To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Reimbursement of $31,250 to the City of El Cerrito for administration costs associated with its Successor Agency
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Auditor-Controller to issue payment in the amount of $31,250 to the City of El Cerrito to reimburse a penalty incurred by the City due to a delay in action by the County Oversight Board and, consequently, the late filing of City’s FY 2025/26 Recognized Obligation Payment Schedule.
FISCAL IMPACT:
No impact to the General Fund. All funds to reimburse the City of El Cerrito will come from a fund account within the Department of Conservation and Development dedicated to housing and housing administration.
BACKGROUND:
Many cities and counties in California once operated a Redevelopment Agency within their respective jurisdiction including the County and most cities in the County. In 2011, the redevelopment agencies in California were dissolved through Assembly Bill x126 enacted by the California state legislature. These previous redevelopment agencies are now called Successor Agencies, and each city or county Successor Agency is tasked with paying, performing, and enforcing the enforceable obligations of its former redevelopment agency and winding down any activities of its former redevelopment agency.
Every Successor Agency is required to prepare and submit to the California Department of Finance (DOF) a Recognized Obligation Payment Schedule (ROPS) by February 1st of every year until all affairs or activities of the dissolved redevelopment agency are completed. Successor Agency’s ROPS must first be approved by an appointed Oversight Board prior to submittal to the DOF, pursuant to Health and Safety Code 34177(o)(1). In Contra Costa County, the official Oversight Board is the Countywide Oversight Board, comprised of members appointed by the Contra Costa County Board of Supervisors. Each of the cities in Contra Costa County that operates a Successor Agency is required to submit its ROPS to the Countywide Oversight Board for approval prior to submittal to the DOF by the February 1st deadline.
The administration work for the Countywide Oversight Board is the responsibility of the County’s Auditor-Controller Office but is administered by the County’s Department of Conservation and Development (DCD) on the behalf of the Auditor-Controller Office. The ROPS by every Successor Agency in the County are submitted to DCD staff for staff to prepare and include at a meeting of the Countywide Oversight Board to consider approval prior to the DOF’s February 1st deadline. In early January 2025, DCD staff received all the ROPS from each Successor Agency for fiscal year (FY) 2025/26, including from the Successor Agency of the City of El Cerrito, to include for the Countywide Oversight Board meeting that was scheduled for January 27, 2025. However, DCD staff mistakenly omitted the City of El Cerrito’s ROPS for the Countywide Oversight Board to consider for approval and consequently the City of El Cerrito’s ROPS could not be submitted to the DOF by the February 1st deadline. The City of El Cerrito’s ROPS was eventually approved by the Countywide Oversight Board and submitted to the DOF, but it was more than ten days after the February 1st deadline. The late approval and submittal of more than ten days resulted in a 25 percent reduction penalty by the DOF (pursuant to Health and Safety Code 34177(o)(1)(B)), a reduction of $31,250, in El Cerrito’s amount for FY 2025/26 administration of its Successor Agency that it would have otherwise been entitled to if not for County staff’s omission of El Cerrito’s ROPS to the Countywide Oversight Board meeting that was held on January 27, 2025.
Given that the 25 percent reduction was not a result of any action from the City of El Cerrito, DCD requests and recommends that the City of El Cerrito get reimbursed by the County the $31,250 that it would have been entitled to for its administrative costs associated with its overall FY 2025/26 administrative work of its Successor Agency. The funds to reimburse the City of El Cerrito would come from a DCD account that is dedicated to housing and housing administration activities.
CONSEQUENCE OF NEGATIVE ACTION:
A negative action to this recommendation would result in the City of El Cerrito not being fully funded for its administrative costs for its Successor Agency and possibly filing a claim against the County.