The role of the successor agency is fairly straightforward; it is actually a simple role and that is to dissolve the assets of the former Redevelopment Agency. We are required to provide and submit to the County and the State a recognized obligation payment schedule that lists in detail all of the obligations of the Redevelopment Agency that are under contracts that we make monetary payments on, any third party agreements that we have, any OPAs or DDAs or any type of land transactions that we are already under obligation for and list those obligations.

We have listed those obligations and our obligations totals $1.28 billion. This includes bond proceeds, this includes third party contracts, this includes debt that the Redevelopment Agency has to the City of Long Beach. It includes the value of the land transactions as well and that is what we are calling our Recognized Obligations Payment Schedule...

As part of the requirements of AB26, there is something called an Oversight Board that is mandated to be established. This is established at the level of the County, not the local jurisdiction. It is a seven member Board where we have limited ability to influence the decisionmaking because most of these are appointed Boardmemberships from either the County or special taxing districts or education interests as well. This Oversight Board is supposed to be established by May 1 and their role is to oversee decisions of the successor agency and to also direct the dissolution of the Redevelopment Agency's assets if they do not think the successor agency is doing it fast enough...

AB26 allows the city to also become the successor agency for housing assets. Those would be any assets that are due to [pause] the Housing Development Company non-profit. So the successor agency can play a role for both the housing assets and the Redevelopment Agency.

As I said earlier, there is an administrative budget that is allowed under law for the successor agency. It is up to 5% of the property taxes allocated to that successor agency for the first year. This budget is meant to support the myriad activities that are going to be necessary to dispose of the Redevelopment Agency's assets.

And I will be very clear with you that we will not know if it will cover all of our obligations in the next few months or whether or not we will have to reply on the General Fund in the interim period.

To specifically talk about the impact of this, there are an estimated 36 filled positions within the Housing and Redevelopment Bureaus within the Department of Development Services and another 23 filled positions throughout the city, also within Development Services but also in other departments for 59 full time equivalent staff positions thata are funded directly by Redevelopment or Housing. We are still working on the exact impact to the General Fund. A lot of it depends on how the order of layoffs will be occurring, what obligations are committed obligations and will withstand scrutiny by the Oversight Board, but we do know what the general impact is in terms of the staffing as well as the approximately $6 million in services that the Redevelopment Agency and Housing Services Bureau currently provide the General Fund for things like code enforcement, graffiti abatement, neighborhood improvements and particularly the CityPlace parking structure debt service repayment.

The city is also in the position as successor agency to protect to the best of its abilities the outstanding debts that the Redevelopment Agency owes the city which is approximately $119 million, which is viewed as an enforceable obligation and is included in our Enforceable Obligations Program List.

So what is being asked of you tonight is to designate the City of Long Beach as the successor agency and transfer all housing functions and redevelopment functions and assets to the successor agency.

The other part of the discussion tonight is how to move forward with the delivery of community and neighborhood development services to the City of Long Beach. I will tell you that aside from the efforts to dissolve 50 years of development activity in the city, there is a need to deliver services to the community, whether it is in the form of affordable housing, economic development or basic neighborhood improvements, the services must still continue to be provided by the City.

As it stood before the dissolution of the Redevelopment Agency, there were three entities that provided those services: the Redevelopment Agency, the LB Housing Development Co. and the Community Development Advisory Commission. It is our suggestion that these three boards and commissions and those functions be consolidated into a brand new Commission that would be a new model for the delivery of services that would also take dramatically reduced resources and allocate them on a priority basis throughout the city. As such, this new Community Improvement Commission would advise the City Council on our use of CDBG funding, on the management of the city's non-profit affordable housing corporation, also on the delivery of housing and neighborhood revitalization services...

Ms. Bodek: Yes, you're correct.

Councilwoman Schipske: OK. Can I ask why that was not agendized so that the City Council, like many other cities in Los Angeles County and Riverside County, were given the opportunity to decide whether to opt out?

Ms. Bodek: This is an incredibly complex subject and we have been dealing with the ramifications of this in an incredibly expedited time frame, and that's the best answer I can give you.

Councilwoman Schipske: Do we not belong to the League of California Cities?

Ms. Bodkek: We as a city organization do, yes we do.

Councilwoman Schipske: Well, they've had it up on their website since for, let's see, since the Califoria Redevelopment Ass'n v. Matosantos was decided, a timeline, and at the top of the timeline it says "January 13. If the city does not want to serve as successor agency to its Redevelopment Agency, then it must submit a resolution to that effect." So did we not know about this?

City Manager Pat West: Ms. Schipske and Councilmembers, yes we knew about this approximately January 3 or January 4. At that point in time we put together the Council letter that's before you tonight that mentions the January 13 date. In addition to that, we had a closed session last Tuesday [Jan. 10] to talk about Redevelopment where the City Attorney did point out that if any Councilmembers were interested in not being the successor agency to speak up and then we'd have to have a special meeting of the City Council prior to...[Councimember Schipske begins speaking]

Councilwoman Schipske: ...Oh, I don't think you want to go there. That would be a violation of the Brown Act because that was not agendized as taking any kind of vote or any sense of the Council and that's something that should have just automatically been put on the public agenda like it was for the City of L.A., for the City of Oakland, for the City of Auburn, for the City of Indian Wells, I could go down the list, they all got it in time.

And I think there seems to be a pattern that goes on here: things are last minute. it's priceless, we've got to make this decision now or we'll lose the opportunity, and so I'm going to go on because obviously we blew it.

But I also ask why wasn't there any detailed analysis? Again, I would point to the City of Los Angeles and many other cities. Well, let's take the City of Los Angeles. We got a four page memo. They got a 38 page detailed analysis. They got an eight page fiscal analysis of the impact of the pro and con of opting in or out. They got a letter from their Mayor. They got a letter from their Controller. They had a Housing Committee meeting. They got quite a bit of material that this City Council didn't get.

City Manager Pat West: If I could respond to that. The City of Los Angeles is different than almost every city, every Redevelopment Agency, in the state of California. Had we were to recommend to the City Council that we would opt out, you certainly would receive from us a 26 report or a 50 page report because that is, that's an outlier. Like I said, almost every, well I believe only nine Redevelopment Agencies in the state of California have decided to opt out.

Los Angeles was in such a different situation because of how their real agency employees are funded; they're funded through PERS pension program like ours. The City of Los Angeles has their own pension formula, so the Mayor wanted to point out as well as the CEO of Los Angeles that had the City of Los Angeles become the successor agency, they would have inherited all the obligations of the Redevelopment Agency employees, and that would include the unfunded PERS liability. I think it was in the neighborhood of $70-80 million there. They would also have to keep the agency employees on for a term of six months because of some union obligations that they have, so because of that situation primarily, the City of Los Angeles prepared that report to tell the City Council that this will be a bad idea to become the successor agency and assume all of the PERS unfunded liabilities...

[in colloquy between Ms. Bodek and Councilwoman Schipske; Ms. Bodek cites difference between Long Beach and L.A;, indicating LB had no RDA employees, all employees are city employees]

Councilwoman Schipske: The two other main issues that the City of Los Angeles was counseled, as was the City of Auburn, City of Oakland, City of San Jose and others, was not just that but they didn't feel that their General Fund could sustain the additional costs that may be required. They're not quite sure if the administrative fee of 5% was going to be able to cover, and in fact today [Jan. 17] was the first time I've seen this from our staff, Slide 11 and Slide 12 both say: Impact to General Fund: Exact impact unknown. It's unclear at this time if available funding will be sufficient to cover the expenses or if the General Fund resources will be required.

Ms. Bodek: That is correct. That is in our staff report.

Councilwoman Schipske: We didn't get this before today.

Ms. Bodek: It is in the written staff report as well under Fiscal Impact section as to the exact unknowns of the implications to the General Fund. [Councilwoman Schipske begins speaking, crosstalk for a moment]

Councilwoman Schipske: Ms. Bodek, this statement is the first time that we've been given this information that whether or not General Fund resources will be required.

Ms. Bodek: Well consider it the freshest information that we have available to provide you.

Councilwoman Schipske: Well it's not adequate. Also the cities also opted out because, not only because the employees, but because they have been advised that successor agencies risk the possibility of being sued for any efforts related to winding down the Agency's projects. And that is consistent. It was advised to L.A. It is consistent in every advisement that has gone out but I don't see anything in our material about that.

[No response]

So my concern is last week this Council supported Councilman DeLong's motion to kill a study on inclusionary housing because the Council felt there was no clear fiscal impact laid out, nor was there any money in the General Fund budgeted for it, and yet today we are being asked to do this, and so for that reason I am voting against this, and I would ask city management in the future: please don't treat this Council as a rubberstamp. Please stop bringing things at the last minute and saying we gotta do it now. And please, please, I would appreciate really professional detailed analysis on items, not the day of the vote but in advance so that we, we're not just the only ones looking at this. The public looks at it, and I would just say that this was not an adequate presentation and analysis before this Council could vote on this issue.

City Manager West: Ms. Schipske, I would like to point out that what you're talking about is in the report and it was released to the public last Tuesday [Jan. 10] for our eight day agenda process, and again: this was something decided by the Supreme Court during the holidays in late December. We then didn't find out about this, whether it's CRA, whether it's League of CA Cities, until January 3 or January 4 and had to determine what we thought was in the best interest and make a recommendation to the City.

In addition to that, we're faced with a potential of $119 million owed to us as debt repayment, and for us to recommend to the City Council that we should walk away from that and not pursue, not pursue that, in addition, we have lots of property that the City, that the Agency turned over the City recently, six months ago, and if we don't become the successor agency, we're not going to be at the table to protect those properties on a lawsuit by losses basis to guarantee that it just doesn't go to the highest and best bidder. So for us, we have so much at stake here financially and in the hopes and dreams of out communities with all these vacant lots that they just don't go back to the highest and best bidder, so again I apologize for the lateness of the report, but we were up against the gun with what the state legislature did and also what the Supreme Court did late during the holidays, during the holiday season.

Councilwoman Schipske: You know, but Mr. West, again, and I am as concerned as you about the assets, I do disagree with you. I'm going through the four page thing again, I read it very extensively, it is not similar to the slide presentation. It does not have the figures that you have in the slide presentation tonight, so that's a misstatement.

And secondly, I understand the urgency but I just find it puzzling how other cities are able to get things on the agenda in a timely manner, to give their legislative body the choice. We probably would choose to do it, but we don't have the choice now, and that's my concern. That's what we're supposedly here for. That's what the Charter says, that it's the City Council that's supposed to make policy decisions, and some of these policy decisions get removed from us because they're done before we even get a chance.

Mayor Bob Foster. Thank you Ms. Schipske. I would just ask, you know, it's one thing to disagree. I don't think we need pejorative comments like treating the Council as rubberstamp or questioning the professionalism of the staff. We can disagree, we can say we didn't get it in time, but I for one are not going to question the professionalism of this staff. I think that's going over the line. Mr. Garcia.

...Just to clarify: if we were not to do or become the successor agency, I think that you mentioned it Mr. West or Miss Bodek is, we're talking about essentially $120 million that we would lose access to, or $120 million of assets that we would lose access to. Is that correct?

City Manager Pat West: Councilmember, the City Attorney would certainly try to protect us as much as possible for that. I don't mean to speak for Mr. Shannon but he made that very, very clear, but our position at the table as the successor agency would give us a much higher probability of working to save those dollars.

Councilman Garcia: Mr. Attorney, is there anything you wanted to add to that, or?

Deputy City Attorney: I have nothing to add. I think Mr. West adequately stated our position. We can't say for sure that we would lose it if we weren't the successor agency but I think we'd be better off to protect it if we were.

Councilman Garcia: That's my, in my conversations, I know with you Mr. West, and we've talked at length about this issue, that's at least what I'm understanding from your work and from the work that Miss Bodek is doing. I just want to make sure that's clear and it's your recommendation, I'll be the first to say certainly have been working on this for a long time and I think we're trying to make the wise decision here with the information that we have...

A motion was made by Councilmember DeLong, seconded by Councilwoman Gabelich, to approve recommendation and adopt Resolution No. RES-12-0009; and direct City Manager to provide recommendations on the establishment of a Community Improvement Commission. The motion carried by the following vote:

Yes: 7 - Garcia, DeLong, O'Donnell, Andrews, Johnson, Gabelich and Neal
No: 1 - Schipske
Absent: 1 - Lowenthal
Enactment No: RES-12-0009