Culver City Observer -

Council Approves Loan To Successor Agency

 

November 27, 2014

By Lynne Bronstein

Observer Reporter

Following the recent delay of transfer of funds to the Culver City Successor Agency to the Redevelopment Agency per action by the state Department of Finance (DOF), the City Council on Monday, November 24 approved a loan agreement that will loan up to $341,500 to the Successor Agency to handle short-term cash flow needs.

The Successor Agency is currently responsible for making payments of "enforceable obligations" of the former Culver City Redevelopment Agency. Because of the DOF's hold on allocating funds to the Agency, the Successor Agency does not have sufficient cash available for any purpose but debt service.

The DOF has reduced the Redevelopment Property Tax Trust Fund (RPTTF) proceeds provided to the Successor Agency by $11.127 million for each of the last two ROPS periods for a total of $22.254 million. The Successor Agency litigated these adjustments, with a ruling issued in late October.

While the judgment ordered the immediate disbursement of

approximately $10.4 million being held by the Los Angeles County Auditor-Controller (CAC), the DOF filed an appeal and the CAC has determined that the judgment is stayed and has not disbursed the $10.4 million to the Successor Agency.

All of the cash on hand with the Successor Agency was used towards the debt service payment that was due on November 3, 2014.

As a result, the Successor Agency would not be able to cover its obligations for the foreseeable future, including expenditures related to the Westfield OPA, the Rush Pacifica settlement, debts to the City, and costs for legal and consulting services.

The loan agreement passed by the Council will provide funds to cover the cost of the following items: under ROPS 14-15A: $2000 to Applied Best Practices; $150,000 to Kane Ballmer and Berkman; $24,000 to Keyser Marsten Associates; $7,500 to Bond Logistix LLC; under ROPS 14-15B:

$2000 to Applied Best Practices; $150,000 to Kane Ballmer and Berkman; $2,500 to Marina Landscape; and $3,500 for various purposes.

The loan will be considered an enforceable obligation and be repaid from future RPTTF revenues received by the Successor Agency in accordance with the Redevelopment Dissolution Act.

 

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