HomeMy WebLinkAboutSA Resolution 2013-01 (Non-Housing Funds Audit)RESOLUTION NO. 2013-01 (SA)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL, IN THE CITY'S
CAPACITY AS SUCCESSOR AGENCY OF THE SAN RAFAEL. REDEVELOPMENT
AGENCY ACCEPTING THE AUDIT OF NON HOUSING FUNDS AND DIRECTING THE
CITY MANAGER OR TIIE CITY MANAGER'S DESIGNEE TO TAKE ALL ACTION
NECESSARY AND APPROPRIATE ON BEHALF OF THE CITY AS SUCCESSOR
AGENCY UNDER THE COMMUNITY REDEVELOPMENT LAW AS REQUIRED BY
HEALTH AND SAFETY CODE SECTION 34179.5
WHEREAS, the California State Legislature enacted Assembly Bill xl 26 ("Dissolution
Act") to dissolve redevelopment agencies formed under the Community Redevelopment Law
(Health and Safety Code Section 33000 et seg.); and
WHEREAS, on December 29, 2011, the California Supreme Court delivered its decision
in the California Redevelopment Association i,. Matosantos case, finding the Dissolution Act
largely constitutional, with the result that all California redevelopment agencies, including the
Redevelopment Agency of the City of San Rafael ("Redevelopment Agency"), would be
dissolved on February 1, 2012; and
WHEREAS, on January 3, 2012 and pursuant to Health and Safety Code Section 34173,
the City Council of the City of San Rafael ("City Council") declared that the City of San Rafael,
a municipal corporation ("City"), would act as successor agency (the "Successor Agency") for
the dissolved Redevelopment Agency effective February 1, 2012; and
WHEREAS, on February 1, 2012, the Redevelopment Agency was dissolved pursuant to
Health and Safety Code Section 34172; and
WHEREAS, the Successor Agency now holds the former Redevelopment Agency's
unobligated housing funds and its non -housing funds and assets and is charged with the
responsibility of paying off the former Redevelopment Agency's existing debts, disposing of the
former Redevelopment Agency's properties and assets to help pay off debts and return revenues
to the local government entities that receive property taxes ("Taxing Entities"), and winding up
the affairs of the former Redevelopment Agency; and
WHEREAS, on June 27, 2012, the State Legislature passed, and the Governor signed.
Assembly Bill 1484 ("AB 1484"). which makes clean-up amendments to the Dissolution Act and
adds several new procedures to the process of winding -down the affairs of the former
Redevelopment Agency: and
WHEREAS. AB 1484 clarifies that the Successor Agency is a separate legal entity from
the City: and
WLIF,REAS, pursuant to the Dissolution Act, an oversight board ("Oversight Board") has
been established with specific duties as set forth in the Dissolution Act and AB 1484, all subject
to final approval by the California Department of Finance ("DOF' ), and
144,1}1 12o4258 l
WHEREAS, Health and Safety Code Section 34179.5 requires reviews to be conducted
of the available cash assets of the former Redevelopment Agency ("Review"), one for
unobligated Low and Moderate Income Housing Fund ("LMIIIF") and another for all other
funds; and
WHEREAS, the Successor Agency has hired Maze and Associates, a licensed accountant
approved by the County Auditor -Controller, to conduct the two Reviews; and
WHEREAS, the Oversight Board held a public comment session on the non -housing
fund review (the "Review") on January 11, 2013 and received no comments and the Oversight
Board met on January 22, 2013 and reviewed and approved the Review; and
WHEREAS, copies of the Review have been submitted to the County Administrative
Officer, the County Auditor -Controller, the State Controller's Office and the DOF as required by
Health and Safety Code Section 34179.5; and
WHEREAS, the Review may result in a determination that a payment of available cash is
to be made by the Successor Agency to the County Auditor -Controller for distribution to the
Taxing Entities; and
WHEREAS, the Oversight Board can adjust amounts set forth in the Review to reflect
additional information and analysis and can authorize the Successor Agency to retain the
restricted funds, non-cash assets, and the cash balances that are contractually committed or
needed for items to be placed on the Recognized Obligation Payment Schedule ("ROPS") during
the fiscal year; and
WHEREAS, the DOF may also adjust the amounts determined to be available for
allocation to the "Taxing Entities in the Review, and
WHEREAS, the Successor Agency can request a meet and confer session with the DOF,
after the DOF has made its determination of the amount available for allocation to the Taxing
Entities pursuant to the Review, within five business days of receipt of the DOF's determination;
and
WHEREAS, AB 1484 authorizes the State to order withholding of future sales and use
and/or property tax distributions to the City if the Successor Agency does not pay the amount
owed under the Review process within five business days after the final determination by the
DOF; and
W1IEREAS, due to the five business day period to request a meet and confer with the
DOF, the Successor Agency Board desires to authorize the Successor Agency Executive Director
to make any meet and confer requests to DOF in consultation with legal counsel: and
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1-11'01 1204-153.1
WHEREAS, due to the five business day period in which to make payment upon notice
of the final determination of the amount of any payment owed pursuant to the Review process,
the Successor Agency Board desires to authorize the Successor Agency Executive Director to
make such payment, or make such payment under protest as determined by the Successor
Agency Executive Director in consultation with legal counsel.
NOW, THEREFORE, BE IT RESOLVED that the Board of the Successor Agency
accepts the Review of the non -housing funds which is on file with the City Clerk and hereby
directs and authorizes transmittal of the Review to the Oversight Board and the County
Administrative Officer, the County Auditor -Controller, the State Controller's Office and the
DOF as required by AB 1484.
BE IT FURTHER RESOLVED that the Board of the Successor Agency hereby
authorizes the Successor Agency Executive Director to make any meet and confer requests to
DOF, in consultation with legal counsel, as permitted by AB 1484.
BE IT FURTHER RESOLVED that the Board of the Successor Agency hereby
authorizes the Successor Agency Executive Director to make any required payment after the
final determination of the amount of any payment owed pursuant to the Review process, or to
make such payment under protest as determined by the Successor Agency Executive Director in
consultation with legal counsel.
I, Esther C. Beirne, Secretary of the San Rafael Successor Agency, hereby certify that the
foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the
San Rafael Successor Agency, held on Tuesday, the twenty-second day of January 2013, by the
following vote, to wit:
AYES: Members: Colin, Connolly, McCullough & Vice -Mayor Heller
NOES: Members: None
ABSENT: Members: Mayor Phillips
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Esther C. Beirne, Secretary, San Rafael Successor Agency
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141M\12042>,8 I
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED UPON PROCEDURES ON
ALL OTHER FUNDS OF
THE SUCCESSOR AGENCY
(EXCLUDING THE LOW AND MODERATE
INCOME HOUSING FUND)
ASSOCIATED WITH CALIFORNIA HEALTH AND SAFETY
CODE SECTIONS 34179.5(c)(1) THROUGH 34179.5(c)(6)
Attachment A
This Page Left Intentionally Blank
MAZE
& ASSOCIATES
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED LTON PROCEDURES ON
ALL OTBER FUNDS OF
THE SUCCESSOR AGENCY
13 S&B PLN V Lei Q%W11 I I'm N
1W_
To the Oversight Board of the Successor Agency of
the Redevelopment Agency of the City of San Rafael
Sail Rafael, California
We have applied the procedures below, which were agreed to by the Successor Agency of the
Redevelopment Agency of the City of San Rafael, California, solely to assist you with respect to the
procedures required under California Health and Safety Code Sections 341719.5(c)(1) through
34179.5(c)(6), referred to as the '-due diligence review" by the Code, for the All Other Funds (excluding
the L,ow and Moderate Income Housing Fund) of the Successor Agency of the Redevelopment Agency of
the City of San Rafael for the year ended June 30, 2012. These procedures were suggested by the
Governmental Auditing and Accounting Committee, as agreed to by the California State Department of
Finance and State Controller's Office. Management of the Successor Agency is responsible for the
accounting records and the Attachments and information provided pertaining to the statutory compliance
pursuant to Health and Safety Code Section 34179.5. This agreed-upon procedures engagement was
conducted in accordance with attestation standards established by the American Institute of Certified
Public Accountants. The sufficiency of the procedures is solely the responsibility of the specified users
of this report. Consequently, we make no representation regarding the sufficiency of the procedures
described below either for the purpose for which this report has been requested or for any other purpose.
The procedures you requested us to perform and our findings were as follows:
Citation:
34179.5(c)(1) The dollar value of assets Iransferredfi-oln the former re(levelopment agency to the
successor agency on or about February 1, 2012.
Suggested Procedure(s):
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 arnounts on this
listingto account balances established in the accounting records of the Successor Agency.
C� -
identify in the Agreed-t.'pon Procedures, (AUP) report the amount of the assets transfcrred to the
Successor Agency as ofthat date.
Accountancy Corporation
t, mazeassociates.com
Results: We obtained the following listing from the staff of the City of San Rafael and agreed
the amount transferred to the Successor Agency to the accounting records without exception.
Redevelopment
Balances
Balances
Agency
transferred to
transferred to
Fund
the Successor
the Housing Successor
Balances
Agency (All
(Low and Moderate Income
January 31, 2012
other funds) on
Housing fund) on
(Prior to transfer)
February 1, 2012
February 1, 2012
ASSETS
Current assets:
Cash and investments $2,672,320 $1,283,907 $1,388,413
Total current assets 2,672,320 1,283,907 1,388,413
Noncurrent assets:
Restricted cash and investments 1,375,315 1,375,315
Deferred loans 553,307 553,307
Capital Assets
Land 39,000 39,000
Depreciable capital assets, net 17,381 17,381
Total noncurrent assets 1,985,003 1,375,315 609,688
Total Assets $4,657,323 $2,659,222 $1,998,101
Citation:
34179.5(c)(2) The dollar value of assets and cash and cash equivalents transferred after January 1,
2011, through June 30, 2012, by the redevelopment agency or the successor agency to the city,
county, or city and county that formed the redevelopment agency and the purpose of each transfer.
The review shall provide documentation of any enforceable obligation that required the transfer,
Suggested Procedure(s):
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
county that 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.
Results: The State Controller's Office has not yet completed its review of transfers. Per our
inquiries with City staff, during the period January 1, 2011 through January 31, 2012, the
former Redevelopment Agency made the following transfers (excluding payments for goods
and services) to the City. For each of the transfers listed, we traced to legal agreements
without exception. See table below:
Date Purpose Amount Qualification
113112012 Road and parking lot improvements in the RDA project area using bond proceeds. $111,443 Per reso 74.14 and San Rafael Redevelopment Project Contract between the City and RDA dated 6114114.
113112012 Road and parking lot improvements in the RDA project area using bond proceeds. 268,372 Per reso 74-14 and San Rafael Redevelopment Project Contract between the City and RDA dated 6114,N,
1/3112012 Road and parking lot improvements in the RDA project area using bond proceeds. 45,574 Per to 74-14 and San Rafael Redevelopment Project Contract between the City and RDA dated 6114r/4,
113112012 Road and parking lot improvements in the RDA project area using bond proceeds, 233,778 Per resp 74.14 and San Rafael Redevelopment Project Contract between the City and RDA dated 6114174,
113112012 Building maintenance in the RDA project area using bond proceeds. 25,540 Per resp 74.14 and San Rafael Redevelopment Project Contract between the City and RDA dated 6114174,
$734,107
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 this Agreed
Upon Procedures report.
Results: Per inquiry of City staff, the Successor Agency did not make any transfers
(excluding payments for goods and services) to the City for the period from February 1, 2012
through June 30, 2012.
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.
Results: See 2A above.
Citation:
34179.5(c)(3) The dollar value of any cash or cash equivalents transferred after January 1, 2011,
through June 30, 2012, by the redevelopment agency or the successor agency to anv other public
agency or private party and the purpose of each transfer. The review shall provide documentation of
any enforceable obligation that required the transfer.
Suggested Procedure(s):
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 this Agreed Upon Procedures 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 this Agreed Upon Procedures
report.
Results: Per inquiry of City staff, the former Redevelopment Agency did not make transfers
(excluding payments for goods and services) to other public agencies or to private parties for
the period from January 1, 2011 through January 31, 2012,
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
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 this Agreed Upon Procedures report.
Results: Per inquiry of City staff, the Successor Agency made the following transfer
(excluding payments for goods and services) to other public agencies or to private parties for
the period from February 1, 2012 through June 30, 2012. For the transfer listed, we traced to
the legal document without exception. See listing below:
Date Purpose Amount Qualification
6/30/2012 Transfer to County for the Demand Payment $148,589 Demand payment notice from the County, dated 7%9112.
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.
Results: See responses to 3B above.
Citation:
34179.5(c)(4) The review shall provide expenditure and revenue accounting information and identify
transfers and funding sources for the 2010-11 and 2011-12 fiscal years that reconciles balances,
assets, and liabilities of the successor agency on June 30, 2012 to those reported to the Controller
for the 2009--10frscal year.
Suggested Procedure(s):
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 Attachment A
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.
Results: We obtained Attachment A from City staff. We performed the procedures above
without exception.
Citation:
34179.5(c)(5) A separate accounting for the balance for the Low and Moderate Income Housing
Fund for all other funds and accounts combined shall be made as follows:
(A) A statement of the total value of each fund as of June 30, 2012,
Suggested Procedure(s):
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 Loss 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 NIoderate
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 listings should be attached as an exhibit to the
appropriate AUP report.
Results: We obtained the following table from City staff and agreed the assets listed to the
accounting records without exception.
Total Assets $ 2,960,449
Citation:
34179.5(c)(5)(B) An itemized statement listing any amounts that are legally restricted as to purpose
and cannot be provided to taxing entities. This could include the proceeds of any bonds, grant funds,
or funds provided by other governmental entities that place conditions on their use.
Suggested Procedure(s):
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.
Results: Per inquiry of City staff, the Successor Agency held the following balances of unspent
bond proceeds as of June 30, 2012. We agreed the balances to the accounting records and legal
documents without exception.
Type of Asset Amount Restricted Period of Time
Cash and investments $704,429 until assets are expended
Restricted cash and investments 1,375,314 until assets are expended
Interest Receivables 1,368 until assets are expended
Total unspent bond proceeds $2,081,111
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Successor
Agency Total
6/30/2012
Assets (modified accrual basis)
Cash and Investments
$ 1,110,123
Restricted Cash and Investments
1,375,314
Receivables:
Accounts Receivables
472,959
Interest Receivables
2,053
Total Assets $ 2,960,449
Citation:
34179.5(c)(5)(B) An itemized statement listing any amounts that are legally restricted as to purpose
and cannot be provided to taxing entities. This could include the proceeds of any bonds, grant funds,
or funds provided by other governmental entities that place conditions on their use.
Suggested Procedure(s):
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.
Results: Per inquiry of City staff, the Successor Agency held the following balances of unspent
bond proceeds as of June 30, 2012. We agreed the balances to the accounting records and legal
documents without exception.
Type of Asset Amount Restricted Period of Time
Cash and investments $704,429 until assets are expended
Restricted cash and investments 1,375,314 until assets are expended
Interest Receivables 1,368 until assets are expended
Total unspent bond proceeds $2,081,111
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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).
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.
Results: Per inquiry of City staff, there were no such grant proceeds or program income that was
restricted for this purpose as of June 30, 2012.
C. Other assets considered to be legally restricted:
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).
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.
Results: Per inquiry of City staff, the Successor Agency has legally restricted assets as of June
30, 2012. The restriction is in effect until the RDA is reimbursed for payments in ROPS 1. We
agreed the balance to the accounting records and legal documents without exception. See the
table below:
Type of Asset Amount Restricted Period of Time
Accounts receivables $472,959 Payment requested by ROPS I but pending reimbursement from the County
Total Assets $472,959
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.
Results: See responses to 6A and 6C above.
Citation:
34179.5(c)(5)(C) An itemised statement of the values of any assets that are not cash or cash
equivalents. This may include physical assets, lana records, and equipment. For the purpose of this
accounting, physical assets may be valued at purchase cost or at any recently estimated market
value. The statement shall list separately housing -related assets.
Suggested Procedure(s):
7. Perform the following procedures:
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.
Results: Per Inquiry of City staff, the Successor Agency does have assets that are not cash or
cash equivalents as of June 30, 2012. The Successor Agency has accounts receivables in the
amount of $472,959. The accounts receivable is a restricted asset and is recorded in the response
to number 6C. We traced the accounts receivable balance to the June 30, 2012 accounting
records, without exception.
Citation:
34179.5(c)(5)(D) An itemized listing of any current balances that are legally or contractually
dedicated or restricted for the funding of an enforceable obligation that identifies the nature of the
dedication or restriction and the specific enforceable obligation. Irr addition, the successor agency
shall provide a listing of all approved enforceable obligations that includes a projection of annual
spending requirements to satisfy each obligation and a projection of annual revenues available to
fund those requirements. If a review finds that future revenues together with dedicated or restricted
balances are insufficient to fund future obligations and thus retention of current balances is
required it shall identify the amount of current balances necessary jor retention. The review shall
also detail the projected property tax revenues and other general purpose revenues to be received by
the successor agency, together with both the amount and timing of the bond debt .service payments of
the successor agency, for the period in which the oversight board anticipates the successor agency
will have insufficient property tax revenue to pay the specified obligations.
Suggested Procedure(s):
8. Perform the following procedures:
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.
ii. Compare all current balances to the amounts reported in the accounting records
of the Successor Agency or to an alternative computation.
iii. 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.
Results: Per inquiry of City staff, the Successor Agency held the following assets at June 30, 2012'
to be retained to satisfy the following enforceable obligations. We agreed the asset balances to
accounting records without exception. For each obligation, we traced to legal documents without
exception. We also traced the obligations to be fulfilled to the Recognized Obligation Payment
Schedule approved by the California Department of Finance. See listing below:
Cash and Investments
Interest Receivables
Total assets to be retained
Due to the San Rafael High School District
Notes payable
2002 Bond payment
2009 Bond payment
Total obligations to be fulfilled
Total obligations in excess of assets
Total Assets to be Retained
$405,694
685
$406,379
Total Obligations to be Fulfilled
($179,000)
(299,489)
(1,802,006)
(1,219,725)
($3,500,220)
($3,093,841)
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 by the
California 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.
1. 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:
1. Obtain from the Successor Agency its assumptions for the forecasted
annual revenues and disclose in the report major assumptions associated
with the projections.
10
Results: Not applicable. Per inquiry of City staff, the Successor Agency did not have any
available assets as of June 30, 2012 to be retained for this purpose. At June 30, 2012, all assets
of the "Other Funds" of the Successor Agency were restricted as identified on Procedures 6, 7
and 8A. Future Redevelopment Property Tax Trust Fund revenues will be used to meet
requirements on future Recognized Enforceable Obligation Payment Schedule related to the
continuing obligations of the Successor Agency.
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.
i. Compare the timing and amounts of bond debt service payments to the related
bond debt service schedules in the bond agreement.
ii. Obtain the assumptions for the forecasted property tax 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.
Results: Not applicable, per inquiry of City staff, they believe that there are sufficient future
revenues to fund future obligation payments.
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.
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 by the amount forecasted for
the annual spending requirements. A negative result indicates the amount of
current unrestricted balances that needs to be retained.
iii. Include the calculation in the AUP report.
Results: See response to 8A above.
Citation:
34179.5(c)(5)(L) An itemized list and analysis of any amounts of current balances that are needed to
satisfy obligations that will be placed on the Recognized Obligation Paynient Schedules .for the
currentfiscal fiscal year.
Suggested Procedure(s):
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 BOPS, 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 belieGes
that such balances are needed to satisfz the obligation. Include this schedule as an attachment to
the AUP report.
Results: Not applicable. Per inquiry of City staff, the Successor Agency did not have any available
assets as of June 30, 2012 to be retained for this purpose. At June 30, 2012, all assets of the "Other
Funds" of the Successor Agency were restricted as identified on Procedures 6A, 6C, 7, and 8A.
Citation:
34179.5(c)(6) The review shall total the net balances available after deducting the total amounts
described in subparagraphs (13) to (F,), inclusive, of paragraph (5). The review shall add any
amounts that were transferred as identified in paragraphs (2) and (3) of subdivision (c) if an
enforceable obligation to make that transfer did not exist. The resulting sum shall be available for
allocation to affected taxing entities pursuant to Section 34179.6. It shall be a rebuttable
presumption that cash and cash equivalent balances available to the successor agency are available
and sufficient to disburse the amount determined in this paragraph to taxing entities. If'the review
finds that there are insufficient cash balances to transfer or that cash or cash equivalents are
specifically obligated to the purposes described in subparagraphs (13), (D), and (E) of paragraph (5)
in such amounts that there is insufficient cash to provide the full amount determined pursuant to this
paragraph, that amount shall be demonstrated in an additional itemized schedule.
Suggested Procedure(s):
10. Include (or present) a schedule detailing the computation of the Balance Available for Allocation
to Affected Taxing Entities (Attachment B). 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 by the 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).
Results: See Attachment B.
Suggested Procedure(s):
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 34 179.5) 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.
Results: Management representation letter was obtained.
12
We were not engaged to, and did not, conduct an audit, the objective of which would be the expression of
an opinion on the information provided for the purposes of the agreed-upon procedures and the
Attachments. Accordingly, we do not express such an opinion. Had we performed additional procedures
Z_
or had we performed an audit of the information provided for the purposes of the agreed-upon procedures
and the Attachments, matters might have come to our attention which would have been reported to you.
This report is intended for the information of management and the Oversight Board, the State Department
of Finance and State Controller's Office. llo�vever, this restriction is not intended to limit the distribution
of this report, which is a matter of public record.
December 14. 2012
a
Attachment A
$6,243,438
Redevelopment Redevelopment
Redevelopment
Agency Agency
Agency
12 Months Ended 12 Months Ended
7 Months Ended
6/30/2010 6/30/2011
1/31/2012
Assets (modified accrual basis)
Cash and Investments
$6,243,438
Restricted Cash and investments
289,591
Receivables:
Accounts Receivables
21,900
Tax Receivables
3,276
Grants Receivables
26,624
Interest Receivables
5,696
Loans Receivables
307,555
Total Assets
$6,898,080
Liabilities (modified accrual basis)
Current Liabilities
Accounts Payable
$48,812
Interest Payable
Notes Payable
Developer Bonds payable
25,000
Arbitrage Payable
25,127
Deferred Revenue
Total Liabilities
$98,939
Equity
-
Total Liabilities + Equity
$98,939
Total Revenues:
$5,325,818
Total Expenditures:
$5,852,374
Total Transfers:
$695,856
Net change in equity
$1,774,276
Beginning Equity:
$5,024,865
Ending Equity:
$6,799,141
Other Information (show year end balances for
all four periods presented):
Capital assets as of end of year
60.542
Long-term debt as of end of year
35,524,988
14
$5,520,068
431,582
95,576
2,024
26,624
4,686
314,322
$6,394,882
$149,042
25,000
25,127
26,624
$225,793
$225,793
$4,699,178
$5,470,609
$141,379
($630,052)
$6,799,141
$6,169,089
57,914
33,467,499
$2,672,320
1,375,315
553,307
$4,600,942
$31,973
255,838
291,326
$579,137
$579,137
$3,088,493
$3,953,906
($5,012,350)
($5,877,763)
$6,169,089
56,381
31,191,577
Successor
Agency
5 Months Ended
6/30/2012
$1,110,123
1,375,314
472,959
2,053
$2,960,449
$169,517
255,838
299,489
$724,844
$724,844
$1,073,374
$1,067,000
($28,925,831)
($28,919,457)
($28,919,457)
31,155,062
Attachment B
SUMMARY OF BALANCES AVAILABLE FOR ALLOCATION TO AFFECTED TAXING ENTITIES
Total amount of assets held by the successor agency as of June 30, 2012 (procedure 5) $2,960,449
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)
Less assets legally restricted for uses specified by debt
covenants, grant restrictions, or restrictions imposed by other
governments (procedure 6) (2,554,070)
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) (3,093,841)
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
directed by the California Department of Finance (148,589)
Amount to be remitted to county for disbursement to taxing entities
a
($2,836,051)
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