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HomeMy WebLinkAbout2012-06-12 OB Agenda Item No. 2a-2bOVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE TO: MEMBERS OF THE OVERSIGHT BOARD FROM: BARBARA LEIBOLD, SUCCESSOR AGENCY COUNSEL DATE: JUNE 12, 2012 SUBJECT: CORRESPONDENCE FROM DEPARTMENT OF FINANCE Backaround- On Thursday, April 19, 2012, the Director of Administrative Services received an email from the Department of Finance (DOF) indicating it was reviewing certain items listed on the Successor Agency's Recognized Obligation Payment Schedule (ROPS), as approved by the Oversight Board on April 10, 2012. On April 27, 2012, the Director of Administrative Services received a letter from the Department of Finance indicating that DOF determined the administrative cost budget for fiscal 2012 to exceed that permitted by statute and denying the excess administrative costs as enforceable obligations on the First Amended ROPS for January through June 2012. On May 8, 2012, the Oversight Board approved the ROPS for July through December 2012 with reduced amounts of project related legal fees on page 1 of the ROPS and revised descriptions for other project costs. A response was submitted to DOF on May 9, 2012 with the July through December ROPS in an effort to address DOF's comments. On May 17, 2012, after a telephone discussion with DOF, the Director of Administrative Services submitted hand - written corrections on the ROPS for January through June 2012. A Second Amended ROPS for January through June 2012 incorporating those corrections is being presented for Board and Successor Agency approval this afternoon. Discussion: The Director of Administrative Services received a letter from DOF dated May 24, 2012 approving the most current ROPS for January through June 2012 and July through December 2012. The Director of Administrative Services expects to receive a check for AGENDA ITEM 2a Page 1 Correspondence from Department of Finance June 12, 2012 Page 2 Real Property Tax Trust Fund monies reflected on the July through December 2012 ROPS prior to the June 12, 2012 meeting. Recommendation: That the Oversight Board receive and file the correspondence from the Department of Finance. Prepared and approved by: Barbara Leibold City Attorney /Successor Agency Counsel Attachment: 1. Copy of Letter from Department of Finance AGENDA ITEM 2a Y Page 2 e DA, A, Id Illl n o JIL DEPARTMENT OF EDMUND 6. BROWN JR. • GOVERNOR �..�. FINANCE 016 L YTitcEr 0 dA,c..rNrO CA ■ 95814 -3706 ■ www.00►.c,%sav May 24, 2012 James R. Riley, Director of Administrative Services City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 Dear Mr. Riley: Subject: Recognized Obligation Payment Schedule Approval Letter Pursuant to Health and Safety Code (HSC) section 34177 (l) (2) (C), the City of Lake Elsinore Successor Agency (Agency) submitted a revised Recognized Obligation Payment Schedules (ROPS) to the California Department of Finance (Finance) on May 17, 2012 for the period of January to June 2012 and on May 9, 2012 for the period July to December 2012. Finance assumes oversight board approval. Finance has completed its review of your ROPS which may have included obtaining clarification for various items. Based on our review, we are approving all of the items listed on your ROPS at this time. This letter supersedes Finance's letter dated April 27, 2012 wherein we disallowed administrative costs. This is our determination with respect to any items funded from the Redevelopment Property Tax Trust Fund ( RPTTF) for the June 1, 2012 property tax allocations. In addition, items not questioned during this review are subject to subsequent review If they are Included on a future ROPS. If an item Included on a future ROPS is not an enforceable obligation, Finance reserves the right to remove that item from the future ROPS, even if it was not removed from the preceding ROPS. Please refer to Exhibit 12 at htty: / /www.dof.ca.aov /assembly bills 26- 27/view.nhi, for the amount of RPTTF that was approved by Finance. As you are aware the amount of available RPTTF is the same as the property tax increment that was available prior to ABxl 26. This amount is and never was an unlimited funding source. Therefore as a practical matter, the ability to fund the items on the ROPS with property tax is limited to the amount of funding available in the RPTTF. Please direct inquiries to Evelyn Suess, Supervisor or Mindy Patterson, Lead Analyst at (916) 322 -2985. Sincerely, MARK HILL Program Budget Manager cc: Ms. Pam Elias, Chief Accountant Property Tax Division, Riverside County Auditor - Controller Ms. April Nash, Supervising Accountant, Riverside County Auditor - Controller Ms. Jennifer Baechel, Business Process Analyst 11, Riverside County Auditor - Controller OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE TO: MEMBERS OF THE OVERSIGHT BOARD FROM: BARBARA LEIBOLD, SUCCESSOR AGENCY COUNSEL DATE: JUNE 12, 2012 SUBJECT: STATUS OF AGREED UPON PROCEDURES Background: Health & Safety Code Section 34182(a)(2), as enacted by Assembly Bill x1 26 ( "AB x1 26 "), requires that a successor agency's initial recognized obligations payment schedule ( "ROPS ") be "certified." Because the use of the term "certified" in the statute had no customary financial meaning (terms of art with respect to financial information include "audited," "reviewed" or "compiled "), the accounting community and the state of California agreed that the initial ROPS of each successor agency would be subject to certain "Agreed Upon Procedures" to be performed by or on behalf of each county in the state. The purpose of the agreed upon procedures engagement is to "establish each redevelopment agency's assets and liabilities,, to document and determine each redevelopment agency's pass - through obligations to other taxing agencies, and to document and determine both the amount and the terms of any indebtedness incurred by the redevelopment agency and certify the initial recognized obligation payment schedule" as required by Health & Safety Code Section 34182(a)(2). On May 15, 2012, the Director of Administrative Services received an email regarding the performance of Agreed Upon Procedures ( "AUP ") on the Successor Agency's Enforceable Obligations Schedule ( "EOPS ") and initial ROPS. A copy of the document request in connection with such AUP is attached. The Director of Administrative Services and the City Attorney's Office have provided the auditor with numerous documents in response to requests by the auditor engaged by the County to perform the AUP. The auditor visited the offices of the City on Thursday, May 31, 2012. AGENDA ITEM 2b Page I Status of Agreed Upon Procedures June 12, 2012 Page 2 Discussion: The ROPS for the Successor Agency are not considered final until the AUP are completed. Successor Agency staff will continue to work with the auditor performing the AUP and provide status reports to the Oversight Board. Recommendation: That the Oversight Board receive and file the attached AUP correspondence. Prepared and approved by: Barbara Leibold City Attorney /Successor Agency Counsel Attachment: I . Copy of Agreed Upon Procedures Document Request AGENDA ITEM 2b Page 2 County of Riverside Redevelopment Agency Dissolution Agreed Upon Proecedures Successor Agency to the Lake Elsinore Redevelopment Agency Initial Information request list Please provide the information listed below, electronically, if possible: A. RDA Dissolution and Restrictions 1. Provide a copy of the Enforceable Obligation Payment Schedule (EOPS) for the period of August 1, 2011, through December 31, 2011. a. For each item listed on the EOPS, provide a legal document supporting the payment that includes, at a minimum, the project name or redevelopment area, payee and a description of the nature of the work or service agreed to. b. For each item listed on the EOPS, provide a schedule of the amount of payments made by month through December 31, 2011 and supporting documentation for the payments. (This may be invoices or other support if the EOPS used estimated amounts or, if the legal document contained specific payment information, it could be the legal document provided in item 1a.) 2. If any EOPS were amended between January 1, 2012 and June 30, 2012, provide the amended EOPS. Provide the items listed in la. & 1b. for the 1 /i /12- 6/30/12 for the amended FOPS. 3. Provide the Statement of Indebtedness that was filed with the County Auditor - Controller. (This. document had to be filed on or before October 1, 2011.) 4. Describe how and when the Low and Moderate Income Housing assets were transferred to the Successor Agency. a. If the Successor Agency is the agency that created the RDA, provide support showing the changing of the name of the fund or bank account that held the Low and Moderate Income Housing assets. If the Successor Agency is not the agency that created the RDA, provide support for the transfer of funds (bank statements or fund creation /renaming) that held the Low and Moderate Income Housing assets. Note that under ABX126, only the encumbered fund balance and low income housing assets (property, rental payments, bond proceeds, lines of credit, etc.) will be transferred to the successor housing agency, the unencumbered low and moderate income housing fund balance must be transferred to the County Auditor - Controller. If the RDA mode transfers to both the County Auditor - Controller and a separate successor housing agency, provide support for both of the transfers and a reconciliation of the total transferred to the ending fund balance for the RDA's Low and Moderate Income Housing Fund as of January 31, 2012. S. Describe how and when the Low and Moderate Income Housing activities were transferred to a Successor Housing Agency. 0. Successor Agency 1. Describe the RDA's Successor Agency and when it was established. Provide supporting documentation regarding the establishment of the successor agency and the date it was established. (Note that if the Agency that created the RDA did not vote not to become the successor agency by January 13, 2012, the Agency was automatically named the successor agency.) b. Provide the names of the successor agency Oversight Board members and who they were appointed by. (This must be submitted to the Department of Finance by May 1, 2012.) Note that Most oversight boards are made up of the following: Two members appointed by the county board of supervisors, including one member representing the public. Two members appointed by the mayor, including one member representing the recognized employee organization with the largest number of former redevelopment agency (RDA) employees. One member appointed by the largest special district, by property tax share, within the boundaries of the dissolved RDA. One member appointed by the county superintendent of education or county board of education. One member appointed by the Chancellor of the California Community Colleges. 2. Describe the procedures used to transfer operations of the RDA to the Successor Agency and when this was accomplished. 3. Provide support showing the establishment of a Redevelopment Obligation Retirement Fund in the successor agency's accounting system. a. Provide a detailed listing of all EOPS and ROPS payments that have been made from June 30, 2011 through current. This list should include at a minimum: Date, Payee, Amount. 5. Provide audited financial statements for the RDA for the years ending June 30, 2010 and June 30, 2011. a. Provide a balance sheet for the RDA as of January 31, 2012. b. Provide detailed listings for all asset amounts (cash, investments, accounts receivable, notes receivable, fixed assets, etc.) on all three balance sheets (6/30/10, 6/30/11 and 1/31/12). C. Recognized Obligation Payment Schedule (Draft ROPS) 1. Provide a copy of the initial draft of the ROPS that was prepared by March 1, 2012. 2. If the draft ROPS has been approved by the Oversight Board, provide minutes showing the approval, otherwise state that it has not been approved. 3. Provide evidence that a copy of the draft ROPS was submitted to the County Auditor - Controller, State Controller and Department of Finance. D. Recognized Obligation Payment Schedule (Final ROPS) 1. Provide a copy of the final ROPS for the January 1, 2012 through June 30, 2012 period. 2. Provide evidence the final ROPS was submitted to the County Auditor - Controller, State Controller and Department of Finance by April 15, 2012. E. Other 1. Provide a list of pass - through obligations and payments made from July 1, 2011 through January 31, 2012. 2. Provide supporting documentation that payment was made for all items listed.