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HomeMy WebLinkAbout05D Letters to RCOE-COD-PSUSDTHE SUCCESSOR AGENCY TO THE Pfll�l DESER� REDEVEIOP�IENI AGENCY 73-5�o FkEi� Wna��vG DRIVE PAI,M DESERT, CALIFORNIA 922fi0-2j]8 rFi.: �60 ;q6—o6�� F,�:760 34i-637z in fn( �palm-desert.org March 8, 2012 Riverside County Office of Education Teresa Hyden, Auditor Controller Division of Administration and Business Services 3939 Thirteenth Street PO Box 868 Riverside, CA 92502-0868 ��,� . � BY OVERSIGi-[T F,OARD c�tv �5 -'I - 2-ot2—� ��ERiFIED B Original on file with City Clerk's � ce Re: Your Letter Demand Dated January 30, 2012 for Alleged Detinquent Pre-AB X1 26 ("AB 26") Passthrough Payments of Tax Incrernent Revenues This letter responds to your letter to the Palm Desert Redevelopment Agency ("former agency") dated January 30, 2012 alieging that the former agency miscalculated and underpaid Riverside County Office of Education pre-AB 26 statutory passthrough payments and/or pre-AB 26 payments under a passthrough agreement, and asserting that the successor agency to the former agency is now responsible for this alleged obligation. Your effort to treat your alleged pre-AB 26 passthrough claim�s) as the responsibility of the successor agency is misplaced. As an initial matter, the duties oi successor entities under AB 26 are limited and do not include any obligation to taxing entities in connection with pre-AB 26 passthrough payment claims against a former redevelopment agency. A successor agency has a duty to pay the "enf�rceable obligakions" of a former agency. However, AB 26 specifical�y excludes passthrough payments from the definition of enforceable obligations. See Health & Safety Code §34171(d)(1)(D). Your claim for unpaid or underpaid pre-AB 26 passthrough payments is based entirely on the statutory scheme that existed prior to the enactment of AB 26. That statutory scheme has been eliminated with the scheme established in AB 26. "Whenever the Legislature eliminates a statutory remedy 'before a judgment becomes final,' the legislative act 'destroys the right of action."' Zipperer v. County of Sanfa Cruz, 133 Cal.App.4th 1013, 1024 (2005} (internal citations omitted). A statutory right or benefit that is not reduced io a final judgment is not a vested right, but is instead merely an 'inchoate, incomplete, and unperfected" right, which is subject to legislative abolition. Id. Through AB 26, the Legislature has effectively abolished the former tax increment revenue statutory scheme that gives rise to your claim(s), replacing it with the property tax revenue scheme established under AB 26, including Fiealth & Safety Gode §§ 34172, 34183, and 34188. Upon redevelopment agency dissolution, AS 26 deems all indebtedness of former agencies to be extinguished, exceot that indebtedness that is an enforceable oblicaation uncler A8 26 mav still be paid. See Heafth & Safety Code § 34174(a). However, as noted above, passthrough payments are excluded from enforceable obligations under AB 26. Although courts normally construe statutes to operate prospectively, ihe courts corcelatively hold that when a pending action or claim rests solely on a statutory basis, the withdrawal of that statutory right or remedy without a savings clause will terminate all pendina actions based on that statutory right or remedy. The justification for this rule is that all statutory remedies and benefits are pursued wifh the full realization that the Legislature may abolish the remedy or right at any time. Rialto Unified Schoot Disfrict •' v +ume ae nimm r+n� a former redevelopment agency related to passthrough payments, which are also excluded from . enforceabfe obligations recognized by AB 26. See Health & Safety Code § 34171(d)(1)(D). in addition, as noted above, the successor agency has no duty to taxing entities in connection with ciaims against the former redevefopment agency based on alleged unpaid or underpayment of pre-AB 26 passthrough payments, or with respect to payment of passthrough obligations on a go forvrard basis. The county auditor-controller is charged with the duties of conducting an audit to establish the former agency's assets and liabilities, and documenting and determining each former redevelopment agency's passthrough obligations to taxing agencies. See Health & Safety Code § 34172. The provisions of Health & Safety Code §§ 34183 and 34188 governing the county auditor-controller's distributions of property tax revenues to taxing agencies with property in the project area(s} ("affected taxing agencies") require the county auditor-controller to distribute property tax revenues and the proceeds of the sale of former agency assets to the affected taxing agencies in accordance with their property tax shares. These provisions do not contemplate a distribution to a particular taxing entity based on a pre-AB 26 claim of unpaid or underpaid passthrough payments. If, contrary to the position set forth in this letter, the county auditor-controller should determine that you have a cognizable claim in connection with pre-AB 26 passthrough obligations, any distribution of property tax revenues that recognizes that claim as enforceable would reduce the amounts to which other affected taxing entities are entitled under the plain language of sections 34183 and 34188. As a result, we are copying the Riverside County Auditor-Controller and the Oversight Board to the Successor Agency to the Palm Desert Redevelopment Agency (once convened), on this letter response, so that they are aware of your claim. The Oversight Board has a fiduciary duty to the affected taxing agencies and may wish to communicate with the County Auditor-Controller i� connection with your claim. To the extent that you intend your letter dated January 30, 2012 to Palm Desert Redevelopment Agency to serve as a claim under the California Government Tort Ctaims Act, it is being returned to you as untimely for the reasons set iorth above and because it was not presented within six months after the event or occurrence as required by law. See Section 901 and 911.2 oi the Government Code. Because the ctaim was not presented within the time allowed by law, no action was taken on the claim. Your only recourse at this time is to apply without delay to the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency, cfo Successor to the Palm Desert Redevelopment Agency, 73510 Fred Waring Drtve, Palm Desert, CA 92260 for leave to present a tate claim. See Sections 911.4 to 912.2, inclusive, and Section 946.6 of the Government Code_ Under some circumstances, leave to present a late claim will be granted. See Section 911.6 of the Government Code. You may seek advice of an attorney of your choice in connection with this matter. If you desire to consult an attorney, you should do so immediately. ly, John M. Wohlmuth Executive Director cc: Paul Angulo, CPA MA, Auditor-Controller, Riverside County Auditor-Controller, 4080 Lemon Street, 11th Floor, Riverside, CA 92502 Sl1CCESSOR AGENCY TO THE PflL�I �ESEH1 REQEVELOPMENi AGENCY -z- GbdalVeronita TapiaVWord Filesl$uccessor Agency43-7-72 bttar to RCOE re lale pasa through Uaimdorx � nin�ooumaFovwn RIVERSiDE COUNTY OiFlCE OF EDUCATION • . ��?%=:"�_.�'.�;�'�� 3439 ThirteeMh Street P.O. eox 868 Riverside, Califomia 92502•0868 (951)826-6530 January 30, 2012 Justin McCarthy Redevelopment Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Dese�t, CA 92260 47-336 Oasis Street paul Angulo, GPA, MA �ndio, Catifornia Auditof-COfttf011ef 92201-6998 {760) 863-33b3 Riverside County Auditor-Controller 4080 Lemon Street, 11th Floor Riverside, CA 92502 t �,� 1�"Y OVERS�GI �T Bt�.ARD �-��v.�.�-'l � � �� ��ERIFIED B _ .� Original on file with City Clerk's Office 24980 Las Brisas Road RE: Demand for Payment of Delinquent Tax Increment Revenues and for Murrieta, Caliiornia lnclusion in County Auditor-Controiler's Audit Pursuant to Health and 92562 Safety Code 34182 (951) 60D-5680 As you know, the California Supreme CouR recently upheid Assembly Bill ("A8") 1X 26, which orders the dissolution of all redevetopment agencies by February 1, 2012, inciuding the Palm Desert Redevelopment Agency ("RDA"). When the RDA dissolves, its existing obiigations, including its duty to make proper pass-through payments to the Riverside County O�ce of Education ("LEA"), will shift to a successor agency. Therefore, prior to the RDA's dissolution, we wish to notify you of the claims of Riverside County Office of Education ("LEA") as a result of the RDA's faiture to properly calculate and allocate pass-through payments. ' The LEA is party to a pass-through agreement ("Agreement") with the RDA, as well as being an affected taxing entity for redevelopment project areas managed by the RDA. As Riverside County shown on the attached financial overview (Attachment #1), the LEA believes that the Board of Education RDA has incorrectly calculated the amount of tax increment to be passed-through the LEA. This miscalculation is believed to have resulted in a significant loss to the LEA and Gerald P. Colapinro will result in an even larger deficit in the future, if not corrected usa a. co�yc�s, vn.�, p�ease take notice that this letter constitutes the LEA's demand, under the Agreement Lynne D. Craig and alf applicable laws, including the Govemment Cfaims Act if applicable, that payment of all past due amounts be made immediately. . Bruce Dennis In addition, it is our understanding that under Health & Safety Code section 34182 (added Vick Knight, Ed.D by AB Xi Zi)�, that each Auditor-Controller must conduct an a�dit of "each redevelopment Adolfo Mediano, Jr., 1.D. a9enCY's assets and liabilities, ta documeM and determine each redevelopment agency's pass-through payment obligations to other taxing agencies, and to document and Ef�zabeth R. Toledo determine both the amount and the terms of any indebtedness incurred by the redevelopment agency and ceRity the initial Recognized Obligatton Payment Schedule." The LEA hereby requests that the County Auditor-Controller review and analyze �: �A: �.. .r �:.��:� Jus6n McCarthy Paul Angulo, CPA, MA January 30, 2012 Page Z The LEA values its relationship with the City and Palm Desert Redeveiopment Agency, and hopes to resolve this matter quickly and outside of formal litiga6on. If you have any questions or require additional information, please contact me at (951) 826-679Q. Thank you for your prompt attention to this matter. erely, � Tere�de�� Y Aud itor/Controller Division of Administration and Business Services (951) 828-6790/FAX (951) 826-6974 Enclosures c: Peter Fagen, Fagen Friedman 8� Fulfrost LLP, Counsel Darrin Watters, Executive Director, Dolinka Group, LLC iHE SUCtESSOR AGENCY TO THE P�l�l DESER� REDEVEIOP�lEN1 AGENCY ]j- jl0 FRED WARING DRIVE PALM DESf R"C, CALIFORNIA 92260-2578 TE�; 760 ;q6—o6�� F,ax: 760 34�-637z in foC�' palm-desert.orR — ` � — March 8, 2012 z��� ov�Rs�c;t��' ����,�t�..� 0�1 �-'t -2-� i 2-- College of the Desert VERIFI�.D BY Wade Ellis, CPA Original on file with City Clerk's Office Director, Fiscal Services 43-500 Monterey Avenue Palm Desert, CA 92260-2499 Re: Your Letter Demand Dated January 27, 2012 for Alleged Delinquent Pre-AB X1 26 ("AB 26") Passthrough Payments of Tax Increment Revenues This letter responds to your letter to the Palm Desert Redevelopment Agency ("former agency"} dated January 27, 2012 alleging that the former agency miscalculated and underpaid Coilege of the Desert pre- AB 26 statutory passthrough payments and/or pre-AB 28 payments under a passthrough agreement, and asserting that the successor agency to the former agency is now responsible for this alleged obligation. Your effort to treat your alleged pre-AB 26 passthrough claim(s) as the responsibility of the successor agency is misplaced. As an initiai matter, the duties of successor entities under AB 26 are limited and do not include any obligation to taxing entities in connection with pre-AB 26 passthrough payment claims against a former redevelopment agency. A successor agency has a duty to pay the "enforceable obligations" of a former agency. However, AB 26 specifically excludes passthrough payments from the definition of enforceable obligations. See Health & Safety Code §34171(d)(1)(D). Your claim for unpaid or underpaid pre-AB 26 passthrough payments is based entirely on the statutory scheme that existed prior to the enactment of AB 26. That statutory scheme has been eliminated with the scheme established in AB 26. "Whenever the Legislature eliminates a statutory remedy 'before a judgment becomes final,' the legislative act `desiroys the right of action."' Zipperer v. Counfy of Santa Cruz, 133 Cal.App.4th 1013, 1024 (2005) (internal citations omitted}. A statutory right or benefit that is not reduced to a final judgment is not a vested right, but is instead merely an "inchoate, incomplete, and unperfected" right, which is subject to legislative abolition. Id. Thro�gh AB 26, the Legislature has effectively abolished the former tax increment revenue statutory scheme that gives rise to your claim(s), replacing it with the property tax revenue scheme established under AB 26, including Health & Safety Code §§ 34172, 34183, and 34188. Upon redevelopment agency dissolution, AB 26 deems all indebtedness of former agencies to be extinguished, except that indebtedness that is an enforceable oblicaatian under AB 26 mav still be paid. See Healih & Safety Code § 34174(a). However, as noted above, passthrough payments are excluded from enforceable obligations under AB 26. Although courts normally construe statutes to operate prospectively, the courts correlatively hold that when a pending action or claim rests solely on a statutory basis, the withdrawal of that statutory right or remedy without a savings clause will kerminate all �endin4 actions based on that statuiory right or remedy. The justification for this rule is that all statutory remedies and benefits are pursued with the full realization that the Legislature may abolish the remedy or right at any time. Rialfo Unified Schoo! District v. Mann, 18 Cal.3d 819, 829 (1977). AB 26 abolishes not just pending claims, but also judgments against "AM,�oowar�fi'u)Rs",�„�P.,�� a„n aom.,,,�u��a„ia„u „ra� cP�r�„<<T,.m„�,a.,� i�,P��Pr caPmr��eP�r n��w„awv��i ir,wa��a_�� iana� i„ mn.P iA�� �a.� �n.�,�,�n ��a�m n��. a former redevelopment agency related to passthrough payments, which are also exciuded from enforceable obiigations recognized by AB 26. See Health & Safety Code § 34171(d)(1j{D). In addition, as noted above, the successor agency has no duty to taxing entities in connection with claims against the former redevelopment agency based on alleged unpaid or underpayment of pre-AB 26 passthrough payments, or with respect to payment of passthrough obligations on a go forward basis. The counry auditor-controller is charged with the duties of conducting an audit to establish the former agency's assets and liabilities, and documenting and determining each former redevelopment agency's passthrough obligations to taxing agencies. See Health & Safety Code § 34172. The provisions of Health & Safety Code §§ 34183 and 34188 governing the county auditor-controller's distributions of property tax revenues to taxing agencies with property in the project area(s} ("affected taxing agencies") require the county auditor-controller to distribute property tax revenues and the proceeds of the sale of former agency assets to the affected taxing agencies in accordance with their property tax shares. These provisions do not contemplate a distribution to a particular taxing entity based on a pre-AB 26 claim of unpaid or underpaid passthrough payments. If, contrary to the position set forth in this letter, the caunty auditor-controller should determine that you have a cognizable claim in connection with pre-AB 26 passthrough obligations, any distribution of property tax revenues that recognizes that claim as enforceable would reduce the amounts to which other affected taxing entities are entitled under the plain language of sections 34183 and 34188. As a result, we are copying the Riverside County Auditor-Controller and the Oversight Board to the Successor Agency to the Palm Desert Redevelopment Agency (once convened), on this letter response, so that they are aware of your claim. The Oversight Board has a fiduciary duty to the affected taxing agencies and may wish to communicate with the County Auditor-Controller in connection with your claim. To the extent that you intend your letter dated January 30, 2012 to Palm Desert Redevelopment Agency to serve as a claim under the California Government Tort Claims Act, it is being returned to you as untimely for the reasons set forth above and because it was not presented within six months after the event or occurrence as required by law. See Section 901 and 911.2 of the Government Code. Because the claim was not presented within the time allowed by law, no action was taken on the claim. Your only recourse at this time is to apply without delay to the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency, c/o Successor to the Palm Desert Redevelopment Agency, 73510 Fred Waring Drive, Palm Desert, CA 92260 for leave to present a late claim. 5ee Sections 971.4 to 912.2, inclusive, and Section 946.6 of the Government Code. Under some circumstances, leave to present a late claim will be granted. See Section 911.6 of the Government Code. You may seek advice of an attorney of your choice in connection with this matter. If you desire to consult an attorney, you shauld do so immediately. John M. Wohlmuth Executive Director cc: Paul Angulo, CPA MA, Auditor-Controller, Riverside County Auditor-Controller, 4080 Lemon Street, 11'h Floor, Riverside, CA 92502 SUCCESSOR AGENCY TO THE PflL(CI �ESEN1 REOEYfLOPMEHi AGENCY -2- G: VtlaWerornca TapiaWJortl Fiie5lSuccesaa Agency�3-7-12 lener ta COO re la�e pass through claim.docx 111Y11C DX it�fLF011P1 r s _ .� College of the Desert 43-500 Monterey Avenue Paim Desert, CA 92260-2499 January 27, 2�12 Justin McCarthy Redevelopment Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, CA 92260 Paul Angulo, CPA, MA Auditor-Controlier Riverside County Auditor-Controller 4080 Lemon Street, 11 th Fioor Riverside, CA 92502 6G � BI' OVERSIGHT Bi3AR11� iJN �5 - � � a`a t ,�� �_�_ VERIFI�D BY � r - c Original on file with City Clerk's Office RE: Required Change to Statutory Payment Calculation and Request for Inclusion in County Auditor-Controller's Audit Pursuant to Health and Safety Code §34182 As you know, the California Supreme Court rece�tiy upheld Assemb�y B;II ("A8") X1 26, which orders the dissolution of all redevelopment agencles by February 1, 2012, including the Palm Desert Redevelopment Agency ("RDA"). When the RDA dissolves, its existing obligations, including its duty to make proper pass-through payments to the Desert Community College District ("LEA"), will shift to a successor agency. We have recently entered into an agreement with a consultant to confirm the amount of revenue that we should expect to receive from the successor agency and / or from the Auditor-Controller in future years The consultant will also confirm that we have received the proper funding for prior years. Therefore, we wish to notify you that we may soon submit a demand for reimbursement under all applicable laws, includ+ng the Government Claims Act and/or any Pass-Through Agreements, if applicable. We also wrile to notify you of a required change to the RDA's calculation of statutory payments to the Desert Community College District pursuant to Health and Safety Code sections 33607.5 and 33507.7 {collectively, "Statuiory Payments"). This change reflects a recent appellate courl decision, Los Angeles Unified Schoo! District v. County oi Los Angeles, et al (2010) 181 Cal.App.dth 414 ("LAUSD Decision"), finding that RDAs imprope�ly excluded Education Revenue Augmentation Fund ("ERAF") payments in calculating the Los Angeles Unified School DistricYs share of Statutory Payments. The California Supreme Court has denied a petition for review by the RDAs, making the LAUSO Qecision of precedential effect statewide. As you know, the RDA allocates Statutory Payments to the LEA in "proporlion to the percentage share of property taxes each affected taxing entity... receives during the fiscal year the funds are allocated." (See HSC 33607.5, subd.(a)(2).) The LAUSD decision clarifies that RDAs must include ERAF payments in the LEA's "percentage share of property taxes" when calculating Statutory Payments. ��"� �� � �L. � `�;�' �;;, �. -F• - 't :Jt�/ �'/�%�'� ���'i��� r:�xi r. � Desert Community Coilcge District � 760/346-8041 ..� Therefore, pursuant to the LAUS� decisian, the RDA must incorporate ERAF payments into its payment calculations in two ways: (i) Prospectively, beginning with Stafutory Payments for the 2011-2012 fiscal year and continuing for all future payments, and (ii) Refroacfively, requiring the RDA to reimhurse the District for the difference in payments for at least the three prior fiscal years 2010-09, 2009-08, and 2008-07. (See CaL Code Civ. Proc. § 338. ) Furthermore, the LEA may have entered into one or more pass-th�ough agreements with the RDA that may require the inclusion of ERAF in the LEA's sha�e pursuant to RTC 97.2(d)(5) and 97.3(d)(5). Finally, it is our understanding that under Health & Safety Code section 34182 (added by A8 X1 26), that the county Auditor-Controller must conduct an audit of "each redevelopment agency's assets and liabilities, to document and determine each redevelopment agency's pass-through payment obligations to other taxing agencies, and to document and determine both the amount and the terms of any indebtedness incurred by the redevelopment agency and certify the initial Recognized Obligation Payment Schedule." Desert Community College District hereby requests that the County Auditor- Controller review and analyze payments f�om prior fisca! years when conducting its audit pursuant to Health & Safety Code section 34182. We value our relationship with the City, Palm Desert Redevelopment Agency, and Auditor-Controller and look forvvard to continuing to work with you. If you have any questions or require additional information, please contact Mr. Wade W. Ellis at 760-773-2513. Sincerely, ��� � �� Wade W. Ellis, CPA Director, Fiscal Services cc: Dolinka Group, LLC THE SUCCESSOR AGENCY TO TNE PRI�I �ESERI REDEVEIOP�IENT AG�NCY ]j-510 FRED WARING DRIVE P.ALh1 DESER'I', CALIPOPNIA �j2260-257H TEL: �60 ;q6—o6�t rnx:76o 34i�6372 i nfoC�palm-deser�.org March 8, 2012 BY O`�'Et�Sl�k-xT �t7AF.',_) Ot�1 �'7 '1 ' � t 2^ Palm Springs Unified School District VLRIFIED BY Lisa Howell, Assistant Superintendent Business Services Original on file with Ciz}' Clerk's t�ffice 980 East Tahquitz Canyon Way Palm Springs, CA 92262-0119 Re: Your Letter Demand Dated January 30, 2Q12 for Alleged Qelinquent Pre•AB X1 26 ("AB 26") Passthrough Payments of Tax Increment Revenues This letter responds to your ietter to the Palm pesert Redevelopment Agency {"former agency") dated January 30, 2012 alleging that the former agency miscalculated and underpaid Palm Springs Unified School District pre-AB 26 statutory passthrough payments and/or pre-AB 26 payments under a passthrough agreement, and asserting thaf the successor agency to the former agency is now responsible for this alleged obligation. Your effort to treat your alleged pre-AB 26 passthrough claim(s) as the responsibility of the successor agency is misplaced. As an initial matter, the duties of successor entities under AB 26 are limited and do not include any obligation to taxing entities in connection with pre-AB 26 passthrough payment claims against a former redevelopmertt agency. A successor agency has a duty io pay the "enforceable obligations" oi a former agency. However, AB 26 specifically excludes passthrough payments from the definition of enforceable obligations. See Health 8 Safety Code §34171(d}(1)(D). Your claim for unpaid or underpaid pre-AB 26 passthrough payments is based entirely on the s#atutory scheme that existed prior to lhe enactment of AB 28. That statutory scheme has been eliminated with the scheme established in AB 26. "Whenever the Legislature eliminates a statutory remedy 'before a judgment becomes final,' the legislative act 'destroys the right of action.'" Zipperer v. County of Sanfa Cruz, 133 Cal.App.4th 1013, 1024 (2005) (internal citations omitted). A statutory right or benefit that is not reduced to a final judgment is not a vested right, but is instead merely an °inchoate, incomplete, and unperfected" right, which is subject to legislative abolition. Id. Through AB 26, the Legislature has effectively abolished the former tax increment revenue statutory scheme that gives rise to your claim(s), replacing it with the property tax revenue scheme established under AB 26, including Health & 5afety Code §§ 34172, 34183, and 34188. Upon redevelopment agency dissolution, AB 26 deems all indebtedness of former agencies to be extinguished, except that inde6tedness that is an enforceable obliqation under AB 26 mav still be aaid. See Health & Safety Code § 34174(a). However, as noted above, passthrough payments are excluded from enforceable obligati�ns under AB 26. Although courts �ormally construe statutes to operate prospective�y, the courts correlatively hold that when a pending action or claim rests solely on a statutory basis, the withdrawai of that statutory right or remedy without a savings clause will terminate all pendinq actions based on that statutory right or remedy. The justification for this rule is that all statutory remedies and benefits are pursued with the full realization that the Legislature may abolish the remedy or right at any time. Rialto Unified School District v. Mann, 18 Cal.3d 819, 829 (1977). AB 26 abofishes not just pending claims, but also judgments against �� nane o� �in[un rrtu a former redevelopment agency related to passthrough payments, which are also excluded from enforceable obligations recognized by AB 26. See Health & Safety Code § 34171(d)(1)(D). In addition, as noted above, the successor agency has no duty to taxing entities in connection with claims against the former redevelopment agency based on alleged unpaid or underpayment of pre-AB 26 passthrough payments, or with respect to payment �f passthrough obligations on a go forward basis. The county auditor-controller is charged with the duties of conducting an audit to establish the former agency's assets and liabilities, and documenting and determining each former redevelopment agency's passthrough obligations to taxing agencies. See Health & Safety Code § 34172. The provisions of Health & Safety Code §§ 34183 and 34188 governing the county auditor-controller's distributions of property tax revenues to taxing agencies with property in the project area(s) ("affected taxing agencies") require the county auditor-controller to distribute property tax revenues and the proceeds of the sale of former agency assets to the affected taxing agencies in accordance with their property tax shares. These provisions do not contemplate a distribution to a particular taxing entity based on a pre-AB 26 claim of unpaid or underpaid passthrough payments. If, contrary to the position set forth in this letter, the county auditor-controller should determine that you have a cognizable claim in connection with pre-AB 26 passthrough obligations, any distribution of property tax revenues that recognizes that claim as enforceable would reduce the amounts to which other affected taxing entities are entitled under the plain language of sections 34183 and 34188. As a result, we are copying the Riverside County Auditor-Controller and the Ovetsight Board to the Successor Agency to the Palm Desert Redevelopment Agency (once convened), on this letter response, so that they are aware oF your claim. The Oversight Board has a fiduciary duty to the affected taxing agencies and may wish to communicate with the County Auditor-Controller in connection with your claim. To !he extent that you intend your letter dated January 30, 2012 to Patm Desert Redevelopment Agency to serve as a claim under the California Government Tort Claims Act, it is being returned to you as untimely for the reasons set fo�th above and because it was not presented within six months after the event or occurrence as required by law. See Section 901 and 911.2 of the Government Code. Because the claim was nat presented within the time allowed by law, no action was taken on the claim. Your only recourse at this time is to apply without delay to the Oversight Board of the Successor Agency to the Palm Desert Redevelopment Agency, c/o Successor to the Palm Desert Redevelopment Agency, 73510 Fred Waring Drive, Palm Desert, CA 92260 for leave to present a late clalm. See Sections 911.4 to 912.2, inclusive, and Section 946.6 of the Government Code. Under some circumstances, leave to present a late claim will be granted. See Section 911.6 of the Government Code. You may seek advice of an attomey of your choice in connection with this matter. 1f you desire to consult an attorney, yau should do so immediately. M. Wohlmuth utive Director cc: Paul Angulo, CPA MA, Auditor-Controller, Riverside County Auditor-Controller, 4080 Lemon Street, 11'" Floor, Riverside, CA 92502 SUCCESSOR AGENCY TO THE Pfllf� �ESfRi RfDEVEIOPMENi �GENCV -2- G:kda\Veronice TapialWord FdeslSuccessor Agancy\3�7-12 lelter to PSUSO re late pass tMough cla�m DOCX . mnEo ae nnaEo r��u PALN1 SPRIN�S UNIFIED SCHOOL DISTRICT 980 EAST TAHQU�TZ CqNYON WAY PAIM SPRINGS, CALIFORNIA 92262-0119 (760) a16-6000 CHRISTINE J. �rNDERSOi+I, `Ed.D., Superintendent af Schools BOARD OF EDUCATION: RICHARO CIAPP. President - KARENT CORNETT, Clerk JUSTIN BLAKE, Member- GARYJEANDRON, Member- SNARI STEWART Member ;,�, ,� � � ��, .s�. � � �. � �., � � � �� ,,� January 30, 2012 Justin McCarthy Redevelopment Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, CA 92260 Paul Angulo, CPA, MA Auditor-Controller Riverside County Auditor-Controlier 4080 Lemon Street, 11th Floor Riverside, CA 92502 �a.�� :i ] i�i� � �AL� ���":`;�' ; _. . + r ... . , � ' BY OVERSIGHT BOARD ON ��' �� � �^' — vEruFl�.� sY� —� Original on file with City Clerk's Ol�'ice RE: Required Change to Statutory Payment Calculatio� and Request for Inclusion in Cvunty Auditor-Controller's Audit Pursuant to Heaith and Safety Code §34182 As you know, the California Supreme Court recently upheld Assembly Biil ("AB") X1 26, which orders the dissolution of all redevelopment agencies by February 1, 2012, including the Palm Desert Redeve�opment Agency ("RDA"). When the ROA dissolves, its existing obligations, including its duty to make proper pass- through payments to the Palm Springs Unified Schoot District ("LEA"), will shift to a successor agency. We write to notify you of a requirad change to the RDA's calculation of statutory payments to the Palm Springs Unified School District pursuant to Health and Safety Code sections 33607.5 and 33607.7 (collectively, "Statutory Payments"). This change reflects a recent appellate court decision, Los Angetes Uni�ed School District v. County of Los Angeles, et a( (2010) 181 Cal.App.4th 414 ("LAUSD Decision"), finding that RDAs improperly exciuded Education Revenue Augmentation Fund ("ERAF") payments in calculating the Los Angeles Unified School DistricYs share of Statutory Payments. The California Supreme Court has denied a petition for review by the RDAs, making the LAUSD Decision of precedential effect statewide. As you know, the RDA allocates Statutory Payments to the LEA in "proportion to the percentage share of prope�ty taxes each affected taxing entity... receives during the fiscal year the funds are allacated." (See HSC 33607.5, subd.(a)(2).) The LAUSD decision clarifies that RDAs must include ERAF payments in the LEA's "percentage share of property taxes" when calculating Statutory Payments. Therefore, pursuant to the LAUSD decision, the RDA must incorporate ERAF payments into its payment calculations in two ways� (i) Prospectively, beginning with Statutory Payments for the 2011-2012 fiscal year and continuing for all future payments, and (il) Refroactively, requiring the RDA to reimburse the District for the difference in payments for at least the three prior fiscal years 20010-09, 2009-08, and 2008-07. (See Cal. Code Civ. Proc. § 338.) Furthermore, the LEA may have entered into one or more pass-thr�ugh agreements with the RDA that may require the inclusion of ERAF in the LEA's share pursuant to RTC 97.2(d)(5) and 97.3(d)(5). Finally, we had previously contracted with a consultant to confirm our redevelopment payments and found that the RDA did not always praperly calculate and allocate pass-through payments. It is our understanding that under Health & Safety Code section 34182 (added by AB X1 26}, that the oounty Auditor-Controller must conduct an audit ot "each redevelopment agency's assets and liabilities, to document and determine each redevelopment agency's pass-through payment obligations to other taxing agencies, and to document and = determine both the amount and the terms of any indebtedness incurred by the redevelopment agency and certify the initial Recognized Obligation Payment Schedule." Palm Springs Unified Schooi District hereby requests that the County Auditor-Contraller review and anafyze payments from prior fisca! years when conducting its audit pursuant to Health & Safety Code section 34182. We value our relationship with the City, Palm Desert Redevelopment Agency, and Auditor-Controller and look forward to continuing to work with you. If you have any questions or require additional information, please contact my office at (760) 416-6126. Sincerely, ����� �� Lisa Howell Assistant 5uperintendent, Business Services cc: Constance J. Schwindt, Law Firm of Atkinson, Andelson, Loya, Ruud & Romo larry ferchaw, Senior Director, Dolinka Group, LLC �