AGENDA ITEM
TO: HONORABLE CHAIR
AND MEMBERS OF THE SUCCESSOR AGENCY
FROM: CARLO TOMAINO
CHIEF ADMINISTRATIVE OFFICER
BY: SIAMLU COX
FINANCE DIRECTOR
DEBBIE PACHECO
ACCOUNTING MANAGER
DANIEL BASULTO
SENIOR ACCOUNTANT
SUBJECT:
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ADOPT RECOGNIZED OBLIGATION PAYMENT SCHEDULE - JULY 1, 2026 TO JUNE 30, 2027 (ROPS FY 26-27AB)
summary
Summary:
Pursuant to AB1x 26, codified as Health and Safety Code Section 34172, the Signal Hill Redevelopment Agency was dissolved effective February 1, 2012. In accordance with Health and Safety Code Section 34177, the Recognized Obligation Payment Schedule (ROPS) process requires submission of an annual budget outlining proposed expenditures for the upcoming fiscal year. The ROPS Fiscal Year (FY) 26-27AB covers the period from July 1, 2026, to June 30, 2027. Staff is requesting that the City Council, as Successor Agency of the City of Signal Hill, adopt a resolution approving the ROPS and transmitting such to the Los Angeles County 4th Supervisorial District Consolidated Oversight Board for review and approval. Formal City Council action is required for the City to comply with the State law and associated requirements.
recommendation
Recommendation:
Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL AS SUCCESSOR AGENCY OF THE CITY OF SIGNAL HILL, CALIFORNIA, ADOPTING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) FY 26-27AB PURSUANT TO HEALTH AND SAFETY CODE §34177 AND TRANSMITTING THE ROPS FY 26-27AB TO THE LOS ANGELES COUNTY 4TH SUPERVISORIAL DISTRICT CONSOLIDATED OVERSIGHT BOARD FOR ITS REVIEW AND APPROVAL
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Fiscal Impact:
The anticipated total funding for the ROPS FY 26-27AB covering July 1, 2026, to June 30, 2027, is $13,491,021, including $3,902,881 debt service reserves and $796,950 in bond proceeds funding in ROPS 26-27B. The expenditures for the year cover $2,800,000 for contractual obligations. The budget includes an administrative cost allowance of $250,000. The budget includes the seventh payment on the City-Agency loan of $3,100,000. Bond payments, reserves for bonds, continuing disclosure, and trustee fees total $7,341,021.
Background:
Pursuant to AB1x 26, the City Council is the designated Successor Agency (SA) to the former Signal Hill Redevelopment Agency (SHRA). Under the revised schedule provided by the Supreme Court in upholding the constitutionality of AB1x 26, the dissolution of the SHRA became effective February 1, 2012. With the dissolution of the SHRA, the SA became responsible for payment of all enforceable obligations of the former SHRA and for disposal of the SHRA’s assets.
Every Successor Agency is required to submit an Oversight Board (OB) approved ROPS on an annual basis. The State Department of Finance (DOF) reviews and approves the budget. If the SA needs to amend the budget for the payment of an enforceable obligation, HSC §34177.7(o)(1)E permits a one-time amendment to the budget during the fiscal year, provided it is submitted no later than October 1 of the given year.
The administrative cost allowance is capped at three percent of the actual property tax distributed to the Successor Agency by the County Auditor Controller (CAC) in the preceding fiscal year for payment of approved enforceable obligations. This amount is further reduced by the SA’s administrative cost allowance and loan repayments made to the City during the preceding fiscal year, subject to a minimum of $250,000, unless such amount is reduced by the OB or by agreement between the SA and the DOF. For the FY 26-27AB, the administrative cost allowance is $250,000. This money is used to cover staff costs associated with SHRA dissolution activities.
Upon approval of ROPS FY 26-27AB, the ROPS would be submitted to the Los Angeles County 4th Supervisorial District Consolidated Oversight Board for review and approval at its meeting on January 20, 2026. State law requires that the approved ROPS the submitted to the DOF by February 2, 2026. The DOF will issue determinations on enforceable obligations by April 15, 2026; funds will be distributed on June 1, 2026. As required, the approved ROPS must be posted on the City’s website. Additionally, SA staff must provide the adopted ROPS to the County Administrator, CAC and the DOF.
Failure to file the ROPS within the specified time frame can lead to significant legal actions and financial consequences. Creditors of the SA, DOF, and affected taxing entities may file a writ of mandate to compel the SA to adopt a ROPS. In addition, the SA may be subject to civil fines of $10,000 per day for noncompliance. If the SA does not submit the ROPS within 10 days of the deadline, it may result in a 25% reduction on its maximum administrative cost allowance for the period covered by the delinquent ROPS. Furthermore, the DOF may instruct the CAC to withhold payments to enforceable obligations, potentially disrupting the SA’s ability to meet its financial commitments.
Under AB 1484, the DOF has five days to request review of an enforceable obligation listed on the ROPS schedule. The DOF is required to make a determination regarding the enforceable obligations, including the amounts and funding sources, no later than 45 days after the ROPS is submitted by an SA. In addition, AB 1484 provides the SA a five-day window to request an opportunity to meet and confer on additional disputed items once the SA has received the DOF determination. This process allows for clarification and resolution of discrepancies before finalizing the ROPS.
Previously under the dissolution bill (AB1x 26), the CAC was required to “certify” the ROPS. Under AB 1484, the CAC is authorized to review the ROPS and may object to any item or funding source. The CAC is required to submit notice to the DOF, the SA and the OB, 60 days prior to the distribution date before payment of funds. If the SA and OB dispute the rejected item, then the DOF is responsible for determining what will be included on the applicable ROPS.
Staff is requesting the City Council, as Successor Agency of the City of Signal Hill, to adopt the resolution approving the ROPS and transmitting such to the Los Angeles County 4th Supervisorial District Consolidated Oversight Board for its review and approval. The proposed actions are required to comply with the State law and requirements
Attachment(s):
A. Successor Agency Resolution Adopting ROPS FY 26-27AB
B. Exhibit A - ROPS FY 26-27AB