PREPARED BY: ARTURO CASTILLO DATE OF MEETING: 01/20/2026
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTION OF THE LOCAL SUCCESSOR AGENCY OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF SAN PABLO APPROVING AN ADMINISTRATIVE BUDGET AND ADOPTING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR FISCAL YEAR 2026-27 (“ROPS 26-27”)
CEQA: This is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
COUNCIL PRIORITY WORKPLAN statements
Continue Best Management Practices, Fiscal Excellence, and Fiscal Transparency is an adopted City Council Priority contained in the adopted Fiscal Year 2025-2027 City Council Priority Workplan, effective April 7, 2025.
CEQA Compliance Statement
This proposed action is not a project as defined by CEQA.
BACKGROUND
The San Pablo Local Successor Agency (“LSA”) is responsible for winding down the activities of the former Redevelopment Agency of the City of San Pablo (the “former Redevelopment Agency”) pursuant to the requirements of Part 1.85 of Division 24 of the California Health and Safety Code (Health and Safety Code Section 34170 et seq.; the “Dissolution Act”).
Section 34177(o) of the Dissolution Act requires the LSA to adopt an annual ROPS each fiscal year, which is then presented to the Countywide Oversight Board. The ROPS functions as the LSA’s claim for tax increment funds and general authorization to pay enforceable obligations. The ROPS lists the outstanding obligations of the former Redevelopment Agency and the funding source for each obligation. The LSA is only authorized to pay obligations listed on the ROPS and will only be allocated tax increment funds by the County Auditor-Controller for those listed obligations. Obligations that will be funded by other sources, such as existing fund balances, must also be listed on the ROPS.
The San Pablo LSA’s ROPS 26-27 is attached to the resolution accompanying this staff report.
ROPS Enforceable Obligations
The ROPS 26-27 requests $5,164,775 in enforceable obligations, of which $4,914,775 are non-administrative and $250,000 is an administrative allowance. Enforceable obligations include:
• Item 20 - Trustee Fees - The Successor Agency is requesting $20,000 to pay administrative fees charged by the fiscal agent on the bonds pursuant to an enforceable contract.
• Item 29 - Administrative Fees - The Successor Agency is requesting $250,000 for its FY 2026-27 administrative expenses, which is the minimum amount permitted by the Dissolution Act. The administrative budget is needed to fund staff time to prepare the ROPS, prepare for and attend Successor Agency and Oversight Board meetings, administer payments, and maintain financial records including the annual audited financial statements.
• Item 36 - Property Maintenance Costs - The Successor Agency is requesting $5,000 for property tax, landscaping, utilities, and property maintenance costs on LSA property.
• Item 45 - JPFA/2016 Tax Allocation Bond/CABs - The Successor Agency is requesting $460,000 to make debt service payments on the 2016 Bonds by June 15, 2027 as required pursuant to the Indenture of Trust for the bonds.
• Item 47 - Bond Continuing Disclosure Services - The Successor Agency is requesting $10,000 to make payments to a consultant for bond continuing disclosure services.
• Item 49 - Audit Services - The Successor Agency is requiring $6,400 to make payments to a consultant for Successor Agency statements and disclosures in the Comprehensive Annual Financial Report.
• Item 52 - 2024 Tax Allocation Refunding Bonds/Series 2024 - The Successor Agency is requesting $4,413,375 to make debt service payments on the 2014 Bonds by December 15, 2026, June 15, 2027, and December 15, 2027 as required pursuant to the Indenture of Trust for the bonds.
Administrative Cost Allowance and Administrative Budget
Pursuant to Section 34171(b), the LSA is to receive an administrative cost allowance (“ACA”) for the staff costs to administer the wind down of the former Redevelopment Agency. These costs include staff time in preparing for and attending Countywide Oversight Board meetings and staff costs related to preparing reports and documents required by the Dissolution Act. The ACA is the greater of $250,000 or 3% of the property tax revenues allocated to the LSA in the preceding fiscal year to pay approved enforceable obligations (after first deducting from said allocated property tax revenues the amount of the LSA’s ACA for the preceding fiscal year and any loan repayments to the City during said preceding fiscal year).
Each ROPS should include the amount of the ACA for the LSA. In addition, Section 34177(j) of the Dissolution Act requires the LSA to prepare an administrative budget for each six-month fiscal period, and to submit the budget to the Countywide Oversight Board for its approval. The budget shall include:
• Estimated amounts for LSA administrative costs;
• Proposed sources of payment for the LSA administrative costs; and
• Proposals for arrangements for administrative and operations services provided by a city or other entity.
The LSA’s ACA for ROPS 26-27 will be $250,000, which is the minimum amount. These funds will be the sole source of payment for the LSA’s administrative costs. City staff serves as the staff for the LSA.
The proposed administrative budget for the San Pablo LSA is attached to the resolution for this item and covers all of Fiscal Year 2026-27. It shows the estimated breakdown of the ACA for staff and consultant costs.
ROPS Approval Procedure
Following the Countywide Oversight Board’s approval of a ROPS, the LSA must submit the ROPS to the County Auditor-Controller, the State Controller and the State Department of Finance (“DOF”), and post it on the LSA’s website.
Section 34177(o) states that the LSA must submit a ROPS to DOF and the County Auditor-Controller, after approval by the Countywide Oversight Board, no later than February 1, 2026.
DOF shall make its determinations regarding the enforceable obligations and the amounts and funding sources of the enforceable obligations no later than April 15, 2026. Section 34177(o) provides for a meet and confer period if the LSA disputes the DOF’s determinations.
Section 34177(o) also provides for significant penalties if a ROPS is submitted late. The City of San Pablo could be subject to a civil penalty of $10,000 per day for each day a ROPS is not submitted to the DOF, and if a ROPS is not submitted within 10 days of the deadline, the maximum ACA of the LSA for the ROPS period could be reduced by 25%.
Budget, Fiscal and Legislative Standing Committee Review
The Budget, Fiscal & Legislative Standing Committee, consisting of Mayor Pabon-Alvarado and Councilmember Ponce, reviewed the proposed ROPS for FY 2026-27 on January 14, 2026, and recommended its formal consideration and approval by the City Council/Local Successor Agency.
FISCAL IMPACT
The approval of ROPS 26-27 by the Countywide Oversight Board is part of the procedure of adopting a valid ROPS for Fiscal Year 2026-27 pursuant to Section 34177(o), and obtaining the funds to make payments on obligations listed on that ROPS. The approval of the LSA’s administrative budget provides the supporting detail for the LSA’s claim for ACA funding for ROPS 26-27.
Attachments:
Att A - Resolution
Att B - LSA Administrative Budget
Att C - ROPS 2026-27