Successor Agency to the PCDC FY 2017 Recommended Budget Joint Finance Committee/City Council Meeting June 20, 2016

Successor Agency Manages redevelopment projects currently underway. Mission Statement Manages redevelopment projects currently underway. Makes payments identified on the Recognized Obligation Payment Schedule (ROPS) and disposes of redevelopment assets and properties as directed by the Oversight Board. The ROPS delineates the Successor Agency’s outstanding “bills” or “enforceable obligations” payable every six months and their source of payment. Drafts an annual administrative budget and a ROPS that must be approved by the Oversight Board and the California Department of Finance (DOF). The Successor Agency to the Pasadena Community Development Commission Responsible for the winding down of all Redevelopment Agency operations. Disposal of the assets and properties formerly owned by the Redevelopment Agency. Collection of Debts. Paying and overseeing recognized enforceable obligations.

Successor Agency Revenue and Expense History By Fund FY 2015 Actual Sources / Expenses FY 2015 Actual FY 2016 Revised FY 2017 Recommended Redevelopment Obligation Retirement Fund $5,224,000 $3,388,000 $7,376,000 Total FTEs 1.00 Successor Agency does not use General Fund monies. FY 17 Sources and Expenses are 118% or $3.98 million greater than FY 16 Revised. The increase represents the City’s outstanding loans to the former PCDC that have been added to the Successor Agency budget after the State’s Finding of Completion. FTEs in FY 17 will remain the same. Successor Agency Financial Structure The State required that all Successor Agencies create the Redevelopment Obligation Retirement Fund. Approved funds are then deposited into the Redevelopment Obligation Retirement Fund and then transferred into the Successor Agency expense accounts. Every six months the Successor Agency creates a Recognized Obligation Payment Schedule (ROPS) that outlines all outstanding obligations and debt service expenses to be approved by: Oversight Board County Auditor-Controller, and State Department of Finance

Successor Agency Expense History By Category FY 2015 Actual FY 2016 Expenses FY 2015 Actual FY 2016 Revised FY 2017 Recommended Personnel $179,000 $172,000 $180,000 Services & Supplies $3,376,000 $659,000 $683,000 IS Charges $16,000 $17,000 Debt Service $392,000 $2,540,000 $6,496,000 Depreciation Expense $901,000 $0 Total $5,224,000 $3,388,000 $7,376,000 Cash Flow Loans to Repay General Fund - $3,948,874 million Funds located under Debt Service – Described in next slide. Debt Service - $2,594,466 million Funds located under Debt Service and portion under Services & Supplies . Old Pasadena Parking Structure Certificate of Participation. Lake/Washington & Fair Oaks Tax Allocation Bonds. Fiscal Agent Fees. Fire Station #36 Rent (Fair Oaks – Watt Location). ROPS Obligation Implementation Expenses - $310,000 thousand Funds located under Services & Supplies. Covers contract services for the property disposition (appraisal services, title and escrow, legal services, environmental, right of way). 3% Admin Expenses - $523,327 thousand Funds located under Personnel, portion of S&S, and IS Charges. one FTE, Service & Supplies, and City’s Internal Services.

Successor Agency Significant Changes From FY 2016 Budget The $3.98 million dollar increase represents the City’s outstanding loans to the former PCDC that have been added to the Recognized Obligation Payment Schedule after the State’s Finding of Completion. At the dissolution of Redevelopment under ABX1 26 (Feb. 1, 2012), the City had 15 loans to the former PCDC in excess of $20.1 million. State law says that: (1) upon receipt of a Finding of Completion, (2) approval by the Oversight Board, (3) and an application made by the Successor Agency; loan agreements between the cities and redevelopment agencies can be deemed enforceable obligations. With the State approving the Successor Agency’s Finding of Completion on Dec. 22, 2015 and the Oversight Board approving the loans on January 28, 2016, the Successor Agency can begin to request repayment of the funds within a designated cap amount for each ROPS period. Funds received will pay the loan principal first, then interest. Money received in FY 17 will pay the loan principal’s for 10 of the 15 loans.

Successor Agency Key Issues Strategies Resolution of SB 481 Issue. FY 2017 Key Issues and Strategies Key Issues Strategies Resolution of SB 481 Issue. Implementation of Long- Range Property Management Plan for the disposition of remaining Successor Agency properties. Pursue any valid obligation payments denied by the State. Work to have Enforceable Obligations recognized. Monitor potential changes in state law. On a positive note, in the past fiscal year the Legislature adopted legislation that allowed cities to regain ownership of public parking garages and clarified interest rates associated with former City/Agency loans. This is broadly viewed as a positive step towards helping cities increase revenue. Hopefully the trend will continue.