HomeMy WebLinkAboutRes OB-029 (2)OVERSIGHT BOARD TO THE SUCCESSOR AGENCY TO THE
PALM DESERT REDEVELOPMENT AGENCY
REQUEST:
SUBMITTED BY:
DATE:
CONTENTS:
Recommendation
STAFF REPORT
RECEIVE AND FILE DEPARTMENT OF FINANCE
DETERMINATION LETTER RELATIVE TO THE DUE DILIGENCE
REVIEW FOR THE LOW AND MODERATE INCOME HOUSING
FUND IN ACCORDANCE WITH HEALTH AND SAFETY CODE
SECTION 34179.5
Veronica Tapia, Accountant II
ON
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rvt-rFt; SIGHT ARD
January 7, 2013 VERIFIED BY sSs
Resolution No. OB- 029
Otiginal on file with City Clerk's Office' -�
11/9/12 Letter from Department of Finance
Request for Meet and Confer
12/15/12 Letter from Department of Finance
12/20/12 Dispute Letter of Remittance
That the Oversight Board approve Resolution No. OB-029receiving and filing
the Department of Finance Letter of Determination relative to the Due
Diligence Review ("DDR") for the Low and Moderate Income Housing
Fund ("LMIHF") pursuant to Health and Safety Code Section 34179.5.
Executive Summary
The Oversight Board held a meeting on October 8, 2012 to approve the Due Diligence
Review ("DDR") for the Low and Moderate Income Housing Fund ("LMIHF") as required
by AB 1484. At that same meeting the Oversight Board ordered the transmittal of the
DDR to the Department of Finance ("DOF") and the County Auditor -Controller ("CAC")
by October 15, 2012. The DDR for the LMIHF determined there to be no cash or cash
equivalents available for disbursement to the taxing entities. The DOF objected to the
findings of the DDR and demanded the amount of cash on hand be remitted to the CAC
immediately. Following a Meet and Confer Session, on December 15, 2012 the DOF
issued a letter maintaining their original position, declared the determination to be final,
and demanded that the amount of cash on hand be remitted within five days or be
subject to the penalties described therein.
Discussion
Staff Report
Receive and file DOF Final Determination relative to LMIHF DDR
January 7, 2013
Pursuant to Health and Safety Code Section 34179.5, each successor agency must
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 taxing entities.
White Nelson Diehl Evans LLP, Certified Public Accountants and Consultants were
retained by the Successor Agency to conduct the DDR.
Pursuant to Health and Safety Code Section 34179.6 the Oversight Board held the
required public comment sessions and approved the DDR for the LMIHF, as well as its
transmittal to the appropriate agencies on October 8, 2012. The DDR determined there
to be no funds available for transfer to the taxing entities.
On November 9, 2012 the DOF issued a letter of determination based on the DDR
submitted for the LMIHF stating their opposition to the retention of cash on hand and
requested the amount available of $12,874,855 as determined by the DDR, be remitted
to the CAC immediately. Staff disagreed with the determination and immediately
requested a Meet and Confer Session with the DOF to discuss the items that were
noted as the reason for their objection.
On December 6, 2012 staff, along with Agency Counsel, attended a Meet and Confer
Session with the DOF via teleconference. The items that were noted in DOF's
determination letter were discussed in more detail. DOF agreed that the items were
determined to be "enforceable obligations" and communicated that their determination
would be forth coming.
On December 15, 2012, the DOF issued their final determination on the DDR for the
LMIHF stating that they maintained their position relative to the disputed items, and that
the cash on hand should be immediately remitted to the CAC for distribution to the
taxing entities or certain consequences would be imposed including "criminal penalties".
As a result, the amount was remitted to the CAC on December 19, 2012 along with a
letter disputing the transfer of funds.
The remittance of $12,874,855 to the Riverside County Auditor -Controller will negatively
impact the Agency's ability to timely comply with its enforceable obligations since there
is no other funding source identified for these enforceable obligations at this time.
b ► ted by:
, Accounta II
ul Gibson, Director of Finance
Wohlmuth, Executive Director
Moore, Director of Housing
\rda\Veronica Tapia\Word Files\Oversight Board \Staff Reports\OB SR for RECEIVING DOF Determination re LMIHF DDR 1-7-13.docx2
RESOLUTION NO. OB - 029
A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR
AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY
ACKNOWLEDGING THE RECEIPT OF THE REVIEW OF THE LOW AND
MODERATE INCOME HOUSING FUND CONDUCTED PURSUANT TO
HEALTH AND SAFETY CODE SECTION 34179.5
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
(the "Oversight Board") shall be adopted by resolution.
B. There has been presented to this Oversight Board the Final Determination as
provided by the Department of Finance relative to the Due Diligence Review for the Low
Mod Income Housing Fund pursuant to Health and Safety Code Section 34179.5.
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 receives and files the Final Determination
as provided by the Department of Finance relative to the Due Diligence Review for the Low
Mod Income Housing Fund pursuant to Health and Safety Code Section 34179.5.
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.
PASSED, APPROVED AND ADOPTED this 7th day of January, 2013.
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
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DEPARTMENT OF
FINANCE
November 9, 2012
Ms. Veronica Tapia, Accountant 11
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
EDMUND G. BROWN JR. • GOVERNOR
915 L STREETS SACRAMENTO CAS 95814.370d • WWW.00R.CA.GOV
Dear Ms. Tapia:
Subject: Low and Moderate income Housing Fund Due Diligence Review
Pursuant to Health and Safety Code (HSC) section 34179.6 (c), the City of Palm Desert
Successor Agency (Agency) submitted an oversight board approved Low and Moderate Income
Housing Fund Due Diligence Review (DDR) to the California Department of Finance (Finance)
on October 9, 2012. The purpose of the review was to determine the amount of cash and cash
equivalents available for distribution to the affected taxing entities. Pursuant to HSC section
34179.6 (d), Finance has completed its review of your DDR, which may have included obtaining
clarification for various items.
HSC section 34179.6 (d) authorizes Finance to adjust the DDR's stated balance of Low and
Moderate Income Housing Fund (LMIHF) available for distribution to the taxing entities. Based
on our review of your DDR, the following adjustments were made:
Balances legally restricted for funding obligations in the amount of $12.9 million. Our review
indicates both obligations were funded with RPTTF on prior Recognized Obligation Payment
Schedule review; therefore, the amount has been adjusted by $12.9million.
If you disagree with Finance's adjusted amount of LMIHF balances available for distribution to
the taxing entities, you may request a Meet and Confer within five business days of the date of
this letter. The Meet and Confer process and guidelines are available at Finance's website
below:
htto://www.dof.ca.00v/redevelopmentlmeet and confer/
The Agency's LMIHF balance available for distribution to the affected taxing entities is
$12.9 million (see table below). Pursuant to HSC 34179.6 (h) (1) (B), any remittance related to
unallowable transfers to a private party may also be subject to a 10 percent penalty if not
remitted within 60 days.
Ms. Veronica Tapia
November 9, 2012
Page 2
LMIHF Balances Available For Distribution To Taxing Entities
Available Balance per DDR: $0
Finance Adjustments
Add: Requested retained balance not supported in Procedure 8 12,874,855
Total LMIHF available to be distributed: $ 12,874,855
Absent a Meet and Confer request, HSC section 34179.6 (f) requires successor agencies to
transmit to the county auditor -controller the amount of funds identified in the above table within
five working days, plus any interest those sums accumulated while in the possession of the
recipient.
If funds identified for transmission are in the possession of the successor agency, and if the
successor agency is operated by the city or county that created the former redevelopment
agency, then failure to transmit the identified funds may result in offsets to the city's or the
county's sales and use tax allocation, as well as its property tax allocation. If funds identified for
transmission are in the possession of another taxing entity, that taxing entity's failure to remit
those funds may result in offsets to its sales and use tax allocation or to its property tax
allocation.
Failure to transmit the identified funds will also prevent the Agency from being able to receive a
finding of completion from Finance. Without a finding of completion, the Agency will be unable
to take advantage of the provisions detailed in HSC section 34191.4. Specifically, these
provisions allow certain loan agreements between the former redevelopment agency (RDA) and
the city, county, or city and county that created the RDA to be considered enforceable
obligations. These provisions also allow certain bond proceeds to be used for the purposes in
which they were sold and allows for the transfer of real property and interests into the
Community Redevelopment Property Trust Fund once Finance approves the Agency's long-
range property management plan.
In addition to the consequences above, willful failure to return assets that were deemed an
unallowable transfer or failure to remit the funds identified above could expose certain
individuals to criminal penalties under existing law.
Pursuant to HSC section 34167.5 and 34178.8, the California State Controller's Office
(Controller) has the authority to claw back assets that were inappropriately transferred to the
city, county, or any other public agency. Determinations outlined in this letter and Finance's
Housing Assets Transfer letter dated August 31, 2012 do not in any way eliminate the
Controller's authority.
Ms. Veronica Tapia
November 9, 2012
Page 3
Please direct inquiries to Beliz Chappuie, Supervisor or Mindy Patterson, Lead Analyst at
(916) 445-1546.
Sincerely,
PLf
STEVE SZALAY
Local Government Consultant
cc: Ms. Janet Moore, Director of Housing, City of Palm Desert
Ms. Pam Elias, Chief Accounting Property Tax Division, County of Riverside
Auditor -Controller
MEET AND CONFER REQUEST FORM
Instructions: Please fill out this form in its entirety to initiate a Meet and Confer session. Additional supporting
documents may be included with the submittal of this form —as justification for the disputed item(s). Upon
completion, email a PDF version of this document (including any attachments) to:
Redevelopment_Administration@dof.ca.gov
The subject line should state "[Agency Name] Request to Meet and Confer". Upon receipt and determination
that the request is valid and complete, the Department of Finance (Finance) will contact the requesting agency
within ten business days to schedule a date and time for the Meet and Confer session.
To be valid, all Meet and Confer requests must be specifically related to a determination made by Finance and
submitted within the required statutory time frame. The requirements are as follows:
• Housing Asset Transfer Meet and Confer requests must be made within five business days of the date
of Finance's determination letter per HSC Section 34176 (a) (2).
• Due Diligence Review Meet and Confer requests must be made within five business days of the date of
Finance's determination letter, and no later than November 16, 2012 for the Low and Moderate Income
Housing Fund due diligence review per HSC Section 34179.6 (e).
• Recognized Obligation Payment Schedule (ROPS) Meet and Confer requests must be made within
five business days of the date of Finance's determination letter per HSC Section 34177 (m).
Agencies should become familiar with the Meet and Confer Guidelines located on Finance's website. Failure to
follow these guidelines could result in termination of the Meet and Confer session. Questions related to the
Meet and Confer process should be directed to Finance's Dispute Resolution Coordinator at (916) 445-1546 or
by email to Redevelopment_Administration@dof.ca.gov.
AGENCY (SELECT ONE):
® Successor Agency ❑ Housing Entity
AGENCY NAME: SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY
TYPE OF MEET AND CONFER REQUESTED (SELECT ONE):
❑ Housing Assets Transfers ® Due Diligence Reviews ❑ ROPS Period
DATE OF FINANCE'S DETERMINATION LETTER: November 9, 2012
REQUESTED FORMAT OF MEET AND CONFER SESSION (SELECT ONE):
❑ Meeting at Finance
® Conference Call
Page 1 of 3
DETAIL OF REQUEST
A. Summary of Disputed Issue(s) (Must be specific.)
DOF's letter states that "...Our review indicates both obligations were funded with RPTTF on prior Recognized
Obligation Payment Schedule review; therefore, the amount has been adjusted by $12.9 million."
Section 8B of the DDR for Palm Desert identifies two enforceable obligations that the $12.9 million current balance was
reserved for:
1) The Stipulation (Case No. Indio 51124) did appear on previous ROPS. However, it is an ongoing obligation and
only the amounts payable in the applicable six-month period were included in the previous ROPS. Only the amounts listed
on prior ROPS have been paid from the RPTTF; and
2) The Settlement and Release Agreement dated February 27, 2009 between the City of Palm Desert, the Palm Desert
Redevelopment Agency, and IS Palm Desert was also reported on a previous ROPS. However, there are two components
to the obligation, a monthly payment as well as a one-time $5,000,000 financing obligation that must be paid upon the park
owner completing the subdivision. The monthly obligations are listed on previous and current ROPS, and the $5,000,000 is
listed under "Total Outstanding Debt or Obligation" column on each ROPS. However, no prior RPTTF has been allocated
for the financing component.
B. Background/History (Provide relevant background/history, if applicable.)
Item No. 1 above: On May 15, 1991, the Riverside County Superior Court entered a final judgment incorporating a
Stipulation for Entry of Judgment, among the Palm Desert Redevelopment Agency, the Western Center on Law and
Poverty, Inc. and California Rural Legal Assistance in connection with City of Palm Desert v. All Persons Interested (Case
No. Indio 51143). On June 18, 1997 and on September 20, 2002, the Riverside County Superior Court entered
amendments to the Judgment, incorporating certain amendments to the Stipulation. The Stipulation, as amended, requires
the Palm Desert Redevelopment Agency to use at least 20% of its tax increment, if necessary, to develop, rehabilitate or
otherwise financially assist a certain number of affordable housing units and to meet certain affordable housing needs of the
City.
Item No. 2 above: On February 27, 2009 a Settlement and Release Agreement was entered into among the City of
Palm Desert, the Palm Desert Redevelopment Agency and IS Palm Desert which obligates the Agency to provide
assistance to very low and low income households with financing for the acquisition of their respective lots within a
mobilehome development that is being subdivided by the owner. While the subdivision process is ongoing, the requirement
for the financing exists now and will be required within a limited time frame when the process is complete.
C. Justification (Provide additional attachments to this form, as necessary.)
1) Stipulation (Case No. Indio 51124). This enforceable obligation does appear on prior ROPS. However, this is an
ongoing obligation that will appear on future ROPS based on the corresponding six-month projections. The enforceable
obligation is not adequately funded, and based on our cash flow projections, the potential payment obligation exceeds twice
the amount of anticipated and available revenues. Prior RPTTF allocations have been used to fund the obligations noted
on each ROPS and have not funded shortfalls expected during future ROPS periods.
2) Settlement and Release Agreement. This existing enforceable obligation does appear on prior ROPS. However, the
"Total Outstanding Debt or Obligation" column includes 2 components, a.) the monthly payments required by the
Agreement and b.) the $5,000,000 financing obligation. Previous ROPS only show the monthly required payments. The
financing component (Section 4, Page 6 of the Settlement and Release Agreement) is to be paid by the Agency to assist
very low and low income households with financing for the acquisition of their respective lots within a mobilehome
development that is being subdivided by the owner. The subdivision process is still in its organizational stages. However,
once the process is complete the financing component ($5,000,000) will be required to be paid within a specified time -
frame. The amount is being reserved from cash on hand as there is no funding for the existing obligation given the limited
time -frame for the assistance once the subdivision process is complete.
Page 2 of 3
Agency Contact Information
Name: VERONICA TAPIA Name: JANET MOORE
Title: ACCT Title: DIRECTOR OF HOUSING
Phone: 760.346.0611 Phone: 760.346.0611
Email: vtapia@cityofpalmdesert.org Email: jmoore@cityofpalmdesert.org
Date: 11/15/12 Date: 11/15/12
Deoartrnent of Finance ioeal Govremmont Unit=Use Only
REQUEST TO MEET AND CONFER DATE: ❑ APPROVED Q DENIED
REQUEST APPROVED/DENIED BY: DATE:
MEET AND CONFER DATE/TIME/LOCATION:
MEET AND CONFER SESSION CONFIRMED: Q YES DATE CONFIRMED:
DENIAL NOTICE PROVIDED: f YES DATE AGENCY NOTIFIED:
Form DF-MC (Revised 9/10/12)
Page 3 of 3
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DEPARTMENT OF
e4,,.,,Rs% F I N A N C E
December 15, 2012
Ms. Veronica Tapia, Accountant II
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
Dear Ms. Tapia:
EDMUND G. BROWN JR. - GOVERNOR
915 L STREET ■ 9ACRAMENTO CA ■ 95814-3706 WWW.DOF.CA.00V
Subject: Low and Moderate Income Housing Fund Due Diligence Review
This letter supersedes Finance's original Low and Moderate Income Housing Fund (LMIHF) Due
Diligence Review (DDR) determination letter dated November 9, 2012. Pursuant to Health and
Safety Code (HSC) section 34179.6 (c), the City of Palm Desert Successor Agency (Agency)
submitted an oversight board approved LMIHF DDR to the California Department of Finance
(Finance) on October 9, 2012. Finance issued a LMIHF DDR determination letter on
November 9, 2012. Subsequently, the Agency requested a Meet and Confer session on one or
more items adjusted by Finance. The Meet and Confer Session was held on December.6, 2012.
Based on a review of additional or clarifying information provided to Finance during the Meet
and Confer process, Finance continues to believe the adjustments made to the DDR's stated
balance of LMIHF available for distribution to the taxing entities is appropriate. HSC section
34179.6 (d) authorizes Finance to make these adjustments. We maintain the adjustments
continue to be necessary for the following reasons:
Balances retained for funding enforceable obligations in the amount of $12,874,855.
Agency contends the retention of $12,874,855 for two enforceable obligations related to
the Indian Springs Stipulation and the Settlement and Release Agreement is necessary.
However, the Agency has been requesting and receiving Redevelopment Property Tax
Trust Fund (RPTTF) for these projects on the Recognized Obligation Payment
Schedules for monthly obligations and reserves for housing rehabilitation, repair and
renovation assistance. Furthermore, $5 million was transferred to the housing
successor agency to provide loan assistance to low-income residents pursuant to this
agreement. Per HSC section 34176 (a) (1), if a city or county elects to retain the
authority to perform housing functions previously performed by a redevelopment agency,
all rights, powers, duties, obligations, and housing assets shall be transferred to that city
or county. Therefore, Agency's request to retain $12,874,855 is not allowed.
The Agency's LMIHF balance available for distribution to the affected taxing entities continues
to be $12,874,855.
This is Finance's final determination of the LMIHF balances available for distribution to the
taxing entities. HSC section 34179.6 (f) requires successor agencies to transmit to the county
Ms. Veronica Tapia
December 15, 2012
Page 2
auditor -controller the amount of funds identified in the above table within five working days, plus
any interest those sums accumulated while in the possession of the recipient.
If funds identified for transmission are in the possession of the successor agency, and if the
successor agency is operated by the city or county that created the former redevelopment
agency, then failure to transmit the identified funds may result in offsets to the city's or the
county's sales and use tax allocation, as well as its property tax allocation. If funds identified for
transmission are in the possession of another taxing entity, the successor agency is required to
take diligent efforts to recover such funds. A failure to recover and remit those funds may result
in offsets to the other taxing entity's sales and use tax allocation or to its property tax allocation.
If funds identified for transmission are in the possession of a private entity, HSC 34179.6 (h) (1)
(B) states that any remittance related to unallowable transfers to a private party may also be
subject to a 10 percent penalty if not remitted within 60 days.
Failure to transmit the identified funds will also prevent the Agency from being able to receive a
finding of completion from Finance. Without a finding of completion, the Agency will be unable
to take advantage of the provisions detailed in HSC section 34191.4. Specifically, these
provisions allow certain loan agreements between the former redevelopment agency (RDA) and
the city, county, or city and county that created the RDA to be considered enforceable
obligations. These provisions also allow certain bond proceeds to be used for the purposes in
which they were sold and allows for the transfer of real property and interests into the
Community Redevelopment Property Trust Fund once Finance approves the Agency's long-
range property management plan.
In addition to the consequences above, willful failure to return assets that were deemed an
unallowable transfer or failure to remit the funds identified above could expose certain
individuals to criminal penalties under existing law.
Pursuant to HSC section 34167.5 and 34178.8, the California State Controller's Office
(Controller) has the authority to claw back assets that were inappropriately transferred to the
city, county, or any other public agency. Determinations outlined in this letter and Finance's
Housing Assets Transfer letter dated August 31, 2012 do not in any way eliminate the
Controller's authority.
Please direct inquiries to Beliz Chappuie, Supervisor or Mindy Patterson, Lead Analyst at
(916) 445-1546.
Sincerely,
77
STEVE SZALAY
Local Government Consultant
cc: Ms. Janet Moore, Director of Housing, City of Palm Desert
Ms. Pam Elias, Chief Accounting Property Tax Division, County of Riverside
Auditor -Controller
California State Controller's Office
THE SUCCESSOR AGENCY TO THE
December 20, 2012
Mr. Steve Szalay
Local Government Consultant
Department of Finance
State of California
915 L Street
Sacramento, California 95814
rD[ O[SERT REO[V[LOPffi[NJ AGENCY
73-510 FRED WARING DRIVE
PALM DESERT, CALIFORNIA 92260-2578
TEL:760 346-0611
FAX: 760 34i-6372
nfo@palm-dcscrt.org
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
7010 0290 0003 3915 8738
& VIA EMAIL redevelopment_administration@dof.ca.gov
Re: Notice of Remittance of LMIHF Balance and Dispute of such Remittance
Dear Mr. Szalay:
On November 9, 2012 the Department of Finance (DOF) issued a determination letter on Palm Desert's
Low and Moderate Income Housing Fund (LMIHF) Due Diligence Review (DDR). The Successor Agency
to the Palm Desert Redevelopment Agency (SARDA) disagreed with the DOF's determination and
requested a Meet and Confer session which was held on December 6, 2012. Information was presented
during the Meet and Confer to clarify the statements in the DOF's determination letter regarding the
balances that SARDA believed to be legally restricted for enforceable obligations in the aggregate amount
of $12,874,855.
There were two main issues related to the DOF's determination letter: 1) the Stipulated Judgment (Case
No. Indio 51124) ("Item No. 1"), and 2) the 2009 Settlement and Release Agreement entered into by the
City of Palm Desert, the Palm Desert Redevelopment Agency and IS Palm Desert ("Item No. 2"). Both Item
Nos. 1 and 2 are enforceable obligations of the former redevelopment agency and were on previous ROPS.
In the Meet and Confer request under item C. Justification, City staff explained with respect to Item No. 1:
(i) it is an ongoing enforceable obligation that will appear on future ROPS, (ii) this obligation is not
adequately funded, and (iii) allocations from prior ROPS have been used only to meet the requirements of
the six-month period covered by the ROPS, and not to fund shortfalls expected during future ROPS
periods. City staff explained with respect to Item No. 2: (i) this obligation includes a monthly payment
obligation component and a $5,000,000 financing obligation, (ii) previous ROPS only show the monthly
required payments, and (iii) the $5,000,000 component will be required to be paid within a specified time
frame once the subdivision process for the mobile home development is completed, and existing funds
need to be reserved so that this obligation can be timely paid when due.
By letter dated December 15, 2012, the City of Palm Desert was notified that the DOF reviewed the
additional clarifying information submitted with the request to Meet and Confer and presented at the Meet
and Confer session, and the DOF confirmed its belief that the DOF's previous adjustments were
appropriate. In the letter, which indicates it is a 'final determination' by the DOF, it states that "...the Agency
has been requesting and receiving RPTTF for these projects on the Recognized Obligation Payment
Schedule..." and further states that the "...$5 million was transferred to the housing successor agency to
provide loan assistance to low-income residents pursuant to this agreement..."
,,,N1ED aN uaalo run
Mr. Steve Szalay, Local Government Consultant
December 20, 2012
Page 2
As set forth above and in the Meet and Confer Justification, the fact that SARDA received RPTTF through
prior ROPS does not negate the need to retain the $12,874,855 on hand so that SARDA can address
expected shortfall and timing issues with respect to Item Nos. 1 and 2. In addition, SARDA disagrees that
$5,000,000 was transferred to the housing successor. SARDA notes that it included $5,000,000 on the
Housing Assets List. However, this amount was not actually transferred to the housing successor pursuant
to the Housing Assets List. Instead, the inclusion of this amount on the Housing Assets List represented
SARDA's expectation that the $5,000,000 would be retained in order to allow the timely payment of the
obligation specified in Item No. 2. The $5,000,000 obligation has not previously been paid nor have
moneys been transferred to the housing successor to make this payment.
In summary, the remittance of $12,874,855 to the Riverside County Auditor -Controller will negatively impact
SARDA's ability to timely comply with its enforceable obligations since there is no other funding source
identified for either of these obligations at this time.
The City has remitted the amount of $12,874,855, as directed by the DOF, to the Riverside County Auditor -
Controller's on December 19, 2012 by wire transfer to Account No. 2740018593 ABA 122000496. The
County has confirmed receipt of the wire. Such remittance has been made under protest and without
waiver of any legal rights or remedies that SARDA has or may have to challenge the DOF's legal right to
direct such payment or the amount of the payment. Further, the remitted sum does not include an interest
component as SARDA finds no statutory requirement for the payment of interest. If the DOF continues to
demand the payment of interest, please provide statutory authority and the method for calculating the
amount of such interest.
If you have any questions or need additional documentation, please contact Janet Moore at extension 327.
John Wohlmuth
City Manager/Executive Director
Enclosures: as noted
JW:jmm
cc: Beliz Chappuie, Supervisor
Mindy Patterson, Lead Analyst
Paul Angulo, County Auditor -Controller
Pam Elias, Chief Accountant, Riverside County Property Tax Division
Jay Orr, County Administrative Officer
John Chiang, State Controller's Office
Paul S. Gibson, Director of Finance
Janet M. Moore, Director of Housing
Veronica Tapia, Accountant II
Oversight Board of the SARDA
SUCCESSOR AGENCY TO THE
PHA DESERT REDEVELOPMENT AGENCY
I2812-0001\I517510v2.doc Ci:\HOI1SINCii\PL\JMM-.1Wnhlmuth\LM1HF Disnute- Letter to DOF 12-20-12.dnc