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HomeMy WebLinkAboutItem No. 15 - Amended Recognized Obligation Payment Schedule 2020- Consent Calendar City of San Bernardino Request for Council Action Date: May 20, 2020 To: Honorable Mayor and City Council Members From: Teri Ledoux, City Manager By:Michael Huntley, Community & Economic Development Director Subject: Amended Recognized Obligation Payment Schedule 2020- 2021B Recommendation It is recommended that the Mayor and City Council, in its capacity as the Successor Agency to the Redevelopment Agency of the City of San Bernardino, approve the amended Recognized Obligation Payment Schedule 2020-2021B and authorize the City Manager, or designee, to administer its filing and implementation consistent with the California Health and Safety Code and as more particularly described within the staff report. Background Pu October 1st of each year, a successor agency may submit one amendment to the ROPS, if the San Ber that a revision is necessary for the payment of approved enforceable obligations during the second one-half of the ROPS period, which shall be defined as January 1 to June 30, inclusive. The Successor Agency to the Redevelopment Agency of the City of San - the Successor Agency is a defendant. On December 16, 2019, the CWOB approved ROPS 20-21 A & B of the Successor Agency for Fiscal Year 2020/21. Item No. 133 of ROPS 20-21 A & B is for the payment mount was listed with respect to Item No. 133 because, as explained in the notes of ROPS 20- 21 A & B, Item No. 133 would fund any payment as may be due in satisfaction of a judgment or settlement of Los Angeles Superior Court Case Nos. BC465755 and BC468955 involving Placo San Bernardino, LLC, the Successor Agency and related parties. Item No. 115 relates to attorney fees for the same litigation but does not include amounts to be paid in satisfaction of a judgment or settlement. At this time Item No. 133 is a placeholder. To the extent that an obligation for payment is established by or through the Superior Court, such payment will be specified on a future ROPS or amended ROPS. Further, the date noted in Item No. 133 as the agreement or contract Page 1 6733 date is the date that the action against the Agency was filed; it is not an obligation date. Also, 100% of the matter in dispute arises from pre-dissolution events and transactions. The actions identified in ROPS 20-i.e. Redevelopment Agency of the City of San Bernardino v. DMC Investment Holdings, LLC, et al., Los Angeles Superior Court Case No. BC465755 and Placo San Bernardino, LLC v. City of San Bernardino, et al., Los Angeles Superior Court Case No. BC468955) were filed on May 11, 2011 and September 7, 2011, prior to the dissolution of redevelopment agencies in California. After dissolution the litigation against the former Redevelopment as a matter of law, to the Successor Agency. (HSC 31473(g).) The parties to the Placo Lawsuit have reached a global settlement of that litigation. However, the Successor Agency is not allowed to reallocate the RPTTF revenues differently than how the Successor Agency reported the use of reserve amounts on subsequent approved ROPS. As a result, while the payment of a settlement in the Placo Lawsuit is an approved obligation on ROPS 20-21 A & B, the Successor Agency cannot pay the settlement amounts because no funds were allocated for the approved obligation. Therefore, the staff is requesting approval of the proposed Amended Recognized Obligation Payment Schedule 2020-2021B for the period of January 1, 2021 through -to add $600,000 to the previously approved Item No. 133 of the ROPS 20-21 to allow the Successor Agency to make the payment required by the settlement agreement. Discussion Approval of Amended ROPS 2020-2021B would allocate an additional $600,000 of RPTTF to the Successor Agency in order to resolve the Placo Lawsuit. The Placo the settlement agreement and the Amended ROPS 2020-2021B is likely to result in savings as the Successor Agency would no longer incur the significant costs and Former Agency and Panattoni. Given the complexity of the litigation, there is a through trial would meet or exceed $600,000. ROPS 20-21 A & B include a line amount of $547,400 (Item No. 115) for the time period of July 1, 2020 through June 30, 2021 for -million dollar adverse judgment. 2020-2025 Key Strategic Targets and Goals Adoption of the attached resolution aligns with Key Strategic Target No. 1: Financial Stability. Specifically, the settlement of the lawsuit related to the Carousel Mall property minimizes further risk and litigation exposure to the Successor Agency. Fiscal Impact lawsuit is provided through the Recognized Obligation Payment Schedule. Page 2 6733 Conclusion It is recommended that the Mayor and City Council of the City of San Bernardino, in its capacity as the Successor Agency, approve the Amended ROPS 20-21B, and authorize transmit the ROPS 20-21 B to the County Wide Oversight Board for consideration; ii) to the State Department of Finance for their consideration; iii) take such other actions and execute such other documents as are necessary to effectuate the ROPS; and iv) implement ROPS 20-21B on behalf of the Successor Agency, including authorizing and causing such payments as authorized by ROPS 20-21B. Attachments Attachment 1 Amended ROPS 20-21B Ward: All Synopsis of Previous Council Actions: The Successor Agency considers its ROPS annually. ROPS 20-21 A & B represents the tenth (10th) fiscal year for winding-down the former redevelopment agency. Page 3