DEPARTMENT OF FINANCE

LOCAL GOVERNMENT UNIT

REDEVELOPMENT AGENCY DISSOLUTION

OVERVIEW Local Government Unit

Goals and Objectives Audits and Review Dispute Resolution/Property Disposition Program, Policy, and Budgets

OVERVIEW (CONTINUED) Current Projects

July 2012 True Up Payments Housing Asset Transfer Forms ROPS Reviews Due Diligence Reviews Property Disposition Meet and Confer Sessions Finding of Completion Long-Range Property Management Plan Final and Conclusive Enforceable Obligation

Determinations Questions and Answers

LOCAL GOVERNMENT UNIT (CONTINUED)

Goals and Objectives

Oversee the Winding Down of Redevelopment Agencies

Protect Core Public Services by Ensuring Proper Collection of Former Redevelopment Agency Tax Increment and Liquidation of Property Assets for Distribution to Local Taxing Entities

Developing Positive Working Relationships with Counties, Cities, and Other Stakeholders

Protect Bond Holders Minimize Litigation when Possible

LOCAL GOVERNMENT UNIT (CONTINUED)Organization Chart

       Program Budget Manager

Executive Assistant   

                      Attorney   

Office Technician         

Assistant Program Budget Manager 

  

                                        

Principal Program Budget Analyst Principal Program Budget Analyst  Assistant Chief Program, Policy, and Budgets Dispute Resolution/Property Disposition Audits and Review

                  Office Technician

                 Budget Analyst Budget Analyst  

       Audit Managers   

         Budget Analyst  

   Audit Supervisors

     

       45 Auditors and 20 Retired Annuitants

       

LOCAL GOVERNMENT UNIT (CONTINUED)

Program, Policy, and Budget -- Responsibilities Performs Budget Related Activities During the Fall and

Spring Budget Development Process Compiles, Tracks, and Disseminates Fiscal and Budget

Information to Management and Stakeholders Serves as Primary Program Contact with Local

Government Entities, Legislative Consultants, and the Legislative Analyst’s Office

Represents the Administration During Budget and Committee Hearings

Develops and Refine Program Policies Identify Issues with Enabling Legislation and Drafts

Proposed Fixes Develop Reporting Forms and Assist with Establishing

Review Criteria

LOCAL GOVERNMENT UNIT (CONTINUED)

Audit and Review -- ResponsibilitiesDevelop Reporting Forms and Criteria for Review and Approval of Recognized Obligation Payment SchedulesDevelop Reporting Forms and Criteria for Review and Approval of Housing Entities Assets Inventory SubmittalsDevelop Criteria for Review and Approval of True-Up Payment ProtestsDevelop Criteria for Review and Approval of Due Diligence ReviewsDevelop Criteria for Review and Approval of Final and Conclusive Enforceable ObligationsParticipate in Meet and Confer Sessions when Needed

LOCAL GOVERNMENT UNIT (CONTINUED)

Meet and Confer/Property Disposition -- ResponsibilitiesDevelop Forms and Processes to be Used for the Meet and Confer SessionsCoordinate Requests to Meet and Confer and Schedule Meetings with Appropriate Staff and Local EntitiesDraft Findings of Meet and Confer Issues for Distribution to Management and RequestorsEstablish Guidelines for Governmental Purpose Property DispositionsDevelop Approval Process for Finding of Completion IssuancesDevelop Approval Process for Long-Range Property Management Plans

CURRENT PROJECTS July 2012 True Up Payments Housing Asset Transfer Forms ROPS Reviews Due Diligence Reviews Property Disposition Meet and Confer Sessions Finding of Completion Long-Range Property Management Plan Final and Conclusive Enforceable Obligation

Determinations

CURRENT PROJECTS (CONTINUED)JULY TRUE UP PAYMENT

Health and Safety Code (HSC) section 34183.5 subdivision (b) as added by AB 1484 clarified that property tax distributed to redevelopment agencies in December 2011 or January 2012 should have been subject to distribution through the AB x1 26 mechanism.

In part due to confusion about the Supreme Court’s order regarding the changes in deadlines under AB x1 26, very few, if any, counties correctly adjusted the June 1 property tax payments to successor agencies to capture the amount of funds owed to taxing entities for the January through June period.

CURRENT PROJECTS (CONTINUED)JULY TRUE UP PAYMENT

No later than July 9, 2012, county auditor-controllers were required to notify each successor agency of the “residual” amount it still owes to affected taxing entities (ATEs), if anything, for the period covered by the January 2012 to June 2012 ROPS, after the payment of property tax-funded enforceable obligations and agency administrative costs that were approved by Finance.

Failure to remit the residual amount to the county auditor-controller could result in penalties for the successor agency and/or the city that created the RDA

27 Successor Agencies failed to remit payment To date no penalties have been levied against these

Successor Agencies

CURRENT PROJECTS (CONTINUED)HOUSING ASSET TRANSFERS

Pursuant to HSC section 34176 (a) (2), the entity assuming the housing functions of the former redevelopment agency is required to submit to the Department of Finance a list of all housing assets by August 1, 2012.

The list must adequately detail how the housing asset meets the criteria specified in HSC Section 34176 (e) and must also include all assets transferred between February 1, 2012 and the date upon which the list is created.

CURRENT PROJECTS (CONTINUED)HOUSING ASSET TRANSFERS

DOF has 30 days to review and object to any transfers included on the Housing Asset Transfer Form.

If there is any disagreement with our determination the Housing Entity assuming the functions may request a meet and confer on the issue.

To date Finance has issued over 360 determination letters and has received over 150 requests to meet and confer.

Due Date Document Time Period

September 1 ROPS 3 January to June 2013

March 1 ROPS 4 July to December 2013

October 1 ROPS 5 January to June 2014

March 1 &

October 1 Subsequent ROPS Every 6 months until

all obligations are paid

CURRENT PROJECTS (CONTINUED)ROPS REVIEW

CURRENT PROJECTS (CONTINUED)ROPS REVIEW

By September 1• ROPS 3 for the period January to June 2013 is due to DOF

for review and approval.

Late Penalty• $10,000 for each day late after September 1• After 10 days, maximum administrative costs allowed is

reduced by 25 percent.

CURRENT PROJECTS (CONTINUED)ROPS REVIEW

• Upon receipt of ROPS forms, DOF has 45 days to complete review and deny any ROPS items.

• Agencies are not allowed to make payments on items denied by DOF.

• Items not denied can be reviewed and denied during a subsequent ROPS review.

• DOF’s final determination must be communicated to successor agencies and county auditor-controllers 15 days before the date of property tax distribution.

January 1: January – June ROPS June 1: July – December ROPS

CURRENT PROJECTS (CONTINUED)ROPS REVIEW

Successor agency may request to meet and confer with department to resolve any disputes.

Request within 5 business days of determination.

Department shall either confirm or modify determinations within 30 days of request.

CURRENT PROJECTS (CONTINUED) OTHER ROPS NOTABLES

ROPS Database HSC 34186 (a) – Differences between actual

payments and past estimated obligations HSC 34182.5 – County A/C review of ROPS ROPS III forms and Review Letters on Website Exhibit 12 ROPS Review Distributions

CURRENT PROJECTS (CONTINUED)DUE DILIGENCE REVIEWS

HSC Section 34179.5 requires each Successor Agency to employ a licensed accountant, approved by the county auditor-controller and with experience and expertise in local government accounting, to conduct a due diligence review to determine the unobligated balances available for transfer to taxing entities. As an alternative, an audit provided by the county auditor-controller that provides the information required by this section may be used to comply with this section with the concurrence of the oversight board.

CURRENT PROJECTS (CONTINUED)DUE DILIGENCE REVIEWS

There are two Due Diligence Reviews to be conducted Low-Moderate Income Housing Fund (LMIHF) All other Funds and Accounts

The LMIHF review is due to Finance by October 15, 2012

The all other Funds and Account review is due by January 15, 2013

DOF is required to review the Due Diligence Reviews and make determinations related to the unobligated balances available for transfer to taxing entities

If there is a disagreement with DOF’s determination a request to meet and confer may be made within 5 business days of DOF’s determination.

CURRENT PROJECTS (CONTINUED)PROPERTY DISPOSITION

CURRENT PROJECTS (CONTINUED)PROPERTY DISPOSITION

CURRENT PROJECTS (CONTINUED)MEET AND CONFER SESSIONS

AB 1484 allows for meet and confer with the Department of Finance on specified issues. Meet and Confer can only be used for new determinations and cannot be used to change decisions made prior to the enactment of AB 1484. The specific topics authorized in AB 1484 for meet and confer include: ROPS submittals, beginning with the January 2013

through June 2013 ROPS. See HSC Section 34177 (m). Previous ROPS are not authorized for meet and confer.

Housing Assets Submittals. See HSC Section 34176 (a) (2).

Due diligence reviews. See HSC Section 34179.6 (e).

CURRENT PROJECTS (CONTINUED)MEET AND CONFER SESSIONS

CURRENT PROJECTS (CONTINUED)FINDING OF COMPLETION

The Department of Finance will issue a finding of completion within five business days, once the following conditions have been met:  The successor agency has paid the full amount as

determined during the due diligence reviews and the county auditor-controller has reported those payments to the Department of Finance.

The successor agency has paid the full amount as determined during the July True-Up process. 

Or 

The successor agency has paid the full amount upon a final judicial determination of the amounts due and confirmation that those amounts have been paid by the county auditor-controller.

CURRENT PROJECTS (CONTINUED)FINDING OF COMPLETION

Once a Finding of Completion is Made:

Real property can be transferred to the Community Redevelopment Property Trust Fund and used in accordance with the Long Range Property Management Plan.Loans between the former RDA and the Sponsoring Entity can become enforceable.Bond proceeds from bonds issued before Dec 31, 2010 can be used for the purposes in which they were sold.

CURRENT PROJECTS (CONTINUED)LONG-RANGE PROPERTY MANAGEMENT

PLAN The successor agency shall prepare a long-

range property management plan that addresses the disposition and use of the real properties of the former redevelopment agency.

The report shall be submitted to the oversight board and the Department of Finance for approval no later than six months following the issuance to the successor agency of the finding of completion.

CURRENT PROJECTS (CONTINUED)FINAL AND CONCLUSIVE EO

DETERMINATIONS A Successor Agency can request to have an

Enforceable Obligation be determined to be final and conclusive.

If DOF were to agree to the request, the Enforceable Obligation would no longer be subject to DOF rejection during ROPS reviews. DOF would only be allowed to object to the dollar amount listed for EO in the future.

There is no timeline specified for DOF to make determinations related to this type of request when they come in.

ADDITIONAL INFORMATION

DOF public website (www.dof.ca.gov/redevelopment)

FAQs Templates DOF Letters

Contact Information (916) 445-1546 Redevelopment_Administration@dof.ca.gov

QUESTIONS