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Home My WebLink About10.A- Mayor's Office ® II DOC ID: 2328 CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION Budget From: Patrick J. Morris M/CC Meeting Date: 03/18/2013 Prepared by: Georgeann"Gigi" Hanna, Dept: Mayor's Office Ward(s): All Subject: Initiate Process for the Acceptance of Assets of the San Bernardino Economic Development Corporation, as Ordered by the State Controller's Office Final Asset Transfer Review Report Dated March 6, 2013. (At Meeting of March 14, 2013, Item Continued to March 18,2013.) Current Business Registration Certificate: Not Applicable Financial Impact: Account Budgeted Amount: «Inert Amount>> Account No. «Inert Account No» Account Description: «Inert Account Description Balance as of: «Insert Date>> Balance after approval of this item: «Inert Amount>> Please note this balance does not indicate available funding. It does not include non-encumbered reoccurring expenses or expenses incurred,but not yet processed. Motion: That the Mayor and Common Council Acting as the Successor Agency to the Redevelopment Agency of the City of San Bernardino ("Successor Agency"), direct the City Manager, working with the City Attorney, to bring back the appropriate resolution(s) and documentation to accomplish the following: (1) accept the assets of the San Bernardino Economic Development Corporation ("SBEDC") proposed to be transferred by the SBEDC to the Successor Agency, as ordered by the State Controller's Office Final Asset Transfer Review Report dated March 6, 2013 (SBEDC Assets); (2) that acceptance of the SBEDC Assets be subject to a prior complete inventory and review of the SBEDC Assets, and that acceptance of the SBEDC Assets include acceptance by the Successor Agency of any and all outstanding liabilities, conditions, encumbrances, or other claims recorded upon, associated with, or otherwise arising from or related to the SBEDC Assets; (3) that acceptance of the SBEDC Assets be done under protest and with a reservation of any and all rights to assert, claim, and defend the validity and legality of the initial transfer of the SBEDC Assets from the former Redevelopment Agency of the City of San Bernardino to the SBEDC; and (4)that acceptance of the SBEDC Assets include the Successor Agency's acknowledgement and acceptance of all liability associated with the transfer of the SBEDC Assets, including indemnifying, defending, and holding harmless the SBEDC Board of Directors for any actions, claims or liability arising out or connected with SBEDC's ownership and transfer of the SBEDC Assets. Synopsis of Previous Council Action: «Inert synopsis here>> OBackground: I I i Updated: 3/14/2013 by Linda Sutherland 2328 «Inert background here>> Supporting Documents: Updated:3/14/2013 by Linda Sutherland cket Pg. 1071 eEkWARp�� } op `O YpFD 010 INTER OFFICE MEMORANDUM OFFICE OF THE CITY ATTORNEY CITY OF SAN BERNARDINO TO: Mayor and Common Council From: James F. Penman City Attorney Date: March 18, 2013 Subject: Delinquent Taxes/Tax Liens on SBEDC and AHS Properties and Conflict of Interest for Mayor and Current and Former SBEDC Board Members cc: City Manger, City Clerk, Tom Clark, Michael Busch, Steve Dukett As a result of the follow-up to the questions raised by Council Member McCammack last Thursday, the following limited and incomplete information has been discovered to date, by Urban Futures, Stradling Yocca Carlson and Rauth, P.C., and the City Attorney's Office: After the property owned by the former San Bernardino City Redevelopment Agency was transferred to the non-profit,San Bernardino Economic Development Corporation(SBEDC),and to Affordable Housing Solutions(AHS)said properties were assessed property taxes and billed for those taxes,at some point in time. Tax bills were apparently addressed to San Bernardino Economic Development Corporation C/O Redevelopment Agency of City of San Bernardino. Further research is in progress to confirm this information. The taxes assessed were not paid when due in December 2012 and supplemental taxes that were due prior to April 2013. The Current Due tax debt is for April 2013. The amounts due, including penalties and interest to date is $2.9 million. That amount is the total for SBEDC and AHS and also includes approximately$881,000 of unsecured taxes that PLACO owes. The SBEDC owes approximately$1.9 million in arrears and AHS owes approximately$1 million in arrears. (0,4 4 n_1 /in /9n V2 Mayor and Common Council Delinquent Property Taxes/Tax Liens March 18, 2013 Page two Certain properties,still listed as being owned by the RDA were overlooked when the transfers were done in March 2011. There are no taxes due on those properties because they continued to qualify for the government exemption. The Carousel Mall properties are owned by the Carousel Mall,LLC. This is a limited liability,for- profit corporation whose sole member is the SBEDC. The SBEDC currently consists of the Mayor and two Council Members appointed by the Mayor. Last spring,the San Bernardino Area Chamber of Commerce and the attorney for the San Bernardino City Unified School District Board of Directors separately notified the City Attorney in April 2012 that both entities were withdrawing from the SBEDC and their representatives would no longer attend meetings of the SBEDC. (The Mayor said last week that he had received contrary information from the SBCUSD. However, in conversations with School Board President Barbara Flores Saturday and again last night, she confirmed to me what their attorney told me last year. She said we will receive a letter this week withdrawing the SBCUSD from participation in the SBEDC.) According to the SBEDC website (which is not up to date) the SBEDC board of directors did not meet between March 10, 2012 and March 13, 2013. A meeting was attempted in November 2012, but Council Member Kelley was absent and there was no quorum. Their first recent meeting was last Wednesday, March 13, 2013. Present as voting members were Mayor Moms and Council Members Chas Kelley and Fred Shorett. Council Member Rikke Van Johnson was a past voting member of the SBEDC board. The San Bernardino Area Chamber of Commerce delivered a letter of resignation from the SBEDC on March 8, 2013. It is unknown why the taxes were not paid. It is unknown if the SBEDC or the AHS qualified for the Welfare Exemption(Revenue and Taxation Code§214(a)). It is unknown if the SBEDC or the AHS applied for the Welfare Exemption or if either one submitted the Welfare Exemption form. We understand that it is the position of the San Bernardino County Assessor that the SBEDC and the AHS do not qualify for the Welfare Exemption. It is unknown why the Common Council was not informed of the receipt of the tax bills. It is not known why the Common Council was not notified the property taxes were not going to be paid and were not paid. It is not known why the Common Council was not informed that liens were placed on the property. It is unknown why the Common Council was not informed that interest on the Mayor and Common Council Delinquent Property Taxes/Tax Liens March 18, 2013 Page three delinquent taxes was accruing daily. We have been informed that the Mayor was not advised of any of this information either. It is unknown why the SBEDC did not ask the City as the Successor Agency(CASA)to accept the property back in order to halt the daily accumulation of taxes(as opposed to the daily accumulation of interest) on each of the parcels, unless they too were unaware of the tax issue. We are researching to confirm whether or not the SBEDC and/or the AHS qualifies for the Welfare Exemption. If they do qualify there would be a question as to whether it is possible to file late for the Welfare Exemption and whether that would zero out or reduce the amount of taxes owed. It is important for the Mayor and Common Council to understand that this information is not complete, we are attempting to verify some parts of it. We will keep you advised as more information and research results become available. In the meantime, Mayor Morris and Council Members Shorett, Kelley and Johnson have personal conflicts of interest,including potential financial conflicts,regarding the issue of whether or not the property should be accepted for transfer from the SBEDC to the CASA and whether or not the CASA should accept the liability of the SBEDC. Obviously,if the CASA accepts the liabilities of the SBEDC, the Mayor and three council members would not have any liability for failure to pay the taxes, failure to file the WE form and failure to advise the CASA of the taxes and tax liens, on the property transferred from the EDA to the SBEDC. Therefore, they should abstain from presiding over any meeting, discussing or voting on these issues during meetings of the CASA and San Bernardino City Council,and specifically on item l0A on today's Council open session agenda. R spectfully submitted, ames F. 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Order. 14.0308 Applicability to Partnership Transactions. 14.0309 Credit for City Imposed Real Property Transfer Tax. 14.0310 Stamps—Redemption by Recorder. 14.0311 Administration, Allocation, and Distribution of Proceeds. 14.0312 Tax Payment Required Before Recordation—Location and Sales Data Required. 14.0313 (Deleted by Ord. 1430, passed - -1968). 14.0314 Procedure for Claiming Refunds of Taxes. 14.0315 Administrative Interpretation. 14.0316 Recorder May Require Sales Records. 14.0317 Intentional Avoidance by Misrepresentation a Misdemeanor. 14.0318 Parcel Numbers on Instruments of Conveyance. W§ 14.0301 Title. This Chapter shall be known as the "Real Property Transfer Tax Code of the County of San Bernardino."It is adopted pursuant to Revenue and Taxation Code §§ 11901 et seq. (Ord. 1394,passed- -1967) f�§ 14.0302 Tax Imposed—Rate. There is hereby imposed on each deed, instrument or writing by which any lands,tenements, or other realty sold within the County of San Bernardino shall be granted, assigned,transferred, or otherwise conveyed to or vested in the purchaser or purchasers or any other person or persons by his or her or their direction when the consideration or value of the interest or property conveyed(exclusive of the value of any lien or encumbrances remaining thereon at the time of sale) exceeds $100.00, a tax at the rate of$0.55 for each$500.00 or fractional part thereof. (Ord. 1394,passed - -1967) San Bernardino County Recorder-Clerk 222 W. Hospitality lane, 11'Floor,San Bernardino CA 92415-0022 Public Counter Hours 8 a.m.to 4:00 p.m., Monday-Friday FEE SCHEDULE Effective January 1,2013 (Subject to change) Recording Fees Code Fee First page of all titles not associated with the Real Estate Fraud Fee GC27361, GC 27361.4, GC27397, $ 15.00 (8 1/2 x 11) Cnty 16.0203 First page of all titles associated with the Real Estate Fraud Fee GC27361, GC 27361.4, GC27388, $ 18.00 (8 'h x 11) GC27397, Cnty 16.0203 Assignment of Deed of Trust • Amended Deed of Trust Abstract of Judgment Affidavit • Assignment of Rents Assignment of a Lease • Construction Trust Deed • Covenants, Conditions, and Restrictions (CC&Rs) • Declaration of Homestead Deed of Trust • Easement Lease • Lien • Lot Line Adjustment • Mechanics Lien • Modification for Deed of Trust • Notice of Completion • Notice of Default • Notice of Rescission of Declaration of Default • Notice of Trustee's Sale • Quitclaim Deed, • Release • Reconveyance Request for Notice • Subordination Agreement • Substitution of Trustee Trustee's Deed Upon Sale Uniform Commercial Code Amendment, Assignment, Continuation, Statement, or Termination. Each additional page GC27361 $ 3.00 Non-conforming page size (other than 8 1/2 x 11), each page of GC27361a, GC27361.5 $ 3.00 the entire document Penalty print(per page) GC27361a $ 1.00 Release of lien by a local government entity(excludes Federal) GC27361.3, GC27361.4, GC 27361 $ 14.00 GC27388 Release of lien by a local government entity that is recorded in GC27361.3, GC27361.4, GC 27361 $ 11.00 connection with a document subject to transfer tax(excludes Federal) Document Reauiring Additional Indexing Each additional reference indexed GC27361.2 $ 1.00 Each additional name indexed (Each group of 10 names after 1s`.) GC27361.8 $ 1.00 Rev.010213 age I of 1 Each additional title not associated with the Real Estate Fraud Fee GC27361, GC 27361.4, GC 27397, $ 15.00 Cnty 16.0203 Each additional title associated with the Real Estate Fraud Fee GC27361, GC 27361.4, GC27388, $ 18.00 GC 27397, Cnty 16.0203 Miscellaneous Fees Documentary transfer tax per$500.00 R&T11911, Cnty 14.0302 $ 0.55 Survey Monument Preservation Fund Fee GC27585, Cnty 16.0215B $ 10.00 Cnty 16.0215B(c)(10) Notification of Involuntary Lien (per debtor) GC27387 $ 3.00 Documents recorded without a Preliminary Change of R&T 480.3 $ 20.00 Ownership Report Preliminary 20-day filing and notice GC27361.9, Cnty, 16.0203 $ 30.00 Non-recorded document GC27380 $ 6.00 On-line image file (per image) Cnty 16.0203 $ .05 Certification of electronic recording submitter(per submitter) Cnty 16.0203 $ 15.00 Clerk Search (per hour) GC26854, Cnty 16.0203 $ 90.00 Conies Recorded or filed documents 8 1/2"X 11"(ln page per document) GC27366, Cnty 16.0203 $ 12.00 Recorded or filed documents 8 1/2"X 11"(ea. subsequent page after la) GC27366, Cnty 16.0203 $ 2.00 Certificate under seal (1st page, per document) GC27364, Cnty 16.0203 $ 4.00 Certificate under seal (ea. subsequent page, per document) GC27364, Cnty 16.0203 $ 1.00 Copies(continued) Conformed copies (per labeled page) GC54985, Cnty 16.0203 $ 6.00 Fax Copies(per page) GC27366, Cnty 16.0203 $ 2.00 Certificate of Record (per name) GC26852, Cnty 16.0203 $ 15.00 Computer copy of Index GC27366, Cnty 16.0203 $ 2.00 Map Copies Map, 18"X 26"Bond (per page) GC27366, Cnty 16.0203 $ 25.00 Conformed copies of maps (per page) Cnty 16.0203 $ 12.00 Map Recording GIMS Tract Cnty 16.0228A(b) $ 317.00 GIMS Parcel Cnty 16.0228A(b) $ 173.00 Map recording fee (ln page) GC27372, GC27361 $ 10.00 Map recording fee (ea. subsequent page after la) GC27372 $ 2.00 Accounting New account setup (Includes 5 different charge codes) GC54985a, Cnty 16.0203 $ 125.00 Account fee-per change GC54985a, Cnty 16.0203 $ 15.00 Refunds without fault of County(per item) GC54985a, Cnty 16.0203 $ 75.00 Returned check fee Cnty Code 16.0207D $ 25.00 Certification of electronic recording submitter Cnty 16.0203 $ 15.00 Vital Record Certificates Code Fqe Birth Certificate/Search H&5103625, H&5103525.5 $ 23.00 W&I18966, H&5100430, Birth Certificate/Search (Government Agencies) H8S103625, H8S100430, $ 14.00 H&5103525.5 Death Certificate/Search H&5103625, H&S100430, $ 16.00 H8S103525.5, Penal 14251 Death Certificate/Search (Government Agencies) H&S103625, H&5100430, $ 16.00 H&S 103525.5, Penal 14251 Fetal Death Certificate/Search HSS103625, H8S100430 $ 13.00 Marriage Certificate/Search H8S103625, FC1852, $ 14.00 AB233, H8S100430, Marriage Certificate/Search (Government Agencies) H&5103625, H8S100430 $ 10.00 Confidential Marriage Certificate/Search H8S103625, FC1852, H&S100430 $ 14.00 Rev.010213 Page 2 of