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2012 10 03 OBOVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY AGENDA La Quinta City Council Chambers 78-495 Calle Tampico, La Quinta, California Regular Meeting WEDNESDAY, OCTOBER 3, 2012 2:00 p.m. Beginning Resolution No. 2012-015 CALL TO ORDER Roll Call: Board Members: Ellis, Marshall, Maysels, McDaniel, Nelson, Osborne and Chairperson Pena PLEDGE OF ALLEGIANCE PUBLIC COMMENT This is the time set. aside for public comment on any matter not listed on the agenda. Please complete a "Request to Speak" form and limit your comments to three minutes. When addressing the Oversight Board, please state your name and address. CONFIRMATION OF AGENDA APPROVAL OF MINUTES 1. Approval of Oversight Board Minutes of Regular Meeting on August 8, 2012i PUBLIC COMMENT SESSION 1. Receive Public Comments Regarding Low -Moderate Income Housing Fund Due Diligence Review Pursuant to AB 1484 BUSINESS ITEMS 1. Adoption of a Resolution Approving the Successor Agency Administrative Budget for January 2013 through June 2013 REPORTS AND INFORMATIONAL ITEMS 1. Update on Department of Finance Review of Recognized Obligation Payment Schedule for January 2013 through June 2013 2. Update Regarding City and Successor Agency Property. Transactions Pertaining to SilverRock Resort, the Highway 111 Retail Property and Other Public Properties ADJOURNMENT DECLARATION OF POSTING I, Lori Lafond, Oversight Board Secretary, do hereby declare that the foregoing Agenda for Oversight Board of the Successor Agency to La Quinta Redevelopment Agency meeting of October 4, 2012, was posted on the outside entry to the Council Chamber, 78-495 Calle Tampico, the bulletin board at the La Quinta Post Office located at 51-321 Avenida Bermudas, La Quinta, California and 78-630 Highway 111, La Quinta, California on September 27, 2012. Dated: September 27, 20_1I2 � RI LAFOND Oversight Board Seldetary Public Notices The La Quinta City Hall Council Chambers is handicapped accessible. If special equipment is needed for the hearing impaired, please call the City Clerk's office at (760) 777-7123, twenty-four (24) hours in advance of the meeting and accommodations will be made. If special electronic equipment is needed to make presentations to the Oversight Board, arrangements should be made in advance by contacting the City Clerk's office at (760) 777- 7123. A one (1) week notice is required. If background material is to be presented to the Oversight Board during a Board meeting, please be advised that ten (10) copies of all documents, exhibits, etc., must be supplied to the Oversight Board Secretary for distribution. It is requested that this take place prior to the beginning of the meeting. Any writings or documents provided to a majority of the Oversight Board regarding any item on this agenda will be made available for public inspection at the City Clerk's counter at City Hall located at 78-495 Calle Tampico, La Quinta, CA 92253, during normal business hours. Oversight Board Agenda October 3, 2012 2 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY MINUTES Regular Meeting at 2:00 P.M. ROLL CALL - Present: Board Members Ellis, Mars-7 I-, Maysels, McDaniel, Nelson, Osborne and Chairperson Pena r, Absent: Board Member McDaniel A Motion was made by `; Board Members Osp'6rne/Maysels to excuse Board Member McDaniel; Motion carried unanimously CONFIRMATION OF AGENDA - Confirmed PUBLIC COMMENT Don Adolph, Mayor of the City of'l4, Qu and support on the Oversight Board. 'He such a wonderful Board and he is proud`,d and is helping the' City of La ' Quinta 'thr facing. WAL:,O.F W INUTES taj, thanked the Board for their service F: said' that: the City is fortunate to have Flow theLLBoard stepped up to the plate ugh the tough times we are currently E, t A motion was„inade by Board Members Maysels/Ellis to approve the minutes ftom the Junes 012 Oversight Board meeting as submitted. Motioh,carried 6 aids, 0 nays, 1 absent 1. Adoption of ` a Resolution Approving a Recognized Obligation Payment Schedule of the Former La Quinta Redevelopment Agency for the Period of January 2013 through June 2013. Staff presented staff report. Chairperson Pena suggested commas in the amounts on the BOPS to make sure there is no question regarding dollar amounts. Staff indicated that $100,000 estimated for administrative allowance in the BOPS was not spent. Chairperson Pena asked if that $100,000 goes to the State. Staff indicated the County would make the disbursement minus the $100,000. Board Member Osborne asked if, in the future, the $100,000 is a negative figure, would that amount be added to our property tax disbursement. Attorney Bill Ihrke, Rutan & Tucker, for Kathy Jenson, Counsel for Successor Agency, indicated that the provisions in the law that govern the reconciliation process regarding the ROPS, seems to indicate that it could be a situation where you would be able to get more ;from the redevelopment property tax trust fund if you were short in the prior six month period. The statute reads as though that would be the case whether or not the Department of Finance ("DOF") actually allpws it or that the County Auditor - Controller actually has the funds to do,;lt. li another question: Therefore, the implementation may end up being dlifent than what the statute seems to allow. The DOF may allow you to:hold on ,t6 ;the money to, pay future obligations when they become due in that nexts x' month period. It remains to be seen but most likely the money wi(t'not be forwarded or will be directed by the Auditor -Controllers to be -distributed to the other taxing entities. Board Member M distributed. Attbt Successor Aae" ncv Board Membe been received. to Frank Spevacek, Gity Matiager, informed the Board that the debt service payments are due on September 1, 2012. When the former La Quinta Redevelopment Agency (" LQRDA") was active, it kept a debt service reserve fund - not bond funds but cash at the City because property taxes are distributed in January and April and are not distributed again until January of the following year. When there was supplemental property tax income coming in, it allowed for better flow through the year but as the recession hit and building and property sales stopped, monies were put in the debt service reserve fund to make sure the September debt service payments would be covered. The question is will there be enough property tax revenue left over from the disbursement in June 2013 to have funds available to make the September 2013 bond payments. Now that fund balances are being swept away, if there is not enough cash coming in, then Oversight Boards are being faced with the challenge of what to pay and what to default on. s asked staff P when.. the $6,900,000 would be Ihrke indicated January 2, 2013 is the day the hysically,receive the distribution. asked,;if the, money for July to December, 2012 has dicaf6d' hat the money was received in June and the paid for` 6t service has been transmitted to US Bank 1, 2012 debt service payment. OVERSIGHT BOARD ACTION MINUTES 2 AUGUST 8, 2012 Board Member Osborne asked if the insurance policies were still in place on all the bonds. City Manager Spevacek stated that the insurance policies are in place provided that the insurance companies are still in place. Some of the companies that went bankrupt, if that occurred prior to the dissolution of redevelopment, redevelopment agencies were required to replace the policy with a debt service reserve. In the City's situation, our insurance policies are still all in place and the only bonds that are not insured of the LQRDA are those that were issued in 2011 — the housing bond as well as the Project Area No. 2 bond. Those were not insured because at, that point in time, the bond insurance did not exist. All other bonds listed -'are insured and the policies are valid. Chairperson Pena wanted to know if the Ci pay and not to pay in case obligationS, Spevacek stated that has not been doh-d' law states the first thing that gets,"otift, we second would be any third party" Ibliga enforce, third would be any taxing agency 1 bond payments. Currently, we are not full.)' those bond proceeds that are -taxable may any shortfall. Chairperson Pena asked what``agency is a default on debt.service payments. would be the State. 1as set..up,a priority of what to nnot be met. City Manager however,' guidance from the be administrative allocations, °that may be e'ss easy to rnents and the fourth would be ;pending the bond proceeds so 'used if necessary to back fill sible to collect if there indicated most likely it Board Member`Osborne asked if the 2011 bonds were issued in respect to Coral Mountainproject and is,the remainder still in the bank. City Manager Spevaj ek `stated' that the bonds were not issued in relationship to Coral Mot stain 5 butN,,for 'Washington Street Apartments ("WSA"). The bond proceeds that#te being'"pledged over time are for the rehabilitation and improvements at VVL,SA. The issue before the Board today are the tax-exempt bold"; -.proceeds left, from 2004, there are severe limits on what those proceeds can be Used for, visa via they need to be used on affordable housi g portitli of the 2011 taxable bonds are being pledged for WSA but fundinghwll'rot occur until after June 2013. Board Member Maysels asked if the DOF will accept an amended BOPS since the January 2013 through June 2013 is being done so many months in advance. Attorney Ihrke indicated that the statute provides for amending the BOPS however, the DOF stated in correspondence in June 2012 that they were done reviewing any further requested revisions to BOPS 1 and 2. If there are remaining disputes, it can be taken care of during the process on ROPS 3. The answer is yes, you can amend ROPS 3 but it comes down to how the law is administered by the State. OVERSIGHT BOARD ACTION MINUTES 3 AUGUST 8, 2012 1 A motion was made by Marshall/Nelson to adopt Resolution No. OB 2012- 014 adopting a Resolution of the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency Adopting a Recognized Obligation Payment Schedule for the Period January 2013 through June 2013 RESOLUTION NO. OB 2012-014 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENGY TO LA QUINTA REDEVELOPMENT AGENCY 1) ADOPTING A RECOGNIZED 0(1'GATION PAYMENT SCHEDULE FOR THE PERIOD OF-'JANUARY 2013 THROUGH JUNE 2013; 2) APPROVING THE CONTINUED IMPLEMENTATION OF ;f , W HINGTON STREET APARTMENTS REHABILITATION PRQJEOT, 3) APPROVING THE EXPENDITURE OF $3,006 360!,:AN 2004 TAX-EXEMPT HOUSING ~BOND PROCEEDS Ys,(x1E3 $15,523,220 OVER ''THE COURSE 0 IMPLEMENTATION, AND $2,450;250 IN 2004 TAX— EXEMPT HOUSING BOND PROCEEDS DURING THE JANUARY — JUNE 2 13,ROPS PERIOD,-4) CONFIRMING THAT THE HOUSING Bot4 •PROCEEDS'ARE HOUSING ASSETS THAT ARE Tfi? BE T13AN$FERRED TO THE LA QUINTA HOUSING AU THORITYPUFtSIJANT`TO HEALTH & SAFETY CODE SECTJON . '416(6)'11CACCORDANCE WITH THE ROPS'SCHEDULE Motion carried6 aves, i0 nays, 1 ary of Redevelopment Agency Dissolution Budget Trailer Bill report. Attorney ahrke ek0ained the following revisions to the law under AB 1484 as follows. For purposes of the Oversight Board, it is important to remember the general role remains the same where the Board has a fiduciary responsibility to the holders of enforceable obligations and to the taxing entities. Immunities to the Board have been slightly changed Substantive changes to the law that will be brought before the Board will be how housing assets are going to be dealt with on a going forward basis. OVERSIGHT BOARD ACTION MINUTES 4 AUGUST 8, 2012 AB 1484 provides the Housing Authority to submit a list of housing assets to the DOF pursuant to the law, and if the DOF approves that housing list, then all those assets essentially get handed over to the Housing Authority for affordable housing purposes. The non -housing LQRDA real property was originally governed by a provision in AB 26 that would have required expedited liquidation. Those provisions have been suspended under AB 1484 for the purposes of dealing with a finding of completion - meaning due diligence review audits, which is an inventory of all assets of the LQRDA including housing and non -housing. The accountants are still waiting for further clarification on what they are supposed to be auditing. Once the audits are completed, the Successor Agency will review those for approval. The DOF will decide what remittance needs to be'made by the Successor Agency to do a "true -up payment." If everything balances out and everyone agrees and that payment is made, the D0 Will issue a finding of completion. Once there is a finding of completion{ phis allows the Successor Agency, along with the approval of the Oversight Board, to put together a property 41. management plan. Property management _plans will be a', governing document as to how all non-housing'`rr- 0opment real property is to be dealt with in the future. Assets will be coVritd in the audit as well. Attorney Ihrke further explaini broken down into an audit of.th an audit of everything else of: needs to be dame sedn - supF The Oversight �:,Ooarc1" needs to audit; one 00"Ods to be r publi which can be more "than fiyi the audit is a'iin-tsv6dT it must the due diligence audits have been rhd moderate income housing fund and RDA. -The audit of the housing fund o' be completed by October 1, 2012. two public meetings to address that rig and the second for actual approval, ess days after the first hearing. Once rwarded to the DOF by October 15, For all other assets subject to the later due diligence audit, which needs to be done in December, is'fh»'same concept. Concerning the ROPS, there have been significant changes by AB 1484 to codify the>„pro cess'that was used in previous BOPS. The deadlines have been moved up for approval process and the DOF has more time for review. The law allows a meet and confer process, meaning that the Successor Agency and DOF may need to have a meet and confer and depending on any disputes or anything that the DOF wishes to have modified, an amended BOPS may need to come back to the Board. Another change the BOPS procedure is that the County Auditor -Controller has a much more expanded role to the extent of being able to dispute what a particular item may be on a BOPS. Ultimately, the DOF would review that as well. OVERSIGHT BOARD ACTION MINUTES 5 AUGUST 8, 2012 Board Member Maysels inquired about the issue with CPAs/audit and timing of finalizing the audit by October 1, 2012 and how likely is that to happen on time. Board Member Osborne indicated that on August 7, 2012, he received notification from the State Board of Accountancy that the CPAs are asked not to sign any agreements yet because they are trying to work out the scope and procedures of the audits. City Manager Spevacek explained that in terms of land assets, the LQRDA land assets were primarily, if not almost exclusively,,, housing assets. The schedule that was put together by staff was sent to the DOF and that schedule can be used as the basis for the audit relating to what is needed to be delivered on October 1,2012 In terms of financialassets, on the housing side of the ledger, there are the bond proceeds, cash that is being dedicated to the Coral Mountain development and°that cash `has, moved from the Successor Agency to the Housing Au,SnQrty and by the end,,of this month, will be sitting in an escrow account 'with the financing .group that put together the 4% tax credits for the"�Cbral Mountain development. The only assets on the non -housing ledger that`the LQRb4 held were the museum for the City, the parking lot relating to the library and some odd landscape parcels associated with F th ,,.Washington ;wnd Miles development with Homewood Suites. The L`ORIJ "did not have anv other land assets in its possession. In terms of non land assets that the 4QRDA had, those included roughly $9,000,000 of 200�1.t3ond pefrceeds that` were being reserved for SilverRock until the economy coltapsdand`ther about $5,000,000 of cash that may have already: been disb iii d because it was used to pay for prior obligations, that the LQRDA hadti When talking about "land assets" La Quinta is different than other,.,communities in that when redevelopment was eliminated, the only assets the'LQ14D'4 held were relating to housing and if the hvirsing., asset list is blessed by DOF, those will be removed and moved to.,tfie Housing,Autharty and what's left is the parking lot, a museum and some landscape parcels. Boar`tl,,Member Nel§on asked if there are any assets that would be subject to the 5'Claw, back City Manager Spevacek stated that in 2011, prior to the adoption,bf, AB 70, and prior to the subsequent legal challenges, the LQRDA repaid 54t?p1Cf00 of loans outstanding to the City general fund — those funds could "b"e subject to claw back per AB 1484. The second aspect is that in 2011 . prior to AB 26, the City obtained appraisals and purchased from the LQRDA at the market value in 2011, the public and private parcels at SilverRock, 9 acres of property on Hwy. 111 and a few other parcels. Then, in June of 2011, the City purchased properties in the Village area, about six or seven acres around La Quinta Park, between City Hall and Old Town as well as another property northwest of Old Town using LQRDA funds. So, those transactions could be subject to review. OVERSIGHT BOARD ACTION MINUTES 6 AUGUST 8, 2012 Chairperson Pena asked if there have been any other cities affected by the claw back provisions. Attorney Ihrke said he has not heard of any yet — he believes the State Controller's office has been holding back to see what the results are of the audits. He is not aware of any claw back prior to AB 1484 becoming law. ADJOURNMENT — 2:53 p.m. A motion was made by Board Members Maysels/Os passed unanimously. 11 Respectfully submitted, Lori Lafond Oversight Board Secretary to adjourn. Motion OVERSIGHT BOARD ACTION MINUTES 7 AUGUST 8, 2012 OVERSIGHT BOARD MEETING DATE: October 3, 2012 ITEM TITLE: Adoption of a Resolution Approving the Successor Agency Administrative Budget for the Period of January 2013 through June 2013 RECOMMENDED ACTION: AGENDA CATEGORY: BUSINESS SESSION: BI CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Adopt a Resolution approving the Successor Agency Administrative Budget for the period of January 2013 through June 2013. EXECUTIVE SUMMARY: Per ABx1 26, the Successor Agency will be reimbursed for costs related to Successor Agency and Oversight Board administration ("Administrative Allowance"). The Administrative Allowance, funded from property taxes, is capped at 3% of the total amount listed on the Recognized Obligation Payment Schedule ("ROPS"). ABx1 26 requires the Successor Agency and Oversight Board to review and approve the proposed administrative budget (Attachment 1). FISCAL IMPACT: For this time period, the administrative allowance is $205,061. However, this total is subject to change based on review and approval by the Oversight Board, and review by the State Department of Finance ("DOF"). BACKGROUND/ANALYSIS: ABx1 26, the "Dissolution Act," provides for each successor agency to prepare a proposed administrative budget setting forth the successor agency's estimated administrative costs of carrying out the wind -down activities of the former redevelopment agency, proposing sources of payment for such estimated administrative costs, and proposing for arrangements for administrative and operations services provided by a city, county and/or other entity. The Dissolution Act requires the successor agencies to prepare an administrative budget every six months. The proposed tbudget includes staff time required to carry out Successor Agency and Oversight Board activities and administration, the cost of IT support, supplies, printing of agendas and agenda packets, posting, and legal and consulting costs. It also includes $15,000 for audits. AB 1484 included a new requirement for a "due diligence review" to determine the unobligated balances available for transfer to taxing entities. The City's auditor, Lance, Soil and Lunghard (LSQ, will perform the review at a cost of $20,000. ($5,000 is available from the July - December 2012 administrative budget to fully fund this cost.) On September 18, 2012, the Successor Agency reviewed and approved the Administrative Budget. While the Dissolution Act does not require administrative budgets be submitted to the DOF, the DOF does review oversight board actions. Therefore, the DOF may review the Administrative Budget and could question the budget. . However, the Administrative Budget has been prepared pursuant to the guidance staff has received from DOF for past budgets. ALTERNATIVES: 1. Provide staff with alternative direction. Respectfully submitted, Debbie Powell Economic Development/Housing Manager Attachment: 1. Draft Successor Agency Administrative Budget, January 2013 through June 2013 2 Attachment 1 SUCCESSOR AGENCY/OVERSIGHT BOARD JANJUNE 2013 ADMINISTRATIVE BUDGET PERSONNEL $125,416 Includes base salary plus benefits. Successor Agency Administration $81,520 Oversight Board Administration $43,896 SUPPLIES & SERVICES CONTRACT SERVICES $60,225 This account provides for legal, consulting, and audit services, insurance, mileage reim bursement, plus a portion of League of California Cities dues related to technical assistance and training for implementation of ABx1 26 and AS 1484 Audits as required by ABx1 26 and AS 1484 $15,000 Dues/Seminars/Webinars related to ABx1 26 and AS 1484 $1,867 Mileage reimbursement for travel to seminars; use of persona1 $854 vehicles for Successor Agency /Oversiht Board business Legal Services for Successor Agency $25,561 Consulting Services for Successor Agency $5,000 Insurance $11.943 SUPPLIES AND PUBLICATIONS $773 This account provides for various office supplies and publics ions to be used by SA and OB staff and board members Successor Agency Supplies $386 Oversight Board Supplies 00 Successor Agency/ Oversight Board Publications PRINTING/MAILING/ADVERTISING $1,048 This account provides for required mailings, agenda printing a and legal advertising PrintingLegal Advertisingand Mailing 57 INFORMATION TECHNOLOGY $4,931 This account provides for annual replacement charges for information technology items such as computers, printers, and computer related items attributable to SA/OB; and support/hosting for SA/OB web pages, Which are required by ABx1 26 and AS 1484 $4,931 OFFICE AND EQUIPMENT $12,668 This account provides for office space rental and equipment usage in City Hall Rent $11,100 Equipment Usage $1,568 TOTAL ADMINISTRATIVE BUDGET $205,061 $205,061 FUNDING SOURCES: 3% ADMINISTRATIVE ALLOWANCE RESOLUTION NO. OB 2012- A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY APPROVING THE SUCCESSOR, AGENCY ADMINISTRATIVE BUDGET FOR THE PERIOD OF JANUARY 2013 THROUGH JUNE 2013 WHEREAS, the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency ("Oversight Board" or "Successor Agency," as applicable) has been established to direct the Successor Agency to take certain actions to wind down the affairs of the former La Quinta Redevelopment Agency ("Agency") in accordance with the California Health and Safety Code; and WHEREAS, the Agency was engaged in activities to execute and implement the Project Area No. 1 Redevelopment Plan and the Project Area No. 2 Redevelopment Plan (collectively, the "Redevelopment Plans") pursuant to the provisions of the California Community Redevelopment Law (Health and Safety Code § 33000, at seq.) ("CRL"); and WHEREAS, as part of the 2011-12 State budget bill, the California Legislature enacted and the Governor signed, ABx1 26 requiring that each redevelopment agency be dissolved; and WHEREAS, an action challenging the constitutionality of ABx1 26 and companion bill ABx1 27 was filed in the California Supreme Court by the California Redevelopment Association, the League of California Cities, and two individual cities; and WHEREAS, on December 29, 2011, the Court upheld ABx1 26; and WHEREAS, Health and Safety Code Section 34177(j) requires each successor agency to prepare a. proposed administrative budget every six months setting forth the successor agency's estimated administrative costs of carrying out the wind -down activities of the former redevelopment agency, proposing sources of payment for such estimated administrative costs, and proposing for arrangements for administrative and operations services provided by a city, county and/or other entity; and WHEREAS, the Successor Agency has prepared a proposed administrative budget for the six-month period January 1, 2013 - June 31, 2013 (the "Administrative Budget"); and Resolution No. OB 2012-015 Adoption of SA Administrative Budget Adopted: October 3, 2012 Page 2 WHEREAS, on September 18, 2012, the Successor Agency reviewed and approved the Administrative Budget; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW THEREFORE, BE IT RESOLVED, by the Oversight Board of Successor Agency to La Quinta Redevelopment Agency, does hereby resolve as follows: Section 1. Recitals. The Recitals set forth above are true and correct and incorporated herein by reference. Section 2. Approval of .Administrative Budget. The Oversight Board hereby approves the Administrative Budget, which Administrative Budget is on file with the Secretary of the Successor Agency. Section 3. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The Oversight Board hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. Section 4. The Oversight Board Secretary shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED at the meeting of the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency held this 3rd day of October, 2012, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JOHN PENA, Chairperson Oversight Board of the Successor Agency to La Quinta Redevelopment Agency Resolution No. OB 2012-015 Adoption of SA Administrative Budget Adopted: October 3, 2012 Page 3 ATTEST: LORI LAFOND Oversight Board Secretary OVERSIGHT BOARD MEETING DATE: October 3, 2012 ITEM TITLE: Receive Public Comments Regarding the Low -Moderate Income Housing Fund Due Diligence Report Pursuant to AB 1484 RECOMMENDED ACTION: AGENDA CATEGORY: BUSINESS SESSION: PCI CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Receive comments and input from the public regarding the Low -Moderate Income Housing Fund due diligence review. EXECUTIVE SUMMARY: AB 1484, the 2012 State Budget Trailer Bill, amended the Health & Safety Code relative to redevelopment dissolution. Section 34179.5 was added requiring each successor agency ("SA") to employ a licensed accountant to conduct a due diligence review (i.e., audit) of the housing and non -housing funds to determine the amount of unobligated funds available for distribution to taxing agencies. The housing fund review must be completed by October 1, 2012; the non -housing fund review by December 1, 2012. Successor agencies must transmit completed reviews to the oversight board, the county administrative officer, the county auditor -controller, and the Department of Finance ("DOF"). Oversight boards are then required to convene a public comment session at least five business days prior to formally approving the reviews. At the October 3, 2012 meeting, the Oversight Board will be conducting the public review process. The Board will then be requested to convene on October 10, 2012 to consider and adopt the Housing Fund due diligence review (Attachment 1). This process will again occur in November when the Oversight Board will consider the non -housing fund due diligence review. FISCAL IMPACT: None for this action. Based on the due diligence review, there are no unobligated housing funds available for distribution to taxing agencies. However, this could change based upon any input from the County Auditor -Controller's office and the Department of Finance. BACKGROUND/ANALYSIS: The State is reviewing all successor agencies' housing and non -housing assets and cash balances to determine if there are unobligated funds available for transfer to taxing agencies. AB 1484 requires the review be transmitted to the County Auditor -Controller, the State Controller's Office, and the DOF at the same time it is transmitted to the Oversight Board. This review was submitted to all parties on September 27, 2012. A summary of Attachment 1 is as follows: ■ Pages 2-6 list the agreed -upon procedures from the State Controller's Office and DOF. ■ The financial information begins on page 7, which identifies the total amount of cash ($59,521,440) that was transferred from the RDA to the SA upon redevelopment dissolution. This is for information purposes only, and is not factored in to the final calculation. • Page 8 shows there were no housing funds transferred from the RDA to the City. ■ Page 9 lists non -cash assets that were transferred from the RDA to the Housing Authority. The $2.0 million note is for a senior housing complex (Seasons) built in 1994 plus related interest; the $1.2 million loan is for the Coral Mountain Apartments note, plus related interest. While the total funding amount for Coral Mountain is $29 million (and is structured as a loan), the loan is recorded in the Housing Authority's books as funds were disbursed to the developer. As of that accounting period, only $1.2 million had been disbursed. Escrow closed on the Coral Mountain transaction in late August; therefore, the entire $29 million has been deposited into escrow, and now the full $29 million loan is reflected in the books. 2 ■ Page 11 lists all the cash and assets now held by the La Quinta Housing Authority due to redevelopment dissolution, which total $54.7 million. ■ Page 12 lists the assets that are restricted (i.e., cannot be distributed to taxing agencies) including set -aside funds for bond debt service payments, and bond proceeds (which must be used for a specific purpose in the bond agreements). This total is $36.7 million. ■ Page 13 lists non -liquid assets, including interest and discount on investments, which total-$8,315. ■ Page 14 lists funds that are dedicated to enforceable obligations. As of June 30, 2012, the only DOF-approved enforceable housing obligation is Coral Mountain Apartments. ■ Pages 15 through 17 lists assets that would need to be retained due to insufficient funding available for enforceable obligations, bond debt payments, and future BOPS. La Quinta has no shortages in these categories. ■ Page 18 performs the final calculation (total assets, less restricted assets, plus non -liquid assets, less enforceable obligations). Based on this calculation, La Quinta does not owe funds to the taxing agencies. Per AB 1484, an oversight board may request additional information and documentation from the successor agency to assist in its review and approval. An oversight board is empowered to authorize the successor agency to retain assets or funds that are: -Legally restricted, 'such as bond proceeds and grant funds; -Physical assets, land, records, and equipment; -Funds that are legally or contractually dedicated or restricted for the funding of an enforceable obligation; If the oversight board determines that these funds/assets are to be retained, it shall identify to the DOF the amount of funds authorized for retention, the source of those funds, and the purposes for which those funds are retained. Staff will prepare this information, and will incorporate public comment and county auditor - controller input for the oversight board's October 10, 2012 meeting. C1 It should be noted that if funds are owed to taxing agencies, AB 1484 requires payment be made to the county within five working days of DOF notification. Failure to pay could result in the DOF retaining future sales tax and/or property tax revenues. Respectfully submitted, Debbie Powell Economic Development/Housing Manager Attachment: 1. Low -Moderate Housing Fund Due Diligence Review :1 ATTACHMENT 1 Successor Agency of the Former La Quinta Redevelopment Agency Due Diligence Review of the Low and Moderate Income Housing Fund Pursuant to Sections 34179.5(c)(1) through 34179.5(c)(3) and Sections 34179.5(c)(5) through 34179.5(c)(6) of Assembly Bill No. 1484 of 2012 Successor Agency of the Former La Quinta Redevelopment Agency Due Diligence Review of the Low and Moderate Income Housing Fund Pursuant to Sections 34179.5(c)(1) through 34179.5(c)(3) and Sections 34179.5(c)(5) through 34179.5(c)(6) of Assembly Bill No. 1484 of 2012 COG LSE COG 00 CERTIFIED PUBLIC ACCOUNTANTS • Brandon W. Burrows, CPA • David E. Hale, CPA, CFP A Professional Corporation • Donald 6. Slater, CPA • Richard K. Kikuchi, CPA • Susan F. Matz, CPA • Shelly K. Jackley, CPA • Bryan S. Gruber, CPA • Deborah A. Harper, CPA INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED -UPON PROCEDURES To the Successor Agency of the Former La Quints Redevelopment Agency City of La Quinta, California We have performed the procedures enumerated in Attachment A for the Low and Moderate Housing Fund, which were agreed to by the California State Controller's Office and the State of California Department of Finance (State Agencies) solely to assist you in ensuring that the dissolved redevelopment agency is complying with Assembly Bill 1484, Chapter 26, Section 17's amendment to health and safety code 34179.5. This agreed -upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Management of the successor agency is responsible for providing all the information obtained in performing these procedures. The sufficiency of these procedures is solely the responsibility of those parties specified in the report. Consequently, we make no representations regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. As stated above, the scope of this engagement was limited to performing the procedures identified in Attachment A, which specified the "List of Procedures for the Due Diligence Review" obtained from the California Department of Finance Website. The results of the procedures performed are identified in Attachment 131 through B11. We were not engaged to and did not conduct an audit, the objective of which would be the expression of a certified opinion as to the appropriateness of the results of the procedures performed. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to the Successor Agency. This report is intended solely for the information and use of the Successor Agency Oversight Board, the Successor Agency and the applicable State Agencies, and is not intended to be, and should not be used by anyone other than these specified parties. This restriction is not intended to limit distribution of this report, which is a matter of public record. orf�, .roOZC Brea, California September 23, 2012 Lance, Soil B Longhand, LLP 203 North Brea Boulevard • Suite 203 • Brea, CA 92821 TEL: 714.672.0022 • Fax: 714.672.0331 www.isicpas.com Orange County • Temecula Valley • Silicon Valley SCHEDULE A List of Procedures for Due Diligence Review of the Low and Moderate Housing Fund 1. Obtain from the Successor Agency a listing of all assets that were transferred from the former redevelopment agency to the Successor Agency on February 1, 2012. Agree the amounts on this listing to account balances established in the accounting records of the Successor Agency. Identify in the Agreed - Upon Procedures (AUP) report the amount of the assets transferred to the Successor Agency as of that date. 2. If the State Controller's Office has completed its review of transfers required under both sections 34167.5 and 34178.8 and issued its report regarding such review, attach a copy of that report as an exhibit to the AUP report. If this has not yet occurred, perform the following procedures: a. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the former redevelopment agency to the city, county, or city and countythat formed the redevelopment agency for the period from January 1, 2011 through January 31, 2012. For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency's enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. b. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Successor Agency to the city, county, or city and county that formed the redevelopment agency for the period from February 1, 2012 through June 30, 2012. For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency's enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. c. For each transfer, obtain the legal document that formed the basis for the enforceable obligation that required any transfer. Note in the AUP report the absence of any such legal document or the absence of language in the document that required the transfer. 3. If the State Controller's Office has completed its review of transfers required under both Sections 34167.5 and 34178.8 and issued its report regarding such review, attach a copy of that report as an exhibit to the AUP report. If this has not yet occurred, perform the following procedures: a. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the former redevelopment agency to any other public agency or to private parties for the period from January 1, 2011 through January 31, 2012. For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency's enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. b. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Successor Agency to any other public agency or private parties forthe period from February 1, 2012 through June 30, 2012. For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency's enforceable obligations or other legal requirements. Provide this listing as an attachmentto the AUP report. c. For each transfer, obtain the legal document that formed the basis for the enforceable obligation that required any transfer. Note in the AUP report the absence of any such legal document or the absence of language in the document that required the transfer. SCHEDULE A (Continued) List of Procedures for Due Diligence Review for the Low and Moderate Housina Fund (Continued) 4. Perform the following procedures: a. Obtain from the Successor Agency a summary of the financial transactions of the Redevelopment Agency and the Successor Agency in the format set forth in the attached schedule for the fiscal periods indicated in the schedule. For purposes of this summary, the financial transactions should be presented using the modified accrual basis of accounting. End of year balances for capital assets (in total) and long-term liabilities (in total) should be presented at the bottom of this summary schedule for information purposes. b. Ascertain that for each period presented, the total of revenues, expenditures, and transfers accounts fully for the changes in equity from the previous fiscal period. c. Compare amounts in the schedule relevant to the fiscal year ended June 30, 2010 to the state controller's report filed for the Redevelopment Agency for that period. d. Compare amounts in the schedule for the other fiscal periods presented to account balances in the accounting records or other supporting schedules. Describe in the report the type of support provided for each fiscal period. 5. Obtain from the Successor Agency a listing of all assets of the Low and Moderate Income Housing Fund as of June 30, 2012 for the report that is due October 1, 2012 and a listing of all assets of all other funds of the Successor Agency as of June 30, 2012 (excluding the previously reported assets of the Low and Moderate Income Housing Fund) for the report that is due December 15, 2012. When this procedure is applied to the Low and Moderate Income Housing Fund, the schedule attached as an exhibit will include only those assets of the Low and Moderate Income Housing Fund that were held by the Successor Agency as of June 30, 2012 and will exclude all assets held by the entity that assumed the housing function previously performed by the former redevelopment agency. Agree the assets so listed to recorded balances reflected in the accounting records of the Successor Agency. The listing should be attached as an exhibit to the appropriate AUP report. 6. Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that are restricted for the following purposes: a. Unspent bond proceeds: i. Obtain the Successor Agency s computation of the restricted balances (e.g., total proceeds less eligible project expenditures, amounts set aside for debt service payments, etc.). ii. Trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation (specify in the AUP report a description of such documentation). iii. Obtain from the Successor Agency a copy of the legal document that sets forth the restriction pertaining to these balances. Note in the AUP report the absence of language restricting the use of the balances that were identified by the Successor Agency as restricted. b. Grant proceeds and program income that are restricted by third parties: i.. Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less eligible project expenditures). ii. Trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation (specify in the AUP report a description of such documentation). SCHEDULE A (Continued) List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund (Continued) iii. Obtain from the Successor Agency a copy of the grant agreement that sets forth the restriction pertaining to these balances. Note in the AUP report the absence of language restricting the use of the balances that were identified by the Successor Agency as restricted. c. Other assets considered to be legally restricted: Obtain the Successor Agenc)%s computation of the restricted balances (e.g., total proceeds less eligible project expenditures). Trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation (specify in the AUP report a description of such documentation). iii. Obtain from the Successor Agency a copy of the legal document that sets forth the restriction pertaining to these balances. Note in the AUP report the absence of language restricting the use of the balances that were identified by Successor the Agency as restricted. d. Attach the above mentioned Successor Agency prepared schedule(s) as an exhibit to the AUP report. For each restriction identified on these schedules, indicate in the report the period of time for which the restrictions are in effect. If the restrictions are in effect until the related assets are expended for their intended purpose, this should be indicated in the report. 7. Perform the following: a. Obtain from the Successor Agency a listing of assets as of June 30, 2012 that are not liquid or otherwise available for distribution (such as capital assets, land held for resale, long-term receivables, etc.) and ascertain if the values are listed at either purchase cost (based on book value reflected in the accounting records of the Successor Agency) or market value as recently estimated by the Successor Agency. b. If the assets listed at 7(A) are listed at purchase cost, trace the amounts to a previously audited financial statement (or to the accounting records of the Successor Agency) and note any differences. c. For any differences noted in 7(B), inspect evidence of disposal of the asset and ascertain that the proceeds were deposited into the Successor Agency trust fund. If the differences are due to additions (this generally is not expected to occur), inspect the supporting documentation and note the circumstances. d. If the assets listed at 7(A) are listed at recently estimated market value, inspect the evidence (if any) supporting the value and note the methodology used. If no evidence is available to support the value and\or methodology, note the lack of evidence. 8. Perform the following: a. If the Successor Agency believes that asset balances need to be retained to satisfy enforceable obligations, obtain from the Successor Agency an itemized schedule of asset balances (resources) as of June 30, 2012 that are dedicated or restricted for the funding of enforceable obligations and perform the following procedures. The schedule should identify the amount dedicated or restricted, the nature of the dedication or restriction, the specific enforceable obligation to which the dedication or restriction relates, and the language in the legal document that is associated with the enforceable obligation that specifies the dedication of existing asset balances toward payment of that obligation. i. Compare all information on the schedule to the legal documents that form the basis for the dedication or restriction of the resource balance in question. SCHEDULE A (Continued) List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund (Continued) ii. Compare all current balances to the amounts reported in the accounting records of the Successor Agency or to an alternative computation. Compare the specified enforceable obligations to those that were included in the final Recognized Obligation Payment Schedule approved by the California Department of Finance. iv. Attach as an exhibit to the report the listing obtained from the Successor Agency. Identify in the report any listed balances for which the Successor Agency was unable to provide appropriate restricting language in the legal document associated with the enforceable obligation. b.. If the Successor Agency believes that future revenues together with balances dedicated or restricted to an enforceable obligation are insufficient to fund future obligation payments and thus retention of current balances is required, obtain from the Successor Agency a schedule of approved enforceable obligations that includes a projection of the annual spending requirements to satisfy each obligation and a projection of the annual revenues available to fund those requirements and perform the following procedures: i. Compare the enforceable obligations to those that were approved bythe Califomia Department of Finance. Procedures to accomplish this may include reviewing the letter from the California Department of Finance approving the Recognized Enforceable Obligation Payment Schedules for the six month period from January 1, 2012 through June 30, 2012 and for the six month period July 1, 2012 through December 31, 2012. ii. Compare the forecasted annual spending requirements to the legal document supporting each enforceable obligation. a. Obtain from the Successor Agency its assumptions relating to the forecasted annual spending requirements and disclose in the report major assumptions associated with the projections. iii. For the forecasted annual revenues: a. Obtain from the Successor Agency its assumptions for the forecasted annual revenues and disclose in the report major assumptions associated with the projections. c. If the Successor Agency believes that projected property tax revenues and other general purpose revenues to be received by the Successor Agency are insufficient to pay bond debt service payments (considering both the timing and amount of the related cash flows), obtain from the Successor Agency a schedule demonstrating this insufficiency and apply the following procedures to the information reflected in that schedule. Compare the timing and amounts of bond debt service payments to the related bond debt service schedules in the bond agreement. Obtain the assumptions for the forecasted propertytax revenues and disclose major assumptions associated with the projections. iii. Obtain the assumptions for the forecasted other general purpose revenues and disclose major assumptions associated with the projections. d. If procedures A, B, or C were performed, calculate the amount of current unrestricted balances necessary for retention in order to meet the enforceable obligations by performing the following procedures. SCHEDULE A (Continued) List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund (Continued) i. Combine the amount of identified current dedicated or restricted balances and the amount of forecasted annual revenues to arrive at the amount of total resources available to fund enforceable obligations. ii. Reduce the amount of total resources available bythe amount forecasted forthe annual spending requirements. A negative result indicates the amount of current unrestricted balances that needs to be retained. iii. Include the calculation in the ALP report. 9. If the Successor Agency believes that cash balances as of June 30, 2012 need to be retained to satisfy obligations on the Recognized Obligation Payment Schedule (ROPS) for the period of July 1, 2012 through June 30, 2013, obtain a copy of the final ROPS for the period of July 1, 2012 through December 31, 2012 and a copy of the final ROPS for the period January 1, 2013 through June 30, 2013. For each obligation listed on the ROPS, the Successor Agency should add columns identifying (1) any dollar amounts of existing cash that are needed to satisfy that obligation and (2) the Successor Agency's explanation as to why the Successor Agency believes that such balances are needed to satisfy the obligation. Include this schedule as an attachment to the AUP report. 10. Include (or present) a schedule detailing the computation of the Balance Available for Allocation to Affected Taxing Entities. Amounts included in the calculation should agree to the results of the procedures performed in each section above. The schedule should also include a deduction to recognize amounts already paid to the County Auditor -Controller on July 12, 2012 as directed bythe California Department of Finance. The amount of this deduction presented should be agreed to evidence of payment. The attached example summary schedule may be considered for this purpose. Separate schedules should be completed for the Low and Moderate Income Housing Fund and for all other funds combined (excluding the Low and Moderate Income Housing Fund). 11. Obtain a representation letter from Successor Agency management acknowledging their responsibility for the data provided to the practitioner and the data presented in the report or in any attachments to the report. Included in the representations should be an acknowledgment that management is not aware of any transfers (as defined by Section 34179.5) from either the former redevelopment agency or the Successor Agency to other parties for the period from January 1, 2011 through June 30, 2012 that have not been properly identified in the AUP report and its related exhibits. Management's refusal to sign the representation letter should be noted in the AUP report as required by attestation standards. Procedure 1 ATTACHMENT B7 List of Assets Transferred from the Former Redevelopment Agency to the Successor Agency Low and Moderate Housing Fund As of February 1, 2012 Asset Pooled Cash Cash with Fiscal Agent Investments - Current Interest Receivable Premium/Discount on Investment Balance at 211/2012 $ 30,938,646 10,775,585 17,800,000 9,695 (2,486) Total Assets transferred: $ 59,521,440 ATTACHMENT B2 Procedure 2 Listing of Transfers (excluding payments for goods and services) to the City Low and Moderate Housing Fund For the Period from January 1, 2011 through June 30, 2012 Enforceable Obligation (EO)/ Legal Other Legal Documentation Describe Purpose of Transfer Requirement (LR) Amount Obtained? (Y/N) None lI IIJ Procedure 3 ATTACHMENT B3 Listing of Transfers (excluding payments for goods and services) to other public agencies or private parties Low and Moderate Housing Fund For the Period from January 1 2011 through June 30 2012 Enforceable Obligation (ED)/ Legal Other Legal Documentation Describe Purpose of Transfer Requirement (LR) Amount Obtained? (Y/N) From former Redevelopment Agency to other public agencies or Private parties for January 1. 2011 through January 31, 2012: Loans Receivable to the La Quinta Housing Authority LR $ 2,035,388 Y Interest on Loans Receivable to the La Quinta Housing Authority LR 1,930,492 Y Sub -total: 3,965,880 From Successor Agency to other Public agencies or private parties for February 1 2012 through June 30, 2012 Loans Receivable to the La Quinta Housing Authority LR $ 1,251,556 Y Interest on Loans Receivable to the La Quinta Housing Authority LR 8,559 Y Sub -total: 1,260,115 Total Transfers to other public agencies or private parties for 1/1/2011 through 6/30/2012: $ 5,225,996 Procedure 4 ATTACHMENTB4 Summary of the financial transactions of Redevelopment Agency and Successor Agency Low and Moderate Housing Fund Per schedule attached to List of Procedures for Due Diligence Review NOT APPLICABLE TO THE LOW AND MODERATE HOUSING FUND DUE DILIGENCE REVIEW 0 Procedure 5 Listing of All Assets (excluding all assets held by the entity that assumed the housing function) Low and Moderate Housing Fund As of June 30, 2012 ATTACHMENT B5 Amount Asset Cash 245-0000-101.00-00 Pooled Cash $ 4,609,935 246-0000-101.00-00 Pooled Cash 13,329,563 TOTAL CASH: $ 17,939,498 Investments 245-0000-103.82-25 Investments -Current 2,600,000 248-0000-103.00-00 Investments - Current 2,800,000 249-0000-103.00-00 Investments - Current 25,000,000 TOTAL INVESTEMENTS: 30,400,000 Cash with fiscal agent 245-0000-102.82-07 94 Bond Issue 473,629 245-0000-102.82-14 2004 Bond Issue 2,626,101 245-0000-102.82-25 2011 Debt Service Reserve 96,659 245-0000-102.82-40 2011 Housing Bonds 727,542 246-0000-102.82-14 2004 Bond Issue 1,293,452 246-0000-102.82-40 2011 Housing Bonds 358,342 248-0000-102.81-17 2004 FA Bond Issue 207,695 249-0000-102.81-20 2011 Bond Proceeds 532,913 TOTAL CASH WITH FISCAL AGENT: 6,316,333 Interest receivable 1,471 245-0000-125.00-00 Interest Receivable 246-0000-125.00-00 Interest Receivable 5,752 TOTAL INTEREST RECEIVABLE: 7,223 Other Assets 245-0000-150.00-00 Premium/Discount on Investment (349) 248-0000-150.00-00 Premium/Discount on Investment (761) 249-0000-150.00-00 Premium/Discount on Investment (7,205) TOTAL OTHER ASSETS: (8,315) TOTAL ASSETS AT 6/30/2012: $ 54,654,739 Procedure 6 ATTACHMENT B6 Listing of Assets that are restricted Low and Moderate Housing Fund As of June 30, 2012 Legal Documentation Documentation Item # Description Referenced Amount Purpose Obtained? (YIN) Cash with fiscal Agent a) Series 94 Bond Issue 245-0000-103.82-25 b) Series 2004 Bond Issue 245-0000-102.82-14 c) Series 2011 Debt Service Reserve 245-0000-102.82-25 d) Series 2011 Housing Bond 245-0000-102.82-40 e) Series 2004 Bond Issue 246-0000-102.82-14 f) Series 2011 Housing Bond 246-0000-102.82-40 g) Series 2011 Debt Service Reserve 245-0000-103.82-25 2 Unspent bond proceeds a) 2004 FA Bond Issue 248-0000-102.81-17 b) 2004 FA Bond Issue 248-0000-103.00-00 c) 2011 Bond Proceeds 249-0000-102.81-20 N d) 2011 Bond Proceeds 249-0000-103.00-00 TOTAL: 473,629 Set aside for debt service payments Y 2,626,101 Set aside for debt service payments Y 96,659 Set aside for debt service payments Y 727,542 Set aside for debt service payments Y 1,293,452 Set aside for debt service payments Y 358,342 Set aside for debt service payments Y 2,600,000 Set aside for debt service payments 207,695 Project cash Y 2,800,000 Project cash Y 532,913 Project cash Y 25,000,000 Project cash Y $ 36,716,333 Procedure 7 ATTACHMENT B7 Listing of Assets That Are Not Liquid or Otherwise Available for Distribution Low and Moderate Housing Fund As of June 30, 2012 Variance Noted? Item # Description Reference Amount Value Method (Y/N) 1 Premium/Discount on Investment a) Premium/discount on investment N/A $ (8,315) Amortized balance N TOTAL RESTRICTIONS OF NON -CASH ITEMS w Procedure 8a ATTACHMENT Bile Listing of Assets (resources) that are dedicated or restricted for the funding of enforceable obligations Low and Moderate Housing Fund As of June 30, 2012 Amount Restricted for Amount Paid in Obligation from Legal Approved Period Ending June 30, 2012 Documentation Item # Project Name Reference Obligation Amount June 30, 2012 Balance Obtained? (YIN) 1 Coral Mountain Apartments Project Area 2. In 4 $ 29,000,000 $ 10,302,262 $ 17,946,721 Y $ 29,000,000 $ 10,302,262 $ 17,946,721 Procedure Sb ATTACHMENT BBb Listing of Assets (resources) that need to be retained due to insufficient funding for the funding of enforceable obligations Low and Moderate Housing Fund As of June 30, 2012 Approved Designated Amount Amount Needed to be Legal Obligation Plus Estimated Revenue Retained from June Documentation Item # Project Name Reference Amount Future Revenues Source 30, 2012 Balance Obtained? (YIN) None. Procedure 8c ATTACHMENT B8c Listing of Assets (resources) that need to be retained due to projected insufficient property tax revenues for bond debt payments Low and Moderate Housing Fund As of June 30, 2012 Amount Needed to be Retained from Legal Approved Estimated Future Revenue June 30, 2012 Documentation Item # Project Name Reference Obligation Amount Revenues Source Balance Obtained? (Y/N) None. R Procedure 9 ATTACHMENT 89 Listing of Assets (resources) that need to be retained due to projected Insufficient property tax revenues for future ROPS Low and Moderate Housing Fund As of June 30, 2012 Amount Needed to Approved Estimated be Retained from Identified on Obligation Future June 30, 2012 the ROPS 2 Item # Project Name Reference Amount Revenues Revenue Source Balance or 3? None. Procedure 10 ATTACHMENT B10 Summary of Low -Mod Balances Available for Allocation to Affected Taxing Entities Total amount of assets held by the successor agency as of June 30, 2012 (procedure 5) Add the amount of any assets transferred to the city or other parties for which an enforceable obligation with a third party requiring such transfer and obligating the use of the transferred assets did not exist (procedures 2 and 3) To City To other parties Less assets legally restricted for uses specified by debt covenants, grant restrictions, or restrictions imposed by other governments (procedure 6) Less assets that are not cash or cash equivalents (e.g., physical assets) - (procedure 7) Less balances that are legally restricted for the funding of an enforceable obligation (net of projected annual revenues available to fund those obligations) - (procedure 8) Less balances needed to satisfy ROPS for the 2012-13 fiscal year (procedure 9) Less the amount of payments made on July 12, 2012 to the County Auditor -Controller as 00 directed by the California Department of Finance Amount to be remitted to county for disbursement to taxing entities 54,654,739 (36,716,333) 8,315 (17,946,721) Reports & Informational Item No. R1 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY MEMORANDUM TO: Honorable Chairperson and Members of the Oversight Board FROM: Debbie Powell, Economic Development/Housing Manag ers--%e-Q-Q- DATE: October 3, 2012 SUBJECT: Update on Department of Finance Review of Recognized Obligation Payment Schedule for January 2013 through June 2013 At the August 8, 2012 Oversight Board meeting, the Oversight Board took action on the following item: • Adoption of a Resolution Approving a Recognized Obligation Payment Schedule for the period of January 2013 through June 2013. The Department of Finance was notified of the Oversight Board's actions on the same day, immediately following the Oversight Board meeting. On August 20, 2012, the Department of Finance asked for additional documentation on two items: • Rutan & Tucker (legal services) contract for legal expenses for the Coral Mountain affordable housing project, and a project update; and • Tall Man Group contract for project and construction management of the Washington Street Apartments rehabilitation project. The requested information was sent to the DOF on August 23, 2012. The Department of Finance has 45 days to make a determination. On September 24, 2012, staff received a letter from the DOF approving the BOPS. (Attachment 1.) ATTACHMENT 1 gNT Oa A� m III n o n s DEPARTMENT OF emwmo a. 9ROwN JR. • GOVERNOR ctA,,.v.,,P-F 1 N A N C E 915 L BTKSt ■ 9AURAMTNTC CA ■ 95014-9706 ■ w .GGF.CA.MOV September 24, 2012 Ms.. Debbie Powell, Economic Development/Housing Manager City of La Quinta P.O. Box 15N La Quinta, CA 92247-1504 Dear Ms. Powell: Subject: Recognized Obligation Payment Schedule Approval Letter Pursuant to Health and Safety Code (HSC) section 34177 (m), the City of La Quinta successor agency submitted a Recognized Obligation Payment Schedule (ROPS III) to the California Department of Finance (Finance) on August 10, 2012 for the period of January through June 2013. Finance has completed its review of your ROPS III, which may have Included obtaining clarification for various items. Based on our review, we are approving all of the items listed on your ROPS III at this time. The Agency's maximum approved Redevelopment Property Tax Trust Fund (RPTTF) distribution for the reporting period is $7,040,411 as summarized below: Approved RPTTF Distribution Amount For the period of January through June 2013 Total RPTTF funding requested for obligations $ 6,835,350 Lets: Six-month total for ftem(s) denied or reclassified as administrative cost 0 approved RPTTF for enforceable obligations Allowable RPTTF distribution for administrative cost for ROPS III Pursuant to HSC section 34186 (a), successor agencies were required to report on the ROPS III form the estimated obligations and actual payments associated with the January through June 2012 period. The amount of RPTTF approved in the above table will be adjusted by the county auditor -controller to account for differences between actual payments and past estimated obligations. Additionally, these estimates and accounts are subject to audit by the county 2uditor-controller and the State Controller. Please refer to the ROPS III schedule that was used to calculate the approved RPTTF amount: http://www.dof.ca.aov/redevelor)ment/ROPS/ROPS tll Forms by Successor Anencv/. Ms: Debbie Powell September 24, 2012 Page 2 All items listed on a future ROPS are subject to a subsequent review. An item included on a future ROPS may be denied even if it was not questioned from the preceding ROPS. The amount available from the RPTTF is the same as the property tax increment that was available prior to enactment of ABxt 26 and AB 1484. This amount is not and never was an unlimited funding source. Therefore, as a practical matter, the ability to fund the items on the ROPS with property tax is limited to the amount of funding available to the successor agency in the RPTTF. Please direct inquiries to Beliz Chappuie, Supervisor or Mindy Patterson, Lead Analyst at (816) 445-1546. Sincerely �STEVESZALAY Local Government Consultant cc: Mr. Frank Spevacek, Executive Director, City of La Quints Ms. Pam Elias, Chief Accountant, Property Tax Division, County of Riverside Auditor -Controller Reports & Informational Item No. R2 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY MEMORANDUM TO: Honorable Chairperson and Members of the Oversight Board FROM: Debbie Powell, Economic Development/Housing Manager,--�,,,,,-a--- DATE: October 3, 2012 SUBJECT: Update Regarding City and Successor Agency Property Transactions Pertaining to SilverRock Resort, the Highway 111 Retail Property and Other Public Properties In early 2011, the State was working on legislation to dissolve redevelopment. During the first six months of 2011, the La Quinta Redevelopment Agency transferred ten (10) public properties to the City of La Quinta; and sold to the City, at fair market value based on appraisals, vacant properties slated for private development at SilverRock Resort and on Highway 111 east of Dune Palms. The purchase and sale transactions were completed in March and April 2011. Many of public property transfers relate to fully developed public facilities. As to several of the properties, the Redevelopment Agency Board had authorized the approval of the transfer to the City in 2009, long before there was talk of any dissolution of redevelopment agencies. Because of certain title related issues, the transfers were not completed until 2011. ABx1 26 was upheld by the Supreme Court in December 2011. It contains a two- year "clawback" provision that purportedly allows the State to unwind any property transfers which occurred after January 2011, which includes RDA/city property transfers. At the October 2, 2012 Successor Agency and City Council meeting, the City and Successor Agency are scheduled to take certain actions to facilitate the ultimate disposition of the properties. Staff will provide an update during the meeting. PUBLIC NOTICE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA O.UINTA REDEVELOPMENT AGENCY LOW -MODERATE INCOME HOUSING FUND DUE DILIGENCE REVIEW PURSUANT TO AB 1484 NOTICE IS HEREBY GIVEN that the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency will meet on Wednesday, October 3, 2012 at 2:00 p.m. to hear public comments and input regarding the Low -Moderate Income Housing Fund Due Diligence Review pursuant to Health & Safety Code Section 34179.5. The Board will then be requested to convene on Wednesday, October 10, 2012 at 2:00 p.m. to consider and approve the Housing Fund Due Diligence Review. All interested parties are invited to attend said meetings. Additional information relative to the above may be obtained from the Oversight Board Secretary at (760) 777-7108 or visit the City's website at www.la-guinta.org. Lori Lafond Oversight Board Secretary Dated this 27`h day of September 2012 POSTED: September 27, 2012