrictions and limitations concerning loan repayments; and WHEREAS, the City and Successor Agency have submitted the February 22, 1991 Sewer Fund Loan, together with other information relating thereto, to the Oversight Board and requested that the Oversight Board approve the February 22, 1991 Sewer Fund Loan, and find that the loan of funds under the February 22, 1991 Sewer Fund Loan was for legitimate redevelopment purposes; NOW, THEREFORE, BE IT RESOLVED by the Oversight Board to the Successor Agency of the Poway Redevelopment Agency as follows: Section 1. Recitals. The recitals set forth above are true and correct and are incorporated into this Resolution by this reference. Section 2. Findings. The Oversight Board has reviewed the original purpose and use of the February 22, 1991 Sewer Fund Loan and hereby finds and determines that the loan of funds by the City to the former Redevelopment Agency under the February 22, 1991 Sewer Fund Loan was for legitimate redevelopment purposes. This finding is based upon the following: a) The amounts due and owing to the City under the February 22, 1991 Sewer Fund Loan reflects the repayment to the City of amounts advanced to or on behalf of the former Redevelopment Agency in order to assist the Redevelopment Agency with public improvement projects to benefit the Paguay Redevelopment Project Area and the community. b) Financing public improvements in the Paguay Redevelopment Project Area was specifically identified in the Redevelopment Plan as activities to be undertaken by the Redevelopment Agency to further the goals of the Redevelopment Plan. c) Health and Safety Code Section 33133 authorizes a redevelopment agency to accept assistance from any public or private source for the redevelopment agency's activities. Furthermore, the Redevelopment Plan specifically authorizes the Redevelopment Agency to receive assistance from the City in forms that include advances and loans. d) The Redevelopment Agency was established for the purpose of eliminating blight; stimulating private investment; upgrading commercial and industrial areas; developing parks and recreation facilities; financing public improvements; alleviating infrastructure deficiencies; and providing affordable housing in the areas constituting the Paguay Redevelopment Project Area pursuant to the adopted Redevelopment Plan. The Redevelopment Agency entered into the Resolution No. OSB 14-002 Page 3 February 22, 1991 Sewer Fund Loan with the City in order to borrow funds necessary for the Redevelopment Agency to pay costs associated with public improvement projects in accordance with and in implementation of the Redevelopment Plan and the five-year Implementation Plan adopted by the Redevelopment Agency pursuant to Health and Safety Code Section 33490. e) The amounts provided to the Redevelopment Agency under the February 22, 1991 Sewer Fund Loan were loaned to the Redevelopment Agency to further the Redevelopment Agency's redevelopment activities and goals in accordance with and in furtherance of the Redevelopment Plan and the Implementation Plan, to benefit the Paguay Redevelopment Project Area and the surrounding community. Section 3. Approval of February 22, 1991 Sewer Fund Loan. The Oversight Board hereby approves the February 22, 1991 Sewer Fund Loan from the City to the former Redevelopment Agency, including without limitation the recalculation of interest using the Local Agency Investment Fund rate as of the quarter ending December 31, 2013, in accordance with and as set forth in the February 22, 1991 Sewer Fund Loan Repayment Schedule (Exhibit B). The total principal and interest owed ("Amounts Owed") for the February 22, 1991 Sewer Fund Loan is $871,250.12. The Oversight Board further determines that the repayment of Amounts Owed under the February 22, 1991 Sewer Fund Loan is an enforceable obligation and the Successor Agency is authorized to include the repayment of the February 22, 1991 Sewer Fund Loan as an enforceable obligation under its future Recognized Obligation Payment Schedules (ROPS) submitted to the Oversight Board for approval. As Proposition 218, and other constitutional requirements that must be met, support the need for repayment of the full amounts loaned to the Redevelopment Agency from the City's Sewer Fund, the Oversight Board hereby approves, and authorizes the Successor Agency to take such actions, in cooperation with the City, to ensure that all monies due and owing under the February 22, 1991 Sewer Fund Loan are repaid in full to the City's Sewer Fund. Section 4. Transmittal of February 22, 1991 Sewer Fund Loan to Department of Finance. The Successor Agency is hereby authorized and directed to take any action necessary to carry out the purposes of this Resolution, including without limitation, providing any documentation and evidence to the Department of Finance as necessary to obtain from the Department of Finance approval of the February 22, 1991 Sewer Fund Loan as an enforceable obligation. Resolution No. OSB 14-002 Page 4 PASSED, ADOPTED AND APPROVED by the Oversight Board to the Successor Agency of the Poway Redevelopment Agency at a meeting thereof this 30th day of April 2014. Bruce Tarzy, Chair c`-LJ ATTEST: Sheil R. Cobian, CMC, Secretary Resolution No. OSB 14-002 Page 5 STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN DIEGO ) I, Sheila R. Cobian, Secretary of the Successor Agency of the Poway Redevelopment Agency, do hereby certify under penalty of perjury that the foregoing Resolution No. OSB 14-002 was duly adopted by the Oversight Board to the Successor Agency of the Poway Redevelopment Agency at a meeting of said Board held on the 30th day of April 2014, and that it was so adopted by the following vote: AYES: TARZY, FONG-SAKAI, LYON, SCOTT, LADERMAN, THOLANDI NOES: NONE ABSENT: TAM DISQUALIFIED: NONE ir,saa).6E't aberia;k" Sheila Cobian, CMC, Secretary Attachments: Exhibit A — February 22, 1991 Sewer Fund Loan Repayment Agreement and Supporting Budget Documentation Exhibit B — February 22, 1991 Sewer Fund Loan Repayment Schedule • REPAYMENT AGREEMENT This ,Repayment Agreement entered in to as of the 22nd day of February , 19_11, by and between. the PoWay Redevelopment Agency, a public body, corporate and politic (the "Agency") and the City of Poway, a municipal corporation (the . "City"). RECITALS A. The Agency is responsible for carrying out redevelopment activities in the Poway .Redeve.Tdpmen.t Project Area (the "Project.Area") which is the subject of a redevelopment plan approved by the City Council of the City by ordinance adopted on December 13, 1983. B. The City Council of the City desires to advance a loan to the Agency in the principal amount of up• to $ 874,308.00 to assist the Agency in paying the cost of the design and .construction of public 'improvement projects, and the Agency desires to accept said loan on the terms and 'conditions set forth herein • (the "Public Improvement Projects Loan"). C. The purpose of this loan is to finance Pay Back.of RDA Loans From Street Development project. • NOW, THEREFORE, in consideration of the foregoin and the mutual covenants � 1 � 9 and conditions set forth herein, the parties hereto agree as follows: ' Section 1. The City hereby advances to the Agency a Public Improvement Projects Loan in the principal amount of up to $ 874,3 08.00 with interest thereon calculated at the rate of return on City' investments calculated at January 1 of each year, and the Agency hereby accepts the Public Improvement • Projects Loan on the terms and provisions set forth herein. The Agency shall be authorized to draw against the Public Improvement Projects Loan up to the authorized principal amount thereof from time to time in accordance with generally accepted accounting principles. The Agency's obligation to repay the Public Improvement Projects Loan and the interest thereon shall be evidenced by a promissory note in the form attached hereto as Exhibit "A" and incorporated herein by reference (the "Public Improvement Projects Promissory Note'). Section 2. The Agency's obligation to make payments "to••the city pursuant to the promissory note referred to herein and in the recitals hereinabove shall be repayed solely from amounts deposited in the special fund created with respect to the Project Area into which tax increment revenues received by• the Agency pursuant to section 33670(b) are deposited, if and only to the extent that such • tax increment revenues are received. Section 3. The parties hereto acknowledge and agree that the Agency's obli- gation to repay amounts evidenced by the •Promissory Note referred to herein - shall be automatically subordinated to any other obligation of the Agency secured by tax increment revenues derived from the Area for which such tax increment revenues are otherwise pledged in connection with the issuance of bonds, notes, or certificates of participation as part of the implementation of the Redevelopment Plan fdr the Project Area. • Exhibit A t7 • ID -2- • Section 4. The Agency shall have the right At any time, from ,time. to time, upon at least ten (10) days Written notice to the City,, to prepay., without pre- mium Or penalty the outstanding balance of the Promissory Note referred to herein., or any portion theredf, with the interest payable through the date 'of such .prepayment. Section 5. This. Agreement .shall terminate when all obligations of the .. Agency evidenced by- the P„rom.1ssory Note referred to herein shall have been discharged in full.. . • Section 6. In case .any one or more of the provisions contained in this Agreement should be held invalid, illegal , or unenforceable in any respect, the validity, legality, and enforceability of ithe rema•i•ning provisions contained herein shall not in any way be-affected or impaired thereby. Section; 7. No member, offficerr agent, or employee of the Agency shall be individually or per5onal'Ty T•iatil•e for the payment of the principal of or • interest on the Promissory Note. Section 8. The parties hereto acknowledge and agree that the obligations of the Agency evidenced by the Promissory Note referred to herein constitutes an "indebtedness°u within the meaning of Health and Safety Code Section 33670.(b). IN WITNESS WHEREOF, the parties hereto have executed this Repayment Agreement as of the date first above written. CITY •0 POWAY. IV f ,.� an olds it ., Mayor ATTEST: Mariogie Wahlsten, City Clerk POWAY jE DEVELO MENT AGENCY / am ol4smi th, Chairman ATTEST: �1 . i`U ate , Marjorie. K. Wahl s.ten, Secretary 6/G/Repayl-3/CP33 Exhibit A '41 • PUBLIC :IMPROVEMENT PROJECTS' PROMISSORY'NM • Poway,, California 'Dated as of: February 22 , 19 91 The Poway Redevelopment. Agency, a public body corporate and politic ('"Agency") , for value recei.ved:, hereby promises to pay the City of Poway., a municipal corporatibn ("City") the •principal sum of $ .874,308:00 , in lawful • money of the United .States. o;fj .America, together with interest thereon on the unpaid balance thereof from the date hereof at the rate of return. on the City of Poway's investments as calculated. This rate is not to exceed 12% or the maxi- mum interest rate that may be lawfully, paid by a Redevelopment Agency. - 'Repayment of principal and interest shall be made as monies are available. from tax increment or other sources. P0WAY' REDEVEL PMENT AGENCY Jan 'Goldsmi'fh, Chairman ATTEST: 4 Ma'rjori . Wahl step, Secretary • • EXHIBIT "A" Exhibit A sia+f,Wi,r4 : 3Rs'.tyig'„t {`€}�r £s;! : £3C. c ' `" aigfi. _nV,M:. .,.,, ,M ,r 5N:a gg gIYSC 3 Fnrt. ,ti Chart: C I a Period: 3 Fiscal Year 07 ° rr-n Fund: 520 (! Account: 8154_ I Account Transaction Date Type Document Description Amount Debit/ Credit 8154 : 118-APR-2007 i J099- i J07O4018 aDaY ForUon of RDA loan batense ._,...„__ Liy _ 413 55600, CreA@ ,� 8154 .. 9i�lUL 2006.......> ioa BtJD0801 : GINNING BALANCE,_ _ ��" ! j 3 076 049 00. (Debt I ' L__.,_. . 1 i 1 ...__ } I. I. L_.. J I. i 1 . 1.. .. . ; (__ 1 1 1. ..: .. 1 1 Cam` [ i [ l ( I .. .. [ ] [ .._II.. . uF........ . j (................................................................................................ i1. .. ..,_[ ( ;. 4 -‘------7,J . --'' '''; 1==.1 F-H 1 — — --- . --1 . ---- -- : — "' ' [ i [_ 1 I .. l ! 1 1 ___ 1 [ [ .. I [ [ [ 1 c 1 l I_.. .� Li......________ m __ ,1 ; EE i __ fy�--• Total:. ....M..:A. 8:564;ss od, oabit... Note: The$413,556.00 FY 07 principal repayment paid off three loans as well as part of the$874,308 loan. The amounts of the three loans were$64,019,$240,000 and$90,000,which left$19,537 to be applied to this loan. Original Loan 874,308.00 , FY 07 principal payback (19,537.00) Current balance 854,771.00 Exhibit A 31 1 • CITY OF POWAY SEWER FUND . I1988-1989 1989-1990 1989-1990 , 1990-1991 1990-1991 ACTUAL BUDGET ACTUAL PROPOSED APPROVED IFUND ACTIVITY DETAIL BEGINNING BALANO-July 1 $ - $ $ - $ - $ - . :Prior Years Appropriation 7,543,400 7,903,870 9,040,919 12,746,494 12,746,494 Revenues 4,787,363, 3,5051010 6,637,612 • 4,364,750 4,364,750 TOTAL FUNDS AVAILABLE $12,330,763 $11,408,880 $15,678,531 $17,111,244 $17,111,244 . =` EXPENDITURES• Bond Interest l• & Redemption $ 153;480 $ 152,900 $ 153,578 $ 146,400 $ . 146,400 r Operating Expenses: . �- Admin. Services $ 286,651 $ 278,360 $ 285,257 $ 396,308 $ 396,307 Engineering Services - - - 148,230 148,230 Public Services 1,994,894 2,808,511 2,121,679 3,111,276 3,111,276 ` Total Operating Expenses $ 2,281,545 $ 3,086,871 $ 2,406,936 $ 3,655,814 $ 3,655,813 Capital Projects: h Sewer Improvements Ins (continuing approp.) $ 849,485 $ - $ - $ - $ - ,.,4,.::.:: :.. Sewer Improvements - 95,000 371,523 150,000 150,000 T TOTAL CAPITAL PROJECTS $ 849,485 $ 95,000 $ 371,523 $ 150,000 $ 150,000 1f TOTAL EXPENDITURES $ 3,284,510 $ 3,334,771 $ 2,932,037 $ 3,952,214 $ 3,952,213 k TRANSFERS/LOANS-In (Out) rr.{ Transfer to Cap. Repl . Fund $ (5,334). $ - $ - $ • - $ - Loan• to Redev. Agency - - - - (874,308) IML:,.. .. �,>:_ } =TOT ;;_,, AL TRANSFERS/LOANS $ (5,334) $ - $ - $ - $ (874,308) . TOTAL APPROPRIATIONS $ 9,040,919 $ 8,074,109 $12,746,494 $13,159,030 $12,284,723 ENDING BALANCE-June 30 0 0 0 0 0 L,-,-,::;11,:,,,,,.•,:,..:.• . ,,,„„,„. •, r: k•wz .:6,::.,•, Exhibit A FEBRUARY 22, 1991 SEWER FUND LOAN 18-YEAR $854,771 Principal Balance Annual paymenton.6/30 of each fiscal year(18 year repayment) 49,478A8-„ 1.I*interest rate 0.26°l0?` Pymt# Balances Principal Interest Total Balance @ 6/30/15 854,771.00 16,479.12 871,250.12 1 1 Payment CO 6/30/15 32,999.36 16,479.12 49,478.48 Balance @ 7/1/15 821,771.64 - 821,771.64 FY 15-16 Interest - 2,136.61 2,136.61 Balance @ 6/30/16 821,771.64 2,136.61 823,908.25 2 1 Payment @ 6/30/16 47,341.87 2,136.61 49,478.48 Balance @ 7/1/16 774,429.77 - 774,429.77 FY 16-17 Interest - 2,013.52 2,013.52 Balance @ 6/30/17 774,429.77 2,013.52 776,443.29 3 1 Payment @ 6/30/17 47,464.96 2,013.52 49,478.48 Balance @ 7/1/17 726,964.81 - 726,964.81 FY 17-18 Interest - 1,890.11 1,890.11 Balance @ 6/30/18 726,964.81 1,890.11 728,854.92 4 1 Payment @ 6/30/18 47,588.37 1,890.11 49,478.48 Balance @ 7/1/18 679,376.44 - 679,376.44 FY 18-19 Interest - 1,766.38 1,766.38 Balance @ 6/30/19 679,376.44 1,766.38 681,142.82 5 1 Payment @ 6/30/19 47,712.10 1,766.38 49,478.48 Balance @ 7/1/19 631,664.34 - 631,664.34 FY 19-20 Interest - 1,642.33 1,642.33 Balance @ 6/30/20 631,664.34 1,642.33 633,306.67 6 1 Payment @ 6/30/20 47,836.15 1,642.33 49,478.48 Exhibit B FEBRUARY 22, 1991 SEWER FUND LOAN 18-YEAR $854,771 Principal Balance Continued Pymt# Balances Principal Interest Total Balance @ 7/1/20 583,828.19 - 583,828.19 FY 20-21 Interest - 1,517.95 1,5.17.95 Balance @ 6/30/21 583,828.19 1,517.95 585,346.14 7 I Payment @ 6/30/21 47,960.53 1,517.95 49,478.48 Balance CO 7/1/21 535,867.66 - 535,867.66 FY 21-22 Interest - 1,393.26 1,393.26 Balance @ 6/30/22 535,867.66 1,393.26 537,260.92 8 I Payment @ 6/30/22 48,085.22 1,393.26 49,478.48 Balance @ 7/1/22 487,782.44 - 487,782.44 FY 22-23 Interest - 1,268.23 1,268.23 Balance © 6/30/23 487,782.44 1,268.23 489,050.67 9 I Payment @ 6/30/23 48,210.25 1,268.23 49,478.48 Balance @ 7/1/23 439,572.19 - 439,572.19 FY 23-24 Interest - 1,142.89 1,142.89 Balance @ 6/30/24 439,572.19 1,142.89 440,715.08 10 I Payment @ 6/30/24 48,335.59 1,142.89 49,478.48 Balance @ 7/1/24 391,236.60 - 391,236.60 FY 24-25 Interest - 1,017.22 1,017.22 Balance @ 6/30/25 391,236.60 1,017.22 392,253.82 11 I Payment @ 6/30/25 48,461.26 1,017.22 49,478.48 Balance @ 7/1/25 342,775.34 - 342,775.34 FY 25-26 Interest - 891.22 891.22 Balance @ 6/30/26 342,775.34 891.22 343,666.56 12 I Payment @ 6/30/26 48,587.26 891.22 49,478.48 Exhibit B FEBRUARY 22, 1991 SEWER FUND LOAN 18-YEAR $854,771 Principal Balance Continued Pymt# Balances Principal Interest Total Balance @ 7/1/26 294,188.08 - 294,188.08 FY 26-27 Interest - 764.89 764.89 Balance @ 6/30/27 294,188.08 764.89 294,952.97 13 I Payment @ 6/30/27 48,713.59 764.89 49,478.48 Balance @ 7/1/27 245,474.49 - 245,474.49 FY 27-28 Interest - 638.23 638.23 Balance @ 6/30/28 245,474.49 638.23 246,112.72 14 I Payment @ 6/30/28 48,840.25 638.23 49,478.48 Balance @ 7/1/28 196,634.24 - 196,634.24 FY 28-29 Interest - 511.25 511.25 Balance @ 6/30/29 196,634.24 511.25 197,145.49 15 . I Payment @ 6/30/29 48,967.23 511.25 49,478.48 Balance @ 7/1/29 147,667.01 - 147,667.01 FY 29-30 Interest - 383.93 383.93 Balance @ 6/30/30 147,667.01 383.93 148,050.94 16 1 Payment © 6/30/30 49,094.55 383.93 49,478.48 Balance @ 7/1/30 98,572.46 - 98,572.46 FY 30-31 Interest - 256.29 256.29 Balance CO 6/30/31 98,572.46 256.29 98,828.75 17 ( Payment © 6/30/31 49,222.19 256.29 49,478.48 Balance @ 7/1/31 49,350.27 - 49,350.27 FY 31-32 Interest - 128.31 128.31 Balance @ 6/30/32 49,350.27 128.31 49,478.58 18 I Payment @ 6/30/32 49,350.27 128.31 49,478.58 Balance @ 7/1/32 - - - Exhibit B