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Home My WebLink About08/20/2012 POSTED AGENDA ADJOURNED REGULAR MEETING OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MONDAY, AUGUST 20, 2012 — 1:30 P.M. ADMINISTRATIVE CONFERENCE ROOM- PALM DESERT CIVIC CENTER 73-510 FRED WARING DRIVE, PALM DESERT, CALIFORNIA 92260 This Oversight Board has been created pursuant to§34161 through 34190 of the Health and Safety Code for the sole purpose of overseeing the actions of the Successor Agency to the Palm Desert Redevelopment Agency. In accordance with Health and Safety Code§34179(h), all Oversight Board actions shall not be effective for five (5) business days, pending a request for review by the State Department of Finance ("DepartmenY'). In the event that the Department requests a review of a given Oversight Board action, it shall have 40 calendar days from the date of its request to approve the Oversight Board action or retum it to the Oversight Board for reconsideration, and such Oversight Board action shall not be effective until approved by the Department. In the event that the Department retums the Oversight Board action to the Oversight Board for reconsideration, the Oversight Board shall resubmit the modified action for Department approval,and the modified Oversight Board action shall not become effective until approved by the Department. Reports and documents relating to each of the following items listed on the agenda, including those received following posting/distribution, are on file in the Office of the Secretary to the Successor Agency to the Palm Desert Redevelopment Agency/Palm Desert City Clerk and are available for public inspection during normal business hours, Monday - Friday, 8:00 a.m. - 5:00 p.m., 73510 Fred Waring Drive, Palm Desert, CA 92260, te/ephone (760) 346-0611. Please contact the Office of the Secretary of the Successor Agency to the Palm Desert Redevelopment Agency, 73510 Fred Waring Drive, Palm Desert, CA 92260, (760) 346-0611, for assistance with access to any of the Agenda, Materials, or participation at the meeting. I. CALL TO ORDER II. ROLL CALL III. ORAL COMMUNICATIONS A. Any person wishing to discuss any item not on the agenda may address the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency at this point by giving his/her name and address for the record. Remarks shall be limited to a maximum of three (3) minutes unless the Oversight Board authorizes additional time. B. This is the time and place for any person who wishes to comment on agenda items. It should be noted that at the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency's discretion,these comments may be deferred until such time on the agenda as the item is discussed. Remarks shall be limited to a maximum of three (3) minutes unless the Oversight Board authorizes additional time. POSTED AGENDA ' AUGUST 20, 2012 ADJOURNED REGULAR MEETING OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY IV. APPROVAL OF MINUTES A. MINUTES of the June 26, 2012, Special Meeting of the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency. Rec: Waive further reading and adopt Resolution No. OB - 002, approving the Minutes of the June 26, 2012, Special Meeting of the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency. Action: V. NEW BUSINESS A. ACTIONS/MINUTES OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY. Rec: Waive further reading and adopt Resolution No. OB - 003, receiving and filing the Minutes of the Successor Agency to the Palm Desert Redevelopment Agency Meetings of June 14 and June 28, 2012. Action: B. REPORT ON THE EXECUTIVE DIRECTOR'S EXECUTED CONTRACTS FOR JULY2012 FOR ROUTINE MAINTENANCEAND EMERGENCYMAINTENANCE SERVICES FOR AGENCY PROPERTIES PER OBLIGATIONS LISTED ON THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS). Rec: Waive further reading and adopt Resolution No. OB - 004, receiving and filing the report on the Executive Director's Summary of Executed Contracts for July 2012 for Routine Maintenance and Emergency Maintenance Services for Agency Properties per obligations listed on the Recognized Obligation Payment Schedule (ROPS). Action: 2 POSTED AGENDA AUGUST 20, 2012 ADJOURNED REGULAR MEETING OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY C. REQUEST FOR AUTHORIZATION TO PROCEED WITH A SPECIAL AUDIT OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AND PALM DESERT HOUSING AUTHORITY FOR THE PERIODS ENDED JANUARY 31, 2012, AND JUNE 30, 2012, AND AUTHORIZE CITY MANAGER TO EXECUTE THE CONTRACT (CONTRACT NO. C27540A). Rec: Waive further reading and adopt Resolution No. OB - 010, providing authorization to proceed with said Special Audit and the City Manager to execute a contract in a total amount not to exceed $25,000, with approximately$15,000 for the Housing Authority Audit and $10,000 for All Other Funds Audit. Action: D. OVERVIEW OF ASSEMBLY BILL 1484 AS IT RELATES TO THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY. Rec: Waive further reading and adopt Resolution No. OB - 005, receiving and filing the report. Action: E. REQUEST FOR APPROVAL OF A COOPERATIVE AGREEMENT FOR ADVANCE AND REIMBURSEMENT OF ADMINISTRATIVE, OVERHEAD, AND OTHER EXPENSES BETWEEN THE CITY OF PALM DESERT AND THE SUCCESSORAGENCYTO THE PALM DESERT REDEVELOPMENTAGENCY, AND TAKING CERTAIN OTHER ACTIONS. Rec: Waive further reading and adopt Resolution No. OB - 006, approving the execution of a Cooperative Agreement forAdvance and Reimbursement of Administrative, Overhead, and Other Expenses between the City and the Successor Agency, and taking certain other actions. Action: F. REQUEST FOR APPROVAL OF THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE THIRD SIX-MONTH PERIOD, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177, FOR THE PERIOD OF JANUARY 1, 2013, THROUGH JUNE 30, 2013 ("ROPS3"). Rec: Waive further reading and adopt Resolution No. OB - 007, approving ROPS3 for the period of January 1 - June 30, 2013. Action: 3 POSTED AGENDA AUGUST 20, 2012 ADJOURNED REGULAR MEETING OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY G. REQUEST FOR APPROVAL OF THE ADMINISTRATIVE BUDGET FOR THE THIRD SIX-MONTH PERIOD, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177, FOR THE PERIOD OF JANUARY 1, 2013, THROUGH JUNE 30, 2013. Rec: Waive further reading and adopt Resolution No. OB - 008, approving the Administrative Budget for the third six-month period of January 1 -June 30, 2013. Action: H. REQUEST FOR DISCUSSION REGARDING UPCOMING OVERSIGHT BOARD MEETINGS FOR SEPTEMBER 2012 AND OCTOBER 2012. Rec: Waive further reading and adopt Resolution No. OB - 009, approving the Oversight Board Meeting schedule for the months of September 2012 and October 2012. Action: VI. CONTINUED BUSINESS None VII. OLD BUSINESS None VIII. REPORTS AND REMARKS A. CHAIR B. MEMBERS OF THE OVERSIGHT BOARD IX. ADJOURNMENT I hereby certify, under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency was posted on the City Hall bulletin board not less than 72 hours prior to the meeti . Date is h day of Au ust, 2012. Rachelle . Klassen, Secret of the Successor Agency to the Palm Desert Redevefopment Agency 4 � RESOLUTION NO. OB - 002 A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, APPROVING JUNE 26, 2012, SPECIAL MEETING MINUTES RECITALS: A. Pursuant to Health and Safety Code Section 34179(3), all actions taken by the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency (the "Oversight Board") shall be adopted by resolution. B. There has been presented to this Oversight Board for approval Minutes of its June 26, 2012, Special Meeting. NOW,THEREFORE,THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS,DETERMINES,RESOLVES,AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby approves Minutes of the June 26, 2012, Special Meeting, which are made a part hereof and attached hereto as "Exhibit `A'." Section 3. The staff of the Successor Agency is hereby directed to provide the State Department of Finance ("DOF") written notice and information regarding the action taken by the Oversight Board in Section 2 of this Resolution. Such notice and information shall be provided by electronic means and in a manner of DOF's choosing. Section 4. The officers of the Oversight Board and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things that they may deem necessary or advisable to effectuate this Resolution. PASSED, APPROVED, AND ADOPTED this day of , 20 AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: ��..p) BY OV�RSIGHT SOARD ON_�-��—��1�----� RACHELLE D. KLASSEN, SECRETARY VERIFIED $Y ��1� �� OVERSIGHT BOARD OF THE SUCCESSOR AGENCY p��on��,�e�,s�ff� ,� TO THE PALM DESERT REDEVELOPMENT AGENCY RESOLUTION NO. OB - 002 EXHIBIT A OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MINUTES June 26, 2012, Special Meeting 2 RESOLUTION N0. OB - 002 D R A F T PRELIMINARY MINUTES D R A F T SPECIAL MEETING OF THE OVERSIGHT BOARD �F THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVEL�PMENT AGENCY TUESDAY, JUNE 26, 2012 — 1:30 P.M. ADMINISTRATIVE CONFERENCE ROOM - PALM DESERT CIVIC CENTER 73-510 FRED WARING DRIVE, PALM DESERT, CALIFORNIA 92260 This Oversight Board has been created pursuant to§34161 through 34190 of the Health and Safety Code for the sole purpose of overseeing the actions of the Successor Agency to the Palm Desert Redevelopment Agency. In accordance with Health and Safety Code§34179(h),all Oversight Board actions shall not be effective for three business days,pending a request for review by the State Department of Finance("Department"). In the event that the Department requests a review of a given Oversight Board action,it shall have 10 days from the date of its request to approve the Oversight Board action or retum it to the Oversight Board for reconsideration,and such Oversight Board action shall not be effective until approved by the Department. I n the event that the Department returns the Oversight Board action to the Oversight Board for reconsideration,the Oversight Board shall resubmit the modified action for Department approval,and the modified Oversight Board action shall not become effective until approved by the Department. I. CALL TO ORDER Chair Spiegel convened the meeting at 1:30 p.m. II. ROLL CALL Present: Member Lisa Brandl (representing Riverside Co. Board of Supervisors) Member Heather Buck (Palm Desert RDA former Employee) Member Bill Carver(representing Riverside County) Member Patricia A. Larson (representing Coachella Valley Water District) Member Peggy Reyes (DSUSD, representing Riverside County Office of Education — arrived at 1:40 p.m. Chair Robert A. Spiegel (Mayor, City of Palm Desert) Absent: Member Edwin Deas(COD, representing Chancellor of California Community Colleges) Also Present: John M. Wohlmuth, Executive Director of the Successor Agency-Palm Desert RDA William L. Strausz, Richards, Watson & Gershon, Successor Agency Counsel Paul S. Gibson, Finance Officer Janet M. Moore, Director of Housing Martin Alvarez, Redevelopment Manager David Hermann, Management Analyst/Public Information Officer Rachelle D. Klassen, Secretary, Successor Agency-Palm Desert RDA A - 1 RESOLUTION N0. OB - 002 PRELIMINARY MINUTES D R A F T JUNE 26, 2012 SPECIAL MEETING OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY ill. ORAL COMMUNICATIONS � None IV. APPROVAL OF MINUTES A. MINUTES of the June 4, 2012, Regular Meeting of the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency. On a motion by Member Larson, second by Member Carver, and 4-0-1 vote of the Oversight Board, with Spiegel ABSTAINING due to his absence from the June 4 Meeting, and Deas and Reyes ABSENT, the Minutes were approved as presented. V. NEW BUSINESS A. ACTIONS/MINUTES OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY. Member Larson moved to receive and file the Minutes of the Successor Agency to the Palm Desert Redevelopment Agency Meeting of May 24, 2012. Motion was seconded by Member Brandl and carried by 5-0 vote, with Deas and Reyes ABSENT. B. REPORT ON THE EXECUTIVE DIRECTOR'S EXECUTED CONTRACTS FOR JUNE 2012 FOR ROUTINE MAINTENANCEAND EMERGENCY MAINTENANCE SERVICES FORAGENCY PROPERTIES PER OBLIGATIONS LISTED ON THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS). Staff noted the printed report provided with the agenda packets and answered questions. Member Larson moved to receive and file the report. Motion was seconded by Member Carver and carried by 5-0 vote, with Deas and Reyes ABSENT. C. REQUEST FOR AUTHORIZATION FOR EXECUTIVE DIRECTOR AND STAFF TO NEGOTIATE WITH THE REGENTS OF THE UNIVERSITY OF CALIFORNIA (UCR) TO EXERCISE THEIR EXISTING OPTION AGREEMENT FOR ADDITIONAL LAND ADJACENT TO THE EXISTING UCR-PALM DESERT CAMPUS. . Note: Member Reyes arrived at 1:40 p.m. A - 2 RESOLUTION N0. OB - 002 PRELIMINARY MINUTES D R A F T JUNE 26, 2012 SPECIAL MEETING OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY Staff referred to the report provided with the agenda packets and answered questions. Member Larson moved to authorize the Executive Director and staff to negotiate with the Regents of the University of California (UCR) to exercise their Option Agreement for the additional land adjacent to the existing UCR-Palm Desert Campus. Motion was seconded by Member Brandl and carried by 6-0 vote, with Deas ABSENT. D. REQUEST FOR APPROVAL OF SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENTAGENCY RESOLUTION NO. SA-RDA 008, APPROVING REVISIONS TO "EXHIBIT A" OF RESOLUTION NO. SA-RDA 007, THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD OF JULY 1, 2012, THROUGH DECEMBER 31, 2012, TO INCLUDE THE FUNDING SOURCE FOR SPECIFIC LINE ITEMS. Staff reviewed the report provided with the agenda packets and answered questions. Member Brandl moved to approve Resolution No. SA-RDA 008, approving revisions to "ExhibitA"of Resolution No. SA-RDA 007,the Recognized Obligation Payment Schedule forthe period of July 1, 2012,to December 31, 2012("ROPS2"), more specifically, Project Area#1 Line Items 1, 2, 3, 4, 5, 7, 8, 10, 25, and 33; Project Area #2 Line Items 1, 2, 3, 8, and 45; Project Area #3 Line Items 1, 2, 3, and 25; and Project Area #4 Line Items 1, 2, 3, 4, and 27, all to include the specific funding source. Motion was seconded by Member Larson and carried by 6-0 vote, with Deas ABSENT. VI. CONTINUED BUSINESS None VII. OLD BUSINESS None VIII. REPORTS AND REMARKS A. CHAIR Chair Spiegel asked about the upcoming schedule of Oversight Board Meetings. Following further discussion and with Oversight Board concurrence, it was determined that the next Oversight Board Meeting would be held Monday, August 20. 2012, at 1:30 p.m. to take the place of the regular August and September 2012 meetings (rescheduling the meeting previously set for Monday, August 27, 2012, at 1:30 p.m.). A - 3 RESOLUTION N0. OB - 002 PRELIMINARY MINUTES D R A F T JUNE 26, 2012 SPECIAL MEETING OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY B. MEMBERS OF THE OVERSIGHT BOARD Member Larson sought information about any available stipend for Oversight Board Members relative to how she accounts for expenses incurred for her service as a Board Member of the Coachella Valley Water District (CVWD). She asked if there was a distinction and whether or not she should consider her expense attending this meeting as directly related to CVWD. She felt it was a definite issue to be considered and may not be equitable, observing that others, such as Member Carver, may be serving here all at their own expense. In response, Mr. Strausz quoted the AB 26 legislation, "Oversight Board Members shall serve without compensation or reimbursement for expenses." Further responding, he had always interpreted the statement to mean that compensation or expense reimbursement couldn't come from the Redevelopment Property Tax Trust Fund. Member Larson indicated that she would go back to CVWD with this information. IX. ADJOURNMENT On a motion by Member Buck, second by Member Brandl, and unanimous vote of the Oversight Board, Chair Spiegel adjourned the meeting at 1:52 p.m. ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY A - 4 RESOLUTION NO. OB - 003 A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, RECEIVING AND FILING MINUTES OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETINGS OF JUNE 14,2012,AND JUNE 28, 2012 RECITALS: A. Pursuant to Health and Safety Code Section 34179(3), all actions taken by the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency (the "Oversight Board") shall be adopted by resolution. B. There has been presented to this Oversight Board for approval, receiving and filing of Minutes of the Successor Agency to the Palm Desert Redevetopment Agency Meetings of June 14, 2012, and June 28, 2012 NOW,THEREFORE,THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS,DETERMINES, RESOLVES,AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby approves receiving and filing Minutes of the Successor Agency to the Palm Desert Redevelopment Agency Meetings of June 14, 2012, and June 28, 2012, which are made a par# hereof and attached hereto as "Exhibit `A'." Section 3. The staff of the Successor Agency is hereby directed to provide the State Department of Finance ("DOF") written notice and information regarding the action taken by the Oversight Board in Section 2 of this Resolution. Such notice and information shall be provided by electronic means and in a manner of DOF's choosing. Section 4. The officers of the Oversight Board and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things that they may deem necessary or advisable to effectuate this Resolution. PASSED, APPROVED, AND ADOPTED this day of , 20 AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: �.�_d) �BY OVER,SIGHT BOARD ON �'S—�_�I�--� RACHELLE D. KLASSEN, SECRETARY VERIFIED BY �.�s�� OVERSIGHT BOARD OF THE SUCCESSOR AGENCY ��o��e��ty Clerk's Office TO THE PALM DESERT REDEVELOPMENT AGENCY RESOLUTION NO. OB - 003 EXHIBIT A SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING MINUTES June 14, 2012 June 28, 2012 2 RESOLUTION N0. OB - 003 MINUTES REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TNURSDAY, JUNE 14, 2012 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER- 3:00 P.M. Chair Spiegel convened the meeting at 3:00 p.m. II. ROLL CALL Present: Director Jean M. Benson Director Cindy Finerty Director Jan C. Harnik Vice Chair William R. Kroonen Chair Robert A. Spiegel Also Present: John M. Wohlmuth, Executive Director David J. Ervvin, City Attorney Rachelle D. Klassen, Secretary Russell Grance, Director of Building & Satety Lauri Aylaian, Director of Community Development Paul S. Gibson, Director of Finance/City Treasurer Janet M. Moore, Director of Housing Mark Greenwood, Director of Public Works Frankie Riddle, Director of Special Programs Bill Hunley, Battalion Chief, Palm Desert Fire/Riverside Co. Fire Dept./CalFire Neal Stephenson, Fire Specialist, Palm Desert Fire/Riverside Co. Fire Dept./CalFire Bill Sullivan, Asst. Chief, Palm Desert Police/Riverside Co. Sheriff's Dept. Grace L. Mendoza, Deputy City Clerk I{I. ADJOURN TO CLOSED SESSION Request for Closed Session: None A - 1 RESOLUTION N0. OB - 003 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEYELOPMENT AGENCY MEETiNG JUNE 14, 2012 ... On a motion by Kroonen,second by Harnik,and 5-0 vote of the Successor Agency 8oard "` of Directors, Chair Spiegel adjourned the meeting to Closed Session of the City Council at 3:01 p.m. He Reconvened the meeting at 4:00. p.m. 1V. RECONVENE REGULAR MEETING - 4:00 P.M. A. REP T ON ACTION FROM CLOSED SESSION. Action: V. AWARDS, PRESENTATIONS, AND APPOINTMENTS None VI. CONSENT CALENDAR A. MINUTES of the May 24, 2012, Regular Meeting of the Board of Directors of the Successvr Agency to the Palm Desert Redevelopment Agency. Rec: Approve as presented. .. B. CLAIMS AND DEMANDS AGAINST SUCCESSOR AGENCY TREASURY - .. Warrant Nos.260RDA,261 RDA, 267RDA, 272RDA,264SA,269SA,and 275SA. Rec: Approve as presented. Upon a motion by Kroonen, second by Finerty, and 5-0 vote of the Successor Agency Board of Directors, the Consent Calendar was approved as presented. VI1. CONSENT ITEMS HELD OVER None VIII. RESOLUTIONS None IX. NEW BUSINESS None X. CONTINUED BUSINESS ^ None u` A - 2 RESOLUTION N0. OB - 003 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 14, 2012 XI. OLD BUSINESS None Xil. PUBLIC HEARINGS None XIII. REPORTS,REMARKS,SUCCESSOR AGENCY BOARD ITEMS REGIUIRING ACTtON A. EXECUTIVE DIRECTOR None B. SUCCESSOR AGENCY COUNSEL None C. CHAIR AND MEMBERS OF THE SUCCESSOR AGENCY None XIV. ORAL COMMUNICATIONS - C None XV, ADJOURNMENT On a motion by Finerty,second by Kroonen, and 5-0 vote of the Successor Agency Board of Directors, Chair Spiegel adjourned the meeting at 5:34 p.m. �� ROBERT A. S IEG L, HAIR ATTEST: RA HELLE D. KLASSEN, ECRETARY SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY A - 3 RESOLUTION N0. OB - 003 MINUTES REGULAR MEETlNG OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY THURSDAY, JUNE 28, 2012 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CAi.L TO ORDER - 3:00 P.M. Chair Spiegel convened the meeting at 3:00 p.m. I1. ROLL CALL Pr n : Director Jean M. Benson Director Cindy Finerty Director Jan C. Harnik Vice Chair William R. Kroonen Chair Robert A..Spiegel Also Present: John M. Wohlmuth, Executive Director David J. Erwin, City Attorney Rachelis D. Klassen, Secretary Russell Grance, Director of Buiiding & Safety Paul S. Gibson, Director of Finance/City Treasurer Janet M. Moore, Director of Housing Mark Greenwood, Director of Public Works Frankie Riddle, Director of Special Programs Tony Bagato, Principal Planner Neal Stephenson, Fire Specialist, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Bill Sullivan, Asst. Chief, Palm Desert Police/Riverside Co. Sheriff's Dept. Grace L. Mendoza, Deputy City Clerk III. ADJOURN TO CLOSED SESSION Reque�t for Closed Session: Mr. Erwin requested the City Council's/Successor Agency Board of Directors' consideration of adding, by four-fifths vote, an item of Property Negotiation for Closed Session discussion, as follows: A - 4 __--- __._... _:.. .. . :..,..:,__ ...T.ti.. z�.,,:,,.��.,��,,t- ,....... �,,,.=,�r.-. �,. �. RESOLUTION N0. OB - 003 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 28, 2012 � A. Conference with Real Property Negotiator pursuant to Government Code � Section 54956.8: 1) Property; University Property - California State University - North Sphere, Palm Desert Negotiating Parties: Agency: John M. Wohlmuth/Martin Alvarez/Stephen Y. AryaN City of Palm Desert/Successor Agency to the Palm Desert Redevelopment Agency Property Owner: City of Palm Desert/Successor Agency to the Palm Desert Redevelopment Agency Under Negotiation: x Price x Terms of Payment On a motion by Finerty,second by Kroonen,and 5-0 vote of the Successor Agency Board of Directors, the aforementioned Property Negotiation item was added to the agenda. Upon a motion by Finerty, second by Kroonen, and 5-0 vote of the Successor Agency Board of Directors, Chair Spiegel adjourned the meeting to Closed Session at 3:02 p.m. He reconvened the meeting at 4:p0 p.m. IV. RECONVENE REGULAR MEETING - 4:00 P,M. � A. EP RT ON ACTlON FROM CLOSED SESSION. � None V. AWARDS, PRESENTATIONS, AND APPOINTMENTS None VL CONSENT CALENDAR A. MIN TE of the June 14, 2012, Regular Meeting of the Board of Directors of the Successor Agency to the Palm Desert Redevelopment Agency. Rec: Approve as presented. B. CLAIMS AND DEMANDS AGAINST SUC ESSOR AGENCY TREASURY - Warrant Nos. 278RDA and 280SA. Rec: Approve as presented. .., ... A - 5 RESOLUTION N0. OB - 003 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING JUNE 28, 2012 C. COMPLIANCE ANALYSIS AND INVESTMENT REPORTS for the Month of April 2012 (Joint Consideration with the Palm Desert Clty Council). Rec: Receive and file. Upon a motion by Finerty, second by Kroonen, and 5-0 vote of the Successor Agency Board of Directors, the Consent Calendar was approved as presented. VII. CONSENT ITEMS HELD OVER None VIII. RESOWTIONS A. RESOLUTION NO SA-RDA OQ8 - A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, APPROVING REVISIONS TO "EXHIBIT A° OF RESOLUTION NO. SA-RDA 007, THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD OF JULY 1, 2012, THROUGH DECEMBER 31, 2012, TO INCLUDE THE FUNDING SOURCE FOR SPECIFIC LINE ITEMS. Chair Spiegel noted the Oversight Board approved this item at their last meeting. Director Finerty moved to waive further reading and adopt Resolution No. SA-RDA 008. Motion was seconded by Kroonen and carried by a 5-0 vote. IX. NEW BUSINESS None X. CONTINUED BUSINESS None XI. OLD BUSINESS A. REQUEST FOR APPROVAL OF A PARTIAL RElEASE OF RETENTION BEiNG HELD FOR CONSTRUCTION OF THE COOK STREET DRAINAGE PROJECT- CONTRACT NO. 29 7 - COOLEY CONSTRUCTION, INC. (PROJECT NO. 505-03) (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL). Councilmember/Director Finerty moved to, by Minute Motion, authorize the Director of Finance to release partial retention in the amount of $128,696.75 to Cooley Construction, Inc., A - 6 .... -:Y�"•�. �..,..+._ -nrrYuvk.w..+�x.a;M..�w....wern�.n•r�:+cr.v.s�t.sM.._rr.ua+'�+*s�+i:r�'ta�r�ai'Y:n'aa+r._v._..__ ...-��vu-'.svni'�e*-c�+u`eerr-w:r�sM�Mea<a�:s_.v.eu�ur_u+��vw'_.[dsC»e+xtur..tiMr..v.w:-�.w.��.�vnd�.r+a�.�_*r++i�nyu++r.�.-,.. w..w..-.,,..,......_" RESOLUTION N0. OB - 003 MINUTES SUCCESSOR AGENCY TO THE PALM DESERT REDEVEi.OPMENT AGENCY MEETING JUNE 28, 2012 . .. Hesperia, California, for the subject contract — funds are available in Account No. � 703-0000-206-0000 -Cook Street Drainage Retention-no General Fund money is being used for this expenditure. Motion was seconded by Kroonen and carried by a 5-0 vote. XII. PUBLIC HEARINGS None Xill. REPORTS, REMARKS,SUCCESSOR AGENCY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None B. SUCCESSOR AGENCY COUNSEL None C. CHAIR AND MEMBERS OF THE SUCCESSOR AGENCY � None � XIV, ADJOURNMENT On a motion by Finerty,second by Kroonen,and 5-0 vote of the Successor Agency Board of Directors, Chair Spiegel adjourned the meeting at 4:48 p.m. �� ROBERT A. SPI GE CHAIR ATTEST: R HELLE D. KLASSEN, SECRETARY SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY � r..� A - 7 Res. No. OB - 004 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: RECEIVE AND FILE THE EXECUTIVE DIRECTOR'S EXECUTED CONTRACTS FOR JULY 2012, FOR ROUTINE MAINTENANCE AND EMERGENCY MAINTENANCE SERVICES FOR OBLIGATIONS LISTED ON THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) SUBMITTED BY: Martin Alvarez, Director of Economic Development DATE: August 20, 2012 CONTENTS: Resolution No. OB - 004 Recommendation That the Oversight Board waive further reading and adopt a Resolution No. OB - 004 receiving and filing the Executive Director's summary of executed contracts for routine maintenance and emergency maintenance services for obligations listed on the Recognized Obligation Payment Schedule (ROPS). Backqround On April 9, 2012, the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency (Oversight Board) approved the ROPS which lists routine maintenance services on Successor Agency properties as an obligation. On June 4, 2012, the Oversight Board authorized the Executive Director to execute contracts under $5,000 for routine maintenance, recurring services, and emergency maintenance services required to maintain the Successor Agency properties until disposition. Below is a summary of the contracts executed by the Executive Director in the month of July for maintenance services on Successor Agency properties: Pro ert Vendor Service Cost 43845 Portola Ave. Canyon Pools Board Up 3 A/C Openings / Pipe $375.00 Re air 42455 Washington Del's Pest Control Annual Pest Control Contract $300.00 St. Case 's Rest. 42455 Washin ton Libert Annual Landsca e Maintenance $3,528.00 Oversight Board Staff Report xes. tvo. oB - 004 Receive and File Summary of Executed Maintenance Contracts for July 2012 August 20, 2012 Page 2 of 2 St. (Case 's Rest.) Landscapin / Re airs Contract 43845, 43895, Garza Landscape Annual Landscape Maintenance $2,940.00 43915 Portola; Contract 44887 San Antonio Circle, 44889 San Clemente Circle Carlos Ortega Quality Weed abatement, removal of $1,419.00 Villas (4) Vacant Landscape / debris / Replace Green Screen Lots (Avenue of the American Fence on Fencing States) Co. 43895 Portola Ave. Killer Bee Pest Wasp Removal $50.00 Control Total $8,832.00 Staff recommends that the Oversight Board receive and file the July 2012 maintenance contracts for the Successor Agency owned properties. Fiscal Analvsis There is no fiscal impact as all items associated with this action are listed on the ROPS. Submitted By: '� ��f�-�_ / _ .. �� C e f� ,k. rtin Alvarez, et Moore, Director of Housing Director conomic Development Pau . Gibson, Director of Finance �� BY OVERSIGHT BOARD ON O'S'a't7—_�-c��a---� A oval: ��FIED BY �-� � Original on file with City Clerks Offiic�e L� n M. Wohlmuth, Executive Director k/� G:\rda\Martin Alvarez�20121SR\OBSR\July 2012 PropMaint-Expenses.doc RESOLUTION NO. OB - 004 RESOLUTION NO. OB - 004 A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY RECEIVING AND FILING THE EXECUTIVE DIRECTOR'S EXECUTED CONTRACTS FOR JULY 2012, FOR ROUTINE MAINTENANCE AND EMERGENCY MAINTENANCE SERVICES FOR OBLIGATIONS LISTED ON THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) RECITALS: A. Pursuant to Health and Safety Code Section 34179(3), all actions taken by the Oversight Board for Successor Agency to the Palm Desert Redevelopment Agency (Oversight Board) shall be adopted by resolution. There has been presented to this Oversight Board for approval to receive and file the Executive Director's summary of executed contracts for routine maintenance and emergency maintenance services for obligations listed on the Recognized Obligation Payment Schedule (ROPS). NOW, THEREFORE, THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby adopts Resolution No. OB- 004 receiving and filing the Executive Director's summary of executed contracts for routine maintenance and emergency maintenance services for obligations listed on the Recognized Obligation Payment Schedule (ROPS). Section 3. The staff of the Successor Agency is hereby directed to provide the State Department of Finance ("DOF") written notice and information regarding the action taken by the Oversight Board in Section 2 of this Resolution. Such notice and information shall be provided by electronic means and in a manner of DOF's choosing. Section 4. The officers of the Oversight Board and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all 81000-0172\1482371 v1.doc RESOLUTION N0. OB — 004 things which they may deem necessary or advisable to effectuate this Resolution. PASSED, APPROVED AND ADOPTED this day of , 2012. AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELL D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY 81000-0172\1482371v1.doc 2 RESOLUTION NO. OB - 004 EXHIBIT A OVERSIGNT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY SUMMARY OF EXECUTED CONTRACTS FOR ROUTINE MAINTENANCE AND EMERGENCY MAINTENANCE SERVICES (July 2012) Pro er Vendor Service Cost 43845 Portola Ave. Canyon Pools Board Up 3 A/C Openings/Pipe $375.00 Repair 42455 Washington Del's Pest Control Annual Pest Control Contract $300.00 St. (Casey's Rest.) 42455 Washington Liberty Annual Landscape Maintenance/ $3,528.00 St. (Casey's Rest.) Landscaping Repairs Contract 43845, 43895, 43915 Garza Landscape Annual Landscape Maintenance $2,940.00 Portola; 44887 San Contract Antonio Circle, 44889 San Clemente Circle Carlos Ortega Villas Quality Landscape/ Weed abatement, removal of debris $1,419.00 (4) Vacant Lots American Fence /Replace Green Screen on Fencing (Avenue of the Co. States) 43895 Portola Ave. Killer Bee Pest Wasp Removal $50.00 Control Total $8,832.00 81000-0172\1482371v1.doc CITY OF PALM DESERT FINANCE DEPARTMENT STAFF REPORT REQUEST: Authorization to proceed with a special audit of the Successor Agency to the Palm Desert Redevelopment Agency and Palm Desert Housing Authority for the periods ended January 31, 2012 and June 30, 2012, and authorize the City Manager to execute the contract. DATE: August 20, 2012 CONTENTS: Contract No. C27540 Excerpt of April 9, 2012 Minutes of the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency Recommendation By Minute Motion, that the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency: (xesolution No. os-Ol0) 1. Provide authorization to proceed with a special audit of the Successor Agency to the Palm Desert Redevelopment Agency and Palm Desert Housing Authority for the periods ended January 31, 2012 and June 30, 2012; and 2. Authorize the City Manager to execute the contract in a total amount not to exceed $25,000, with approximately $15,000 for the Housing Authority audit and $10,000 for All Other Funds audit. Backs�round On April 9, 2012 the Oversight Board approved Contract No. C27540A with White Nelson Diehl Evans LLP to conduct a special audit of the Palm Desert Housing Authority and all other funds. At that time, a scope of work was not available, and the audit was placed on hold until such time as a scope of work could be properly outlined and accepted by the State Department of Finance ("DOF"). To date, a scope of work has still not been released by the DOF, yet the deadline for work to be complete and submitted is October 1, 2012 for the Housing Authority audit, and December 1, 2012 for the All Other Funds audit. At this time, staff believes it is necessary to execute the contract and begin preliminary work while the DOF finalizes its requirements. Authorization to proceed will allow White Nelson Diehl Evans LLP to initialize the audit work. Staff also requests that the City Manager be authorized to execute the contract up to a total amount of $25,000, with a scope of work to be provided as such time as the DOF releases it to the City and its auditors. Staff Report Authorization to Proceed with a Special Audit — Contract No. C27540A August 20, 2012 Page 2 of 2 Fiscal Impact The Housing Authority audit is expected to cost approximately $15,000 and All Other Funds audit approximately $10,000. Once a scope of work is available a more definitive amount can be determined and provided at a future meeting. Submitted by: BY OVERSIGHT BOARD ON O�-2�- 2��t�--� aul S. Gib on, Director of Finance ��FIED B_ � , Originat on fi!e with City Clerl�s OfFi�oe ApprovaL 7i� F— n Wohlmuth, City Manager MINUTES APRIL 9, 2012 ADJOURNED REGULAR MEETING OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY C. RESOLUTION NO. SA-RDA 005 - A RESOLUTION OF THE SUCCESSOR AGENCYTOTHE PALM DESERT REDEVELOPMENTAGENCY,AUTHORIZING THE INVESTMENT OF MONIES IN THE LOCAL AGENCY INVESTMENT FUND (LAIF) OF THE STATE OF CALIFORNIA, AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH. Member Larson moved to approve investment of monies in the Local Agency Investment Fund (LAIF) - Resolution No. SA-RDA 005, as presented. Motion was seconded by Member Deas and carried by 6-0 vote, with Member Reyes ABSENT. D. PALM DESERT STATEMENT OF INVESTMENT POLICY, AS AMENDED. Member Larson moved to receive and file the Palm Desert Statement of Investment Policy, As Amended. Motion was seconded by Member Carver and carried by 6-0 vote, with Member Reyes ABSENT. E. CONTRACT NO. C27540A - WITH WHITE NELSON DIEHL EVANS LLP TO PERFORM A SPECIAL AUDIT OF THE PALM DESERT REDEVELOPMENT � AGENCY AND PALM DESERT HOUSING AUTHORITY FOR THE PERIOD ENDED JANUARY 31, 2012. Member Larson moved to approve Contract No. C27540A as presented, subject to discussion with legal counsel and bond trustees about the necessity therefor. Motion was seconded by Member Deas and carried by 6-0 vote, with Member Reyes ABSENT. F. SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY CONFLICT OF INTEREST CODE PURSUANT TO THE POLITICAL REFORM ACT, GOVERNMENT CODE SECTIONS 81000, ET SEQ. Member Larson moved to receive and file the Successor Agency to the Palm Desert Redevelopment Agency Conflict of Interest Code pursuant to the Political Reform Act, Government Code Sections 81000,et seq. Motion was seconded by Member Brandl and carried by 6-0 vote, with Member Reyes ABSENT. 3 Contract No. C27540A March 13, 2012 Mr. Paul Gibson � Director of Finance Palm Desert Redevelopnzent Agency 73-510 Fred Warning Drive Palm Desert, CA 9226U Dear Mr. Cibson: We are pleased to confirnl �ur undcrstanding of� the s�rvices we are to provide the Palm Desert Redevelopment Agency (the Agency) for the period froln July 1, 2011 to January 31, 2012. We will audit the financial statements of the goveininant�l activities, each major fiind, and the aggregate remaining fund information, which collectively coiizprise tlae basic financial statements, of the Ageney as of and for the period ended Januai•y 31, 2012. Accounting standlyds generally accepfied in the Ua1ited Statcs of America provide for certain required supplen�entary information (RSI), such as management's discussion and analysis (MD&A), to supplement the Agency's basic financial statements. Such infoY-mation, although not a �art of the basic financial statements, is required by the Governmental Accounting Standa�rds Board who considers it to be an essential part of financial reporting for placing the basic financial statetnents in an appropriate operational, econornic or historical context. As part of our engageinent, we will apply certain limited procedures to the Agency's RSI in accordance with auditing standards generally accepted in the United States oF Ainerica. These limited procedures will consist of inquiries of managemcnt regalding the mcthods of preparing the infonnation and comparing the inforniation for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The following RSI is required by generally accepted accounting principles and will be subjected to certain limited procedures, but will not be audited: 1) Management's Discussion and Analysis 2) Budgetary Comparison Schedules - Major Special Revenue Funds 1 2875 Michelle Drive,Suite 300, Irvine,C;A 92606 • Tel: 714.978,i300 • Fax; 714•978.7893 Offices locatecl in Ornnge and San Diego Counties • Contract No. C27540A Mr. I'aul Gibsan l�irector of Fin�tnce Palrn Descrt Redevelopment 1�gcncy March 13, 2012 � Page 2 We l�ave also been enga�ed to rcp�rt on supplemcntary information other than RSI that accompanies ilie Agency's tinancial statements. We will suUject the following supplementary inforination to thc� auditing procedures applied in our audit of the Financial statements and certain additional procedures, including comparing aild reconcilin� such ini'orm�tion directly to the underlying accounting and other records c�sec� to prep�re tihe tinancia.l statements or lo the tinancial statcments themsclves, and other additional prc�cedures in accc�rd�nce with auditin� standards generally accepted in the United States of America ax�d will pr•ovide an al�iniaii on it iil re;lation to the financi�l statements as a whole. l) Combining and individual other governliaental fund financial statements. A�adit Objectives: The �bjective of our audit is the expression of opiizions as to whethar your basic financial statements arc fairly presented, in all matei-ial respects, in confonnity with accounting principles generally accepted in the United States of America and to report on the fairness of the supplementary infornlation referred to in the secol�d pai•agraph when considered in relation to tlle financial statements taken as a whole. Our auclit will be conducted in accorc�ance with auditing standards generally accepted in the United States of America and t]-►e standards for financial audits contained in Government Auditin� Standards, issued by tlie Corn�troller General of the United States, and will include tests of tlie accounting records of the Agency a.nd other procedures we consider necessary to enable us to express such opinions. If our opinions on the financial statements are other than unqualified, we will discuss the reasons with you in advance. If, for any reason, we are unable to conlplete the audit or are unable to form or have not formed opinions, we may decline to express opinions or to issue a report as a result of this engagement. We will also provide a report (that does not include an opinion) on internal control related to the financial statements and coinpliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements as � required by Government Auditin� Standards. The report on internal control and compliance will include a statement tha.t the report is intended solely for the information and use of management, the body of individual charged with governance, others within the Agency, and specific legislative or regulatory bodies and is not intended to be and should not be used by anyone other than these specified parties. If during our audit we beeome aware that the Agency is subject to an audit requirement that is not encompassed in the terms of this engagernent, we wil] cornmunicate to management and those charged with governance that an audit in accordance with auditing standards generally accepted in the United States of America and the standards for financial audits contained in Government Auditin� Standards may not satisfy the relevant legal, regulatoiy, or contractual requirements, ^ • � Contract No. C27540A Mr. Paul Gibson Director ot Finlnce I'alm Desert Rec�eveloprnent Ageney March 13, 2012 Page 3 Management Responsibilities: Managemcnt is responsible ior the basic #inancial staternents and �11 accoinpanying information as well as all representatinns cnntained therein. As �arfi oF the audit, we will assist with preparation of your financial statements anci related notes. You �ere res�onsible For makin�; all mana�;ement decisions and perforl�ling all rnan�gement fanctions relating to ihe �nln�ial st�.tenlents and related notes and for acceptang fiill responsibility for such ciecisions. You will be requirecl to acknowledge in the managelnent representation letter our assistance with preparation of the financial stateinents and tl�at you h�ive reviewed and appraved the iinancia( statexnents and relat��i notes prior to theii� issuance and have accepted responsibility for them. Further, you are required to designate an individual with suitable skitl, lcno��vlec�ge, or experience to oversee 17iy nonaudit services we provicle and for ev�luating the adequacy and results of those services and accepting responsibility for them. Manageinent is responsible for establishing and maintaining effective intei-na1 controls, including evaluating and rnonitoring ongoing activities, to ]Zelp ensure that appropriate goals and objectives are met, for the selection and application of accounting principles, and for the fair presentation in the finai�cial statements of the respective financial position of the governmental activities, each nzajor fiu�d, and the aggrcgate remaining fiiiid infornlation of the Ageucy and the respective changes in financial position and, where applicable, cash flows in conformity wit11 accounting principles generally accepted ii� tlie United States of America. Management is also responsible far making all financial records and related information available to us and for ensuring that inanagernent and financial information is reliable and properly recorded. Your responsibilities include adjusting the financial statements to correct material misstatenlents and for confinning to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial,both individually and in the aggregate, to the f nancial statements taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the government involving (1)management, (Z) employees who have significant roles in internal control, and (3}others where the fraud or illegal acts could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, fonner employees, girantors, regulators, or others. In addition, �you are responsible for identifying and ensuring that the Agency complies with applicable laws, regulations, contracts, agreements, and grants for ta.king timely and appropriate steps to remedy any fraud, illegal acts, violations of contracts or grant agreements, or abuse that we may report. You are responsible for the preparation of the supplementary information in conformity with accounting principles generally accepted in the United States of America. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary infoi-mation. Mr, Paul Gibson Contract No. C'17540A Director of Fin�nce Palm Dcsert Redevc;laprnent Agency March 13,2012 Page 4 Management Responsibilities (Continucd): Management is res�onsible for est�blishing aald rnaintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifyilxg for us previous financial audits, attestation en�ageinents, performance audits, or other studies related to the objectives cliscussed iii the Audit Objcctives section of this letie��. This responsibility includes relaying to us corrective actions taken to address si�;niCcant tindings and recornmendations resulting from those audits, attestatio�l en�ageinents, perfoz•r�aancc auclits, or studies. You are also responsible for providing ma�lagement's views an our curi•ent tindings, canclusions, and recommendations, as well as your planned corrective actions, for the report, and f'or the tiining and format for providing that information. Audit Procedures - Genernl; An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; tllerefor�, our audit will involve judginent abaut the number of transactions to be examined and the areas to be testcd. We will plan and pert'onn the audit to obtain reasonable ratlier than absolute assurance about whether tl�.e financial statements are free of n�aterial misstatement, whether from (]) eirors, (2) fraudulent financial reporting, (3)misappxopriation of assets, or (4) violations of laws or governmental regulations that are attributable to the Agency or to acts by management or employees acting on behalf of the Agency. Because the deterrnination of abuse is subjective, Government Auditing Standards do nat expect auditors to provide reasonable assurance of deteeting abuse. Because an audit is designed to provide reasonable, but not absolute assurance and because we will not perform a detailed examination of all transactions, there is a ri�k that material misstatements may exist and not be detected by us. In addition, an audit is not designed to detect immaterial misstatements or violations of lavc�s or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform you of any material errors and any fraudulent financial reporting or misappropriation of assets that come to our attention. We will also inform you of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from your attorneys as part of the engage7nent, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about the financial statements and related rnatters. Contract No. C'27540A Mr. P�lul Cibson Di�•ector of Financ� P�ilm Desc:rt Itccievelalam�nt flg�ncy March 13, 2012 1'age 5 Audit Procedures- Internal Controls: Our audit will include obtaining an understanding of the Agency aaid its environinent, including iiiternal control, sufficient to assess tlie iisks of material misstaternent of the financial statements and to design the nature, timing, and extent of further audit procedures. Tests of controls may be perfonned to tesfi fhc effectiv�ness of certain cc�ntrols tl�at we consider relevli�t to preventing and detecting en•ors and fraud that 1re material to the financial stateinezats anci to preventing 1nd detectii�g nlisstaternents resulting fi•om ille�;al acts and �tlzer noncompliance matters that h�ve a direct and material effect on thc fi-rnancial st�iteinents. Our tests, if perfonnecl, will be less in sco�ae thaiz would be necessary to render an opinion on internal control ancl, accordingly, no opinion will be expressed in our report on intei-nal control issued pursuant to Government Auditin� Standai•ds. An audit is not designed to pi•ovide assurance on internal control or to identify significant deficiencies. However, during the audit, we will con��nunicatc to rnanagement and those chargcd with governance internal control related rnatters that are required to be communicated under AICPA professional standards and Government Auditin� Standards. Audit Procedures - Conapliance: As part of obtaining reasonable assurance about whether the financial statements are fiee of inaterial misstatement, we wrll perform tests of the A�;ency's coinpliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditin� Standards. Audit Administration, Fees and Other: Noted below is a listing of work required by Agency staff to assist in the audit. 1. Techriical assistance in familiarizing our staff with: • The flow of information through the various departments and accounting systems. • Reports generated by your accounting system. • The systein of internal controls. • Controls established to monitor compliance with federal grants. 2. Preparation of trial balances for all funds, after posting of all year end journal entries. 3. Preparation of schedules supporting all major balance sheet accounts, and selected revenue and expenditure accounts. 4. Typing of all confirmation requests. � Contract No. C'L7540A Mr. 1'aul Gibson Direclor of Finance Palm Desert Rcdevelopmcrll /1Sency March 13, 2012 Pagc 6 Audit Administration, recs and Other (Cnntinued): Work Required by Agency Staif(Continued): 5. Pulling and refiling of all supporting documents required for auait verification. 6. Preparation o�Pthe basie fi��zlci�l statemeilts anc� nates. 7. Preparation ofthe m�nagemel�t's discussion a7�d �nalysis. Our maximum annual fee far ihe audit of the Agency's financi<il stateinents for the period ended January 31, 2U12 will be $19,000. The maximum annual fee stipulated herein contemplates tllat cozzditions satisfactory to the norrnal p1•ogress and eompletion of the examination will be encountered a.nd the Agency accounting personnel will furnish the agreed upon assistance in connection with the audit, However, if unusual circumstances are encountered which make it necessaiy for us to do additional work; we shall report such conditions to the responsiblc Ageney officials and provide the Agency with an estimate of the additional accounting fees involved. You may terminate our services or we may witl�draw from this engagement at any time. Any disputes arising under this agreernent shall be mediafied under the rulcs of the American Arbitration Association. The workpapers for this en�;ageinent are the property of VVhite Nelson Diehl Evans LLP and constitute confidential information. However, we may be requested to rnake certain workpapers available to grantor agencies pursuant to authority given to it by law or regulation. If requested, access to such workpapers will be provided under the supervision of our personnel. Furthermore, upon request, we may provide photocopies of selected workpapers to the grantor agencies. The grantor agencies may intend, or decide, to distribute the photocopies or information contained therein to others, including other governmental agencies. In accordance with our firm's current record retention policy, all of your original records will be returned to you at the conclusion of this engagement. Our accounting workpaper files will be kept for a period of seven years after the issuance of the audit report. All other files will be kept for as long as you retain us as your accountants. However, upon termination of our service, all records will be destroyed after a period of seven years. Physica] deterioration or catastrophic events may further shorten the life of these records. The working papers and files of our firm are nat a substitute for your original records, Government Audiring Standards require that we provide you with a copy of our most recent external peer review report and any letter of comment, and any subsequent peer review reports and letters of comment received during the period of the contract. Our 2009 peer reviews accompany this letter. � Contract No. C27540A Mr. P�� r5�t, Director of'Piilance Palin Dcsert Redevc:lo�menl�l�ency . March 13, 2�12 Pa�;e 7 � We appreciate the opportunity to be of service to the Paln� Desert Redevelopment A�;ency and believe this letter accurately summarizes the significanl- terms of our engagement. Tf you liave any quastions, please let us know. If you agree wit11 the tenns of�ur e��gagemexlt as described in this letter, plcase sign the enclosed copy and return it to cis. Very truly yours, WIIITL;NELSON DIEHL EVANS LLP B�: ,�.-.�. � P�� Nitin P. Patel, CPA Engagemei�t Partner RESPONSE: Tl�is letter correclly sets forth the understanding of the Paln� Desert Redevelopinent Agency By Title Date ' Contract No. C27540A . Cl,i{�on � Gunder:s�a zLp Certified Public Accauntants&Consultants System Review Report To the Partners White Nelson & Co., LLP an�i the Peer R�view Committee of the California Society of Certified Public Accountants We have reviewed the system of quality control for the accaunting and auditing practice of White Nelson & Co,, LLP (the firm) in effect for the year ended March 31, 2009, Our p�er review was canducted in accordance with the Standards for Performing and Reporfing on Peer Reviews established by the Peer Review Board of the American Instituf� of Certified Public Accountants. The firm is responsible for designing a system of quality cantra! and complying with it to provide the firm with reasonabl� assurance af p�rforming and reporting in conformity with applicable professianal standards in all material respects. Qur responsibility is to express an opini�n on the design Qf the system of quality control and #he firm's compNanca therewith based on our review. The nature, objectiv�s, scope, limitations of, and fihe procedures performed in a System Revi�w ar� d�scribed in the standards af www.aicpa.ora/prsummar�. As required by the standards, engagement selected for review included engagements performed under the Government Auditing Standards and audits of employee benefit plans. ln our opinion, the system of quality control for the accounting and auditing practice af Whlte Nelson & Co., LLP in effect far the year ended March 31, 2409, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporking in conformity with applicable professianal standards in all maferial re$pects. Firms can receive a rating of pass, pass with defic�ency(ies) or fail. White Nelson & Co., LI�P has received a peer review rating of pass. �� Phoenix, Arizona September 30, 2009 momaa.�r C.)fficcs in 17 states and Washington,DC ��^temational HEIDENREICH & HEIDENREICH, CPA�;`i��N°. C27540A 10201 S.51"�Streot #170 Phoenix,AZ 85044 (480)T04-6301 fax 785-4619 System Review Report January 28, 2009 To the Owners of Diehl, Evans&Company, LLP and the Peer Review Committee of the CA Society of CPAs We have reviewed the system of quality control for the accounting and auditing practice of Diehl, Evans&Company, LLP(the firm) in effect for the year ended September 30,2008. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants.The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm's eompliance therewith based on our review. The nature, objectives, scope, limitations of, and the procedures performed in a System Review are described in the standards at www.aicpa.org/prsummary. As required by the standards, engagements selected for review included engagemenks performed under the Government Auditing Standards and audits of employee benefit plans. In our opinion, the system of quatity control for the accounting and auditing practice of Diehl, Evans&Company, LLP in effect for the year ended September 30, 2008, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicabie professional standards in all material respects. Firms can receive a rating of pass,pass with de�ciency(iesJ or fail. Diehl, Evans& Company, LI�P has received a peer review rating of pass. ��,Q,i,c�rr�uet.cf� �' �11�¢�i,dQAvre�c�t. Heidenreich & Heidenreich, CPAs, PLI.0 RESOLUTION NO. OB - 010 A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY PROVIDING AUTHORIZATION TO PROCEED WITH A SPECIAL AUDIT OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AND PALM DESERT HOUSING AUTHORITY FOR THE PERIODS ENDED JANUARY 31, 2012 AND JUNE 30, 2012 RECITALS: A. Pursuant to Health and Safety Code Section 34179(3), all actions taken by the oversight board for the Successor Agency to the Palm Desert Redevelopment Agency Successor Agency (the "Oversight Board") shall be adopted by resolution. B. There has been presented to this Oversight Board for approval to proceed with a special audit of the Successor Agency to the Palm Desert Redevelopment Agency and Palm Desert Housing Authority for the periods ended January 31, 2012 and June 30, 2012. C. Contract No. C27540A with White Nelson Diehl Evans LLP was previously approved by this Oversight Board at its April 9, 2012 meeting. A scope of work will be provided to the Oversight Board once the State Department of Finance releases its requirements. D. Authorization to proceed will allow the City Manager to approve work to be performed up to an amount of $15,000 for the Housing Authority, and an amount not to exceed $10,000 for all other funds audit. NOW, THEREFORE, THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby provides authorization to proceed with a special audit of the Successor Agency to the Palm Desert Redevelopment Agency and Palm Desert Housing Authority for the periods ended January 31, 2012 and June 30, 2012. Section 3. The staff of the Successor Agency is hereby directed to provide the State Department of Finance ("DOF") written notice and information regarding the action 1 Resolution No. OB- 010 taken by the Oversight Board in Section 2 of this Resolution. Such notice and information shall be provided by electronic means and in a manner of DOF's choosing. Section 4. The officers of the Oversight Board and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution. PASSED, APPROVED AND ADOPTED this 20th day of August, 2012 by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: , ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY 2 RESOLUTION NO. OB - 005 A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, RECEIVING AND FILING AN INFORMATIONAL REPORT ON ASSEMBLY BILL (AB) 1484 RECITALS: A. Pursuant to Health and Safety Code Section 34179(3), all actions taken by the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency (the "Oversight Board") shall be adopted by resolution. B. There has been presented to this Oversight Board for approval, receiving and filing of an AB 1484 Informational Report. NOW,THEREFORE,THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENTAGENCY HEREBY FINDS, DETERMINES, RESOLVES,AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby approves receiving and filing of the AB 1484 Informational Report, which is made a part hereof and is attached hereto as "Exhibit 'A'." Section 3. The staff of the Successor Agency is hereby directed to provide the State Department of Finance ("DOF") written notice and information regarding the action taken by the Oversight Board in Section 2 of this Resolution. Such notice and information shall be provided by electronic means and in a manner of DOF's choosing. Section 4. The officers of the Oversight Board and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things that they may deem necessary or advisable to effectuate this Resolution. PASSED, APPROVED, AND ADOPTED this day of , 20 AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: F�� BY OVERSI�G�T BOARD 4N__ F7'�-' 2-� — �-O��--� RACHELLE D. KLASSEN, SECRETARY ��FIED BY OVERSIGHT BOARD OF THE SUCCESSOR AGENCY Origina�l on file with City Clerk's Of�'ioe TO THE PALM DESERT REDEVELOPMENT AGENCY RESOLUTION NO. OB - 005 EXHIBIT A OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AB 1484 INFORMATIONAL REPORT August 20, 2012 2 CITY OF PALM DESERT OFFICE OF THE CITY MANAGER STAFF REPORT REQUEST: AB 1484 INFORMATIONAL REPORT SUBMITTED BY: Stephen Y. Aryan, Risk Manager DATE: August 20, 2012 CONTENTS: 1. AB 1484 Important Dates (League of California Cities) 2. AB 1484 (Chaptered) RECOMMENDATION By minute motion, receive and file. BACKGROUND Pursuant to the Dissolution Act, ABX1 26, the bill enacted in June 2011 that directed the dissolution of all California redevelopment agencies, the Palm Desert Redevelopment Agency was dissolved effective February 1, 2012. The duties, responsibilities, assets, and liabilities of the Redevelopment Agency were transferred to the Successor Agency to the Palm Desert Redevelopment Agency effective February 1, 2012. On June 27, 2012, Governor Jerry Brown signed Assembly Bill 1484 (AB 1484) that makes several substantive and technical amendments to ABX1 26. In summary, AB 1484 requires several due diligence and audit reviews to assess the amounfi of cash and other revenues of former redevelopment agencies. AB 1484 IMMEDIATE REQUIREMENTS The following is a brief summary of five immediate requirements in AB 1484 and staff's actions to meet the requirements: 1. Separate Le�al Entitv: The legislation establishes successor agencies as separate legal entities distinct from the cities that formed the redevelopment agencies. Prior to any new Successor Agency action, the City Council, should adopt resolutions reaffirming and acknowledging the status of the Successor Agency as a separate legal entity. Response: The Successor Agency to the Palm Desert Redevelopment Agency adopted resolutions pursuant to ABX1 26. 2. Pavment of Januarv-June 2012 Residual Balance: By July 12, 2012, the Successor Agency was obtigated to pay the amount that the County Auditor-Controller determined was owed to their taxing entities for the period January to June 2012, based upon the November 2011/January 2012 distribution of tax increments and ROPS 1. Response: The County Auditor-ControUer's Ofiiice notified stafif that there is no residual balance due from the Redeve%pment Agency. 3. Housinq Asset Inventorv: By August 1, 2012, the Housing Successor is required to submit to the DOF a comprehensive listing of all housing assets that were transferred to it as of February 1, 2012. The DOF has up to 30 days to object to any transferred assets on the inventory list. If DOF objects, the housing successor has five (5) business days to request a meet and confer process with DOF. If the asset"is deemed not to be a housing asset" it must AB 1484 Informational Report August 20, 2012 Page 2 of 4 be returned to the successor agency. Housing assets must be deposited in a Low and Moderate Income Housing Asset Fund ("LMIHAF"). Response: The Palm Desert Housing Authority is the Housing Successor. Successor Agency and Housing Authority staff worked diligently, with minimal State notice of the required format, to assemble this inventory and submifted it by the August 1, 2012, deadline. 4. ROPS Deadlines 8� Bevond: By September 1, 2012, ROPS Three (January 1, 2013 to June 30, 2013) must be submitted to the DOF, State Controller, County Auditor-Controller and County Administrative Office in the form approved by the Oversight Board. Response: As of the drafting of this informational report, staff is working to comp/efe ROPS 3 to be reviewed by the Oversight Board on August 20, 2012, and the Successor Agency on August 23, 2012. 5. Pass-throuph Pavments for 2011/12: AB 1484 provides that if any pass-through payment obligation has not yet been paid to the taxing entities for FY 2011-12, the County Auditor- Controller shall make such payments and shall reduce property tax allocation to the Successor Agency by the amount of such payments. Response:All required pass-through obligation for FY 2011I12 have been paid. CHANGES IN OVERSIGHT BOARD COMPOSITION AND ROLES Staffing Under AB1X 26, a Successor Agency is charged with providing staffing to its Oversight Board. Under AB 1484, the Oversight Board can direct a Successor Agency to provide additional legal or financial advice independent from Successor Agency staff. The Oversight Board is also authorized to contract with the county or other public or private agencies for administrative support. Immunities Oversight Board members have the same immunities applicable to public entities and public employees when exercising the authority granted to the Oversight Board under AB1X 26 and AB 1484. Process for and Review of Oversight Board Acfions by DOF AB 1484 requires that all actions taken by an Oversight Board be adopted by resolution. All actions taken by an Oversight Board require transmittal of notice to the DOF by electronic means in a manner of DOF's choosing. Under AB1X 26, DOF had a period of three (3) business days to request review of Oversight Board actions. AB 1484 extends that time for DOF to request review of an action to five (5) business days after it receives affirmative notice. Actions of the Oversight Board are deemed effective if DOF does not request a review within that period. If DOF requests a review of a particular Oversight Board action, DOF has forty (40) calendar days to approve the action or return it to the Oversight Board for its reconsideration, giving DOF an additional thirty (30) days to review actions of the Oversight Board beyond the deadline originally in the Dissolution Act. For Oversight Board actions related to the disposition of real property and housing assets, DOF inay extend the review period for up to sixty (60) calendar days. AB 1484 Informational Report August 20, 2012 Page 3 of 4 AB 1484 DUE DILIGENCE REVIEW(DDR) AND PAYMENT OBLIGATIONS AB 1484 creates a new "due diligence" process to determine the amount of unobligated redevelopment funds or available cash assets and to disburse those funds to the taxing entities over the next year. This due diligence review process, and the Oversight Board's involvement, will continue until April 2013. The Successor Agency must hire a licensed accountant to perform this review of all agency financial activities (that took place between January 2011 and June 2012). The purpose of the review is to determine the unobligated fund balances that will be available for distribution to the taxing entities. The Oversight Board has a significant role in this new due diligence review process. The law establishes a timeline for completion of the reviews by the Successor Agency, approval of the reviews by the Oversight Board and DOF, and a process to disburse any unobligated funds to the taxing entities. The Oversight Board must review the due diligence review or County Auditor- Controller's audit for both categories of funding, convene a public comment session to take place at least five business days before the oversight board holds the approval vote, and have a separate meeting to approve a determination of the amount of cash and cash equivalents available for disbursement to taxing entities from these funds. The review of the Housing Fund must be completed by October 1, 2012 and non-housing funds by December 15, 2012. By October 15, 2012, (Housing Fund) and January 15, 2013, (non-housing funds) the Oversight Board must review, approve, and transmit to the DOF and the county auditor-controller the determination of the amount of cash and cash equivalents that are available for disbursement to taxing entities. The deadline to send excess funds is five business days following the DOF's final determination in both instances. If a successor agency does not make the required payments and is unable to recover funds that were transferred to other public agencies without an enforceable obligation, a city may be subject to an offset of its sales and use or property tax. Completion of this DDR process is a pre-requisite for a Successor Agency to obtain a Finding of Completion (FOC). FINDING OF COMPLETION ("GOLDEN TICKET") After the Successor Agency fulfills its Due Diligence Review requirement by paying the housing fund balance, the non-housing fund balance, the balance of any outstanding pass-through obligations and residual payments, DOF will issue a Finding of Completion (FOC). The FOC is referred to as the "Golden Ticket" by redevelopment practitioners because it confers the following benefits to successor agencies: A. Long-Range Proper[y Management Plan Successor Agencies may retain real property owned by the former redevelopment agency, upon the Finding of Completion and approval of a long range property management plan. The Finding of Completion entitles Successor Agencies to submit a long-range property management plan governing the disposition and use of former redevelopment agency property to the Oversight Board and DOF for approval. Permissible uses of property include (a) retention for governmental use; (b) retention for future development; (c) sale of property; or (d) use of the property to fulfill enforceable obligations. The due diligence process and issuance of a Finding of Completion by DOF, if applicable, should be completed by April 2013. AB 1484 Informational Report August 20, 2012 Page 4 of 4 B. Reinstatement of Loans Following receipt of a Finding of Completion, the Oversight Board may authorize the Successor Agency to repay the city for loans it made to the former redevelopment agency. Loan agreements entered into between the former redevelopment agency and the city are deemed to be enforceable obligations if the Oversight Board makes a finding that the loan was for legitimate redevelopment purposes. C. Use of Excess Bond Proceeds Under AB 1484, following receipt of a Finding of Completion, a Successor Agency is authorized to spend excess bond proceeds (proceeds not already committed to satisfy approved enforceable obligations)from bonds issued prior to 2011. OTHER CHANGES Expanded DOF Authority AB 1484 greatly expands the review period and authority of the DOF and significantly changes the ROPS review and approval process. Under AB1X 26, the DOF had a period of three (3) business days to request a review of an Oversight Board action. AB 1484 extends the deadline to request review to five (5) business days after affirmative notice is provided to DOF. DOF is required to make its determination "of the enforceable obligations and the amounts and funding sources of the enforceable obligations" no later than forty-five (45) days after the ROPS has been submitted by a Successor Agency. DOF also has the authority to eliminate or modify any item on the ROPS being reviewed prior to DOF approval. A Successor Agency may request additional review by DOF and an opportunity to meet and confer on disputed items, but such a request must be made within five (5) business days of the Successor Agency's receipt of a DOF determination. DOF is then required to notify a Successor Agency and the County Auditor-Controller of its review at least fifteen (15) days before the date of the property tax distribution (i.e., by December 18 for the January 2 distribution and May 17 for the June 1 distribution). Penalties Failure to approve and submit a timely ROPS may result in the assessment of various penalties to a successor agency and/or to the city. If a successor agency does not timely submit a ROPS pursuant to the deadlines set forth in AB 1484, the Citv mav be subiect to a $10,000 per dav civil aenaltv for each dav the ROPS is delinquent. Additionally, if an agency does not submit a Recognized Obligation Payment Schedule within ten days of the deadline, the maximum administrative cost allowance for that period shall be reduced by twenty-five percent (25%). If a successor agency fails to submit an oversight board approved ROPS pursuant to the requirements of AB 1484 within five (5) business days of the date upon which the ROPS is to be used to determine the amount of property tax allocations, DOF inav determine if anv amount should be withheld bv the countv auditor-controller for pavments for enforceable obliqations from distribution to taxinq entities, pending approval of a Recognized Obligation Payment Schedule. � ��I�� 1400 K Street, Suite 400 • Sacramento, California 95814 � T �^ T � C Phone: 916.658.8200 Fax: 916.658.8240 1 1. 1 J www.cacities.org AB 1484: Important Dates July 9: County auditor-controller notifies successor agency of amount of funds owing taxing entities based upon December 2011 property tax payment' July 12: Successor agency must make payment to auditor-controller for deposit into Redevelopment Property Tax Trust Fund and distribution to taxing entities.2 July 16: Auditor-controller distributes money received from successor agencies to taxing entities. Monies received after July 12 date distributed within 5 days of receipt.3 July 18: City sales tax payment suspended if successor agency doesn't make July 12 payment.4 August 1: Successor housing entity must submit to DOF a list of housing assets that contains explanation of how assets meet criteria set forth in the law. DOF will prescribe format for list. DOF inay object to any of the assets within 30 days. If after meet and confer, DOF continues to object, asset must be returned to the successor agency.5 August 10: Successor housing entity notifies successor agency of any designations of use or commitments of funds that successor housing entity authorizes successor agency to retain.s August 15 +/-: Oversight board meets to consider ROPS for January 1, 2013 through June 30, 2013 which must be submitted to DOF by September 1. September 1: ROPS for January 1, 2013 through June 30, 2013 must be submitted electronically to DOF after oversight board approval.' DOF inakes determinations within 45 days. Within 5 days of determination, successor agency may request additional review and meet and confer. I Section 34183.5(b)(2)(A). Note: The statute,that may be drafted in error,states that if June 1 property tax payment has not been made to successor agencies,the amount owing to taxing entities will be deducted from that same June 1 payment(34183.5(b)(1)). z Section 34183.5(b)(2)(A). 3 Section 34183.5(b)(2)(A). 4 Section 34183.5(b)(2)(A) 5 Section 34176(a)(2). Definition of"housing asset"found at section 34176(e). 6 Section 34179.6(c) �Section 34177(m). Future ROPS must be submitted to DOF 90 days prior to property tax distribution. City subject to civil penalty of$10,000 per day for successor agency's failure to timely submit ROPS(Section 34177(m)(2)). July 2, 2012 October 1: Auditor-controller may provide notice to successor agency of any objections to items on January—June 2013 ROPS.B October 1: Successor agency submits to oversight board, county auditor-controller, State Controller, and DOF results of the review of the LMIHF conducted by the licensed accountant agency must retain.9 Note: licensed accountant must be approved by the county auditor-controller. October 1: County auditor-controller completes agreed-upon procedures audit of each redevelopment agency.10 Auditor-controller provides estimate of propert�r tax payments to successor agency for upcoming six-month period. ' October 15: . Oversight Board must review, approve, and transmit LMIHF audit to DOF, auditor-controller. Note that oversight board must hold a public session to consider audit at least five business days prior to the meeting of oversight board in which LMIHF audit is considered for approval.1z November 9: Last day for DOF to complete review of LMIHF audit and reports findings, determinations, and decision to overturn oversight board decision to allow retention of successor agency assets.t3 W/in 5 days of receipt of DOF audit findings: Successor agency may request meet and confer to resolve disputes with DOF findings on LMIHF audit.14 DOF must confirm or modify its determination and decisions within 30 days. W/in 5 days of receipt of DOF final audit determination: Successor agency to transfer LMIHF funds to auditor-controller.15 City sales tax/property tax may be offset for unfunded amounts. December 1: Successor agency may report to auditor-controller that total amount of available revenues will be insufficient to fund enforceable obligations.'s $Section 34182.5. 9 Section 34179.6(a). The requirement to retain a licensed accountant is found in section 34179.5. The audit provided by the county auditor-controller can be substituted for an audit by a licensed accountant if it contains the information required by Section 34179.5. lo Section 34182(a)(1). 11 Section 34182(c)(3) 1z Section 34179.6(c)and(b) 13 Section 34179.6(d) 14 Section 34179.6(e) 15 Section 34179.6(f� 16 Section 34183(b) June 28, 2012 December 15: Successor agency submits to oversight board, county auditor-controller, State Controller, and DOF results of the review of all other fund and account balances by licensed accountant." 2013 January 2: Auditor-controller makes distributions of property tax for January—June 2013 ROPS.1e January 15: Oversight board must review, approve, and transmit other funds audit to DOF; auditor-controller.19 March 3: Successor agency submits ROPS for July 1, 2013 through December 31, 2013 to DOF after oversight board approval.20 April 1: County auditor-controller provides estimate of property tax payments to successor agency for upcoming six-month period.21 April 1: DOF completes review of other funds audit and reports findings, determinations, and decision to overturn oversight board decision to allow retention of successor agency assets.22 April 6 +/-: No later than 5 days after receiving DOF determination on other funds audit, successor agency may request meet and confer to resolve disputes with DOF findings. DOF must confirm or modify its determination and decisions within 30 days. April 10: +/- Successor agency to transfer other"cash and assets" audit payment to auditor-controller if ineet and confer process complete.23 City sales tax/property tax may be offset for unfunded amounts. May 1: Successor agency reports to auditor-controller if total amount of available revenues will be insufficient to fund enforceable obligations.z4 ��Section 34179.6(a). 18 Section 34183(b). � 19 Section 34179.6(a). 20 Section 34177(m). zl Section 34182(c)(3) zz Section 34179.6(a) 23 Section 34179.6(�. The statute does not allow sufficient time between completion of DOF review on April 1 and required payment on April 10. z4 Section 34183(b). June 28, 2012 Assembly Bill No.1484 CHAPTER 26 An act to amend Section 53760.1 of the Government Code,and to amend Sections 33500,33501,34163,34171,34173,34175,34176,34177,34178, 34179, 34180, 34181, 34182, 34183, 34185, 34186, 34187, 34188, and 34189 of,to add Sections 34167.10,34177.3,34177.5,34178.8,34179.5, 34179.6,34179.7,34179.8,34182.5,34183.5,34189.1,34189.2,and 34189.3 to, to add Chapter 9 (commencing with Section 34191.1) to Part 1.85 of Division 24 of, and to add and repeal Section 34176.5 of,the Health and Safety Code, relating to community redevelopment, and making an appropriation therefor,to take effect immediately,bill related to the budget. [Approved by Governor June 27,2012.Filed with Secretary of State June 27,2012.] LEGISLATIVE COUNSEL'S DIGEST AB 1484,Committee on Budget.Community redevelopment. The Community Redevelopment Law authorizes the establishment of redevelopment agencies in communities to address the effects of blight, and,among other things,provides that an action may be brought to review the validity of specified agency actions, findings, or determinations that occurred after January 1,2011,within 2 years of the triggering event. This bill would toll the time limit for bringing an action until the Department of Finance issues a finding of completion to the successor agency. Existing law dissolved redevelopment agencies and community development agencies, as of February 1, 2012, and provides for the designarion of successor agencies,as defined.Existing law requires successor agencies to wind down the affairs of the dissolved redevelopment agencies and to,among other things,make payments due for enforceable obligations, as defined, perform obligations required pursuant to any enforceable obligation, dispose of all assets of the former redevelopment agency, and to remit unencumbered balances of redevelopment agency funds,including housing funds, to the county auditor-controller for distribution to taxing entities. Existing law authorizes the city,county,or ciry and county that authorized the creation of a redevelopment agency to retain the housing assets, functions,and powers previously performed by the redevelopment agency, excluding amounts on deposit in the Low and Moderate Income Housing Fund. The bill would modify provisions relating to the transfer of housing responsibilities associated with dissolved redevelopment agencies and would define the term"housing asseY'for these purposes.The bill would impose 96 Ch.26 —2— new requirements on successor agencies with regard to the submittal of the Recognized Obligation Payment Schedule,the conducting of a due diligence review to determine the unobligated balances a�ailable for transfer to affected taxing entities,and the recovery and subsequent remittance of funds determined to have been transferred absent an enforceable obligation.The bill would authorize the Departrnent of Finance to issue a finding of completion to a successor agency that completes the due diligence review and meets other requirements.Upon receiving a finding of completion,the bill would authorize the successor agency to participate in a loan repayment program and limited property management activities. Existing law authorizes the Deparhnent of Finance and the Controller to require any documents associated with enforceable obligations to be provided to them in a manner of their choosing. The bill would authorize the county auditor-controller and the department, under specified circumstances, to require the return of funds improperly spent or transferred to a public entity and would authorize the department and the Controller to require the State Board of Equalization and the county auditor-controller to offset sales and use tax and property tax allocations, respectively,to the local agency.The bill would authorize the Controller to review the activities of a successor agency to determine if an improper asset transfer had occurred between the successor agency and the city or county that created the former redevelopment agency, and would require the Controller to order the return of these assets if such an asset transfer did occur. The bill would impose new requirements on the county auditor-controller relating to the allocation of property tax revenues to affected taxing entities during a specified timeframe. By imposing additional duties upon local public officials,the bill would create a state-mandated local program. The bill would appropriate up to$22,000,000 to the Departrnent of Finance from the General Fund for costs associated with the bill,as specified. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill. Appropriation:yes. The people ojthe State of California do enact as,f'ollows: SECTION 1. Section 53760.1 of the Government Code is amended to read: 53760.1. As used in this article the following terms have the following meanings: 96 —3— Ch.26 (a) "Chapter 9" means Chapter 9 (commencing with Section 901) of Title 11 of the United States Code. (b) "Creditor"means either of the following: (1) An entity that has a noncontingent claim against a municipality that arose at the time of or before the commencement of the neutral evaluation process and whose claim represents at least five million dollars($5,000,000) or comprises more than 5 percent of the local public entity's debt or obligations,whichever is less. (2) An entity that would have a noncontingent claim against the municipality upon the rejection of an executory contract or unexpired lease in a Chapter 9 case and whose claim would represent at least five million dollars($5,000,000)ar comprises more than 5 percent of the local public entity's debt or obligations,whichever is less. (c) "Debtor" means a local public entity that may file for bankruptcy under Chapter 9. (d) "Good faith"means participation by a party in the neutral evaluation process with the intent to negotiate toward a resolution of the issues that are the subject of the neutral evaluation process, including the timely provision of complete and accurate information to provide the relevant parties through the neutral evaluation process with sufT'icient information, in a confidential manner,to negotiate the readjustment of the municipality's debt. (e) "Interested party" means a trustee, a committee of creditors, an affected creditor,an indenture trustee,a pension fund,a bondholder,a union that, under its collective bargaining agreements, has standing to initiate contract or debt restructuring negotiations with the municipality, or a representative selected by an association of retired employees of the public entity who receive income from the public entity convening the neutral evaluation.A local public entity may invite holders of contingent claims to participate as interested parties in the neutral evaluation if the local public entity determines that the contingency is likely to occur and the claim may represent five million dollars($5,000,000)or comprise more than 5 percent of the local public entiry's debt or obligations,whichever is less. (fl "Local public entity"means any county,city,district,public authority, public agency,or other entity,without limitation,that is a municipality as defined in Section 101(40) of Title 11 of the United States Code (bankruptcy),or that qualifies as a debtor under any other federal bankruptcy law applicable to local public entities,and also includes a successor agency to a redevelopment agency created pursuant to Part 1.85(commencing with Section 34170)of Division 24 of the Health and Safety Code.For purposes of this article,"local public entity"does not include a school district. (g) "Local public entiry representative" means the person or persons designated by the local public agency with authority to make recommendations and to attend the neutral evaluation on behalf of the governing body of the municipality. 96 Ch.26 —4— (h) "Neutral evaluation"is a form of alternative dispute resolution that may be known as mandatory mediation.A"neutral evaluator"may also be known as a mediator. SEC. 2. Section 33500 of the Health and Safety Code is amended to read: 33500. (a) Notwithstanding any other provision of law,including Section 33501,an action may be brought to review the validity of the adoption or amendment of a redevelopment plan at any time within 90 days after the date of the adoption of the ordinance adopting or amending the plan,if the adoption of the ordinance occurred prior to January 1,2011. (b) Notwithstanding any other provision of law,including Section 33501, an action may be brought to review the validity of any findings or determinations by the agency or the legislative body at any time within 90 days after the date on which the agency or the legislative body made those findings or determinations,if the findings or determinations occurred prior to January 1,2011. (c) Notwithstanding any other law, including Section 33501, an action may be brought to review the validity of the adoption or amendment of a redevelopment plan at any time within two years after the date of the adoption of the ordinance adopting or amending the plan, if the adoption of the ordinance occurred after January 1,2011. (d) Notwithstanding any other law, including Section 33501, an action may be brought to review the validity of any findings or determinations by the agency or the legislative body at any time within two years after the date on which the agency or the legislative body made those findings or determinations,if the findings or determinations occurred after January 1, 201 L (e) The time limit for bringing an action under subdivision(c)or(d)shall be tolled with respect to the adoptions,findings,and determinations of any former redevelopment agency or its legislative body until the Department of Finance has issued a finding of completion to the successor agency of that former redevelopment agency pursuant to Section 34179.7.Subdivisions (c)and(d)shall not apply to any adoption,finding,or determination of any former redevelopment agency or its legislative body after the department has issued a finding of completion to the successor agency of that former redevelopment agency pursuant to Section 34179.7. SEC. 3. Section 33501 of the Health and Safety Code is amended to read: 33501. (a) An action may be brought pursuant to Chapter 9(commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure to determine the validity of bonds and the redevelopment plan to be financed or refinanced,in whole ar in part,by the bonds,or to determine the validity of a redevelopment plan not financed by bonds,including without limiting the generality of the foregoing,the legality and validity of all proceedings theretofore taken far or in any way connected with the establishment of the agency, its authority to transact business and exercise its powers, the designation of the survey area, the selection of the project area, the 96 —5— Ch.26 formulation of the preliminary plan, the validity of the finding and determination that the project area is predominantly urbanized, and the validity of the adoption of the redevelopment plan,and also including the legality and validity of all proceedings theretofore taken and(as provided in the bond resolution)proposed to be taken for the authorization,issuance, sale,and delivery of the bonds,and for the payment of the principal thereof and interest thereon. (b) Notwithstanding subdivision(a),an action to determine the validity of a redevelopment plan,or amendment to a redevelopment plan that was adopted prior to January 1,2011,may be brought within 90 days after the date of the adoption of the ordinance adopting or amending the plan. (c) Any action that is commenced on or after January 1,2011,which is brought pursua.nt to Chapter 9(commencing with Section 860)of Title 10 of Part 2 of the Code of Civil Procedure to determine the validity or legality of any issue, document, or action described in subdivision (a), may be brought within two years after any triggering event that occurred after January 1,2011.The time limit for bringing an action under this subdivision shall be tolled with respect to the validity or legality of any issue,document, or action described in subdivision(a)of any former redevelopment agency or its legislative body until the Department of Finance has issued a finding of completion to the successor agency of that former redevelopment agency pursuant to Section 34179.7. This subdivision shall not apply to any adoption, finding, or determination of any former redevelopment agency or its legislative body after the department has issued a finding of completion to the successor agency of that former redevelopment agency pursuant to Section 34179.7. (d) For the purposes of protecting the interests of the state,the Attorney General and the Department of Finance are interested persons pursuant to Section 863 of the Code of Civil Procedure in any action brought with respect to the validity of an ordinance adopting or amending a redevelopment plan pursuant to this section. (e) For purposes of contesting the inclusion in a project area of lands that are enforceably restricted,as that term is defined in Sections 422 and 422.5 of the Revenue and Taxation Code,or lands that are in agricultural use,as defined in subdivision(b)of Section 51201 of the Government Code,the Department of Conservation, the county agricultural commissioner, the county farm bureau,the California Farm Bureau Federation,and agricultural entities and general farm organizations that provide a written request for notice,are interested persons pursuant to Section 863 of the Code of Civil Procedure,in any action brought with respect to the validity of an ordinance adopting or amending a redevelopment plan pursuant to this section. SEC. 4. Section 34163 of the Health and Safety Code is amended to read: 34163. Notwithstanding Part 1 {commencing with Section 33000),Part 1.5(commencing with Section 34000),Part 1.6(commencing with Secrion 34050), and Part 1.7(commencing with Section 34100),or any other law, 96 Ch.26 —6— commencing on the effective date of this part,an agency shall not have the authority to,and shall not,do any of the following: (a) Make loans or advances or grant or enter into agreements to provide funds or provide financial assistance of any sort to any entity or person for any purpose,including,but not limited to,all of the following: (1) Loans of moneys ar any other thing of value or commitments to provide financing to nonprofit organizations to provide those organizations with financing for the acquisition,construction,rehabilitation,refinancing, or development of multifamily rental housing ar the acquisition of commercial property far lease,each pursuant to Chapter?.5(commencing with Section 33741)of Part l. (2) Loans of moneys or any other thing of value for residential construction, improvement, or rehabilitation pursuant to Chapter 8 (commencing with Section 33750) of Part L These include, but are not limited to,construction loans to purchasers of residential housing,mortgage loans to purchasers of residential housing,and loans to mortgage lenders, or any other entity,to aid in financing pursuant to Chapter 8(commencing with Section 33750). (3) The purchase,by an agency,of mortgage or construction loans from mortgage lenders or from any other entities. {b) Enter into contracts with, incur obligations, or make commitments to,any entity,whether governmental,tribal,or private,or any individual or groups of individuals for any purpose, including, but not limited to, loan agreements, passthrough agreements, regulatory agreements, services contracts, leases, disposition and development agreements,joint exercise of powers agreements, contracts for the purchase of capital equipment, agreements for redevelopment activities, including, but not limited to, agreements for planning, design, redesign, development, demolition, alteration,construction,reconstruction,rehabilitation,site remediation,site development or improvement,removal of grai�iri,land clearance,and seismic retrofits. (c) Amend or modify existing agreements,obligations,or commitments with any entity, for any purpose, including,but not limited to, any of the following: (1) Renewing or extending term of leases or other agreements, except that the agency may extend lease space for its own use to a date not to exceed six months after the effective date of the act adding this part and for a rate no more than 5 percent above the rate the agency currently pays on a monthly basis. (2) Modifying terms and conditions of existing agreements,obligations, or commitments. (3) Forgiving all or any part of the balance owed to the agency on existing loans or extend the term or change the terms and conditions of existing loans. (4) Making any future deposits to the Low and Moderate Income Housing Fund created pursuant to Section 333343. 96 —7— Ch.26 (5) Transferring funds out of the Low and Moderate Income Housing Fund,except to meet the minimum housing-related obligations that existed as of January i, 2011, to make required payments under Sections 33690 and 33690.5,and to borrow funds pursuant to Section 34168.5. (d) Dispose of assets by sale, long-term lease, gift, grant, exchange, transfer,assignment,or otherwise,for any purpose,including,but not limited to,any of the following: (1) Assets,including,but not limited to,real property,deeds of trust,and mortgages held by the agency,moneys,accounts receivable,contract rights, proceeds of insurance claims,grant proceeds, settlement payments,rights to receive rents,and any other rights to payment of whatever kind. (2) Real property, including, but not limited to, land, land under water and waterfront property,buildings, structures,fixtures,and improvements on the land, any property appurtenant to, or used in connection with, the land,every estate,interest,privilege,easement,franchise,and right in land, including rights-of-way,terms for years,and liens,charges,or encumhrances by way of judgment,mortgage,or otherwise,and the indebtedness secured by the liens. (e) Acquire real property by any means for any purpose,including,but not limited to,the purchase,lease,or exercising of an option to purchase or lease, exchange, subdivide,transfer, assume, obtain option upon, acquire by gift,grant,bequest,devise,or otherwise acquire any real property,any interest in real property, and any improvements on it, including the repurchase of developed property previously owned by the agency and the acquisition of real property by eminent domain; provided, however, that nothing in this subdivision is intended to prohibit the acceptance or transfer of title for real property acquired prior to the effective date of this part. (fj Transfer, assign, vest, or delegate any of its assets, funds, rights, powers, ownership interests, or obligations for any purpose to any entity, including,but not limited to,the community,the legislative body,another member of a joint powers authority, a trustee,a receiver, a partner entity, another agency,a nonprofit corporation,a contractual counterparly,a public body,a limited-equiry housing cooperative,the state,a political subdivision of the state,the federal government,any private entity,or an individual or group of individuals. (g) Accept financial or other assistance from the state or federal government or any public or private source if the acceptance necessitates or is conditioned upon the agency incurring indebtedness as that term is described in this part. SEC. 5. Section 34167.10 is added to the Health and Safety Code,to read: 34167.10. (a) Notwithstanding any other law,for purposes of this part and Part 1.85 (commencing with Section 34170), the definition of a city, county, or city and county inciudes, but is not limited to, the following entities: (1) Any reporting entity of the city, county, or city and county for purposes of its comprehensive annual financial report or similar report. 96 Ch.26 —8— (2) Any component unit of the city,county,or city and county. (3) Any entity which is controlled by the city,county,or city and county, or for which the city,county,or city and county is financially responsible or accountable. (b) The following factors shall be considered in determining that an entity is controlled by the city, county, or city and county, and are therefore included in the definition of a city,county,or city and county for purposes of this part and Part 1.85(commencing with Section 34170): (1) The city,county,or city and county exercises substantial municipal controi over the entity's operations,revenues,or expenditures. (2) The city, county, or city and county has ownership or control over the entity's property or facilities. (3) The city,county,or city and county and the entity share common or overlapping governing boards,or cotertninous boundaries. (4) The ciry,county,or city and county was involved in the creation or formation of the enrity. (5) The entity performs functions customarily or historically performed by municipalities and financed thorough levies of property taxes. (6) The city, county, or city and county provides administrative and related business support for the entity,or assumes the expenses incurred in the normal daily operations of the entity. (c) For purposes of this section,it shall not be relevant that the entity is formed as a separate legal entity,nonprofit corporation,or otherwise,or is not subject to the constitution debt limitation otherwise applicable to a city, county,or city and county.The provisions in this section are declarative of existing law as the entities described herein are and were intended to be included within the requirements of this part and Part 1.85 (commencing with Section 34170)and any attempt to determine otherwise would thwart the intent of these two parts. SEC. 6. Section 34171 of the Health and Safety Code is amended to read: 34171. The following terms shall have the following meanings: (a) "Administrative budget"means the budget for administrative costs of the successor agencies as provided in Section 34177. (b) "Administrative cost allowance" means an amount that, subject to the approval of the oversight board,is payable from property tax revenues of up to 5 percent of the properiy tax allocated to the successor agency on the Recognized Obligation Payment Schedule covering the period January 1, 2012, through June 30, 2012, and up to 3 percent of the property tax allocated to the Redevelopment Obligation Retirement Fund money that is allocated to the successor agency for each fiscal year thereafter;provided, however,that the amount shall not be less than two hundred fifly thousand dollars($250,000),unless the oversight board reduces this amount,for any fiscal year or such lesser amount as agreed to by the successor agency. However,the allowance amount shall exclude,and shall not apply to, any administrative costs that can be paid from bond proceeds or from sources other than property tax.Administrative cost allowances shall exclude any 96 —9— Ch.26 litigation expenses related to assets or obligations,settlements and judgrnents, and the costs of maintaining assets prior to disposition. Employee costs associated with wark on specific project implementation activiries,including, but not limited to, construction inspection,project management, or actual construction, sha11 be considered project-specific costs and shall not constitute administrarive costs. (c) "Designated local authority" shall mean a public entity formed pursuant to subdivision(d)of Section 34173. (d) (1) "Enforceable obligation"means any of the following: (A) Bonds, as defined by Section 33602 and bonds issued pursuant to Chapter 10.5 (commencing with Section 5850)of Division 6 of Title 1 of the Government Code,including the required debt service,reserve set-asides, and any other payments required under the indenture or similar documents governing the issuance of the outstanding bonds of the fortner redevelopment agency. A reserve may be held when required by the bond indenture or when the next property tax allocation will be insufficient to pay all obligations due under the provisions of the bond for the next payment due in the following half of the calendar year. (B) Loans of moneys borrowed by the redevelopment agency for a lawful purpose, to the extent they are legally required to be repaid pursuant to a required repayment schedule or other mandatory loan terms. (C) Payments required by the federal government,preexisting obligations to the state or obligations imposed by state law, other than passthrough payments that are made by the county auditor-controller pursuant to Section 34183, or legally enforceable payments required in connection with the agencies' employees, including, but not limited to, pension payments, pension obligation debt service, unemployment payments, or other obligations conferred through a collective bargaining agreement. Costs incurred to fizlfill collective bargaining agreements for layoffs or terminations of city employees who performed work directly on behalf of the former redevelopment agency shall be considered enforceable obligations payable from property tax funds. The obligations to employees specified in this subparagraph shall remain enforceable obligarions payable from property tax funds for any employee to whom those obligations apply if that employee is transferred to the entity assuming the housing functions of the former redevelopment agency pursuant to Section 34176.The successor agency or designated local authority shall enter into an agreement with the housing entity to reimburse it for any costs of the employee obligations. (D) Judgments or settlements entered by a competent court of law or binding arbitration decisions against the former redevelopment agency, other than passthrough payments that are made by the county auditor-controller pursuant to Section 34183. Along with the successor agency,the oversight board shall have the authority and standing to appeal any judgment or to set aside any settlement or arbitration decision. (E) Any legally binding and enforceable agreement or contract that is not otherwise void as violating the debt limit or public policy. However, nothing in this act shall prohibit either the successor agency, with the 96 Ch.26 —10— approval or at the direction of the oversight board, or the oversight board itself from terminating any existing agreements or contracts and providing any necessary and required compensation or remediation for such termination. Titles of or headings used on or in a document shall not be relevant in determining the existence of an enforceable obligation. (F) Contracts or agreements necessary for the administration or operation of the successor agency, in accordance with this part, including, but not limited to, agreements concerning litigation expenses related to assets or obligations,settlements and judgements,and the costs of maintaining assets prior to disposition, and agreements to purchase or rent office space, equipment and supplies,and pay-related expenses pursuant to Section 33127 and for carrying insurance pursuant to Section 33134. (G) Amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency, which had been deferred as of the effective date of the act adding this part;provided, however,that the repayment schedule is approved by the oversight board. Repayments shall be transferred to the Low and Moderate Income Housing Asset Fund established pursuant to subdivision (d) of Section 34176 as a housing asset and shall be used in a manner consistent with the affordable housing requirements of the Community Redevelopment Law (Part 1 (commencing with Section 33000)). (2) For purposes of this part,"enforceable obligation"does not include any agreements,contracts,or arrangements between the city,county,or city and county that created the redevelopment agency and the former redevelopment agency. However, written agreements entered into (A) at the time of issuance, but in no event later than December 31, 2010, of indebtedness obligations, and (B) solely for the purpose of securing or repaying those indebtedness obligations may be deemed enforceable obligations for purposes of this part.Notwithstanding this paragraph,loan agreements entered into between the redevelopment agency and the city, county, or city and county that created it, within two years of the date of creation of the redevelopment agency, may be deemed to be enforceable obligations. (3) Contracts or agreements between the former redevelopment agency and other public agencies, to perform services or provide funding for governmental or private services or capital proj ects outside of redevelopment project areas that do not provide benefit to the redevelopment project and thus were not properly authorized under Part 1 (commencing with Section 33000) shall be deemed void on the effective date of this part; provided, however, that such contracts or agreements for the provision of housing properly authorized under Part 1 (commencing with Section 33000) shall not be deemed void. (e) "Indebtedness obligations" means bonds, notes, certificates of participation,or other evidence of indebtedness,issued or delivered by the redevelopment agency, or by a joint exercise of powers authority created by the redevelopment agency, to third-party investors or bondholders to finance ar refinance redevelopment projects undertaken by the 96 -11— Ch.26 redevelopment agency in compliance with the Community Redevelopment Law(Part 1 (commencing with Section 33000)). (fj "Oversight boazd" shall mean each entity established pursuant to Section 34179. (g) "Recognized obligation"means an obligation listed in the Recognized Obligation Payment Schedule. (h) "Recognized Obligation Paymenf Schedule" means the document setting forth the minimum payment amounts and due dates of payments required by enforceable obligations for each six-month fiscal period as provided in subdivision(m)of Section 34177. (i) "School entity"means any entity defined as such in subdivision(f� of Section 95 of the Revenue and Taxation Code. (j) "Successor agency" means the successor entity to the former redevelopment agency as described in Section 34173. (k) "Taxing entities"means cities, counties, a city and county, special districts,and school entiries,as defined in subdivision(fl of Section 95 of the Revenue and Taxation Code, that receive passthrough payments and distributions of property taxes pursuant to the provisions of this part. (n "Property taxes" include all property tax revenues, including those from unitary and supplemental and roll corrections applicable to tax increment. (m) "Department"means the Department of Finance unless the context clearly refers to another state agency. (n) "Sponsoring entity" means the city, counry, or city and county, or other entity that authorized the creation of each redevelopment agency. (o) "Final judicial determination"means a final judicial determination made by any state court that is not appealed, or by a court of appellate jurisdiction that is not further appealed,in an action by any party. SEC. 7. Section 34173 of the Health and Safety Code is amended to read: 34173. (a) Successor agencies, as defined in this part, are hereby designated as successor entities to the former redevelopment agencies. (b) Except for those provisions of the Communiry Redevelopment Law that are repealed,restricted,or revised pursuant to the act adding this part, all authority,rights,powers,duties,and obligations previously vested with the former redevelopment agencies,under the Community Redevelopment Law,are hereby vested in the successor agencies. (c) (1) If the redevelopment agency was in the form of a joint powers authority,and if the joint powers agreement governing the formation of the joint powers authority addresses the allocation of assets and liabilities upon dissolution of the j oint powers authority,then each of the entities that created the former redevelopment agency may be a successor agency within the meaning of this part and each shall have a share of assets and liabilities based on the provisions of the joint powers agreement. (2) If the redevelopment agency was in the form of a joint powers authority,and if the joint powers agreement governing the fortnation of the j oint powers authority does not address the allocation of assets and liabilities 96 Ch.26 —12— upon dissolution of the joint powers authoriry,then each of the entities that created the former redevelopment agency may be a successor agency within the meaning of this part,a proportionate share of the assets and liabilities shall be based on the assessed value in the project areas within each entity's jurisdiction, as determined by the county assessor, in its jurisdiction as compared to the assessed value of land within the boundaries of the project areas of the former redevelopment agency. (d) (1) A city,county,city and county,or the entities forming the joint powers authority that authorized the creation of each redevelopment agency may elect not to serve as a successor agency under this part.A city,county, city and county, or any member of a joint powers authority that elects not to serve as a successor agency under this part must file a copy of a duly authorized resolution of its governing board to that effect with the county auditor-controller no later than January 13,2012. (2) The determination of the first local agency that elects to become the successor agency shall be made by the county auditor-controller based on the earliest receipt by the county auditor-controller of a copy of a duly adopted resolution of the local agency's governing board authorizing such an election.As used in this section,"local agency"means any city,county, city and county,or special district in the county of the former redevelopment agency. (3) (A) If no local agency elects to serve as a successor agency for a dissolved redevelopment agency, a public body, referred to herein as a "designated local authority"shall be immediately formed,pursuant to this part, in the county and shall be vested with all the powers and duties of a successor agency as described in this part.The Governor shall appoint three residents of the county to serve as the governing board of the authority.The designated local authority shall serve as successor agency until a local agency elects to become the successor agency in accordance with this section. (B) Designated local authority members are protected by the immunities applicable to public entities and public employees governed by Part 1 (commencing with Section 810)and Part 2(commencing with Section 814) of Division 3.6 of Title 1 of the Government Code. (4) A city, county, or city and county, or the entities forming the joint powers authority that authorized the creation of a redevelopment agency and that elected not to serve as the successor agency under this part,may subsequently reverse this decision and agree to serve as the successar agency pursuant to this section. Any reversal of this decision shall not become effective for 60 days after notice has been given to the current successor agency and the oversight board and shall not invalidate any action of the successar agency or oversight board taken prior to the effective date of the transfer of responsibility. (e) The liability of any successor agency,acting pursuant to the powers granted under the act adding this part,shali be limited to the extent of the total sum of property tax revenues it receives pursuant to this part and the 96 -13— Ch.26 value of assets transferred to it as a successor agency for a dissolved redevelopment agency. (fl Any existing cleanup plans and liability limits authorized under the Polanco RedevelopmentAct(Article 12.5(commencing with Section 33459) of Chapter 4 of Part 1)shall be transferred to the successor agency and may be transferred to the successor housing entity at that entity's request. (g) A successor agency is a separate public entity from the public agency that provides for its governance and the two entities shall not merge. The liabilities of the former redevelopment agency shall not be transferred to the sponsoring entity and the assets shali not become assets of the sponsoring entity.A successor agency has its own name,can be sued,and can sue.All litigation involving a redevelopment agency shall automatically be transferred to the successor agency. The separate former redevelopment agency employees shall not automatically become sponsoring entity employees of the sponsoring entity and the successor agency shall retain its own collective bargaining status.As successor entities,successor agencies succeed to the organizational status of the former redevelopment agency, but without any legal authority to participate in redevelopment activities, except to complete any work related to an approved enforceable obligation. Each successor agency shall be deemed to be a local entity for purposes of the Ralph M.Brown Act(Chapter 9(commencing with Section 54950)of Part 1 of Division 2 of Title 5 of the Government Code). (h) The city,county,or city and county that authorized the creation of a redevelopment agency may loan or grant funds to a successor agency for administrative costs, enforceable obligations, or project-related expenses at the city's discretion, but the receipt and use of these funds shall be reflected on the Recognized Obligation Payment Schedule or the administrative budget and therefore are subj ect to the oversight and approval of the oversight board. An enforceable obligation shall be deemed to be created for the repayment of those loans. (i) At the request of the city,county,or city and county,notwithstanding Section 33205, all land use related plans and functions of the former redevelopment agency are hereby transferred to the city,county,or city and county that authorized the creation of a redevelopment agency;provided, • however, that the city, county, or city and county shall not create a new project area,add territory to,or expand or change the boundaries of a project area,or take any action that would increase the amount of obligated property tax (formerly tax increment) necessary to fulfill any existing enforceable obligation beyond what was authorized as of June 27,2011. SEC. 8. Section 34175 of the Health and Safety Code is amended to read: 34175. (a) It is the intent of this part that pledges of revenues associated with enforceable obligations of the former redevelopment agencies are to be honored. It is intended that the cessation of any redevelopment agency shall not affect either the pledge,the legal existence of that pledge, or the stream of revenues available to meet the requirements of the pledge. 96 Ch.26 —14— (b) All assets,properties,contracts,leases,books and records,buildings, and equipment of the former redevelopment agency are transferred on February 1,2012,to the control of the successor agency,for administration pursuant to the provisions of this part. This includes all cash or cash equivalents and amounts owed to the redevelopment agency as of February 1, 2012.Any legal or contractual restrictions on the use of these funds or assets shall also be transferred to the successor agency. SEC. 9. Section 34176 of the Health and Safety Code is amended to read: 34176. (a) (1) The city,county,or city and county that authorized the creation of a redevelopment agency may elect to retain the housing assets and functions previously performed by the redevelopment agency.If a city, county,or city and county elects to retain the authority to perform housing functions previously performed by a redevelopment agency, all rights, powers, duties, obligations, and housing assets, as defined in subdivision (e), excluding any amounts on deposit in the Low and Moderate Income Housing Fund and enforceable obligations retained by the successor agency, shall be transferred to the city,county,or city and county. (2) The entity assuming the housing functions of the former redevelopment agency shall submit to the Department of Finance by August 1,2012,a list of all housing assets that contains an explanation of how the assets meet the criteria specified in subdivision (e). The Department of Finance shall prescribe the format for the submission of the list. The list shall include assets transferred between February 1,2012,and the date upon which the list is created.The department shall have up to 30 days from the date of receipt of the list to object to any of the assets or transfers of assets identified on the list. If the Department of Finance objects to assets on the list,the entity assuming the housing functions of the former redevelopment agency may.request a meet and confer process within five business days of receiving the department objection. If the transferred asset is deemed not to be a housing asset as defined in subdivision(e), it shall be returned to the successor agency and the provision of Section 34178.8 may apply.If a housing asset has been previously pledged to pay for bonded indebtedness, the successor agency shall maintain control of the asset in order to pay for the bond debt. (b) If a city, county, or city and county does not elect to retain the responsibility for performing housing functions previously performed by a redevelopment agency, all rights, powers, assets, duties, and obligarions associated with the housing activities of the agency,excluding enforceable obligations retained by the successor agency and any amounts in the Low and Moderate Income Housing Fund,shall be transferred as follows: (1) If there is no local housing authoriry in the territorial jurisdiction of the former redevelopment agency, to the Department of Housing and Community Development. (2) If there is one local housing authority in the territorial jurisdiction of the former redevelopment agency,to that local housing authority. 96 —IS— Ch.26 (3) If there is more than one local housing authority in the territorial jurisdiction of the former redevelopment agency, to the local housing authority selected by the city,county,or city and county that authorized the creation of the redevelopment agency. (c) Commencing on the operative date of this part,the entity that assumes the housing functions formerly performed by the redevelopment agency and receives the transferred housing assets may enforce affordability covenants and perform related activities pursuant to applicable provisions of the Community Redevelopment Law(Part 1 (commencing with Section 33000)},inciuding,but not limited to,Section 33418. (d) Except as specifically provided in Section 34191.4, any funds transferred to the city, county, or city and county or designated entity pursuant to this section, together with any funds generated from housing assets,as defined in subdivision(e),shall be maintained in a separate Low and Moderate Income Housing Asset Fund which is hereby created in the accounts of the entity assuming the housing functions pursuant to this section. Funds in this account shall be used in accordance with applicable housing-related provisions of the Community Redevelopment Law(Part 1 (commencing with Section 33000)). (e) For purposes of this part,"housing asset"includes all of the following: (1) Any real property,interest in,or restriction on the use of real property, whether improved or not,and any personal property provided in residences, including furniture and appliances, all housing-related files and loan documents,office supplies,software licenses,and mapping programs,that were acquired for low- and moderate-income housing purposes, either by purchase or through a loan,in whole or in part,with any source of funds. (2) Any funds that are encumbered by an enforceable obligation to build or acquire low-and moderate-income housing,as defined by the Community Redevelopment Law (Part 1 (commencing with Section 33000)) unless required in the bond covenants to be used for repayment purposes of the bond. (3) Any loan or grant receivable, funded from the Low and Moderate Income Housing Fund, from homebuyers, homeowners, nonprofit or for-profit developers, and other parties that require occupancy by persons of low or moderate income as defined by the Community Redevelopment Law(Part 1 (commencing with Section 33000)}. (4) Any funds derived from rents or operation of properties acquired for low- and moderate-income housing purposes by other parties that were financed with any source of funds,including residual receipt payments from developers,conditional grant repayments,cost savings and proceeds from refinancing,and principal and interest payments from homebuyers subject to enforceable income limits. (5) A stream of rents ar other payments from housing tenants or operators of low- and moderate-income housing financed with any source of funds that are used to maintain,operate,and enforce the affordability of housing or for enforceable obiigations associated with low- and moderate-income housing. 96 Ch.26 —16— (6) (A) Repayments of loans or deferrals owed to the Low and Moderate Income Housing Fund pursuant to subparagraph (G) of paragraph (1) of subdivision(d)of Section 34171,which shall be used consistent with the affordable housing requirements in the Community Redevelopment Law (Part 1 (commencing with Section 33000)). (B) Loan or deferral repayments shall not be made prior to the 2013-14 fiscal year.Beginning in the 2013-14 fiscal year,the matcimum repayment amount authorized each fiscal year for repayments made pursuant to this paragraph and subdivision(b)of Section 34191.4 combined shall be equal to one-half of the increase between the amount distributed to taxing entities pursuant to paragraph(4)of subdivision(a)of Section 34183 in that fiscal year and the amount distributed to taxing entities pursuant to that paragraph in the 2012=13 base year. Loan or deferral repayments made pursuant to this paragraph shall take priority over amounts to be repaid pursuant to subdivision(b)of Section 34191.4. (fl If a development includes both low- and moderate-income housing that meets the definition of a housing asset under subdivision(e)and other types of property use, including, but not limited to, commercial use, governmental use,open space,and parks,the oversight board sha11 consider the overall value to the community as well as the benefit to taxing entities of keeping the entire development intact or dividing the title and control over the property between the housing successor and the successor agency or other public or private agencies.The disposition of those assets may be accomplished by a revenue-sharing arrangement as approved by the oversight board on behalf of the affected taxing entities. (g) (1) (A) The entity assuming the housing functions pursuant to this section may designate the use of and commit indebtedness obligation proceeds that remain after the satisfaction of enforceable obligations that have been approved in a Recognized Obligation Payment Schedule and that are consistent with the indebtedness obligation covenants. The proceeds shall be derived from indebtedness obligations that were issued for the purposes of affordable housing prior to January l,2011, and were backed by the Low and Moderate Income Housing Fund. Enforceable obligations may be satisfied by the creation of reserves for the projects that are the subject of the enfarceable obligation that are consistent with the contractual obligations for those projects,or by expending funds to complete the projects. (B) The enrity assuming the housing functions pursuant to this section shall provide notice to the successor agency of any designations of use or commitments of funds specified in subparagraph(A)that it wishes to make at least 20 days before the deadline for submission of the Recognized Obligation Payment Schedule to the oversight board. Commitments and designations shall not be valid and binding on any party until they are included in an approved and valid Recognized Obligation Payment Schedule. The review of these designations and commitments by the successor agency, oversight board, and Deparhnent of Finance shall be limited to a determination that the designations and commitments are consistent with bond covenants and that there are sufi'icient funds available. 96 -17— Ch.26 (2) Funds shall be used and committed in a manner consistent with the purposes of the Low and Moderate Income Housing Asset Fund. Notwithstanding any other law,the successor agency shall retain and expend the excess housing obligation proceeds at the discretion of the succeeding housing entity,provided that the successor agency ensures that the proceeds are expended in a manner consistent with the indebtedness obligation covenants and with any requirements relating to the tax status of those obligations. The amount expended shall not exceed the amount of indebtedness obligation proceeds available and such expenditure shall constitute the creat'ion of excess housing proceeds expenditures to be paid from the excess proceeds. Excess housing proceeds expenditures shall be listed separately on the Recognized Obligation Payment Schedule submitted by the successor agency. SEC. 10. Section 34176.5 is added to the Health and Safety Code, to read: 34176.5. (a) Notwithstanding any other law,the Director of Finance is authorized to contract with auditors, lawyers, and other types of advisors and consultants to assist, advise, and represent the director and the Department of Finance in any matter or action arising out of or contemplated by this part or Part 1.8 (commencing with Section 34161). In furtherance of this authorization, Sections 14827.1, 14827.2, and 14838 of the Government Code, and Article 4 (commencing with Section 10335) of Chapter 2 of Part 2 of Division 2 of and Section 10295 of, the Public Contract Code shall not apply to any agreement entered into by the director pursuant to this section. (b) In addition to the waivers of statute provided in subdivision (a), Section 6072 of the Business and Professions Code shall not apply to the legal services agreement entered into by the director pursuant to this section. (c) This section shall remain in effect only until January 1,2014,and as of that date is repealed,unless a later enacted statute,that is enacted before January 1,2014,deletes or extends that date. SEC. 11. Section 34177 of the Health and Safety Code is amended to read: 34177. Successor agencies are required to do all of the following: (a) Continue to make payments due for enforceable obligations. (1) On and after February 1, 2012, and until a Recognized Obligation Payment Schedule becomes operative,only payments required pursuant to an enforceable obligations payment schedule shall be made. The initial enforceable obligation payment schedule shall be the last schedule adopted by the redevelopment agency under Section 34169. However, payments associated with obligations excluded from the definition of enforceable obligations by paragraph(2) of subdivision(d) of Section 34171 shall be excluded from the enforceable obligations payment schedule and be removed from the last schedule adopted by the redevelopment agency under Section 34169 prior to the successor agency adopting it as its enforceable obligations payment schedule pursuant to this subdivision.The enforceable obligation payment schedule may be amended by the successor agency at any public 96 Ch.26 —18— meeting and shall be subject to the approval of the oversight board as soon as the board has sufficient members to form a quorum. In recognition of the fact that the timing of the California Supreme Court's ruling in the case California Redevelopment Association v. Matosantos (2011) 53 Ca1.4th 231 delayed the preparation by successor agencies and the approval by oversight boards of the January 1,2012,through June 30,2012,Recognized Obligation Payment Schedule, a successor agency may amend the Enforceable Obligation Payment Schedule to authorize the continued payment of enforceable obligarions until the time that the January 1,2012, through June 30,2�12,Recognized Obligation Payment Schedule has been approved by the oversight board and by the Department of Finance. (2) The Department of Finance and the Controller shall each have the authority to require any documents associated with the enforceable obligations to be provided to them in a manner of their choosing.Any taxing entity,the department,and the Controller shall each have standing to file a judicial action to prevent a violation under this part and to obtain injunctive or other appropriate relief. (3) Commencing on the date the Recognized Obligation Payment Schedule is valid pursuant to subdivision(�,only those payments listed in the Recognized Obligation Payment Schedule may be made by the successor agency from the funds specified in the Recognized Obligation Payment Schedule. In addition, after it becomes valid, the Recognized Obligation Payment Schedule shall supersede the Statement of Indebtedness, which shall no longer be prepared nar have any effect under the Community Redevelopment Law(Part 1 (commencing with Section 33000)). (4) Nothing in the act adding this part is to be construed as preventing a successor agency,with the prior approval of the oversight board,as described in Secrion 34179,from making payments for enforceable obligations from sources other than those listed in the Recognized Obligation Payment Schedule. (5) From February l, 2012, to July 1, 2Q12, a successor agency shall have no authority and is hereby prohibited&om accelerating payment or making any lump-sum payments that are intended to prepay loans unless such accelerated repayments were required prior to the effective date of this part. (b) Maintain reserves in the amount required by indentures, trust indentures, or similar documents governing the issuance of outstanding redevelopment agency bonds. (c) Perform obligations required pursuant to any enforceable obligation. (d) Remit unencumbered balances of redevelopment agency funds to the county auditor-controller for distribution to the taxing entities, including, but not limited to, the unencumbered balance of the Low and Moderate Income Housing Fund of a former redevelopment agency. In making the distribution,the county auditor-controller shall utilize the same methodology for allocation and distribution of property tax revenues provided in Section 34188. 96 -19— Ch.26 (e) Dispose of assets and properties of the former redevelopment agency as directed by the oversight board; provided, however, that the oversight board may instead direct the successor agency to transfer ownership of certain assets pursuant to subdivision(a)of Section 34181.The disposal is to be done expeditiously and in a manner aimed at maximizing value. Proceeds from asset sales and related funds that are no longer needed for approved development projects or to otherwise wind down the affairs of the agency,each as determined by the oversight board,shall be transferred to the county auditor-controller for distribution as property taat proceeds under Section 34188.The requirements of this subdivision shall not apply to a successor agency that has been issued a finding of completion by the Department of Finance pursuant to Section 34179.7. (fl Enforce all former redevelopment agency rights for the benefit of the taxing entities, including, but not limited to, continuing to collect loans, rents,and other revenues that were due to the redevelopment agency. (g) Effectuate transfer of housing functions and assets to the appropriate entity designated pursuant to Section 34176. (h) Expeditiously wind down the affairs of the redevelopment agency pursuant to the provisions of this part and in accordance with the direction of the oversight board. (i) Continue to oversee development of properties until the contracted work has been completed or the contractual obligations of the former redevelopment agency can be transferred to other parties. Bond proceeds shall be used for the purposes for which bonds were sold unless the purposes can no longer be achieved, in which case, the proceeds may be used to defease the bonds. (j) Prepare a proposed administrative budget and submit it to the oversight board for its approval.The proposed administrative budget shall include all of the following: (1) Estimated amounts for successor agency administrative costs for the upcoming six-month fiscal period. (2) Proposed sources of payment for the costs identified in paragraph �1)• (3) Proposals for arrangements for administrative and operations services provided by a city,county,city and county,or other entity. (k) Provide administrative cost estimates,from its approved administrative budget that are to be paid from property tax revenues deposited in the Redevelopment Property Tax Trust Fund,to the county auditor-controller for each six-month fiscal period. (n (1) Before each six-month fiscal period, prepare a Recognized Obligation Payment Schedule in accordance with the requirements of this paragraph. For each recognized obligation, the Recognized Obligation Payment Schedule shall identify one or more of the following sources of payment: (A) Low and Moderate Income Housing Fund. (B) Bond proceeds. (C) Reserve balances. 96 Ch.26 —20— (D) Administrative cost allowance. (E) The Redevelopment Property Tax Trust Fund,but only to the extent no other funding source is available or when payment from property t� revenues is required by an enforceable obligation or by the provisions of this part. (F) Other revenue sources, including rents, concessions, asset sale proceeds,interest earnings,and any other revenues derived from the former redevelopment agency,as approved by the oversight board in accordance with this part. (2) A Recognized Obligation Payment Schedule shall not be deemed valid unless all of the following conditions have been met: (A) A Recognized Obligation Payment Schedule is prepared by the successor agency for the enforceable obligations of the former redevelopment agency.The initial schedule shall project the dates and amounts of scheduled payments for each enforceable obligation for the remainder of the time period during which the redevelopment agency would have been authorized to obligate property tax increment had the a redevelopment agency not been dissolved. (B) The Recognized Obligation Payment Schedule is submitted to and duly approved by the oversight board. The successor agency shall submit a copy of the Recognized Obligation Payment Schedule to the county administrative of�icer,the county auditor-controller,and the Department of Finance at the same time that the successor agency submits the Recognized Obligation Payment Schedule to the oversight board for approval. (C) A copy of the approved Recognized Obligation Payment Schedule is submitted to the county auditor-controller and both the Controller's office and the Department of Finance and be posted on the successor agency's Internet Web site. (3) The Recognized Obligation Payment Schedule shall be forward looking to the next six months. The first Recognized Obligation Payment Schedule shall be submitted to the Controller's oi�ice and the Department of Finance by April 15,2012,for the period of January 1,2012,to June 30, 2012,inclusive.This Recognized Obligation Payrnent Schedule shall include all payments made by the former redevelopment agency between January 1,2012,through January 31,2012,and shall include all payments proposed to be made by the successor agency from February 1, 2012,through June 30,2012. Former redevelopment agency enforceable obligation payments due,and reasonable or necessary administrative costs due or incurred,prior to January 1, 2012, shall be made from property tax revenues received in the spring of 2011 property tax distribution, and from other revenues and balances transferred to the successor agency. (m) The Recognized Obligation Payment Schedule for the period of January 1, 2013, to June 30, 2013, shall be submitted by the successor agency, after approval by the oversight board,no later than September 1, 2012. Commencing with the Recognized Obligation Payment Schedule covering the period July 1, 2013,through December 31, 2013, successor agencies shall submit an oversight board-approved Recognized Obligation 96 —21— Ch.26 Payment Schedule to the Departrnent of Finance and to the county auditor-controller no fewer than 90 days before the date of property tax distribution.The Department of Finance shall make its determination of the enfarceable obligations and the amounts and funding sources of the enforceable obligations no later than 45 days after the Recognized Obligation Payment Schedule is submitted. Within five business days of the department's determination, a successor agency may request additional review by the department and an opportunity to meet and confer on disputed items. The meet and confer period may vary; an untimely submittal of a Recognized Obligation Payment Schedule may result in a meet and confer period of less than 30 days.The department shall notify the successor agency and the county auditor-controllers as to the outcome of its review at least 15 days before the date of property tax distribution. (1) The successor agency shall submit a copy of the Recognized Obligafion Payment Schedule to the Department of Finance electronically, and the successor agency shall complete the Recognized Obligation Payment Schedule in the manner provided for by the department.A successor agency shall be in noncompliance with this paragraph if it only submits to the department an electronic message or a letter stating that the oversight board has approved a Recognized Obligation Payment Schedule. (2) If a successor agency does not submit a Recognized Obligation Payment Schedule by the deadlines provided in this subdivision, the city, county,or city and county that created the redevelopment agency shall be subject to a civil penalty equal to ten thousand dollars ($10,000) per day for every day the schedule is not submitted to the department. The civil penalty shall be paid to the county auditor-controller for allocation to the taxing entities under Section 34183.If a successor agency fails to submit a Recognized Obligation Payment Schedule by the deadline,any creditor of the successor agency or the Department of Finance or any affected taxing entity shall have standing to and may request a writ of mandate to require the successor agency to immediately perform this duty.Those actions may be filed only in the County of Sacramento and shall have priority over other civil matters. Additionally, if an agency does not submit a Recognized Obligation Payment Schedule within ten days of the deadline,the maa�imum administrative cost allowance for that period shall be reduced by 25 percent. (3) If a successor agency fails to submit to the department an oversight board-approved Recognized Obligation Payment Schedule that complies with all requirements of this subdivision within five business days of the date upon which the Recognized Obligation Payment Schedule is to be used to determine the amount of property tax allocations, the departxnent may determine if any amount should be withheld by the county auditor-controller for payments for enforceable obligations from distribution to ta�cing entities, pending approval of a Recognized Obligation Payment Schedule.The county auditor-controller shali distribute the portion of any of the sums withheld pursuant to this paragraph to the affected taxing entities in accordance with paragraph (4) of subdivision (a) of Section 34183 upon notice by the deparhnent that a portion of the withheld balances are in excess of the 96 Ch.26 —22— amount of enforceable obligations. The county auditor-controller shall distribute withheld funds to the successor agency only in accordance with a Recognized Obligation Payment Schedule approved by the department. County auditor-controllers shall lack the authority to withhold any other amounts from the allocations provided for under Section 34183 or 34188 unless required by a court order. (n) Cause a postaudit of the financial transactions and records of the successor agency to be made at least annually by a certified public accountant. SEC. 12. Section 34177.3 is added to the Health and Safety Code, to read: 34177.3. (a) Successor agencies shall lack the authority to, and shall not,create new enforceable obligations under the authoriry of the Community Redevelopment Law(Part 1 (commencing with Section 33000)) or begin new redevelopment work, except in compliance with an enforceable obligation that existed prior to June 28,2011. (b) Successor agencies may create enforceable obligations to conduct the work of winding down the redevelopment agency,including hiring staff, acquiring necessary professional administrative services and legal counsel, and procuring insurance. (c) Successor agencies shall lack the authority to,and shall not,transfer any powers or revenues of the successor agency to any other party,public or private, except pursuant to an enforceable obligation on a Recognized Obligation Payment Schedule approved by the department. Any such transfers of authority or revenues that are not made pursuant to an enforceable obligation on a Recognized Obligation Payment Schedule approved by the Department of Finance are hereby declared to be void,and the successor agency shall take action to reverse any of those transfers.The Controller may audit any transfer of authority or revenues prohibited by this section and may order the prompt return of any money or other things of value from the receiving party. (d) Redevelopment agencies that resolved to participate in the Voluntary Alternative Redevelopment Program under Chapter 6 of the First Extraordinary Session of the Statutes of 2011 were and are subject to the provisions of Part 1.8(commencing with Section 34161).Any actions taken by redevelopment agencies to create obligations after June 27, 2011, are ultra vires and do not create enforceable obligations. (e) The Legislature finds and declares that the provisions of this section are declaratory of existing law. SEC. 13. Section 34177.5 is added to the Health and Safety Code, to read: 34177.5. (a) In addition to the powers ganted to each successor agency, and notwithstanding anything in the act adding this part,including,but not limited to, Sections 34162 and 34189, a successor agency shall have the authority, rights, and powers of the redevelopment agency to which it succeeded solely for the following purposes: 96 —23— Ch.26 (1) For the purpose of issuing bonds or incurring other indebtedness to refund the bonds or other indebtedness of its former redevelopment agency or of the successor agency to provide savings to the successor agency, provided that(A)the total interest cost to maturity on the refunding bonds or other indebtedness plus the principal amount of the refunding bonds or other indebtedness shall not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded plus the remaining principal of the bonds or other indebtedness to be refunded,and (B)the principal amount of the refunding bonds or other indebtedness shall not exceed the amount required to defease the refunded bonds or other indebtedness,to establish customary debt service reserves,and to pay related costs of issuance.If the foregoing conditions are satisfied,the initial principal amount of the refunding bonds or other indebtedness may be greater than the outstanding principal amount of the bonds or other indebtedness to be refunded.The successor agency may pledge to the refunding bonds or other indebtedness the revenues pledged to the bonds or other indebtedness being refunded,and that pledge,when made in connection with the issuance of such refunding bonds or other indebtedness,shall have the same lien priority as the pledge of the bonds or other obligations to be refunded,and shall be valid,binding,and enforceable in accordance with its terms. (2) For the purpose of issuing bonds or other indebtedness to finance debt service spikes, including balloon maturities, provided that (A) the existing indebtedness is not accelerated, except to the extent necessary to achieve substantially level debt service,and(B)the principal amount of the bonds or other indebtedness shall not exceed the amount required to finance the debt service spikes, including establishing customary debt service reserves and paying related costs of issuance. (3) For the purpose of amending an existing enforceable obligation under which the successor agency is obligated to reimburse a political subdivision of the state for the payment of debt service on a bond or other obligation of the political subdivision,or to pay all or a portion of the debt service on the bond or other obligation of the political subdivision to provide savings to the successor agency, provided that (A) the enforceable obligation is amended in connection with a refunding of the bonds or other obligations of the political subdivision so that the enforceable obligation will apply to the refunding bonds or other refunding indebtedness of the political subdivision, (B)the total interest cost to maturity on the refunding bonds or other indebtedness plus the principal amount of the refunding bonds or other indebtedness shall not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded plus the remaining principal of the bonds or other indebtedness to be refunded,and (C)the principal amount of the refunding bonds or other indebtedness shall not exceed the amount required to defease the refunded bonds or other indebtedness,to establish customary debt service reserves and to pay related costs of issuance. 'The pledge set forth in that amended enforceable obligation,when made in connection with the execution of the amendment of the enforceable obligation,shall have the same lien priority as the pledge 96 Ch.26 —24— in the enforceable obligation prior to its amendment and shall be valid, binding,and enforceable in accordance with its terms. (4) For the purpose of issuing bonds or incurring other indebtedness to make payments under enforceable obligations when the enforceable obligations include the irrevocable pledge of property taac increment, formerly tax increment revenues prior to the effective date of this part, or other funds and the obligation to issue bonds secured by that pledge. The successor agency may pledge to the bonds or other indebtedness the properiy ta�c revenues and other funds described in the enforceable obligation,and that pledge,when made in connection with the issuance of the bonds or the incurring of other indebtedness,shall be valid,binding,and enforceable in accordance with its terms.This paragraph shall not be deemed to authorize a successor agency to increase the amount of property tax revenues pledged under an enforceable obligation ar to pledge any properiy tax revenue not already pledged pursuant to an enforceable obligation.This paragraph does not constitute a change in,but is declaratory of,the existing law. (b) The refunding bonds authorized under this section may be issued under the authority of Article ll (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title S of the Government Code,and the refunding bonds may be sold at public or private sale,or to a joint powers authority pursuant to the Marks-Roos Local Bond Pooling Act(Article 4 (commencing with Section 6584)of Chapter 5 of Division 7 of Title 1 of the Government Code). (c) (1) Prior to incurring any bonds or other indebtedness pursuant to this section, the successor agency may subordinate to the bonds or other indebtedness the amount required to be paid to an affected taxing entity pursuant to paragraph(1)of subdivision(a)of Section 34183,provided that the affected taxing entity has approved the subordinations pursuant to this subdivision. (2) At the time the successor agency requests an affected taxing entity to subordinate the amount to be paid to it,the successor agency shall provide the affected taxing entity with substantial evidence that suficient funds will be available to pay both the debt service on the bonds or other indebtedness and the payments required by paragraph(1)of subdivision(a) of Section 34183,when due. (3) Within 45 days after receipt of the agency's request, the affected taxing entity shall approve or disapprove the request for subordination.An affected taxing entity may disapprove a request for subordination only if it finds,based upon substantial evidence,that the successor agency will not be able to pay the debt service payments and the amount required to be paid to the affected t�ing entity.If the affected taxing entity does not act within 45 days after receipt of the agency's request,the request to subordinate shall be deemed approved and shall be final and conclusive. (d) An action may be brought pursuant to Chapter 9(commencing with Section 860)of Title 10 of Part 2 of the Code of Civil Procedure to determine the validity of bonds or other obligations authorized by this section, the pledge of revenues to those bonds or other obligations authorized by this 96 —25— Ch.26 section, the legality and validiry of all proceedings theretofore taken and, as provided in the resolution of the legislative body of the successor agency authorizing the bonds or other obligations authorized by this section, proposed to be taken for the authorization, execution, issuance, sale, and delivery of the bonds or other obligations authorized by this section, and for the payment of debt service on the bonds or the payment of amounts under other obligations authorized by this section.Subdivision(c)of Section 33501 shall not apply to any such action.The Departrnent of Finance shall be notified of the filing of any action as an affected party. (e) Notwithstanding any other law,inciuding,but not limited to,Section 33501, an action to challenge the issuance of bonds, the incurrence of indebtedness,the amendment of an enforceable obligation,or the execution of a financing agreement by a successor agency shall be brought within 30 days after the date on which the oversight board approves the resolution of the successor agency approving the issuance of bonds, the incurrence of indebtedness,the amendment of an enforceable obligation,or the execution of a�inancing agreement authorized under this section. (� The actions authorized in this section shall be subject to the approval of the oversight board, as provided in Section 34180. Additionally, an oversight board may direct the successor agency to commence any of the transactions described in subdivision(a)so long as the successor agency is able to recover its related costs in connection with the transaction.After a successor agency,with approval of the oversight board,issues any bonds, incurs any indebtedness, or executes an amended enforceable obligation pursuant to subdivision(a),the oversight board shall not unilaterally approve any amendments to or early termination of the bonds, indebtedness, or enforceable obligation.If,under the authority granted to it by subdivision (h)of Section 34179,the Department of Finance either reviews and approves or fails to request review within five business days of an oversight board approval of an action authorized by this section, the scheduled payments on the bonds or other indebtedness shall be listed in the Recognized Obligation Payment Schedule and shall not be subject to further review and approvai by the department or the Controller. The departtnent may extend its review time to 60 days for actions authorized in this section and may seek the assistance of the Treasurer in evaluating proposed actions under this section. (g) Any bonds, indebtedness, or amended enforceable obligation authorized by this section shall be considered indebtedness incurred by the dissolved redevelopment agency,with the same legal effect as if the bonds, indebtedness,financing agreement,ar amended enforceable obligation had been issued, incurred, or entered into prior to June 29, 2011, in full conformity with the applicable provisions of the Communiry Redevelopment Law that existed prior to that date,shall be included in the successor agency's Recognized Obligation Payment Schedule,and shall be secured by a pledge of, and lien on, and shall be repaid from moneys deposited from time to time in the Redevelopment Properly Tax Trust Fund established pursuant to subdivision (c) of Section 34172, as provided in paragraph (2) of 96 Ch.26 —26- subdivision (a) of Section 34183. Property tax revenues pledged to any bonds,indebtedness,or amended enforceable obligations authorized by this section are ta3ces allocated to the successor agency pursuant to subdivision (b) of Section 33670 and Section 16 of Article XVI of the California Constitution. (h) The successor agency shall make diligent efforts to ensure that the lowest long-term cost financing is obtained.The financing shall not provide for any bullets or spikes and shall not use variable rates. The successor agency shall make use of an independent financial advisor in developing financing proposals and sha11 make the work products of the financial advisor available to the Department of Finance at its request. (i) If an enforceable obligation provides for an irrevocable commitment of property tax revenue and where allocation of such revenues is expected to occur over time, the successor agency may petition the Department of Finance to provide written confirmation that its determination of such enforceable obligation as approved in a Recognized Obligation Payment Schedule is final and conclusive,and reflects the deparhnent's approval of subsequent payments made pursuant to the enforceable obligation. If the confirmation is granted,then the department's review of such payments in future Recognized Obligation Payment Schedules shall be limited to confirming that they are required by the prior enforceable obligation. (j) The successor agency may request that the department provide a written determination to waive the two-year statute of limitations on an action to review the validity of the adoption or amendment of a redevelopment plan pursuant to subdivision(c)of Section 33500 or on any findings or determinations made by the agency pursuant to subdivision(d) of Section 33500.The deparhnent at its discretion may provide a waiver if it determines it is necessary for the agency to fulfill an enforceable obligation. SEC. 14. Section 34178 of the Health and Safety Code is amended to read: 34178. (a) Commencing on the operative date of this part,agreements, contracts, or arrangements between the ciry or counry, or ciry and counry that created the redevelopment agency and the redevelopment agency are invalid and shall not be binding on the successor agency;provided,however, that a successor entity wishing to enter or reenter into agreements with the city,county,or city and county that formed the redevelopment agency that it is succeeding may do so upon obtaining the approval of its oversight board. A successor agency ar an oversight board shall not exercise the powers granted by this subdivision to restore funding for an enforceable obligation that was deleted or reduced by the Department of Finance pursuant to subdivision (h) of Section 34179 unless it reflects the decisions made during the meet and confer process with the Department of Finance or pursuant to a court order. (b) Notwithstanding subdivision (a), any of the following agreements are not invalid and may bind the successor agency: 96 —27— Ch.26 (1) A duly authorized written agreement entered into at the time of issuance, but in no event later than December 31, 2010, of indebtedness obligations, and solely for the purpose of securing or repaying those indebtedness obligations. (2) A written agreement between a redevelopment agency and the city, county,or city and county that created it that provided loans or other startup funds for the redevelopment agency that were entered into within two years of the formation of the redevelopment agency. (3) A joint exercise of powers agreement in which the redevelopment agency is a member of the joint powers authority.However,upon assignment to the successor agency by operation of the act adding this part,the successor agency's rights,duties,and performance obligations under that j oint exercise of powers agreement shall be limited by the constraints imposed on successor agencies by the act adding this part. SEC. 15. Section 34178.8 is added to the Health and Safety Code, to read: 34178.8. Commencing on the ef�'ective date of the act adding this section, the Controller shall review the activities of successor agencies in the state to determine if an asset transfer has occurred after January 31,2012,between the successor agency and the city,county,or city and county that created a redevelopment agency, or any other public agency, that was not made pursuant to an enforceable obligation on an approved and valid Recognized Obligation Payment Schedule. If such an asset transfer did occur, to the extent not prohibited by state and federal law,the Controller shall order the available assets to be returned to the successor agency.Upon receiving that order from the Controller, an affected local agency shall, as soon as practicable, reverse the transfer and return the applicable assets to the successor agency.This section sha11 not apply to housing assets as defined in subdivision(e)of Section 34176. SEC. 16. Section 34179 of the Health and Safery Code is amended to read: 34179. (a) Each successor agency shall have an oversight board composed of seven members.The members shall elect one of their members as the chairperson and shall report the name of the chairperson and other members to the Deparhnent of Finance on or before May 1,2012.Members shall be selected as follows: (1) One member appointed by the county board of supervisors. (2) One member appointed by the mayar for the city that formed the redevelopment agency. (3) (A) One member appointed by the largest special district,by property tax share, with territory in the temtorial jurisdiction of the former redevelopment agency,which is of the type of special district that is eligible to receive property tax revenues pursuant to Section 34188. (B) On or after the effective date of this subparagraph, the county auditor-controller may determine which is the largest special district for purposes of this section. 96 Ch.26 —28— (4) One member appointed by the county superintendent of education to represent schools if the superintendent is elected.If the county superintendent of education is appointed, then the appointment made pursuant to this paragraph shall be made by the county board of education. (5) One member appointed by the Chancellor of the California Community Colleges to represent community college districts in the county. (6) One member of the public appointed by the county board of supervisors. (7) One member representing the employees of the former redevelopment agency appointed by the mayor or chair of the board of supervisors,as the case may be,from the recognized employee organization representing the largest number of former redevelopment agency employees employed by the successor agency at that time.In the case where city or county employees performed administrative duties of the former redevelopment agency, the appointment shall be made from the recognized employee organization representing those employees.If a recognized employee organization does not exist for either the employees of the former redevelopment agency or the city or county employees performing administrative duties of the former redevelopment agency, the appointment shall be made from among the employees of the successor agency. In voting to approve a contract as an enforceable obligation,a member appointed pursuant to this paragraph shall not be deemed to be interested in the contract by virtue of being an employee of the successor agency or community for purposes of Section 1090 of the Government Code.. (S) If the county or a joint powers agency formed the redevelopment agency,then the largest city by acreage in the territorial jurisdiction of the former redevelopment agency may select one member.If there are no cities with territory in a project area of the redevelopment agency, the county superintendent of education may appoint an additional member to represent the public. (9) If there are no special districts of the type that are eligible to receive properiy tax pursuant to Section 34188,within the territorial jurisdiction of the former redevelopment agency,then the counry may appoint one member to represent the public. (10) If a redevelopment agency was formed by an entity that is both a charter city and a county,the oversight board shall be composed of seven members selected as follows:three members appointed by the mayor of the ciry, if that appointment is subject to confirmation by the county board of supervisors,one member appointed by the largest special district,by property tax share, with territory in the territorial jurisdiction of the former redevelopment agency,which is the type of special district that is eligible to receive property tax revenues pursuant to Section 34188, one member appointed by the county superintendent of education to represent schools, one member appointed by the Chancellor of the California Community Colleges to represent community college districts, and one member representing employees of the former redevelopment agency appointed by the mayor of the city if that appointment is subject to confirmation by the 96 —29— Ch.26 county board of supervisors, to represent the largest number of former redevelopment agency employees employed by the successor agency at that time. (b) The Governor may appoint individuals to fill any oversight board member position described in subdivision (a) that has not been filled by May 15,2012,or any member position that remains vacant for more than 60 days. (c) The oversight board may direct the staff of the successor agency to perform work in furtherance of the oversight board's duties and responsibilities under this part. The successor agency shall pay for all of the costs of ineetings of the oversight board and may include such costs in its administrative budget. Oversight board members shall serve without compensation or reimbursement for expenses. (d) Oversight board members are protected by the immunities applicable to public entities and public employees governed by Part 1 (commencing with Section 810)and Part 2(commencing with Section 814)of Division 3.6 of Title 1 of the Government Code. (e) A majority of the total membership of the oversight board shall constitute a quorum for the transaction of business.A majority vote of the total membership of the oversight board is required for the oversight board to take action.The oversight board shall be deemed to be a local entity for purposes of the Ralph M. Brown Act, the California Public Records Act, and the Political Reform Act of 1974. All actions taken by the oversight board shall be adopted by resolution. (fl All notices required by law for proposed oversight board actions shall also be posted on the successor agency's Internet Web site or the oversight board's Internet Web site. (g) Each member of an oversight board shall serve at the pleasure of tfie entity that appointed such member. (h) The Department of Finance may review an oversight board action taken pursuant to this part.Written notice and information about all actions taken by an oversight board shall be provided to the department by electronic means and in a manner of the department's choosing.An action shall become effective five business days after notice in the manner specified by the department is provided unless the department requests a review. Each oversight board shall designate an official to whom the deparhnent may make those requests and who sha11 provide the department with the telephone number and e-mail contact information for the purpose of communicating with the department pursuant to this subdivision. Except as otherwise provided in this part,in the event that the department requests a review of a given oversight board action, it shall have 40 days from the date of its request to approve the oversight board action or return it to the oversight board for reconsideration and the oversight board action shall not be effective until approved by the deparhnent. In the event that the departrnent returns the oversight board action to the oversight board for reconsideration, the oversight board shall resubmit the modified action for department approval and the modified oversight board action shall not become effective until 96 Ch.26 —30— approved by the deparnnent. If the department reviews a Recognized Obiigation Payment Schedule,the department may eliminate or modify any item on that schedule prior to its approval. The county auditor-controller shall reflect the actions of the department in determining the amount of property ta�c revenues to allocate to the successor agency.The department shall provide notice to the successor agency and the county auditor-controller as to the reasons for its actions. To the extent that an oversight board continues to dispute a deternunation with the department,one or more future recognized obligation schedules may reflect any resolution of that dispute. 'The department may also agree to an amendment to a Recognized Obligation Payment Schedule to reflect a resolution of a disputed item;however,this shall not af�ect a past allocation of property tax or create a liability for any affected taxing entity. (i) Oversight boards shall have fiduciary responsibilities to holders of enforceable obligations and the taxing entities that benefit from distributions of property tax and other revenues pursuant to Section 34188.Further,the provisions of Division 4(commencing with Section 1000)of the Government Code shall apply to oversight boards.Notwithstanding Section 1099 of the Government Code,or any other law,any individual may simultaneously be appointed to up to five oversight boards and may hold an office in a city, county,city and county,special district,school district,or community college district. (j) Commencing on and after July 1; 2016, in each county where more than one oversight board was created by operation of the act adding this part,there shall be only one oversight board appointed as follows: (1) One member may be appointed by the county board of supervisors. (2) One member may be appointed by the city selection committee established pursuant to Section 50270 of the Government Code. In a city and county,the mayor may appoint one member. (3) One member may be appointed by the independent special district selection committee established pursuant to Section 56332 of the Government Code,for the types of special districts that are eligible to receive properiy tax revenues pursuant to Section 34188. (4) One member may be appointed by the county superintendent of education to represent schools if the superintendent is elected.If the county superintendent of education is appointed, then the appointment made pursuant to this paragraph shall be made by the county board of education. (5) One member may be appointed by the Chancellor of the California Community Colleges to represent community college districts in the county. (6) One member of the public may be appointed by the county board of supervisors. (7) One member may be appointed by the recognized employee organization representing the largest number of successor agency employees in the county. (k) 'The Governor may appoint individuals to fill any oversight board member position described in subdivision(j)that has not been filled by July 96 —31— Ch.26 15, 2016, or any member position that remains vacant for more than 60 days. (� Commencing on and after July 1, 2016, in each county where only one oversight board was created by operation of the act adding this part, then there will be no change to the co�►position of that oversight board as a result of the operation of subdivision(b). (m) Any oversight board for a given successor agency shall cease to exist when all of the indebtedness of the dissolved redevelopment agency has been repaid. (n) An oversight board may direct a successor agency to provide additional legal or financial advice than what was given by agency staff. (o) An oversight board is authorized to contract with the county or other public or private agencies for administrative support. (p) On matters within the purview of the oversight board,decisions made by the oversight board supersede those made by the successor agency or the staff of the successar agency. SEC. 17. Section 34179.5 is added to the Health and Safety Code, to read: 34179.5. (a) In furtherance of subdivision(d) of Section 34177, each successor agency shall employ a licensed accountant,approved by the county auditor-controller and with experience and expertise in local government accounting,to conduct a due diligence review to determine the unobligated balances available for transfer to ta�cing entities.As an alternative,an audit provided by the county auditor-controller that provides the information required by this section may be used to comply with this section with the concunence of the oversight board. (b) For purposes of this section the following terms shall have the following meanings: (1) "Cash" and"cash equivalents" includes,but is not limited to, cash in hand,bank deposits, Local Agency Inveshnent Fund deposits, deposits in the ciry or county treasury or any other pool, marketable securities, commercial paper, United States Treasury bills, banker's acceptances, payables on demand and amounts due from other parties as defined in subdivision(c),and any other money owned by the successor agency. (2) "Enforceable obligation" includes any of the items listed in subdivision (d) of Section 34171, contracts detailing specific work to be performed that were entered into by the former redevelopment agency prior to June 28, 20ll, with a third party that is other than the city, county, or city and county that created the former redevelopment agency, and indebtedness obligations as defined in subdivision(e)of Section 34171. (3) "Transferred"means the transmission of money to another party that is not in paytnent for goods or services or an investrnent or where the payment is de minimus. Transfer also means where the payments are ultimately merely a restriction on the use of the money. (c) At a minimum,the review required by this section shall include the following: 96 Ch.26 —32— (1) The dollar value of assets transferred from khe former redevelopment agency to the successor agency on or about February 1,2012. (2) The dollar value of assets and cash and cash equivalents transferred after January 1,2011,through June 30,2012,by the redevelopment agency or the successor agency to the city,county,or city and county that formed the redevelopment agency and the purpose of each transfer. The review shall provide documentation of any enforceable obligation that required the transfer. (3) The dollar value of any cash or cash equivalents transferred after January 1, 2011,through June 30, 2012, by the redevelopment agency or the successor agency to any other public agency or private party and the purpose of each transfer. The review shall provide documentation of any enforceable obligation that required the transfer. (4) The review shall provide expenditure and revenue accounting information and identify transfers and funding sources for the 201�11 and 2011-12 fiscal years that reconciles balances,assets, and liabilities of the successor agency on June 30,2012 to those reported to the Controller for the 2009-10 fiscal year. (5) A separate accounting for the balance far the Low and Moderate Income Housing Fund for all other funds and accounts combined shall be made as follows: (A) A statement of the total value of each fund as of June 30,2012. (B) An itemized statement listing any amounts that are legally restricted as to purpose and cannot be provided to taxing entities.This could include the proceeds of any bonds, grant funds, or funds provided by other governmental entities that place conditions on their use. (C) An itemized statement of the values of any assets that are not cash or cash equivalents. This may include physical assets, land, records, and equipment.For the purpose of this accounting,physical assets may be valued at purchase cost or at any recently estimated market value. The statement shall list separately housing-related assets. (D) An itemized listing of any current balances that are legally or contractually dedicated or restricted for the funding of an enforceable obligation that identifies the nature of the dedication or restriction and the specific enforceable obligarion. In addition, the successor agency shall provide a listing of all approved enforceable obligations that includes a projection of annual spending requirements to satisfy each obligation and a projection of annual revenues available to fund those requirements. If a review finds that future revenues together with dedicated or restricted balances are insufficient to fund future obligations and thus retention of current balances is required,it shall identify the amount of current balances necessary for retention.The review shall also detail the projected property tax revenues and other general purpose revenues to be received by the successor agency, together with both the amount and timing of the bond debt service payments of the successor agency,for the period in which the oversight board anticipates the successor agency will have insufficient property tax revenue to pay the specified obligations. 96 —33— Ch.26 (E) An itemized list and analysis of any amounts of current balances that are needed to satisfy obligations that will be placed on the Recognized Obligation Payment Schedules for the current fiscal year. (6) The review shall total the net balances available after deducting the total amounts described in subparagraphs(B)to(E),inclusive,of paragraph (5).The review shall add any amounts that were transferred as identified in paragraphs (2) and (3) of subdivision (c) if an enforceable obligation to make that transfer did not exist. The resulting sum shall be available for allocation to affected taxing entities pursuant to Section 34179.6. It shall be a rebuttable presumption that cash and cash equivalent balances available to the successor agency are available and sufficient to disburse the amount determined in this paragraph to taxing entities.If the review finds that there are insufficient cash balances to transfer or that cash or cash equivalents are specifically obligated to the purposes described in subparagraphs(B),(D), and(E)of paragraph(5)in such amounts that there is insufficient cash to provide the full amount determined pursuant to this paragraph,that amount shall be demonstrated in an additional itemized schedule. SEC. 18. Section 34179.6 is added to the Health and Safety Code, to read: 34179.6. The review required pursuant to Section 34179.5 shall be submitted to the oversight board for review. The successor agency shall submit a copy of the Recognized Obligation Payment Schedule to the county administrative officer,the county auditor-controller,and the Deparhnent of Finance at the same time that the successor agency submits the review to the oversight board for review. (a) By October 1, 2012, each successor agency shall provide to the oversight board, the county auditor-controller, the Controller, and the Department of Finance the results of the review conducted pursuant to Section 34179.5 for the Low and Moderate Income Housing Fund and specifically the amount of cash and cash equivalents determined to be available for allocation to taxing entities. By December 15, 2012, each successor agency shall provide to the oversight board, the county auditor-controller, the Controller, and the department the results of the review conducted pursuant to Section 34179.5 for all of the other fund and account balances and specifically the amount of cash and cash equivalents determined to be available for allocation to taxing entities.The department may request any supporting documentation and review results to assist in its review under subdivision(d).The department may specify the form and manner information about the review shall be provided to it. (b) Upon receipt of the review,the oversight board shall convene a public comment session to take place at least five business days before the oversight board holds the approval vote specified in subdivision (c). The oversight board also shall consider any opinions offered by the county auditor-controller on the review results submitted by the successor agencies. (c) By October 15, 2012, for the Low and Moderate Income Housing Fund and by January 15,2013,for all other funds and accounts,the oversight board shall review,approve,and transmit to the department and the county 96 Ch.26 —34— auditor-controller the determination of the amount of cash and cash equivalents that are available for disbursement to taxing entities as determined according to the method provided in Section 34179.5. The oversight board may adjust any amount provided in the review to reflect additional information and analysis. The review and approval shall occur in public sessions. The oversight board may request from the successor agency any materials it deems necessary to assist in its review and approval of the determination.The oversight board shall be empowered to authorize a successor agency to retain assets or funds identified in subparagraphs(B) to(E),inclusive,of paragraph(5)of subdivision(c)of Section 34179.5.An oversight board that makes that autharization also shall identify to the department the amount of funds authorized for retention,the source of those funds, and the purposes for which those funds are being retained. The determination and authorization to retain funds and assets shall be subject to the review and approval of the department pursuant to subdivision(d). (d) The department may adjust any amount associated with the determination of the resulting amount described in paragraph (6) of subdivision (c) of Section 34179.5 based on its analysis and information provided by the successor agency and others.The department shall consider any findings or opinions of the county auditor-controllers and the Controller. The department shall complete its review of the determinations provided pursuant to subdivision (c) no later than November 9, 2012, for the Low and Moderate Income Housing Fund and also shall notify the oversight board and the successor agency of its decision to overturn any decision of the oversight board to authorize a successor agency to retain assets or funds made pursuant to subdivision(c).The department shall complete its review of the determinations provided pursuant to subdivision (c) no later than April 1, 2013, for the other funds and accounts and also shall notify the oversight board and the successor agency of its decision to overturn any oversight board authorizations made pursuant to subdivision (c). The department shall provide the oversight board and the successor agency an explanation of its basis for overturning or modifying any findings, determinations, or authorizations of the oversight board made pursuant to subdivision(c). (e) The successor agency and the entity or entities that created the former redevelopment agency may request to meet and confer with the department to resolve any disputes regarding the amounts or sources of funds identified as determined by the deparhnent. The request shall be made within five business days of the transmission, and no later than November 16, 2012, for the deternunation regarding the Low and Moderate Income Housing Fund, to the successor agency or the designated local authority of the department's determinarion, decisions, and explanations and shall be accompanied by an explanation and documentation of the basis of the dispute. The deparhnent shall meet and confer with the requesting party and modify its determinations and decisions accordingly. The department shall either confirm or modify its determinarions and decisions within 30 days of the request to meet and confer. 96 —35— Ch.26 (fl Each successor agency shall transmit to the county auditor-controller the amount of funds required pursuant to the determination of the deparhnent within five working days of receipt of the notification under subdivision(c) or(e)if a meet and confer request is made. Successor agencies shall make diligent efforts to recover any money determined to have been transferred without an enforceable obligation as described in paragraphs(2)and(3)of subdivision(c)of Section 34179.5.The department shall notify the county auditor-controllers of its actions and the county auditor-controllers shall disburse the funds received from successor agencies to taxing entities pursuant to Section 34188 within five working days of receipt.Amounts received after November 28, 2012, and April 10, 2013, may be held and disbursed with the regular payments to taacing entities pursuant to Section 34183. (g) By December 1,2012,the county auditor-controller shall provide the department a report specifying the amount submitted by each successor agency pursuant to subdivision(d)for low-and moderate-income housing funds,and specifically noting those successor agencies that failed to remit the full required amount. By April 20,2013,the county auditor-controller shall provide the department a report detailing the amount submitted by each successor agency pursuant to subdivision (d) for all other funds and accounts, and specifically noting those successor agencies that failed to remit the full required amount. (h) If a successor agency fails to remit to the county auditor-controller the sums identified in subdivisions (d) and(�,by the deadlines specified in those subdivisions,the following remedies are available: (1) (A) If the successor agency cannot promptly recover the funds that have been transferred to another public agency without an enforceable obligation as described in paragraphs(2)and(3)of subdivision(c)of Section 34179.5,the funds may be recovered through an offset of sales and use tax or property tax allocations to the local agency to which the funds were transferred. To recover such funds,the Department of Finance may order the State Board of Equalization to make an offset pursuant to subdivision (a)of Section 34179.8.If the Department of Finance does not order a sales tax offset, the county auditor-controller may reduce the property tax allocations to any local agency in the county that fails to repay funds pursuant to subdivision(c)of Section 34179.8. (B) The county auditor-controller and the department shall each have the authority to demand the return of funds improperly spent or transferred to a private person or other private entity. If funds are not repaid within 60 days, they may be recovered through any lawful means of collection and are subject to a ten percent penalty plus interest at the rate charged for late personal income tax payrnents from the date the improper payment was made to the date the money is repaid. (C) If the city, county, or city and county that created the former redevelopment agency is also performing the duties of the successor agency, the Department of Finance may order an offset to the distribution provided to the sales and use tax revenue to that agency pursuant to subdivision(a) 96 Ch.26 —36— of Section 34179.8.This offset shall be equal to the amount the successor fails to remit pursuant to subdivision(fl.If the Deparnnent of Finance does not order a sales tax offset, the county auditor-controller may reduce the property tax allocations of the city,county,or city and county that created the former redevelopment agency pursuant to subdivision (c) of Section 34179.8. (D) The deparhnent and the county auditor-controller shall coordinate their actions undertaken pursuant to this paragraph. (2) Alternatively or in addition to the remedies provided in paragraph (1),the department may direct the county auditor-controller to deduct the unpaid amount from future allocations of property tax to the successor agency under Section 34183 until the amount of payment required pursuant to subdivision(d)is accomplished. (3) If the Department of Finance determines that payment of the full amount required under subdivision (d) is not currently feasible ar would jeopardize the ability of the successor agency to pay enforceable obligations in a timely manner,it may agree to an installment payment plan. (i) (1) If a legal action contesting a withholding effectuated by the State Board of Equalization pursuant to subparagraphs (B), (C), or(B)and(C) of paragraph (2) of subdivision (b) of Section 34183.5 is successful and results in a final judicial determination,the court shall order the state to pay to the prevailing party a penalty equal to a percentage of the amount of funds found by the court to be improperly withheld,as provided in Section 34179.8. This percentage shall be equivalent to the number of months the funds have been found by the court to be improperly withheld,not to exceed 10 percent. (2) If a legal action contesting an offset effectuated by the State Board of Equalization or the county auditor-controller pursuant to subdivision(h) is successful and results in a final judicial determination, the court shall order the state or the county auditor-controller to pay to the prevailing party a penalty equal to 10 percent of the amount of funds found by the court to be improperly offset,as provided in Section 34179.8. (j) If a legal challenge to invalidate any provision in subdivision(h) or subparagraph(B)or(C),or subparagraphs(B)and(C)of paragraph(2)of subdivision(b)of Section 34183.5 is successful and results in a final judicial determination, the invalidated provision shall become inoperative and subdivision (i) shall become inoperative with respect to the invalidated provision. SEC. 19. Section 34179.7 is added to the Health and Safety Code, to read: 34179.7. Upon full payment of the amounts determined in subdivision (d) or(e) of Section 34179.6 as reported by the county auditor-controller pursuant to subdivision(g)of Section 34179.6 and of any amounts due as determined by Section 34183.5, or upon a finai judiciai determination of the amounts due and confirmation that those amounts have been paid by the county auditor-controller,the department shall issue,within five business 96 Ch.26 —38— redevelopment area under Section 34188 and increasing khe distribution of property taxes to the local entity that was subject to the offset. SEC. 21. Section 34180 of the Health and Safety Code is amended to read: 34180. All of the following successor agency actions shall first be approved by the oversight board: (a) The establishment of new repayment terms for outstanding loans where the terms have not been specified prior to the date of this part.An oversight board shall not have the authority to reestablish loan agreements between the successor agency and the city,county,or city and county that formed the redevelopment agency except as provided in Chapter 9 (commencing with Section 34191.1). (b) The issuance of bonds or other indebtedness or the pledge or agreement for the pledge of property tax revenues(formerly tax increment prior to the effective date of this part)pursuant to subdivision(a)of Section 34177.5. (c) Setting aside of amounts in reserves as required by indentures,trust indentures, or similar documents governing the issuance of outstanding redevelopment agency bonds. (d) Merging of project areas. (e) Continuing the acceptance of federal or state grants, or other forms of financial assistance from either public or private sources,if that assistance is conditioned upon the provision of matching funds,by the successor entity as successor to the former redevelopment agency,in an amount greater than 5 percent. (�(1) If a city,county,or city and county wishes to retain any properties or other assets far future redevelopment activities, funded from its own funds and under its own auspices,it must reach a compensation agreement with the other taxing entities to provide payments to them in proportion to their shares of the base property tax, as determined pursuant to Section 34188,for the value of the property retained. (2) If no other agreement is reached on valuation of the retained assets, the value will be the fair market value as of the 2011 property tax lien date as determined by an independent appraiser approved by the oversight board. (g) Establishment of the Recognized Obligation Payment Schedule. (h) A request by the successor agency to enter into an agreement with the city,county,or city and county that formed the redevelopment agency that it is succeeding. An oversight board shall not have the authority to reestablish loan agreements between the successor agency and the city, county,or city and county that formed the redevelopment agency except as provided in Chapter 9(commencing with Section 34191.1).Any actions to reestablish any other agreements that are in furtherance of enforceable obligations, with the city, county, or city and county that formed the redevelopment agency are invalid until they are included in an approved and valid Recognized Obligation Payrnent Schedule. 96 —39— Ch.26 (i) A request by a successor agency or taxing entity to pledge,or to enter into an agreement for the pledge of, property taac revenues pursuant to subdivision(b)of Section 34178. (j) Any document submitted by a successor agency to an oversight board for approval by any provision of this part shall also be submitted to the county administrative of�'icer, the county auditor-controller, and the Department of Finance at the same time that the successor agency submits the document to the oversight board. SEC. 22. Section 34181 of the Health and Safety Code is amended to read: 34181. The oversight board shall direct the successor agency to do all of the following: (a) Dispose of all assets and properties of the former redevelopment agency;provided,however,that the oversight board may instead direct the successor agency to transfer ownership of those assets that were constructed and used for a governmental purpose,such as roads,school buildings,parks, police and fire stations,libraries,and local agency administrative buildings, to the appropriate public jurisdiction pursuant to any existing agreements relating to the construction or use of such an asset.Any compensation to be provided to the successor agency for the transfer of the asset shall be governed by the agreements relating to the construction or use of that asset. Disposal shall be done expeditiously and in a manner aimed at maximizing value.Asset disposition may be accomplished by a distribution of income to taxing entities proportionate to their property tax share from one or more properties that may be transferred to a public ar private agency for management pursuant to the direction of the oversight board. (b) Cease performance in connection with and terminate all existing agreements that do not qualify as enforceable obligations. (c) Transfer housing assets pursuant to Section 34176. (d) Terminate any agreement, between the dissolved redevelopment agency and any public entity located in the same county, obligating the redevelopment agency to provide funding for any debt service obligarions of the public enrity ar for the construction,or operation of facilities owned or operated by such public entity,in any instance where the oversight board has found that early termination would be in the best interests of the taxing entities. (e) Determine whether any contracts,agreements,or other arrangements between the dissolved redevelopment agency and any private parties should be terminated or renegotiated to reduce liabilities and increase net revenues to the taxing entities, and present proposed termination or amendment agreements to the oversight board for its approval.The board may approve any amendments to or early termination of those agreements if it finds that amendments or early termination would be in the best interests of the ta�cing entities. (fl All actions taken pursuant to subdivisions(a)and(c)shall be approved by resolution of the oversight board at a public meeting after at least 10 days'notice to the public of the specific proposed actions.The actions shall 96 Ch.26 —40— be subject to review by the Deparhnent of Finance pursuant to Section 34179 except that the department may extend its review period by up to 60 days. If the department does not object to an action subject to this section,and if no action challenging an action is commenced within 60 days of the approval of the action by the oversight board,the action of the oversight board shall be considered final and can be relied upon as conclusive by any person. If an action is brought to challenge an action involving title to or an 'interest in real property, a notice of pendency of action shall be recorded by the claimant as provided in Title 4.5(commencing with Secrion 405)of Part 2 of the Code of Civil Procedure within a 60-day period. SEC. 23. Section 34182 of the Health and Safery Code is amended to read: 34182. (a) (1) The county auditor-controller shall conduct or cause to be conducted an agreed-upon procedures audit of each redevelopment agency in the county that is subject to this part,to be completedby October 1,2012. (2) The purpose of the audits shall be to establish each redevelopment agency's assets and liabilities, to document and determine each redevelopment agency's passthrough payment obligations to other taxing entities,and to document and determine both the amount and the terms of any indebtedness incurred by the redevelopment agency pursuant to the initial Recognized Obligation Payment Schedule. (3) The county auditor-controller may charge the Redevelopment Property Tax Trust Fund for any costs incurred by the county auditor-controller pursuant to this part. (b) By October 5,2012,the county auditor-controller shall provide the Controller's ofi'ice and the Department of Finance a copy of all audits performed pursuant to this section. The county auditor-controller shall maintain a copy of all documentation and working papers for use by the Controller. (c) (1) The county auditor-controller shall determine the amount of property taxes that would have been allocated to each redevelopment agency in the county had the redevelopment agency not been dissolved pursuant to the operation of the act adding this part.These amounts are deemed property ta�c revenues within the meaning of subdivision(a)of Section 1 of Article XIII A of the California Constitution and are available for allocation and distribution in accordance with the provisions of the act adding this part. The county auditor-controller shall calculate the property taac revenues using _ current assessed values on the last equalized roll on August 20,pursuant to Section 2052 of the Revenue and Taxation Code,and pursuant to statutory formulas or contractual agreements with other taxing entities, as of the effective date of this section, and shall deposit that amount in the Redevelopment Property Tax Trust Fund. (Z) Each county auditor-controller shall administer the Redevelopment Property Tax Trust Fund for the benefit of the holders of former redevelopment agency enforceable obligations and the taxing entities that receive passthrough payments and distributions of property taxes pursuant to this part. 96 —41— Ch.26 (3) In connection with the allocation and distribution by the county auditor-controller of property tax revenues deposited in the Redevelopment Property TaJc Trust Fund, in compliance with this part, the county auditor-controller shall prepare estimates of amounts of property tax to be allocated and distributed and the amounts of passthrough payments to be made in the upcoming six-month period, and provide those estimates to both the entities receiving the distributions and the Department of Finance, no later than October 1 and April 1 of each year. (4) Each county auditor-controller shall disburse proceeds of asset sales or reserve balances,which have been received from the successor entities pursuant to Sections 34177 and 34187,to the taacing entities.In making such a distribution, the county auditor-controller shall utilize the same methodology for allocation and distribution of property tax revenues provided in Section 34188. (d) By October 1, 2012, the county auditor-controller shall report the following information to the Controller's office and the Director of Finance: (1) The sums of property tax revenues remitted to the Redevelopment Property Tax Trust Fund related to each former redevelopment agency. (2) The sums of property tax revenues remitted to each agency under paragraph(i)of subdivision(a)of Section 34183. (3) The sums of property tax revenues remitted to each successor agency pursuant to paragraph(2)of subdivision(a)of Section 34183. (4) The sums of property tax revenues paid to each successor agency pursuant to paragraph(3)of subdivision(a)of Section 34183. (5) The sums paid to each city,county,and special district,and the total amount allocated for schools pursuant to paragraph(4)of subdivision(a) of Section 34183. (6) Any amounts deducted from other distributions pursuant to subdivision(b)of Section 34183. (e) A county auditor-controller may charge the Redevelopment Property Tax Trust Fund for the costs of administering the provisions of this part. (� The Controller may audit and review any county auditor-controller action taken pursuant to the act adding this part. As such, all counry auditor-controller actions shall not be effective for three business days, pending a request for review by the Controller. In the event that the Controller requests a review of a given county auditor-controller action,he or she shall have 10 days from the date of his or her request to approve the county auditor-controller's action or return it to the county auditor-controller for reconsideration and the county auditor-controller's action shall not be effective until approved by the Controller. In the event that the Controller returns the county auditor-controller's action to the county auditor-controller for reconsideration,the counry auditor-controller must resubmit the modified action for Controller approval and the modified county auditor-controller's action shall not become effective until approved by the Controller. SEC. 24. Section 34182.5 is added to the Health and Safety Code, to read: 96 Ch.26 —42— 34182.5. A county auditor-controller may review the Recognized Obligation Payment Schedules and object to the inciusion of any items that are not demonstrated to be enforceable obligations and may object to the funding source proposed for any items. This review may take place prior to the submission of the Recognized Obligation Payment Schedule to the oversight board or subsequent to oversight board action. The county auditor-controller shall promptly transmit notice of any of those objections to the successor agency,the oversight board,and the Deparhnent of Finance. Notice shall be given at least 60 days prior to an allocation date specified in Section 34183, except that for the January 1, 2Q13 to June 3Q, 2013 Recognized Obligation Payrnent Schedule, notice shall be given no later than October 1,2012.If an oversight board disputes the finding of the county auditor-controller,it may refer the matter to the Department of Finance for a determination of what will be approved for inclusion in the Recognized Obligation Payment Schedule. SEC. 25. Section 34183 of the Health and Safety Code is amended to read: 34183. (a) Notwithstanding any other law, from February 1, 2012, to July 1,2012,and for each fiscal year thereafter,the county auditor-controller shall,after deducting administrative costs allowed under Section 34182 and Section 953 of the Revenue and Taxation Code, allocate moneys in each Redevelopment Property Tax Trust Fund as follows: (1) Subject to any prior deductions required by subdivision(b),first,the county auditor-controller shall remit from the Redevelopment Property Tax Trust Fund to each local agency and school entity an amount of property tatc revenues in an amount equal to that which would have been received under Section 33401, 33492.140, 33607, 33607.5, 33607.7, or 33676, as those sections read on January 1, 2011, or pursuant to any passthrough agreement between a redevelopment agency and a taxing entiry that was entered into prior to January 1, 1994, that would be in force during that fiscal year,had the redevelopment agency existed at that time.The amount of the payments made pursuant to this paragraph shall be calculated solely on the basis of passthrough payment obligations, existing prior to the effective date of this part and continuing as obligations of successor entities, shall occur no later than May 16,2012,and no later than June 1,2012,and each January 2 and June 1 thereafter. Notwithstanding subdivision (e) of Section 33670,that portion of the taxes in excess of the amount identified in subdivision (a) of Section 33670, which are attributable to a tax rate levied by a taxing entity for the purpose of producing revenues in an amount sufficient to make annual repayments of the principal of, and the interest on, any bonded indebtedness for the acquisition or improvement of real property shall be allocated to, and when collected shall be paid into, the fund of that taxing entity.The amount of passthrough payments computed pursuant to this section, including any passthrough agreements, shail be computed as though the requirement to set aside funds for the Low and Moderate Income Housing Fund was still in effect. 96 —43— Ch.26 (2) Second,on June 1,2012,and each January 2 and June 1 thereafter, to each successor agency for payments listed in its Recognized Obligation Payment Schedule for the six-month fiscal period beginning January 1, 2012, and July 1, 2012, and each January 2 and June 1 thereafter, in the following order of priority: (A) Debt service payments scheduled to be made for ta�c allocarion bonds. (B) Payments scheduled to be made on revenue bonds,but only to the extent the revenues pledged for them are insufl5cient to make the payrnents and only if the agency's tax increment revenues were also pledged for the repayment of the bonds. (C) Payments scheduled for other debts and obligations listed in the Recognized Obligation Payment Schedule that are required to be paid from former tax increment revenue. (3) Third,on June 1,2012,and each January 2 and June 1 thereafter,to each successor agency for the administrarive cost allowance,as defined in Section 34171, for administrative costs set forth in an approved administrative budget for those payments required to be paid from former tax increment revenues. (4) Fourth, on June 1, 2012, and each January 2 and June 1 thereafter, any moneys remaining in the Redevelopment Property Tax Trust Fund after the payments and transfers authorized by paragraphs (1)to(3), inclusive, shall be distributed to local agencies and school entiries in accordance with Section 34188. (b) If the successor agency reports,no later than April 1,2012,and May 1, 2012, and each December 1 and May 1 thereafter, to the county auditor-controller that the total amount available to the successor agency from the Redevelopment Property Tax Trust Fund allocation to that successor agency's Redevelopment Obligation Retirement Fund, from other funds transferred from each redevelopment agency,and from funds that have or will become available through asset sales and all redevelopment operations, are insufficient to fund the payrnents required by paragraphs (1) to (3), inclusive,of subdivision(a)in the next six-month fiscal period,the county auditor-controller shall notify the Controller and the Deparhnent of Finance no later than 10 days from the date of that notification. The county auditor-controller shall verify whether the successor agency will have sufficient funds from which to service debts according to the Recognized Obligation Payment Schedule and shall report the findings to the Controller. If the Controller concurs that there are insufficient funds to pay required debt service,the amount of the deficiency shall be deducted first from the amount remaining to be distributed to taxing entities pursuant to paragraph (4),and if that amount is exhausted,from amounts available for distribution for administrative costs in paragraph (3). If an agency, pursuant to the provisions of Section 33492.15,33492.72,33607.5,33671.5,33681.15,or 33688 or as expressly provided in a passthrough agreement entered into pursuant to Section 33401, made passthrough payment obligations subordinate to debt service payments required for enforceable obligations, funds for servicing bond debt may be deducted from the amounts for 96 Ch.26 —44— passthrough payments under paragraph(1), as provided in those sections, but only to the extent that the amounts remaining to be distributed to ta�cing entities pursuant to paragraph(4)and the amounts a�ailable for distribution for administrative costs in paragraph(3)have all been exhausted. (c) The county treasurer may loan any funds from the county treasury to the Redevelopment Property Tax Trust Fund of the successor agency for the purpose of paying an item approved on the Recognized Obligation Payment Schedule at the request of the Department of Finance that are necessary to ensure prompt payments of redevelopment agency debts.An enforceable obligation is created for repayment of those loans. (d) The Controller may recover the costs of audit and oversight required under this part from the Redevelopment Property Taac Trust Fund by presenting an invoice therefor to the county auditor-controller who shall set aside sufi�icient funds for and disburse the claimed amounts prior to making the next distributions to the ta�cing enrities pursuant to Section 34188.Subject to the approval of the Director of Finance,the budget of the Controller may be augmented to reflect the reimbursement, pursuant to Section 28.00 of the Budget Act. (e) Within 10 days of each distribution of property tax, the county auditor-controller shall provide a report to the department regarding the distribution for each successor agency that includes information on the total available for allocation, the passthrough amounts and how they were calculated,the amounts distributed to successor agencies,and the amounts distributed to taxing entities in a manner and form specified by the department. This reporting requirement shall also apply to distributions required under subdivision(b)of Section 34183.5. SEC. 26. Section 34183.5 is added to the Health and Safety Code, to read: 34183.5. (a) The Legislature hereby finds and declares that due to the delayed implementation of this part due to the California Supreme Court's ruling in the case California Redevelopment Association v. Matosantos et al. (2011) 53 Ca1.4th 231, some disruption to the intended application of this part and other law with respect to passthrough payrnents may have occurred. (1) If a redevelopment agency or successor agency did not pay any portion of an amount owed for the 2011-12 fiscal year to an affected taxing entity pursuant to Section 33401,33492.140,33607,33607.5,33607.7,or 33676, or pursuant to any passthrough agreement entered into befare January 1, 1994,between a redevelopment agency and an affected taacing entity, and to the extent the county auditor-controller did not remit the amounts owed for passthrough payments during the 2011-12 fiscal year, the county auditor-controller shall make the required payrnents to the taacing entities owed passthrough payments and shall reduce the amounts to which the successor agency would otherwise be entitled pursuant to paragraph(2)of subdivision(a)of Section 34183 at the next allocation of property tax under this part, subject to the provisions of subdivision(b)of Section 34183. If the amount of available property t�allocation to the successor agency is 96 —45— Ch.26 not sufficient to make the required payment,the county auditor-controller shall continue to reduce allocations to the successor agency under paragraph (2)of subdivision(a)of Section 34183 until the time that the owed amount is fully paid.Alternately,the county auditor-controller may accept payment from the successor agency's reserve funds for payments of passthrough payrnents owed as defined in this subdivision. (2) If a redevelopment agency did not pay any portion of the amount owed for the 2011-12 fiscal year to an affected taxing entity pursuant to Section 33401,33492.140,33607,33607.5,33607.7,or 33676,or pursuant to any passthrough agreement entered into before January 1, 1994,between a redevelopment agency and an affected taxing entity, but the county auditor-controller did pay the difference that was owing, the auditor controller shall deduct from the next allocation of property tax to the successor agency under paragraph(2)of subdivision(a)of Section 34183, the amount of the payment made on behalf of the successor agency by the county auditor-controller,not to exceed one-half the amount of passthrough payments owed for the 2011-12 fiscal year. If the amount of available property tax allocation to the successor agency is not sufficient to make the required deduction, the county auditor-controller shall continue to reduce allocations to the successor agency under paragraph(2)of subdivision(a) of Section 34183 until the time that the amount is fully deducted. Alternatively,the auditor-controller may accept payment from the successor agency's reserve funds for deductions of passthrough payments owed as defined in this subdivision. Amounts reduced from successor agency payments under this paragraph are available for the purposes of paragraphs (2)to(4),inclusive,of subdivision(a)of Section 34183 for the six-month period for which the property t�revenues are being allocated. (b) In recognition of the fact that county auditor-controllers were unable to make the payments required by paragraph(4)of subdivision(a)of Section 34183 for the period January 1, 2012,through June 30, 2012, on January 16, 2012, due to the California Supreme Court's ruling in the case of California Redevelopment Association v. Matosantos (2011) 53 Ca1.4th 231,in addition to taking the actions specified in Section 34183 with respect to the June 1 property tax allocations, county auditor-controllers should have made allocations as provided in paragraph(1). (1) From the allocations made on June 1, 2012, for the Recognized Obligation Payment Schedule covering the period July 1, 2012, through December 31, 2012, deduct from the amount that otherwise would be deposited in the Redevelopment Property Tax Trust Fund on behalf of the successor agency an amount equivalent to the amount that each affected talcing entity was entitled to pursuant to paragraph(4)of subdivision(a)of Section 34183 for the period January 1,2012,through June 30,2012.The amount to be retained by taxing entities pursuant to paragraph (4) of subdivision(a)of Section 34183 for the January l,2012,through June 30, 2012,period is determined based on the Recognized Obligation Payment Schedule approved by the Department of Finance pursuant to subdivision (h) of Section 34179 and any amount determined to be owed pursuant to 96 Ch.26 —46— subdivision (b). Any amounts so computed shall not be of�set by any shortages in funding for recognized obligations for the period covering July 1,2012,through December 31,2012. (2) (A) If an affected taxing entity has not received the full amount to which it was entitled pursuant to paragraph(4)of subdivision(a)of Section 34183 of the property tax distributed for the period January 1,2012,through June 30, 2012, and paragraph (1), no later than July 9, 2012, the county auditor-controller shall determine the amount,if any,that is owed by each successor agency to taxing entities and send a demand for payment from the funds of the successor agency for the amount owed to taxing entities if it has distributed the June 1,2012,allocation to the successor agencies.No later than July 12, 2012, successor agencies sha11 make payment of the amounts demanded to the county auditor-controller for deposit into the Redevelopment Property Tax Trust Fund and subsequent distribution to taxing entities. No later than July 16, 2012, the county auditor-controller shall make allocations of all money received by that date from successor agencies in amounts owed to taxing entities under this paragraph to taxing entities in accordance with Section 34183. The county auditor-controller shall make allocations of any money received after that date under this paragraph within five business days of receipt. These duties are not discretionary and shall be carried out with due diligence. (B) If a county auditor-controller fails to determine the amounts owed to taxing entities and present a demand for payment by July 9,2012,to the successor agencies,the Deparhnent of Finance or any affected taxing entity may request a writ of mandate to require the county auditor-controller to immediately perform this duty.Such actions may be filed only in the County of Sacramento and shall have priority over other civil matters.Any county in which the county auditor-controller fails to perform the duties under this paragraph shall be subject to a civil penalty of 10 percent of the amount owed to taxing entities plus 1.5 percent of the amount owed to taxing entities for each month that the duties are not performed. The civil penalties shall be payable to the taxing enrities under Section 34183. Additionally, any county in which the counry auditor-controller fails to make the required determinations and demands for payment under this paragraph by July 9, 2012,or fails to distribute the full amount of funds received from successor agencies as required by this paragraph shall not receive the distribution of sales and use tax scheduled for July 18,2012,or any subsequent payment, up to the amount owed to taxing entities,until the counry auditor-controller perForms the duties required by this paragraph. (C) If a successor agency fails to malce the payment demanded under subparagraph (A) by July 12, 2012, the Department of Finance or any affected taxing entity may file for a writ of mandate to require the successor agency to immediately make this payment. Such actions may be filed only in the County of Sacramento and shall ha�e priority over other civil matters. Any successor agency that fails to make payrnent by July 12,2012,under this paragraph shall be subject to a civil penalty of 10 percent of the amount owed to taxing entities plus one and one-half percent of the amount owed 96 —47— Ch.26 to taxing entities for each month that the payments are not made. Additionally, the city or county or city and county that created the redevelopment agency shall aiso be subject to a civil penalty of 10 percent of the amount owed to taxing entities plus 1.5 percent of the amount owed to t�ing entities for each month the payment is late. The civil penalties shall be payable to the taxing entities under Section 34183.If the Department of Finance finds that the imposition of penalties will jeopardize the payment of enforceable obligations it may request the court to waive some or all of the penalties.A successor agency that does not pay the amount required under this subparagraph by July 12, 2012, shail not pay any obligations other than bond debt service until full payment is made to the county auditor-controller. Additionally, any city, county or city and county that created the redevelopment agency that fails to make the required payment under this paragraph by July 12,2012, shall not receive the distribution of sales and use tax scheduled for July 18,2012,or any subsequent payment, up to the amount owed to taxing entities,until the payment required by this paragraph is made. (D) The Legislature hereby finds and declares that time is of the essence. Funds that should have been received and were expected and spent in anticipation of receipt by community colleges,schools,counties,cities,and special districts have not been received resulting in significant fiscal impact to the state and taxing entities. Continued delay and uncertainly whether funds will be received warrants the availability of extraordinary relief as authorized herein. (3) If an affected taxing entiry has not received the full amount to which it was entitled pursuant to paragraph(4)of subdivision(a)of Section 34183 for the period January 1,2012,through June 30,2012,and paragraph(1), the county auditor-controller shall reapply the provisions of paragraph(1) to each subsequent properry tax allocation until such time as the affected taxing entity has received the full amount to which it was entitled pursuant to paragraph(4)of subdivision(a)of Section 34183 for the period January 1,2012,through June 30,2012. SEC. 27. Section 34185 of the Health and Safery Code is amended to read: 34185. Commencing on June 1,2012,and on each January 2 and June 1 thereafter, the county auditor-controller shall transfer, from the Redevelopment Property Tax Trust Fund of each successor agency into the Redevelopment Obligation Retirement Fund of that agency,an amount of property tax revenues equal to that specified in the Recognized Obligation Payment Schedule for that successor agency as payable from the Redevelopment Property T� Trust Fund subject to the limitations of subdivision(�of Section 34177 and Section 34183. SEC. 28. Section 34186 of the Health and Safety Code is amended to read: 34186. (a) Differences between actual payments and past estimated obligations on recognized obligation payment schedules shall be reported in subsequent recognized obligarion payment schedules and shall adjust the 96 Ch.26 —48— amount to be transferred to the Redevelopment Obligation Retirement Fund pursuant to this part.These estimates and accounts shall be subject to audit by county auditor-controllers and the Controller. (b) Differences between actual passthrough obligations and property tax amounts and the amounts used by the county auditor-controller in determining the amounts to be allocated under Sections 34183 and 34188 for a prior six-month period shall be applied as adjustments to the property tax and passthrough amounts in subsequent periods as they become known. County auditor-controllers shall not delay payments under this part to successor agencies or taacing entities based on pending transactions,disputes, or for any other reason,other than a court order,and shall use the Recognized Obligation Payment Schedule approved by the Department of Finance and the most current data for passthroughs and property tax available prior to the statutory distribution dates to make the allocations required on the dates required. SEC. 29. Section 34187 of the Health and Safety Code is amended to read: 34187. (a) (1) Commencing May 1, 2012, whenever a recognized obligation that had been identified in the Recognized Payment Obligation Schedule is paid off or retired,either through early payment or payment at maturity,the county auditor-controller shall distribute to the taxing entities, in accordance with the provisions of the Revenue and Taxation Code, all property ta�c revenues that were associated with the payment of the recognized obligation. (2) Notwithstanding paragraph (1), the Department of Finance may authorize a successor agency to retain property tax that otherwise would be distributed to affected taxing entities pursuant to this subdivision, to the extent the deparhnent determines the successar agency requires those funds for the payment of enforceable obligations.Upon making a determination, the department shall provide the county auditor-controller with information detailing the amounts that it has authorized the successor agency to retain. Upon determining the successor agency no longer requires additional funds pursuant to this subdivision,the department shall notify the successor agency and the county auditor-controller.The county auditor-controller shall then distribute the fiznds in question to the affected ta�cing entities in accordance with the provisions of the Revenue and Taxation Code. (b) When all of the debt of a redevelopment agency has been retired or paid off, the successor agency shall dispose of all remaining assets and terminate its existence within one year of the final debt payment.When the successor agency is terminated, all passthrough payment obligations shall cease and no property tax shall be allocated to the Redevelopment Property Tax Trust Fund for that agency. SEC. 30. Section 34188 of the Health and Safety Code is amended to read: 34188. For all distributions of property tax revenues and other moneys pursuant to this part, the distribution to each taa�ing entity shall be in an 96 —49— Ch.26 amount proportionate to its share of property tax revenues in the taY rate area in that fiscal year,as follows: (a) (1) For distributions from the Redevelopment Property Tax Trust Fund, the share of each taxing entiry shall be applied to the amount of property tax available in the Redevelopment Property Tax Trust Fund after deducting the amount of any distributions under paragraphs(2)and(3)of subdivision(a)of Section 34183. (2) For each tu�ing entity that receives passthrough payrnents,that agency shall receive the amount of any passthrough payments identified under paragraph (1) of subdivision (a) of Section 34183, in an amount not to exceed the amount that it would receive pursuant to this section in the. absence of the passthrough agreement. However, to the extent that the passthrough payments received by the taxing entity are less than the amount that the taxing entity would receive pursuant to this section in the absence of a passthrough agreement, the taxing entity shall receive an additional payment that is equivalent to the difference between those amounts. (b) Property tax shares of local agencies shall be determined based on property tax allocation laws in effect on the date of distribution,without the revenue exchange amounts allocated pursuant to Section 97.68 of the Revenue and Taxation Code, and without the property taxes allocated pursuant to Section 97.70 of the Revenue and Taxation Code. (c) The total school share,including passthroughs,shall be the share of the property taxes that would have been received by school entities, as defined in subdivision(fl of Section 95 of the Revenue and Taxation Code, in the jurisdictional territory of the former redevelopment agency,including, but not limited to,the amounts specified in Sections 97.68 and 97.70 of the Revenue and Taxation Code. (d) This section shall not be construed to increase any allocations of excess, additional, or remaining funds that would otherwise have been allocated to cities,counties,cities and counties,or special districts pursuant to clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.2,clause(i)of subparagraph(B)of paragraph(4)of subdivision (d)of Section 97.3,or Article 4(commencing with Section 98)of Chapter 6 of Part 0.5 of Division 1, of the Revenue and Taxation Code, had this section not been enacted. SEC. 31. Section 34189 of the Health and Safety Code is amended to read: 34189. (a) Commencing on the effecrive date of this part,all provisions of the Community Redevelopment Law that depend on the allocation of tax increment to redevelopment agencies,including,but not limited to,Sections 33445, 33640, 33641, 33645,and subdivision(b) of Section 33670, shall be inoperative, except as those sections apply to a redevelopment agency operating pursuant to Part 19(commencing with Section 34192). (b) To the extent that a provision of Part 1 (commencing with Section 33000),Part 1.5(commencing with Section 34000),Part 1.6(commencing with Section 34050), and Part 1.7 (commencing with Section 34100) con$icts with this part,the provisions of this part shall control. Further,if 96 Ch.26 —50— a provision of Part 1 (commencing with Section 33000), Part 1.5 (commencing with Section 34000), Part 1.6 (commencing with Section 34050),or Part 1.7(commencing with Section 34100)provides an authority that the act adding this part is restricting or eliminating,the restriction and elimination provisions of the act adding this part shall control. (c) It is intended that the provisions of this part shall be read in a manner as to avoid duplication of payments. SEC. 32. Section 34189.1 is added to the Health and Safety Code, to read: 34189.1. No party,public or private,may pursue,nor does a court have jurisdiction over, a validation action with respect to any action of a redevelopment agency or a successor agency to a redevelopment agency that took place on or after January 1,2011,unless the Department of Finance and the Controller,representing interests of the State of California and each of the taxing entities who could be affected financially by the action,has been properly noticed.All acrions shall be filed in the County of Sacramento. SEC. 33. Section 34189.2 is added to the Health and Safety Code, to read: 34189.2. A successor agency or any party to an enforceable obligation as defined under this part shall properly notice the state with respect to a validation action involving any enforceable obligation or matter of title to an asset that belonged to a redevelopment agency.For such an action to be properly filed, both the Controller and the Director of Finance shall be noticed and actions shall be filed in the County of Sacramento. SEC. 34. Section 34189.3 is added to the Health and Safery Code, to read: 34189.3. An action contesting any act taken or determinations or decisions made pursuant to this part or Part 1.8(commencing with Section 34161)may be brought in superior court and shall be filed in the County of Sacramenta SEC.35. Chapter 9(commencing with Section 3419 L 1)is added to Part 1.85 of Division 24 of the Health and Safety Code,to read: CHAPTER 9. POSTCOMPLIANCE PROVISIONS 34191.1. The provisions of this chapter shali apply to a successor agency upon that agency's receipt of a finding of completion by the Department of Finance pursuant to Section 34179.7. 341913. Notwithstanding Section 34191.1,the requirements specified in subdivision(e) of Section 34177 and subdivision(a) of Section 34181 shall be suspended, except as those provisions apply to the transfers for governmental use,until the Department of Finance has approved a long-range property management plan pursuant to subdivision(b)of Section 34191.5, at which point the plan shall govern, and supersede all other provisions relating to,the disposition and use of the real property assets of the former redevelopment agency.If the deparhnent has not approved a plan by January 96 —51— Ch.26 1, 2015, subdivision(e) of Section 34177 and subdivision (a) of Section 34181 shall be operative with respect to that successor agency. 34191.4. T'he following provisions shall apply to any successor agency that has been issued a finding of completion by the Department of Finance: (a) All real property and interests in real property identified in subparagraph (C) of paragraph (5) of subdivision (c) of Section 34179.5 shall be transferred to the Community Redevelopment Property Trust Fund of the successor agency upon approval by the Deparhnent of Finance of the long-range property management plan submitted by the successor agency pursuant to subdivision(b}of Section 34191.7 unless that property is subj ect to the requirements of any existing enforceable obligation. (b) (1) Notwithstanding subdivision (d) of Section 34171, upon application by the successor agency and approval by the oversight board, loan agreements entered into between the redevelopment agency and the city,county, ar city and county that created by the redevelopment agency shall be deemed to be enforceable obligations provided that the oversight board makes a finding that the loan was for legitimate redevelopment purposes. (2) If the oversight board finds that the loan is an enforceable obligation, the accumulated interest on the remaining principal amount of the loan shall be recalculated from origination at the interest rate earned by funds deposited into the Local Agency Investment Fund.The loan shall be repaid to the city, county, or city and county in accordance with a defined schedule over a reasonable term of years at an interest rate not to exceed the interest rate earned by funds deposited into the Local Agency Investment Fund. The annual loan repayments provided for in the recognized obligations payment schedules shall be subject to all of the following limitations: (A) Loan repayments shall not be made prior to the 2013-14 fiscal year. Beginning in the 2013-14 fiscal year, the maximum repayment amount authorized each fiscal year for repayments made pursuant to this subdivision and paragraph(7) of subdivision(e) of Section 34176 combined shall be equal to one-half of the increase between the amount distributed to the taxing entities pursuant to paragraph(4)of subdivision(a)of Secrion 34183 in that fiscal year and the amount distributed to taxing entities pursuant to that paragraph in the 2012-13 base year. Loan or deferral repayments made pursuant to this subdivision shall be second in priority to amounts to be repaid pursuant to paragraph(7)of subdivision(e)of Section 34176. (B) Repayments received by the city, county or city and county that formed the redevelopment agency shall first be used to retire any outstanding amounts borrowed and owed to the Low and Moderate Income Housing Fund of the former redevelopment agency for purposes of the Supplemental Educational Revenue Augmentation Fund and shall be distributed to the Low and Moderate Income Housing Asset Fund established by subdivision (d)of Section 34176. (C) Twenty percent of any loan repayment shall be deducted from the loan repayment amount and shall be transfened to the Low and Moderate Income Housing Asset Fund,after all outstanding loans from the Low and 96 Ch.26 —52— Moderate Income Housing Fund for purposes of the Supplemental Educational Revenue Augmentation Fund have been paid. (c) (1) Bond proceeds derived from bonds issued on or before December 31,2010,shall be used for the purposes for which the bonds were sold. (2) (A) Notwithstanding Section 34177.3 or any other conflicting provision of law,bond proceeds in excess of the amounts needed to sarisfy approved enforceable obligarions shall thereafter be expended in a manner consistent with the original bond covenants. Enforceable obligations may be satisfied by the creation of reserves for projects that are the subject of the enforceable obiigation and that are consistent with the contractuai obligations for those projects,or by expending funds to complete the projects. An expenditure made pursuant to this paragraph shall constitute the creation of excess bond proceeds obligations to be paid from the excess proceeds. Excess bond proceeds obligations shall be listed separately on the Recognized Obligation Payment Schedule submitted by the successor agency. (B) If remaining bond proceeds cannot be spent in a manner consistent with the bond covenants pursuant to subparagraph(A),the proceeds shall be used to defease the bonds or to purchase those same outstanding bonds on the open market for cancellation. 34191.5. (a) There is hereby established a Community Redevelopment Property Trust Fund,administered by the successor agency,to serve as the repository of the former redevelopment agency's real properties identified in subparagraph(C)of paragraph(5)of subdivision(c)of Section 34179.5. (b) The successor agency shall prepare a long-range property management plan that addresses the disposition and use of the real properties of the former redevelopment agency.The report shall be submitt�d to the oversight board and the Department of Finance for approval no later than six months following the issuance to the successor agency of the finding of completion. (c) The long-range property management plan shall do all of the following: (1) Include an inventory of all properties in the trust.The inventory shall consist of all of the following information: (A) The date of the acquisition of the property and the value of the property at that time,and an estimate of the current value of the property. (B) The purpose for which the property was acquired. (C) Parcel data, including address, lot size, and current zoning in the former agency redevelopment plan or specific,community,or general plan. (D) An estimate of the current value of the parcel including,if available, any appraisal information. (E) An estimate of any lease,rental,or any other revenues generated by the property, and a description of the contractual requirements for the disposition of those funds. (F) The history of environmental contamination,including designation as a brownfield site,any related environmental studies,and history of any remediation efForts. 96 —53— Ch.26 (G) A description of the property's potential for transit-oriented - development and the advancement of the planning objectives of the successor agency. (H) A brief history of previous development proposals and activity, including the rental or lease of property. (2) Address the use or disposition of all of the properties in the trust. Permissible uses include the retention of the property for governmental use pursuant to subdivision(a)of Section 34181,the retention of the property for future development,the sale of the property,or the use of the property to fulfill an enforceable obligation. The plan shall separately identify and list properties in the trust dedicated to governmental use purposes and properties retained for purposes of fulfilling an enforceable obligation.With respect to the use or disposition of all other properties,all of the following shall apply: (A) If the plan directs the use or liquidation of the property for a project identified in an approved redevelopment plan,the property shall transfer to the city,county,or city and county. (B) If the plan directs the liquidation of the property or the use of revenues generated from the property, such as lease or parking revenues, for any purpose other than to fulfill an enforceable obligation or other than that specified in subparagraph(A),the proceeds from the sale shall be distributed as property tax to the taxing entities. (C) Property shall not be transferred to a successor agency,city,county, or city and county, unless the long-range property management plan has been approved by the oversight board and the Department of Finance. SEC.36. The Legislature finds and declares as follows: (a) Certain provisions of Assembly Bill 26 of the 2011-12 First Extraordinary Session of 2011(Ch.5,2011-12 First Ex.Sess.)are internally inconsistent, or uncertain in their meaning, with regard to the calculation of the amount to be paid by a county auditor-controller from the . Redevelopment Property Tax Trust Fund to meet passthrough payment obligations to local agencies and school entities. (b) Consistent with the statement in Section 34183 of the Health and Safety Code,as added by the measure identified in subdivision(a),that the provisions of that section are to apply"[n]otwithstanding any other law," it was the intent of the Legislature in enacting that measure that the amount of the passthrough payments that are addressed by that section be determined in the manner specified by paragraph(1)of subdivision(a)of Section 34183 of the Health and Safety Code, and that the amount so calculated not be reduced or adjusted pursuant to the operation of any other provision of that measure. SEC. 37. If any provision of this act or the application thereof to any person or circumstance is held invalid,the invalidity shall not affect other provisions or applications of this act which can be given effect without the invalid provision or application and to this end,the provisions of this act are severable. 96 Ch.26 —54— SEC.38. There is hereby appropriated up to twenty-two million doilars ($22,000,000)from the General Fund,for allocation to deparhnents by the Director of Finance in furtherance of the objectives of this act. Up to two million dollars($2,000,000)of this amount may be allocated to the Director of the Trial Court Trust Fund for allocation by the Administrative Of�'ice of the Courts to the Superior Court of California,County of Sacramento far work associated with Part 1.85(commencing with Section 34170)of Division 24 of the Health and Safety Code.An allocation of funds approved by the Director of Finance under this item shall become effective no sooner than 30 days after the director files written notification thereof with the Chairperson of the Joint Legislative Budget Committee,and the chairpersons of the fiscal committees in each house of the Legislature,or no sooner than any lesser time the chairperson of the joint committee,or his or her designee, may in each instance determine. SEC.39. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because this act provides for offsetting savings to local agencies or school districts that result in no net costs to the 1oca1 agencies or school districts, within the meaning of Section 17556 of the Government Code. SEC. 40. This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision(e)of Section 12 of Article IV of the California Constitution,has been identified as related to the budget in the Budget Bill,and shall take effect immediately. O 96 Res. No. OB - 006 OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: ADOPT RESOLUTION NO. OB - 006 APPROVING THE EXECUTION OF A COOPERATIVE AGREEMENT FOR ADVANCE AND REIMBURSEMENT OF ADMINISTRATIVE, OVERHEAD, AND OTHER EXPENSES BETWEEN THE CITY AND THE SUCCESSOR AGENCY, AND TAKING CERTAIN OTHER ACTIONS SUBMITTED BY: Janet M. Moore, Director of Housing DATE: August 20, 2012 CONTENTS: Resolution OB-oo6 Cooperative Agreement Recommendation By Minute Motion that the Oversight Board adopt Resolution OB -006 approving the execution of a Cooperative Agreement for Advance and Reimbursement of Administrative, Overhead, and Other Expenses between the City and the Successor Agency, and taking certain other actions. Backqround Upon dissolution of the Palm Desert Redevelopment Agency on February 1, 2012 pursuant to AB X1 26, the Successor Agency to the Palm Desert Redevelopment Agency was constituted and is governed by a board of directors consisting of the members of the City CounciL Pursuant to AB X1 26, the Successor Agency is required to undertake a number of actions related to winding down the affairs of the former Redevelopment Agency. For example, the Oversight Board may direct the staff of the Successor Agency to perform work in furtherance of the Oversight Board's duties and responsibilities under AB X1 26 and the Successor Agency must pay for all of the costs of ineetings of the Oversight Board. In addition, the Successor Agency will have a number of ongoing responsibilities, such as paying debt service on enforceable obligations of the former Redevelopment Agency and preparing an administrative budget and Recognized Obligation Payment Schedule (ROPS) for each six-month fiscal period. Allowable administrative expenses likely include, among others, the value of City staff, including employee retirement and other benefits, necessary for the administration and operations of the Successor Agency; and the cost of other resources of the City G:Uda\Veronica Tapia\Word Files\Staff Reports\Successor Agency\OB 5[affReport for Coopera[ive Agreement-8-20-12.docx � Staff Report Res. rro. oB - 006 Approving Cooperative Agreement August 20, 2012 Page 2 of 2 necessary for the administration and operations of the Successor Agency, such as office space, supplies, equipment, utilities, and insurance. Staff recommends that the Successor Agency and the City enter into an agreement whereby the City will advance these costs to the Successor Agency. The attached Resolution also approves the Cooperative Agreement for Advance and Reimbursement of Administrative, Overhead and Other Expenses between the City and the Successor Agency attached as Exhibit A to the Resolution. As discussed above, the proposed administrative budgets must include proposals for arrangements for administrative and operations services provided by the City or another entity. The Cooperative Agreement provides for the Successor Agency to use the City's staff, facilities, and other resources for the administration and operations of the Successor Agency and for the Successor Agency to reimburse the City for such advances. The Agreement must be approved by the Oversight Board. Submitted by: �. �— -� -�-z "-c� � l� �---,�-z,�� '� (-� o� t M. Moore, Director of Housing fY OVERSIGHT EOARD Approval: �N �g -��-£�� 2�-� ��--_ VERIFIED B �. ,�� Original on fiIe with City Cler�'s Office Paul S. Gibson, Director of Finance o n M. Wohlmuth, Executive Director G:Uda\Veronica Tapia\Word Files\Staff Reports\Successor Agency\OB Staff Report for Cooperative Agreemen[-8-20-12.docx RESOLUTION NO. OB - 006 RESOLUTION NO. OB - �� A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE EXECUTION OF A COOPERATIVE AGREEMENT FOR ADVANCE AND REIMBURSEMENT OF ADMINISTRATIVE, OVERHEAD AND OTHER EXPENSES BY AND BETWEEN THE SUCCESSOR AGENCY AND THE CITY OF PALM DESERT; AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH RECITALS: A. Pursuant to Part 1.85 of the Community Redevelopment Law (commencing with Health and Safety Code Section 34170) ("Part 1.85"), the Successor Agency to the Palm Desert Redevelopment Agency ("Successor Agency") is required to undertake a number of actions related to winding down the affairs of the former Redevelopment Agency pursuant to Health and Safety Code Section 34177(h). B. In connection with the administration and operations of the Successor Agency, the Successor Agency is and will be utilizing the staff, facilities, and other resources of the City. The City Manager of the City serves as Executive Director of the Successor Agency, the Director of Finance serves as Finance Officer of the Successor Agency, and the City Clerk serves as Secretary to the Successor Agency. Planning, finance, engineering, public works, and other City departments devote and are expected to devote substantial time with respect to the administration and operations of the Successor Agency, including gathering information relating to the Redevelopment Agency's enforceable obligations, conferring with public officials representing governmental agencies, and undertaking other activities in connection with administration and operations of the Successor Agency. C. By providing and making available to the Successor Agency the staff, facilities, services, and other resources of the City, including, without limitation, consultants, legal counsel, office space, equipment, supplies, and insurance, necessary to the administration and operations of the Successor Agency, the City has advanced and will continue to advance the cost of the foregoing to the Successor Agency. The City and the Successor Agency desire to enter into an agreement to provide for an appropriate method of reimbursement of such advances by the Successor Agency to the City. D. Pursuant to Health and Safety Code Section 34171(d)(1)(F), contracts or agreements necessary for the administration or operation of the Successor Agency are enforceable obligations and pursuant to Health and Safety Code Sections 34178(a) and G:�rda\Veronica Tapia\Word Files\Staf£Reports\Successor Agency\Oversight Board Resolu[ion Approving Cooperative Agreement.docx RESOLUTION NO. OB - 006 34180(h), the Successor Agency may enter into agreements with the City with the approval of the oversight board for the Successor Agency (the "Oversight Board"). NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby approves the Cooperative Agreement for Advance and Reimbursement of Administrative, Overhead and Other Expenses, by and between the Successor Agency and the City, dated August 23, 2012, substantially in the form attached hereto as Exhibit A. Section 3. The staff of the Successor Agency is hereby directed to provide the State Department of Finance ("DOF") written notice and information regarding the action taken by the Oversight Board in Section 2 of this Resolution. Such notice and information shall be provided by electronic means and in a manner of DOF's choosing. Section 4. The officers of the Oversight Board and staff of the Successor Agency ar'e hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution. PASSED AND ADOPTED this 20th day of August, 2012. AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY G:Uda\Veronica Tapia\Word Files\Staff Reports\Successor Agency\Oversigh[Board Resolution Approving Cooperative AgreemenLdocx RESOLUTION N0. OB - 006 EXHIBIT A Cooperative Agreement for Advance and Reimbursement of Administrative, Overhead and other Expenses G:Uda\Veronica Tapia\Word Files\Staff Reports\Successor Agency\Oversight Board Resolution Approving Cooperative Agreement.docx RESOLUTION N0. OB - 006 COOPERATIVE AGREEMENT FOR ADVANCE AND REIMBURSEMENT OF ADMINISTRATIVE, OVERHEAD AND OTHER EXPENSES This COOPERATIVE AGREEMENT FOR ADVANCE AND REIMBURSEMENT OF ADMINISTRATIVE, OVERHEAD AND OTHER EXPENSES (this "Agreement") is entered into as of August 23, 2012, by and between the City of Palm Desert (the "City") and the Successor Agency to the Palm Qesert Redevelopment Agency (the "Successor Agency"). RECITALS: A. The Successor Agency is required to undertake a number of actions pursuant to Part 1.85 of the Community Redevelopment Law (commencing with Health and Safety Code Section 34170) ("Part 1.85"), including winding down the affairs of the former Palm Desert Redevelopment Agency ("Agency") pursuant to Health and Safety Code Section 34177(h). B. Pursuant to Health and Safety Code Section 34171(d)(1)(F), contracts or agreements necessary for the administration or operation of the Successor Agency are enforceable obligations. C. Pursuant to Health and Safety Code Section 34177.3(b), the Successor Agency may create enforceable obligations to conduct the work of winding down the Agency, including hiring staff, acquiring necessary professional administrative services and legal counsel, and procuring insurance. D. Pursuant to Health and Safety Code Sections 34178(a) and 34180(h), with the approval of the oversight board, the Successor Agency may enter into agreements with the City. E. In connection with the administration and operations of the Successor Agency, the Successor Agency is and will be utilizing the staff, facilities, and other resources of the City. F. The City Manager of the City serves as Executive Director of the Successor Agency, the Director of Finance serves as Finance Officer of the Successor Agency, and the City Clerk serves as Secretary to the Successor Agency. Planning, finance, engineering, public works, and other City departments devote and are expected to devote substantial time with respect to the administration and operations of the Successor Agency, including gathering information relating to the Agency's enforceable obligations, conferring with public officials representing governmental agencies, and undertaking other activities in connection with winding down the affairs of the Agency. G. By providing and making available to the Successor Agency the staff, facilities, services, and other resources of the City, including, without limitation, consultants, legal counsel, office space, equipment, supplies, and insurance, -1- G:Uda\Veronica Tapia\Word Files\Stat£Reports\Successor Agency\Cooperative AgreementDOC RESOLUTION N0. OB - 006 necessary to the administration and operations of the Successor Agency, the City has advanced and will continue to advance the cost of the foregoing to the Successor Agency. H. The City and the Successor Agency desire to enter into this Agreement to acknowledge the foregoing recitals and to provide for an appropriate method of reimbursement of such advances by the Successor Agency to the City. NOW, THEREFORE, THE PARTIES DO HEREBY AGREE AS FOLLOWS: Section 1. The City shall make available to the Successor Agency its staff, facilities, services, and other resources, including, without limitation, consultants, legal counsel, office space, equipment, supplies, and insurance, necessary to the administration and operations of the Successor Agency. The Successor Agency shall have access to the foregoing staff, facilities, services, and other resources of the City. Section 2. The value of the City staff, including all employee retirement and other benefits, facilities, services, and other resources of the City, including, without limitation, office space, equipment, supplies, and insurance, necessary to the administration and operations of the Successor Agency made, and to be made, available to the Successor Agency for each six-month fiscal period beginning with the fiscal period commencing on January 1, 2012, determined in accordance with Section 3 hereof, shall constitute an advance to the Successor Agency by the City for each six- month fiscal period, to be repaid in accordance with Section 4 of this Agreement. Section 3. Following the end of each six-month fiscal period, beginning with the fiscal period commencing on January 1, 2012, the City Manager shall prepare and present to the Successor Agency an invoice for (i) the value of City staff, including all employee retirement and other benefits, based on time records prepared by City staff, which shall describe the time devoted exclusively to matters directly related to the administration and operations of the Successor Agency; (ii) the value of consultants and legal counsel based on invoices for services devoted exclusively to matters directly related to the administration and operations of the Successor Agency; (iii) the fair rental value of office space and equipment made available to the Successor Agency; and (iv) the value of supplies, insurance and other services and facilities provided by the City to the Successor Agency. Section 4. Within a reasonable time after the City submits an invoice to the Successor Agency pursuant to Section 3, the Successor Agency shall pay to the City the amount of the invoice from available funds of the Successor Agency. In the event that insufficient funds are available to the Successor Agency, any unpaid amounts shall be carried over to the next six-month fiscal period. Section 5. The parties hereto agree to take all appropriate steps and execute any documents which may reasonably be necessary or convenient to implement the intent of this Agreement. -2- G:�rda\Veronica Tapia\Word Files\Staff Reports\Successor Agency\Cooperative Agreement.DOC RESOLUTION N0. OB - 006 Section 6. Each party shall maintain books and records regarding its duties pursuant to this Agreement. Such books and records shall be available for inspection by the officers and agents of the other party at all reasonable times. Section 7. This Agreement is made in the State of California under the Constitution and laws of the State of California, and is to be so construed. Section 8. This Agreement will be become effective upon approval of the Oversight Board to the Successor Agency. Section 9. This Agreement may be amended at any time; and from time to time, by an agreement executed by both parties to this Agreement and approved by the Oversight Board to the Successor Agency. SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY CITY OF PALM DESERT By ROBERT A. SPIEGEL, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK -3- G:�rda\Veronica Tapia\Word Files\S[affReports\Successor Agency\Cooperative Agreement.DOC RESOLUTION N0. OB - 006 APPROVED: Date Oversight Board to the Successor Agency to the Palm Desert Redevelopment Agency -4- G:�rda\Veronica Tapia\Word Files\Staff Reports\S�ccessor Agency\Cooperative Agreemen[.DOC Res. No. OB — 007 OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REC�UEST: ADOPT RESOLUTION NO. OB -oo� APPROVING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE THIRD SIX-MONTH PERIOD PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 FOR THE PERIOD OF JANUARY 1, 2013 THROUGH JUNE 30, 2013 SUBMITTED BY: Janet M. Moore, Director of Housing DATE: August 20, 2012 CONTENTS: Resolution OB - 007 Recognized Obligation Payment Schedule (1/1/13- 6/30/13) Recommendation By Minute Motion that the Oversight Board adopt Resolution OB - oo� approving the Recognized Obligation Payment Schedule for the third six-month period of January 1, 2013 through June 30, 2013 ("ROPS3"). Executive Summary Pursuant to AB X1 26, the Successor Agency must prepare a Recognized Obligation Payment Schedule ("ROPS") for each six-month fiscal period (commencing each January 1 and July 1), listing the payments to be made by the Successor Agency during such period. All ROPS must be approved by the Oversight Board and submitted to the State Department of Finance ("DOF") for review. Backqround Pursuant to AB X1 26, the Successor Agency must prepare a Recognized Obligation Payment Schedule ("ROPS") for each six-month fiscal period (commencing each January 1 and July 1), listing the payments to be made by the Successor Agency during such period. All ROPS must be approved by the Oversight Board. Furthermore, each Oversight Board-approved ROPS must be submitted to the State Department of Finance ("DOF") for review. On June 27, 2012, the Governor signed the State budget trailer bill AB 1484, which became effective immediately. AB 1484 imposes new requirements and deadlines, beginning with the ROPS covering the period from January 1, 2013 through June 30, 2013 ("ROPS3"). G:\rda\Veronica Tapia\Word Files\Oversight Board\Staff Reports\Staff Report-ROPS3.doc Staff Report—Oversight Board Approval of ROPS3 xes. No. os - 007 Page 2 of 2 August 20, 2012 Deadlines for ROPS Submission and Review AB 1484 does not specify a deadline for the Successor Agency to submit ROPS3 to the Oversight Board for approval. However, the Successor Agency must submit an Oversight Board-approved ROPS3 to the DOF, the Office of the State Controller and the County Auditor- Controller no later than September 1, 2012. The Successor Agency must submit the ROPS to the DOF electronically in the manner of DOF's choosing. A copy of the Oversight Board- approved ROPS must be posted on the Successor Agency's website. The DOF inay eliminate or modify any items on the ROPS before approving the ROPS. The DOF must make its determination regarding the enforceable obligations and the amount and funding source for each enforceable obligation listed on a ROPS no later than 45 days after the ROPS is submitted. Within five business days of the DOF's determination, the Successor Agency may request to "meet and confer" with the DOF on disputed items. The meet and confer period may vary, but an untimely submission of ROPS3 may result in a meet and confer period of less than 30 days. The County Auditor-Controller may object to the inclusion of any item on the ROPS that is not demonstrated to be an enforceable obligation and may object to the funding source proposed for any item. The County Auditor-Controller must provide notice of its objections to the DOF, the Successor Agency and the Oversight Board by October 1, 2012. Penalties for Failure to Make Timely Submission If the Successor Agency does not submit an Oversight Board-approved ROPS by September 1, 2012, the City of Palm Desert will be subject to a civil penalty of$10,000 per day for every day that the ROPS is not submitted to the DOF. The penalty is to be paid to the County Auditor-Controller for distribution to the taxing entities. If the Successor Agency does not timely submit a ROPS, creditors of the successor agency, the DOF, and affected taxing entities may request a writ of mandate to require the Successor Agency to immediately perform this duty. Additionally, if the Successor Agency does not submit a ROPS within 10 days of September 1st, the Successor Agency's administrative cost allowance for that period will be reduced by 25 percent. If the Successor Agency fails to submit an Oversight Board-approved ROPS to the DOF within five business days of "the date upon which the ROPS is to be used to determine the amount of property tax allocations", the DOF inay determine whether the County Auditor-Controller should distribute any of property tax revenues to the taxing entities, or whether any amount should be withheld for enforceable obligations pending approval of the ROPS. It is not clear what is "the date upon which the ROPS is to be used to determine the amount of property tax allocations." Staff recommends that the Oversight Board for the Successor Agency to the Palm Desert Redevelopment Agency adopt Resolution No. oB - oo� , approving the Recognized G:Vda\Veronica Tapia\Word Filesl0versight Board\Staff RepoRs\Staff Report-ROPS3.doc Staff Report—Oversight Board Approval of ROPS3 xes. No. oB - 007 Page2of2 August 20, 2012 Obligation Payment Schedule for the six-month fiscal period from January 1, 2013 through June 30, 2013 and taking certain related actions. FISCAL IMPACT The preparation and submittal of ROPS3 is for the purpose of allowing the Successor Agency to pay its enforceable obligations for the period from January 1, 2013 to June 30, 2013. Submitted by: -:�.�,�'��% �� J �t�-�--�� .� ��t-o �- �BY OVE1tSIGHT BOARD .�a t M. Moore, Director of Housing �N ��,�_ �i�....� Appro aL VERIFIED BY_. Original on file with City Clerk's Of�'ice aul S. Gibson, Director of Finance J hn M. Wohlmuth, Executive Director G:\rda\Veronica Tapia\Word Files\Oversight Board\Staff Reports\Staff Report-ROPS3.doc RESOLUTION NO. OB - 007 A RESOLUTION OF THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY APPROVING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE SIX-MONTH FISCAL PERIOD FROM JANUARY 1, 2013 THROUGH JUNE 30, 2013, AND TAKING CERTAIN RELATED ACTIONS RECITALS: A. Pursuant to Health and Safety Code Sec#ion 34177(I), the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency") must prepare a proposed Recognized Obligation Payment Schedule ("ROPS") before each six-month fiscal period (commencing each January 1 and July 1) and submit each proposed ROPS to the oversight board for the Successor Agency (the "Oversight Board") for approval. B. Pursuant to Health and Safety Code Section 34177(I)(2)(C) and (m), the Successor Agency must (1) submit the Oversight Board-approved ROPS for the six- month fiscal period from January 1, 2013 through June 30, 2013 ("ROPS3"), to the DOF, the Office of the State Controller, and the County Auditor-Controller no later than September 1, 2012; and (2) post a copy of the Oversight Board-approved ROPS3 on the Successor Agency's website. NOW, THEREFORE, THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby approves proposed ROPS3, substantially in the form attached hereto as Exhibit A. Staff of the Successor Agency is hereby authorized and directed to submit a copy of Oversight Board-approved ROPS3 to the DOF, the Office of the State Controller, and the County Auditor-Controller and to post a copy of the Oversight Board-approved ROPS3 on the Successor Agency's Internet website (being a page on the Internet website of the City of Palm Desert). Section 3. The Oversight Board hereby designates John M. Wohlmuth, as the official designated to whom DOF inay make a request for review in connection with actions taken by the Oversight Board. Section 4. The officers of the Oversight Board and the staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution, including requesting additional review by the DOF and an opportunity to meet and G:\rda\Veronica Tapia\Word Files\Oversight Board\Staff RepoRs\OB Resolution Approving ROPS 3.DOCX RESOLUTION N0. OB - 007 confer on any disputed items, and any such actions previously taken by such officers and staff are hereby ratified and confirmed. PASSED, APPROVED AND ADOPTED this 20th day of August, 2012. AYES: NOES: ABSENT: ABSTAI N: ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY 2 G:Vda\Veronica Tapia\Word Files\Oversight Board�Staff Reports\OB Resolution Approving ROPS 3.DOCX RESOLUTION N0. 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O c0 � O f�D D a .� y C V C1 � — tD W O m � N N � (D t� Z N W W N � `Y C N v �. a, � m D �, � a W fD V A cN0 �. � � Q fD O) O �7 m W � O OD A W tC N O OD N W -+ V (�O 01 A O Cn 01 t0 � � A 00 W O) A OD V O�D N A O O�0 O :�T '� � � 'T'I N Q A � V N O c0 — W W V � O O A A O O N � N 01 O � W N (� ? fD , � C N Res. No. OB - 008 OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: ADOPT RESOLUTION NO. OB - o0s APPROVING THE ADMINISTRATIVE BUDGET FOR THE THIRD SIX-MONTH PERIOD PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 FOR THE PERIOD OF JANUARY 1, 2013 THROUGH JUNE 30, 2013 SUBMITTED BY: Janet M. Moore, Director of Housing DATE: August 20, 2012 CONTENTS: Resolution OB - oos Proposed Administrative Budget (1/1/13— 6/30/13) Recommendation By Minute Motion that the Oversight Board adopt Resolution OB - 008 approving the Administrative Budget for the third six-month period of January 1, 2013 through June 30, 2013. Executive Summary Pursuant to AB X1 26 and AB 1484, the Successor Agency must prepare a proposed administrative budget and a Recognized Obligation Payment Schedule ("ROPS") for each six- month fiscal period, both of which must be submitted to the Oversight Board for approval. Backqround Pursuant to AB X1 26 and AB 1484, the Successor Agency's proposed administrative budget for each six-month period must include all of the following: (1) estimated amounts for Successor Agency administrative costs for the applicable six-month fiscal period; (2) proposed sources of payment for the administrative costs; and (3) proposals for arrangements for administrative and operations services provided by the City or other entity. AB X1 26 and AB 1484 are unclear regarding the required timing for the submission of the proposed administrative budget for the period from January 1, 2013 through June 30, 2013 (i.e., the second half of fiscal year 2012-13) ("Administrative Budget No. 3") to the Oversight Board. However, because the Successor's Agency's administrative expenditures also have to be reflected on the ROPS, Administrative Budget No. 3 and the ROPS for the same period ("ROPS3") are presented concurrently. The Successor Agency is required to submit the ROPS3 to the Oversight Board for approval and then submit the Oversight Board-approved ROPS3 to the State Department of Finance, State Controller and the County Auditor-Controller no later than September 1, 2012. Staff has G:\rda\Veronica Tapia\Word Files\Oversight Board\Staff Reports\Staff RepoR-Admin Budgel 3.doc Staff Report—Oversight Board Approval of Administrative Budget No. 3 xes. rro. oB - 008 Page2of2 , August 20, 2012 prepared a ROPS3 for the Oversight Board's approval at this meeting as a separate agenda item. Staff recommends that the Board adopt Resolution No. OB-008 approving the Administrative Budget No. 3 for the six-month fiscal period from January 1, 2013 through June 30, 2013. FISCAL IMPACT Under AB X1 26 and AB 1484, an "Administrative Cost Allowance" is paid to the Successor Agency from property tax revenues allocated by the County Auditor-Controller. The Administrative Cost Allowance is defined as an amount, subject to the approval of the Oversight Board, which is up to 3% of the property tax allocated for enforceable obligations from the Redevelopment Property Tax Trust Fund by the County Auditor-Controller. The amount shall not be less than $250,000 for any fiscal year unless the Oversight Board reduces this amount. The calculation of the Administrative Cost Allowance for the six-month period of January 1, 2013 through June 30, 2013 will take into account any adjustments necessary for the previous six-month administrative allowance period. In addition, the Administrative cost Allowance is subject to reduction if there are insufficient funds to pay the enforceable obligations as listed on the ROPS. Submitted by: ,�By p��GHT BOARD � �� ON nS?- �' — �,p j�--� �la t M. Moore, Director of Housing ��FIED B Orig�nal on file with City Clerk's Office Appro I: Paul S. Gibson, Director of Finance ! ,� -, ! C J n M. Wohlmuth, Executive Director G:\rda\Veronica Tapia\Word Files\Oversight Board\Staff RepoRs\Staff Report-Admin Budget 3.doc RESOLUTION NO. OB - 008 A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY APPROVING A PROPOSED ADMINISTRATIVE BUDGET FOR THE SIX-MONTH FISCAL PERIOD FROM JANUARY 1, 2013 THROUGH JUNE 30, 2013 AND TAKING CERTAIN RELATED ACTIONS RECITALS: A. Pursuant to Health and Safety Code Section 34177(j), the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency") must prepare a proposed administrative budget for each six-month fiscal period (commencing each January 1 and July 1) and submit each proposed administrative budget to the oversight board for the Successor Agency (the "Oversight Board") for approval. B. A proposed administrative budget for the Successor Agency for the six- month fiscal period from January 1, 2013 through June 30, 2013 ("Administrative Budget No. 3") has been presented to this Board for approval, and is attached hereto as Exhibit A. NOW, THEREFORE, THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby approves the proposed Administrative Budget No. 3 substantially in the form attached hereto as Exhibit A. Section 3. The officers of the Oversight Board and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution. G:Uda\Veronica Tapia\Word Files\Oversight Board\StatFReports\OB Resolution Approving Administrative Budget 3.DOCX RESOLUTION N0. OB - 008 PASSED, APPROVED AND ADOPTED this 20th day of August, 2012. AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY G:Uda\Veronica Tapia\Word Files\Oversight Board\Staff Reports\OB Resolu[ion Approving Adminis[rative Budget 3.DOCX RESOLUTION N0. OB - 008 EXHIBIT A SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY ADMINISTRATIVE BUDGET (January 1, 2013 through June 30, 2013) � G:trda\Veronica Tapia\Word Fiies\Oversight Board\Staff Reports\OB Resolution Approving Administrative Budget 3.DOCX RESOLUTION N0. OB - 008 Successor Agency to the Palm Desert Redevelopment Agency January 1, 2013 through June 30, 2013 BASED ESTIMATED RPTTF DEPOSIT Jan 1 -Jun 30, 2012 Estimated @ 3% Administrative Cost Allowance 617,691 ROPS3 Budget Source of ADMINISTRATIVE COSTS Jan 1 -Jun 30, 2012 Payment Auditing Service 10,282 A Bank Fees 14,423 A Consulting Services 64,095 A Facilities Lease 31,998 A Legal Services 81,020 A Personnel Expendituresl 415,873 Z A, B Total Administrative Costs 617,691 A -Administrative Allowance, 8- City General Fund 1 Includes salaries, tcaining, travel, meetings, supplies, etc. zCity staff time reimbursement costs in excess of SARDA allowable administrative costs (as adjusted per Department of Finance) will be borne by the City's General Fund. 8/6/2012 3:26 PM Proposed Administrative Budget-June 30,2012 RESOLUTION NO. OB - 009 A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, APPROVING A MEETING SCHEDULE FOR THE MONTHS OF SEPTEMBER 2012 AND OCTOBER 2012 RECITALS: A. Pursuant to Health and Safety Code Section 34179(3), all actions taken by the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency (the "Oversight Board") shall be adopted by resolution. B. There has been presented to this Oversight Board for approval its meeting schedule for the months of September 2012 and October 2012. NOW,THEREFORE,THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES,RESOLVES,AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby approves the following meeting schedule for the months of September 2012 and October 2012: 1) ; 2) ; 3) Section 3. The staff of the Successor Agency is hereby directed to provide the State Department of Finance ("DOF") written notice and information regarding the action taken by the Oversight Board in Section 2 of this Resolution. Such notice and information shall be provided by electronic means and in a manner of DOF's choosing. Section 4. The officers of the Oversight Board and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things that they may deem necessary or advisable to effectuate this Resolution. PASSED, APPROVED, AND ADOPTED this day of , 20 AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: ��L�a1 ,�„ (��_ � , � Ealfr� BY Z/ERSI �T BOARD ON�g-'��.��-E�12--�, VERIFIED BY Os��-, RACHELLE D. 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