HomeMy WebLinkAbout02.A- City Manager RESOLUTION (ID # 4181) DOC ID: 4181 B
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Agreement/Contract
From: Allen Parker M/CC Meeting Date: 12/07/2015
Prepared by: Allen Parker, (909) 384-
5122
Dept: City Manager Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Acting as
the Successor Agency to the Redevelopment Agency of the City of San Bernardino
Approving an Installment Payment Plan with the California Department of Finance for
the Amount Payable Pursuant to the Low- and Moderate-Income Housing Fund Due
Diligence Review Consistent with California Health and Safety Code § 34179.7 and
Approving Certain Related Actions
Current Business Registration Certificate: Not Applicable
Motion: Adopt the Resolution.
Recommendation:
It is recommended that the Mayor and Common Council of the City of San Bernardino,
acting as the Successor Agency to Redevelopment Agency of the City of San
Bernardino adopt a resolution approving an installment payment plan with the California
Department of Finance for the amount payable pursuant to the Low- and Moderate-
Income Housing Fund Due Diligence Review consistent with California Health and
Safety Code § 34179.7 and approving certain related actions.
Background:
Pursuant to Health and Safety Code ("HSC") § 34172 (a)(1), the Redevelopment
Agency of the City of San Bernardino was dissolved on February 1, 2012. Consistent
with the provisions of the HSC, on January 9, 2012 the Mayor and Common Council of
the City of San Bernardino elected to serve in the capacity of the Successor Agency to
the Redevelopment Agency of the City of San Bernardino ("Successor Agency").
Consistent with the provisions of the HSC, the Mayor and Common Council of the City
of San Bernardino previously elected to serve in the capacity of the Successor Housing
Agency to the Redevelopment Agency of the City of San Bernardino (the "Successor
Housing Agency"). The Oversight Board for the Successor Agency ("Oversight Board")
has been established pursuant to HSC § 34179 to assist in the wind-down of the
dissolved redevelopment agency.
Updated: 11/19/2015 by Allen Parker B Page 1
4181
Consistent with HSC § 34179.6, the Oversight Board approved its Resolution No.
SBOB/2012-19 approving the Successor Agency's Low- and Moderate Income (the
"LMIHF") Due Diligence Review (the "DDR"), which is a special accounting of LMIHF
assets. Subsequent to Oversight Board approval, the LMIHF DDR was submitted to the
California Department of Finance (the "DOF") for its review. Consistent with HSC §
34179.6, any uncommitted tax increment derived LMIHF identified within an LMIHF
DDR is paid to the County Auditor-Controller for later distribution to the taxing entities.
Subsequent to submitting the LMIHF DDR, Successor Agency and DOF representatives
participated in discussions and information exchanges, including a meet and confer
conference to discuss the LMIHF DDR.
On January 11, 2013, February 15, 2013, February 21, 2013, March 21, 2014 and
November 23, 2015, the DOF issued its determination letters with respect to the amount
of LMIHF needed to be paid to the County Auditor-Controller, which ranged from
$14,041,882 on January 11, 2013 to $1,231,423 during November 2015.
Notwithstanding the Successor Agency's best efforts to convince DOF that the actual
amount due to the County Auditor-Controller per the LMIHF DDR should be $218,594,
DOF does not agree with the Successor Agency's documentation supporting its
recommendation and thus requires a payment of$1,231,423.
The HSC requires that the DOF determined LMIHF DDR payment amount be tendered
to the County Auditor-Controller prior to December 31, 2015 to enable the Successor
Agency to qualify for a Finding of Completion, which in turn will enable the Successor
Agency to receive an approval of its Long-Range Property Management Plan and
enable the Successor Agency to expend its unused tax allocation bond proceeds.
Consistent with HSC § 34179.7 (added on September 22, 2015 by SB 107, Chapter
325, Statutes of 2015) the Successor Agency may enter into a written installment
payment plan agreement with DOF to satisfy the financial obligation with respect to the
amount due per the LMIHF DDR. It is recommended that the Successor Agency
approve the LMIHF DDR installment payment plan structure described within Exhibit
"A", attached hereto and authorize the City Manager/Executive Director to execute on
behalf of the Successor Agency a written installment plan agreement in a form
acceptable to DOF consistent with the LMIHF DDR installment payment plan structure
described within Exhibit "A".
The attached Resolution has been reviewed with respect to applicability of the California
Environmental Quality Act (the "CEQA"), the State CEQA Guidelines (California Code of
Regulations, Title 14, §§ 15000 et seq., hereafter the "Guidelines"), and the City's
environmental guidelines. The approval of the attached Resolution does not constitute
a "project" for purposes of CEQA, as that term is defined by Guidelines § 15378,
because this Resolution is an organizational or administrative activity that will not result
in a direct or indirect physical change in the environment, per § 15378(b)(5) of the
Guidelines.
Updated: 11/19/2015 by Allen Parker B Page 2
4181
Fiscal Impact:
Once the payment required by the LMIHF DDR installment payment plan is made, the
City will receive a share of approximately 18% or approximately $220,000.
Updated: 11/19/2015 by Allen Parker B Page 3
I RESOLUTION NO. 2015-258
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT
3 AGENCY OF THE CITY OF SAN BERNARDINO APPROVING AN INSTALLMENT
4 PAYMENT PLAN WITH THE CALIFORNIA DEPARTMENT OF FINANCE FOR THE
AMOUNT PAYABLE PURSUANT TO THE LOW- AND MODERATE-INCOME
5 HOUSING FUND DUE DILIGENCE REVIEW CONSISTENT WITH CALIFORNIA
HEALTH AND SAFETY CODE § 34179.7 AND APPROVING CERTAIN RELATED
6 ACTIONS
7 WHEREAS, pursuant to Health and Safety Code (the "HSC") § 34172 (a)(1), the
8 Redevelopment Agency of the City of San Bernardino was dissolved on February 1, 2012; and
9 WHEREAS, consistent with the provisions of the HSC, the Mayor and Common Council
10 of the City of San Bernardino previously elected to serve in the capacity of the Successor Agency to
11 the Redevelopment Agency of the City of San Bernardino (the"Successor Agency"); and
12 WHEREAS, the Oversight Board for the Successor Agency (the "Oversight Board") has
13 been established pursuant to HSC § 34179 to assist in the wind-down of the dissolved
14 redevelopment agency; and
15 WHEREAS, consistent with HSC § 34179.6, the Oversight Board approved its Resolution
16 No. SBOB/2012-19 approving the Successor Agency's Low- and Moderate Income (the "LMIHF")
17 Due Diligence Review(the "DDR'), which is a special accounting of LMIHF assets; and
18 WHEREAS, subsequent to Oversight Board approval, the LMIHF DDR was submitted to
19 the California Department of Finance(the "DOF") for its review; and
20 WHEREAS, consistent with HSC § 34179.6, any uncommitted tax increment derived
21 LMIHF identified within an LMIHF DDR is paid to the County Auditor-Controller for later
22 distribution to the taxing entities; and
23 WHEREAS, subsequent to submitting the LMIHF DDR, Successor Agency and DOF
24 representatives participated in discussions and information exchanges, including a meet and confer
25 conference to discuss the LMIHF DDR; and
26 WHEREAS, on January 11, 2013, February 15, 2013, February 21, 2013, March 21, 2014
27 and November 2015, the DOF issued its determination letters with respect to the amount of LMIHF
28
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1 needed to be paid to the County Auditor-Controller, which ranged from $14,041,882 on January 11,
2 2013 to $1,231,423 during November 2015; and
3 WHEREAS, notwithstanding the Successor Agency's best efforts to convince DOF that
4 the actual amount due to the County Auditor-Controller per the LMIHF DDR should be $218,594,
5 DOF does not agree with the Successor Agency's documentation supporting its recommendation
6 and thus requires a payment of$1,231,423; and
7 WHEREAS, the HSC requires that the DOF determined LMIHF DDR payment amount be
8 tendered to the County Auditor-Controller prior to December 31, 2015 to enable the Successor
9 Agency to qualify for a Finding of Completion, which in turn will enable the Successor Agency to
10 receive an approval of its Long-Range Property Management Plan and enable the Successor Agency
11 to expend its unused tax allocation bond proceeds; and
12 WHEREAS, consistent with HSC § 34179.7 (added on September 22, 2015 by SB 107,
13 Chapter 325, Statutes of 2015) the Successor Agency may enter into a written installment payment
14 plan agreement with DOF to satisfy the financial obligation with respect to the amount due per the
15 LMIHF DDR; and
16 WHEREAS, it is recommended that the Successor Agency approve the LMIHF DDR
17 installment payment plan structure described within Exhibit "A", attached hereto and authorize the
18 City Manager/Executive Director to execute of behalf of the Successor Agency a written installment
19 plan agreement in a form acceptable to DOF consistent with the LMIHF DDR installment payment
20 plan structure described within Exhibit"A"; and
21 WHEREAS, this Resolution has been reviewed with respect to applicability of the
22 California Environmental Quality Act ("CEQA"), the State CEQA Guidelines (California Code of
23 Regulations, Title 14, §§ 15000 et seq., hereafter the "Guidelines"), and the City's environmental
24 guidelines; and
25 WHEREAS, this Resolution is not a "project" for purposes of CEQA, as that term is
26 defined by Guidelines § 15378, because this Resolution is an organizational or administrative
27 activity that will not result in a direct or indirect physical change in the environment,per § 15378(b)
28 (5) of the Guidelines; and
2
1 WHEREAS, all of the prerequisites with respect to the approval of this Resolution have
2 been met.
3 NOW, THEREFORE, by be it resolved by the Successor Agency to the Redevelopment
4 Agency of the City of San Bernardino, as follows:
5 Section 1. The foregoing recitals are true and correct and are a substantive part of this
6 Resolution.
7 Section 2. The Successor Agency's LMIHF DDR installment payment plan structure
8 described within Exhibit"A", which is attached hereto as Exhibit"A", is approved.
9 Section 3. The City Manager, as Executive Director of the Successor Agency, or
10 designee, is hereby authorized and directed to: i) execute of behalf of the Successor Agency a
11 written installment plan agreement in a form acceptable to DOF consistent with the LMIHF DDR
12 installment payment plan structure described within Exhibit"A"; and ii)take such necessary actions
13 and execute such documents as are necessary to effectuate the intent of this Resolution, inclusive of
14 authorizing ministerial revisions to the LMIHF DDR installment payment plan structure.
15 Section 4. This Resolution is not a "project" for purposes of CEQA, as that term is
16 defined by Guidelines § 15378, because this Resolution is an organizational or administrative
17 activity that will not result in a direct or indirect physical change in the environment,per§ 15378(b)
18 (5) of the Guidelines.
19 Section 5. This Resolution shall take effect upon its adoption and execution in the
20 manner as required by the City Charter.
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I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT
2 AGENCY OF THE CITY OF SAN BERNARDINO APPROVING AN INSTALLMENT
3 PAYMENT PLAN WITH THE CALIFORNIA DEPARTMENT OF FINANCE FOR THE
AMOUNT PAYABLE PURSUANT TO THE LOW- AND MODERATE-INCOME
4 HOUSING FUND DUE DILIGENCE REVIEW CONSISTENT WITH CALIFORNIA
HEALTH AND SAFETY CODE § 34179.7 AND APPROVING CERTAIN RELATED
5 ACTIONS
6
7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Successor Agency
8 to the Redevelopment Agency of the City of San Bernardino, at a special meeting thereof, held on
9 the 23`d day of November, 2015, by the following vote,to wit:
10 Council Members Ayes Nays Abstain Absent
11 MARQUEZ x
12 BARRIOS x
13 VALDIVIA x
14 SHORETT x
15 NICKEL x
16 JOHNSON x
MULVIHILL x
17
18
19 Georgeann Hanna, City Clerk
20 The foregoing Resolution is hereby approved this_ day of November, 2015.
21
22
23 R. Carey Davis, Chairman
Successor Agency to the
24 Redevelopment Agency of the
25 City of San Bernardino
Approved as to Form:
26 Gary D. Saenz, City Attorney
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2s
By:
4
1 EXHIBIT "A"
2
3 SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
4 LMIHF DDR INSTALLMENT PAYMENT PLAN STRUCTURE
5 1. In its November _, 2015 letter to the Successor Agency, DOF indicated that the
6 Successor Agency's Low- and Moderate Income Housing Fund ("LMIHF') Due Diligence
Review ("DDR") payment obligation is $1,231,423.
7
2. SB 107 allows Successor Agency's and DOF to enter into an "Installment Payment Plan"
8 for amounts owed by successor agencies with respect to either their Other Funds or
9 Accounts ("OFA") or LMIHF DDRs.
10 3. DDR payments are made to the County Auditor-Controller (T AC). Once the payments
are received by the CAC they are distributed to the taxing entities using the GTL
11 formula.
12 4. The Successor Agency proposes to enter into an Installment Payment Plan agreement
13 with DOF committing to use the land sales proceeds derived from fifteen LMIHF real
property parcels ('LMIHF Parcels") primarily located along 5th Street just east of I-215.
14 As the attached list confirms, the estimated current value of the LMIHF Parcels is
15 $3,081,899.
16 5. The LMIHF Parcels will be transferred to City as Successor Housing Agency ("SHA'�
within the next several weeks. Thereafter, the LMIHF Parcels will be made available for
17 sale. Once the sale or sales are consummated, the first land sales proceeds up to
18 $1,231,423 will be applied to the LMIHF DDR payment obligation. Any balance will be
deposited in the SHAs LMIHF for use on future affordable housing activities. It is
19 anticipate that the amount due with respect to the LMIHF DDR may be paid within
20 approximately two years.
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LMIHF Property along W Sth Street
2 Site# APN Address Land Lot Size Price Estimated
3 Improvements (sf) per sf Current Value
1 0134-054-24 W 5th Street Vacant 33,750 $16.23 $547,762.50
4 2 0134-054-25 796 W 5th Street Closed Gas Station 18,462 $16.23 $299,638.26
5 3 0134-054-26 770 W 5th Street Vacant 24,375 $16.23 $395,606.25
4 0134-061-21 W 5th Street Vacant 6,150 $16.23 $99,814.50
6 5 0134-061-22 W 5th Street Vacant 5,850 $16.23 $94,945.50
7 6 0134-061-25 W 5th Street Vacant 4,050 $16.23 $65,731.50
7 0134-061-30 696 W 5th Street Vacant 8,100 $16.23 $131,463.00
8 8 0134-093-05 745 W 5th Street Vacant 28,921 $16.23 $469,387.83
9 0134-093-06 W 5th Street Vacant 3,231 $16.23 $52,439.13
9 10 0134-101-02 673 W 5th Street Vacant 7,500 $16.23 $121,725.00
10 11 0134-101-03 673 W 5th Street Vacant 6,000 $16.23 $97,380.00
12 0134-101-04 W 5th Street Vacant 7,500 $16.23 $121,725.00
11 13 0134-101-05 W 5th Street Vacant 10,500 $16.23 $170,415.00
12 14 0134-101-06 W 5th Street Vacant 7,500 $16.23 $121,725.00
13 15 0134-101-28 495 N G Street Vacant 18,000 $16.23 $292,140.00
TOTAL $3,081,898.47
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K DEPARTMENT OF EDMUND G. BROWN SIR. GOVERNOR
C44FORr1%P F I N A N C E 91 5 L STREET t SACRAMENT❑ CA■ 95614.3706 ■WWW.D0F.CA.G0V
REVISED
November 23, 2015
Mr. Bill Manis, Deputy City Manager
San Bernardino City
300 North D Street, 6th Floor
San Bernardino, CA 94218
Dear Mr. Manis:
Subject: Low and Moderate Income Housing Fund Due Diligence Review
This letter supersedes Finance's original Low and Moderate Income Housing Fund (LMIHF)
Due Diligence Review(DDR) determination letters dated January 11, 2013, February 15, 2013,
February 21, 2013, and March 21, 2014, respectively. Pursuant to Health and Safety Code
(HSC)section 34179.6 (c), the City of San Bernardino Successor Agency(Agency) submitted
an oversight board approved LMIHF DDR to the California Department of Finance (Finance)on
December 18, 2012.
Based on a review of additional or clarifying information provided to Finance during and
subsequent to the Meet and Confer process, Finance revised some of the adjustments made in
our previous DDR determination letters. Specifically, we revised the following adjustments:
• The total amount of assets held as of June 30, 2012 was originally adjusted by
$5,196,844 due to a lack of clarifying information. Finance was provided adequate
supporting documentation during the Meet and Confer process to reverse the
adjustment.
• The transfer of an infrastructure loan in the amount of$110,901 was originally denied
due to a lack of supporting documentation. The Agency later provided a copy of the
1995 loan agreement to support the reversal of this adjustment.
• The request to restrict bond proceeds in the amount of$1,182,006 was originally denied
by Finance because the Agency did not provide adequate supporting documentation.
During the Meet and Confer process, the Agency provided general ledgers to tie the
restriction of the funds to the 1999 Bond Issue.
• The request to retain $606,347 for Recognized Obligation Payment Schedule (BOPS)
items was originally denied because the ROPS provided for the period January through
June 2013 only identified $184,875 in funding requests from the LMIHF. However, after
reviewing additional information presented during the Meet and Confer process, Finance
was able to identify enforceable obligations supporting the reversal of the adjustment.
Mr. Bill Manis
November 23, 2015
Page 2
• Finance reviewed the DDR submitted by the Inland Valley Development Agency(IVDA)
of which the former San Bernardino City Redevelopment Agency(RDA)was a member.
According to IVDA records, transfers in the amounts of$4,336,291 and $2,594,368 were
made to the former RDA pursuant to HSC section 33334.2 in September 2011 and
October 2011, respectively. Finance originally made an adjustment for these amounts
because the transfers were not explicitly listed in the DDR. After further review, Finance
is no longer adjusting this item. Documentation received during the Meet and Confer
process confirms the amounts were deposited in the "Landsale"account, and
subsequently transferred to the Debt Service account where an expense was recorded.
• The request to retain the deposit in escrow account in the amount of$200,000 remains
disallowed. The Disposition and Development Agreement between the former RDA and
In-N-Out Burger was signed after June 27, 2011. The Agency agreed with this
disallowance.
• Finance continues to object to the transfers from the LMIHF to Affordable Housing
Solutions Inc. (AHS); the Housing Capitalization Funding Agreement between the former
RDA and AHS has been continuously denied by Finance in all ROPS reviews. Based on
revenue amounts stated in the AHS trial balance, it was initially determined that the
$38,211,487 in transfers to AHS consisted of real property totaling $23,202,896 and
cash and cash equivalents totaling $15,008,591.
Based on further information provided subsequent to the Meet and Confer process,
$11,838,584 of the $15,008,591 initially determined to be cash and cash equivalents
represents real property. The Agency identified 29 properties, some consisting of more
than one assessor's parcel number, that were included in the transferred amount. The
Agency also included all 29 properties on the Housing Asset Transfer(HAT)form
submitted to Finance on August 1, 2012, to be transferred to the City of San Bernardino
(City) as the housing successor entity. In Finance's HAT letter dated March 21, 2014,
Finance determined sufficient documentation was provided during the Meet and Confer
process to support these properties are housing assets pursuant to HSC section
34176 (e) (1)and are eligible for transfer from the Agency to the City as housing
successor, not to AHS. We note that all 29 properties were also identified in the Asset
Transfer Review report prepared by the California State Controller's Office(Controller)
as unallowable transfers and should be returned to the Agency.
For the remaining $3,170,007 of cash and cash equivalents from the $15,008,591 in
disallowed transfers, the Agency provided a breakdown of transactions for fiscal years
2010-11 and 2011-12 totaling $3,215,875. The Agency identified 37 transactions
totaling $2,856,858 for fiscal year 2010-11, and 19 transactions totaling $359,017 for
fiscal year 2011-12.
Of the 37 transactions for fiscal year 2010-11, the Agency indicated that 7 transactions
occurred prior to January 1, 2011, which would be outside of the scope of the DDR.
Documents were provided for Items 1, 15, 22 through 24, 33, and 34 totaling $1,917,609
that show the cash transfers or payments were made prior to January 1, 2011, and are
therefore outside of scope of the DDR. Furthermore, it should also be noted that AHS
sold the property associated with Item 23; however, no information was provided on the
amount received or the disposition of the proceeds resulting from the sale. As such,
these items are excluded from Finance's review.
Mr. Bill Manis
November 23, 2015
Page 3
The remaining transactions occurred from January 1, 2011 through June 30, 2012 and
therefore, are appropriately included in the scope of the DDR. The items are further
discussed in the following sections:
o For fiscal year 2010-11, the Agency provided supporting documents showing that
Items 16, 21, and 35 from the transaction list totaling $4,020 were obligations
entered into by the former RDA with third parties. Additionally, Item 2 in the
amount of$650 is an accrual, not an actual cash transaction. Furthermore, the
Agency provided documents showing that Item 6 totaling $4,618 is program
income for the federal Neighborhood Stabilization Program and is restricted for
use in that program. The remaining $929,961 ($2,856,858 - $1,917,609-$4,020
- $650 - $4,618) consists of ineligible payments on behalf of AHS or transfers to
AHS that should be returned to the Agency for remittance to the County Auditor-
Controller(CAC). Specifically, the following transactions are disallowed:
• For Items 4 and 12 totaling $1,082, the Agency did not provide any
documents to support these transactions for us to determine these are
obligations of the former RDA. The Agency did not dispute this
determination.
• For Items 5, 7 through 11, and 13 totaling $5,335, the Agency provided
checks that were payable to AHS, deposited by the former RDA into the
former RDA's account, and subsequently transferred to AHS. The checks
were from various escrow companies for the return of excess funds after
close of escrow. Our review indicates the funds being returned were
originally drawn from the former RDA's LMIHF. Therefore, these are
former RDA funds, not AHS funds. The Agency did not dispute this
determination.
• For Items 14, 25 through 32, and 36 totaling $834,902, the Agency
provided checks or wire transfers, escrow statements, and purchase and
sale agreements to support each of the property purchases. All of the
checks and wire transfers were issued by the former RDA from the
LMIHF; however, all of the escrow statements provided name AHS as the
buyer and all of the purchase and sale agreements were between AHS
and third parties. The former RDA was not named as a buyer on any of
the properties, nor was the former RDA a party to any of the purchase
and sale agreements. The Agency did not provide any other documents
indicating that the former RDA is responsible for making the payments on
behalf of AHS. Furthermore, in the Agency's June 15, 2015 letter to
Finance, the Agency acknowledges that AHS entered into agreements
with third parties for each of these items. Therefore, these transactions
are the responsibility of AHS, not the former RDA.
It should also be noted that AHS sold the properties associated with
Items 25 and 31; however, no information was provided on the amount
received or the disposition of the proceeds resulting from the sale.
• For Items 17 through 20 totaling $86,593, the Agency provided checks
showing payments made and invoices from third parties. The checks
were issued by the former RDA from the LMIHF; however, the invoices
Mr. Bill Manis
November 23, 2015
Page 4
provided either did not identify the entity being billed or were addressed to
AHS. The Agency did not provide agreements with the third parties
showing that the former RDA was responsible for making these
payments. Furthermore, in the Agency's June 15, 2015 letter to Finance,
the Agency states that AHS entered into agreements with third parties for
each of these items. Therefore, these transactions are the responsibility
of AHS, not the former RDA.
■ For Item 37 in the amount of$2,049, the Agency provided a check
showing payment made and the invoice for the annual insurance
premium for a property owned by AHS. However, the Agency did not
provide any documents showing that the former RDA is responsible for
payment of AHS's insurance premium. Furthermore, in the Agency's
June 15, 2015 letter to Finance, the Agency states that this cost was a
result of AHS acquiring and owning property. Therefore, this item is the
responsibility of AHS, not the former RDA.
o Initially, the Agency did not provide any agreements or other documents showing
that the $359,017 is associated with obligations of the former RDA. For fiscal
year 2011-12, the Agency provided various checks issued by the former RDA,
invoices not addressed to the former RDA, and escrow statements listing AHS as
the buyer. However, subsequent to the Meet and Confer process, the Agency
provided supporting documents showing that Items 13 and 16 through 19 from
the transaction list totaling $257,555 were obligations entered into by the former
RDA with third parties. The remaining $101,462 ($359,017 - $257,555) consists
of ineligible payments on behalf of AHS or transfers to AHS that should be
returned to the Agency for remittance to the CAC. Specifically, the following
transactions are disallowed:
■ For Items 1 through 12 totaling $12,177, the Agency did not dispute that
the funds are available for remittance.
■ For Items 14 and 15 totaling $89,285, the Agency provided invoices from
third parties and checks showing payments made by the former RDA;
however, the Agency did not provide agreements with the third parties
showing that the former RDA was responsible for making these
payments. The agreements provided were entered into by AHS.
Therefore, these transactions are the responsibility of AHS, not the former
RDA.
Based on our review of information by the Agency, Finance is reversing $11,838,584
initially identified as cash and cash equivalents to be distributed to the affected taxing
entities; Finance determined this amount is associated with real property. However, we
maintain the adjustment to the available balance of$1,231,423 ($200,000 + $929,961 +
$101,462) is necessary. The Agency's LMIHF balance available for distribution to the
affected taxing entities has been revised to $1,231,423 (see table on following page).
Mr. Bill Manis
November 23, 2015
Page 5
LMIHF Balances Available For Distribution To Taxing Entities
Available Balance per DDR: $ _
Finance Adjustments
Add:
Disallowed transfers 1,231,423
Total LMIHF available to be distributed: $ 1,231,423
This is Finance's final determination of the LMIHF balances available for distribution to the
taxing entities. HSC section 34179.6 (f) requires successor agencies to transmit to the CAC the
amount of funds identified in the above table within five working days, plus any interest those
sums accumulated while in the possession of the recipient.
Failure to transmit the identified funds will also prevent the Agency from being able to receive a
finding of completion from Finance. Without a finding of completion, the Agency will be unable
to take advantage of the provisions detailed in HSC section 34191.4. Specifically, these
provisions allow certain loan agreements between the former RDA and the city, county, or city
and county that created the RDA to be considered enforceable obligations. These provisions
also allow certain bond proceeds to be used for the purposes in which they were sold and
allows for the transfer of real property and interests into the Community Redevelopment
Property Trust Fund once Finance approves the Agency's Long-Range Property Management
Plan.
In addition to the consequences above, willful failure to return assets that were deemed an
unallowable transfer or failure to remit the funds identified above could expose certain
individuals to criminal penalties under existing law.
Pursuant to HSC sections 34167.5 and 34178.8, the Controller has the authority to claw back
assets that were inappropriately transferred to the city, county, or any other public agency.
Determinations outlined in this letter do not in any way eliminate the Controller's authority.
Please direct inquiries to Evelyn Suess, Dispute Resolution Supervisor, or Mary Halterman,
Analyst, at(9 16)445-1546.
SincerelytTaudget J SWARD
ro Manager
cc: Ms. Lisa Connor, Project Manager, San Bernardino City
Ms. Linda Santillano, Property Tax Manager, San Bernardino County