HomeMy WebLinkAboutAppropriation and allocation of $4,669,451 of General Funds ,
Dept. ID ED 13-33 Page 1 of 3
Meeting Date: 10/7/2013
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
MEETING DATE: 10/7/2013
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Fred A. Wilson, City Manager
Lori Ann Farrell, Director of Finance
SUBJECT: Approve appropriation and allocation of$4,669,451 of General Funds to
Successor Agency to pay Department of Finance's Demand Letter regarding
former Redevelopment Agency's Assets
Statement of Issue: On February 1, 2012, all former redevelopment agencies were dissolved
statewide. In June 2012, Assembly Bill 1484 (AB 1484) was approved which set forth new
requirements for the Successor Agency to the former Redevelopment Agency. AB 1484 required
Due Diligence Reviews (DDR) of both Housing and Non-Housing Fund balances available for
distribution to other taxing entities. On September 20, 2013, the City received the final
determination and demand letter from the Department of Finance (DOF)for the Non-Housing DDR.
The Demand is for a total of $11,071,092, which includes $4,669,451 in disallowed transfers from
the former Redevelopment Agency to the City's General Fund. Due to this final determination, the
City Council is requested to appropriate $4,669,451 from the General Fund and to transfer it to the
Successor Agency.
Financial Impact: The appropriation, transfer and subsequent remittance of$4,669,451 from the
City's General Fund, to the Successor Agency, as per the State Department of Finance's demand
notice, will be funded from a combination of sources. The primary source of funding is the City's
General Fund Reserves, namely, the entire Budget Stabilization Fund of$3,100,000 will be
expended to make this payment. As this amount only partially finances the full payment, it is
anticipated the balance of the payment, or$1,569,851, will be funded from FY 2012/13 General
Fund revenues projected to be available and unencumbered at year-end. As per the most recent
budget projections, the City is projecting $1,900,000 in General Fund year-end balances may be
available. This amount can be used, if available, to fund the remainder of this mandatory payment,
barring adverse effects. If year-end balances are not available and instead must be used to help
offset actual General Fund expenditures by year-end, other General Fund reserves, such as the
Economic Uncertainties Reserve, will be utilized to finance the remaining portion.
Recommended Action:
A) Approve an appropriation $4,669,451 in the FY 2012/13 Non-Departmental General Fund
Budget Account - 10040999.88210.350; and
B) Approve the transfer of$4,669,451 from the General Fund FY 2012/13 Non-Departmental
Budget to the FY 2012/13 Successor Agency Budget Account- 35000350.49101.100.
Item 10. - 1 HB -388-
Dept.ID ED 13-33 Page 2 of 3
Meeting Date: 10/7/2013
Alternative Action(s):
Do not approve the payment to the Successor Agency and provide alternative direction.
Analysis:
On June 27, 2012, the Governor signed AB 1484 modifying provisions of the Dissolution Act and
imposing new requirements on Successor Agencies. Section 34177(d) of the Health and Safety
Code requires Successor Agencies to remit unobligated balances of redevelopment agency funds
to the County Auditor-Controller for distribution to the taxing entities. Section 34179.5 of the Health
and Safety Code requires Successor Agencies to hire a licensed accountant, approved by the
County Auditor-Controller and with experience and expertise in local government accounting to
conduct two due diligence reviews as noted below to determine the unobligated balances available
for transfer to taxing entities.
Two due diligence reviews are required to be performed: one for the Housing Funds; and one for
Non-Housing funds. The report for the Non-Housing Funds review was completed and submitted to
the County and State and was reviewed and approved by the Oversight Board as required by State
law. The City/Successor Agency retained the accounting firm Vavrinek, Trine, Day& Co., LLP
(VTD) and the firm was approved by the County of Orange to perform the required due diligence
reviews. The Independent Accountant's Report on Applying the Agreed-Upon Procedures on the
Successor Agency to the dissolved Huntington Beach Redevelopment Agency made the
determination that there was no balance to be disbursed for Huntington Beach, due to Agency
commitments.
As required by Section 34179.6 of the Health and Safety Code, staff submitted the due diligence
review for the Non-Housing Funds to the Oversight Board, the State Controller, the Department of
Finance, and the County Auditor-Controller, by January 15, 2013. On April 1, 2013, our DDR was
determined to be invalid, due to the City/Successor Agency fiscal year being October 1 to
September 30 and the State requirement that the DDR be based on the State Fiscal Year July 1 to
June 30. On June 3, 2013, the City/Successor Agency resubmitted the DDR based on the revised
fiscal year and still determined that there was no cash available for transfer to the County. On
August 15, 2013, the City/Successor Agency received the DOF Letter stating that the City/Agency
was required to remit $13,231,359. On September 4, 2013, the City and DOF held a Meet and
Confer regarding the DDR Determination Response in Sacramento, CA.
Transfers in the amount of $5,078,824 to the City of Huntington Beach (City) were disallowed.
However, the Redevelopment Agency legally made loan repayments to the City between the period
of January 1, 2011, to September 30, 2011. The loan payments were considered enforceable
obligations at the time they were made. All of the transfers questioned by DOF took place before
February 1, 2012. Until .tune 28, 2011, the Redevelopment Agency's actions were governed by
Community Redevelopment Law in effect at the time, which plainly authorized the Redevelopment
Agency to enter into the Agreements with the City, HSC 33220.
However, AB 1484, which was adopted in June 2012, modified the law retroactive to January 1,
2011, and rendered all transfers of cash and/or assets between Agencies and Cities as
disallowable transfers. The City did successfully argue that the transfer made on January 1, 2011,
in the amount of$409,483 was enforceable and legal. As such, the disallowed amount of the former
redevelopment agency's transfer to the General Fund was reduced from $5,078,824 to the required
$4,669,451.
The Successor Agency does not intend to waive any constitutional, statutory, legal, or equitable
rights and expressly reserves any and all rights, privileges and defenses available under law and
equity. Prior to and during the Meet and Confer, the Successor Agency provided the Department
with ample documentation to demonstrate that (i) the payments from the former Redevelopment
HB -389- Item 10. - 2
Dept. ID ED 13-33 Page 3 of 3
Meeting Date: 10/7/2013
Agency to the City were made pursuant to obligations that were enforceable at the time the
payments were made and (ii) the amount of projected revenues to the Successor Agency would be
insufficient to pay scheduled enforceable obligations.
Environmental Status: Not Applicable
Strategic Plan Goal:
Improve long-term financial sustainability
Attachment(s):
1) Department of Finance September 20, 2013, Letter
2) Department of Finance August 15, 2013, Letter
Item 10. - 3 HB -390-
AT
TACH ANT 1
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DEPARTMEN■TT OF EDMUND G. BROWN JR. a GOVERNOR
c4�rFDaa`� @ 91 5 L STREET ■ SACRAMENTO CA ■ 95S 1 4-3706 W WWW.DDF.GA.GG7V
September 20, 2013
Ms. Kellee Fritzal, Deputy Director
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648-2702
Dear Ms. Fritzal:
Subject: Other Funds and Accounts Due Diligence Review
This letter supersedes the California Department of Finance's (Finance) original Other Funds and
Accounts (OFA) Due Diligence Review (DDR) determination letter dated August 15, 2013.
Pursuant to Health and Safety Code (HSC) section 34179.6 (c), the City of Huntington Beach
Successor Agency (Agency) submitted an oversight board approved OFA DDR to Finance on
June 3, 2013. The purpose of the review was to determine the amount of cash and cash
equivalents available for distribution to the affected taxing entities. Since the Agency did not meet
the January 15, 2013 submittal deadline pursuant to HSC section 34179.6 (c), Finance was not
bound to completing its review and making a determination by the April 1, 2013 deadline pursuant
to HSC section 34179.6 (d). Finance issued an OFA DDR determination letter on
August 15, 2013. Subsequently, the Agency requested a Meet and Confer session on one or more
items adjusted by Finance. The Meet and Confer session was held on September 4, 2013.
Based on a review of additional information and documentation provided to Finance during the
Meet and Confer process, Finance has completed its review of those specific items being
disputed. Specifically, the following adjustments were made:
• Transfers in the amount of$5,078,834 to the City of Huntington Beach (City)were not
allowed. The former redevelopment agency (RDA) transferred a total of$5,485,765 in
cash to the City during the period January 1, 2011 to September 30, 2011. Of the total
cash transferred, $406,931 was supported by an enforceable obligation for payments for
the 2010 Series A Lease Revenue Refunding Bond. Based on further review during the
Meet and Confer process, the Agency provided supporting documents showing that an
additional transfer of$409,483 occurred on January 1, 2011, which is outside of the
period for disallowed transfers per HSC section 34179.5 (c) (2).
The remaining transfers represent payments to the City in relation to multiple
cooperative agreements between the City and the former RDA entered into between
1983 through 2003 and amended annually from 2004 through 2011. However, per HSC
section 34179.5 (c) (2), the dollar value of assets and cash transferred by the former
RDA or successor agency to the city, county, or city and county that created the former
RDA after January 1, 2011 through June 30, 2012, must be evidenced by documentation
of the enforceable obligation that required the transfer. HSC section 34179.5 states
HB -391- Item 10. - 4
Ms. Fritzal
September 20, 2013
Page 2
enforceable obligation includes any of the items listed in subdivision (d) of section
34171, contracts detailing specific work that were entered into by the former RDA prior
to June 28, 2011, with a third party other than the city, county, or city and county that
created the former RDA. HSC section 34171 (d) (2) states enforceable obligation does
not include any agreements, contracts, or arrangements between the city that created
the RDA and the former RDA. Therefore, the transfers were not made pursuant to an
enforceable obligation and are not permitted. The OFA balance available will be
increased by $4,669,451 ($5,485,765 - $406,931 - $409,383).
The repayment of these loans may become enforceable obligations after the Agency
receives a Finding of Completion from Finance. If the oversight board makes a finding
that the loans were for legitimate redevelopment purposes, these loans should be placed
on future Recognized Obligation Payment Schedules (ROPS)for repayment. Refer to
HSC section 34191.4 (b) for more guidance.
• The request to retain balances totaling $12,241,970 to satisfy future enforceable
obligations was originally decreased by$8,813,384. Based on further review during the
Meet and Confer process, the Agency may retain a total of$5,179,470 for enforceable
obligations, as further discussed below. Accordingly, the OFA balance available for
distribution will be increased by $7,062,500 ($12,241,970 - $5,179,470).
For the July through December 2012 ROPS (ROPS 11) period, Finance approved
$5,747,947 to be distributed from the Redevelopment Property Tax Trust Fund (RPTTF).
The County Auditor Controller only distributed $3,428,586 from the RPTTF. On the
Estimated Obligations vs. Actual Payments tab of the July through December 2013
ROPS (ROPS 13-14A)form, the Agency reported $5,513,899 in expenditures for the
ROPS II period, which consisted of$3,428,586 paid from the RPTTF and $2,085,313
paid from Reserves. However, based on the expenditure report provided for the period
July 1 through December 31, 2012, only$5,179,470 in approved expenditures was
supported. Therefore, the Agency may retain $5,179,470 ($3,428,586 in RPTTF +
$1,750,884 in Reserves) for ROPS II approved enforceable obligations.
Finance notes that HSC section 34177 (a) (3) states that only those payments listed in
the approved BOPS may be made from the funding source specified in the ROPS.
However, HSC section 34177 (a) (4) goes on to state that with prior approval from the
oversight board, the successor agency can make payments for enforceable obligations
from sources other than those listed in the ROPS. In the future, the Agency should
obtain prior oversight board approval when making payments for enforceable obligations
from a funding source other than those approved by Finance.
For both the January through June 2013 (BOPS 111) and ROPS 13-14A periods, the
Agency received the full amount approved from the RPTTF. Therefore, the Agency is
not allowed to retain any additional funds for the ROPS ill and ROPS 13-14A periods.
Although the Agency contends it will experience a shortfall of RPTTF for the ROPS 13-
14A and subsequent periods, the cash flow analysis provided does not adequately
incorporate all the requirements detailed in HSC section 34179.5 (c) (5) (D). HSC
section 34179.5 (c) (5) (D) requires an extensive analysis before retention of current
unencumbered balances can be contemplated. This includes, but is not limited to,
providing a detail of the projected property tax revenues and other general purpose
revenues to be received by the Agency, together with both the amount and timing of the
bond debt service payments, for the period in which the oversight board anticipates the
Item 10. - 5 HB -392-
Ms. Fritzal
September 20, 2013
Page 3
Agency will have insufficient property tax revenue to pay the specified obligations. The
cash flow analysis provided only identified one period (July through December 2014) in
which there may be insufficient funding from the RPTTF; however, the period prior to this
estimates excess funding from the RPTTF would be available to cover this shortfall,
should it be needed to cover bond debt service. As such, it is not evident that future
property tax revenue will be insufficient or that there is an immediate need to retain
these balances.
Should a deficit occur in the future, HSC provides successor agencies with various
methods to address short term cash flow issues. These may include requesting a loan
from the city pursuant to HSC section 34173 (h), requesting the accumulation of
reserves on the ROPS when a future balloon or uneven payment is expected pursuant
to HSC section 34177 (d) (1) (A), or subordinating pass-through payments pursuant to
HSC section 34183 (b). The Agency should seek counsel from their oversight board to
determine the solution most appropriate for their situation if a deficiency were to occur.
Since the Agency has not met the requirements detailed in HSC section
34179.5 (c)(5) (D)and possesses alternatives to address any short-term cash flow
shortages, Finance deems it is not necessary for the Agency to retain any additional
OFA unencumbered balances.
The Agency's OFA balance available for distribution to the affected taxing entities is
$11,071,092 (see table below).
OFA Balances Available For Distribution To Taxing Entities
Available Balance per DDR. $ (660,859)
Finance Adjustments
Add:
Disallowed transfers $ 4,669,451
Requested retained balance not supported 7,062,500
Total OFAavailable to be distributed: $ 11,071,092
This is Finance's final determination of the OFA balances available for distribution to the taxing
entities. HSC section 34179.6 (f) requires successor agencies to transmit to the county auditor-
controller 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. Upon submission of
payment, it is requested you provide proof of payment to Finance within five business days.
If funds identified for transmission are in the possession of the successor agency, and if the
successor agency is operated by the city or county that created the former redevelopment
agency, then failure to transmit the identified funds may result in offsets to the city's or the
county's sales and use tax allocation, as well as its property tax allocation. If funds identified for
transmission are in the possession of another taxing entity, the successor agency is required to
take diligent efforts to recover such funds. A failure to recover and remit those funds may result
in offsets to the other taxing entity's sales and use tax allocation or to its property tax allocation.
If funds identified for transmission are in the possession of a private entity, HSC section
34179.6 (h) (1) (B) states that any remittance related to unallowable transfers to a private party
may also be subject to a 10 percent penalty if not remitted within 60 days.
HB -393 Item 10. - 6
Ms. Fritzel
September 20, 2013
Page 4
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 redevelopment agency(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 California State Controller's Office
(Controller) has the authority to claw back assets thatwere 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 Haiterman
Analyst, at (916)445-1546.
Sincerely,
STEVE SZALAY
Local Government Consultant.
cc: its. Lori Ann Farrell, Director of Finance, City of Huntington Beach'
Mr. Frank Davies, Property Tax Manager, Grange County
Mr. Steven Mar, Bureau Chief, Local Government Audit Bureau, California State
Controller's Office
Item 10. - 7 HB -394-
ATT' ACHMENT #2
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;c DEPARTMENT OF EomUNO G. 13RaWN JR. m GMVERNOR
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August 15, 2013
Ms. Kellee Fritzal, Deputy Director
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648-2702
Dear Ms. Fritzal:
Subject: Other Funds and Accounts Due Diligence Review
The City of Huntington Beach Successor Agency(Agency) submitted an oversight board
approved Other Funds and Accounts (OFA) Due Diligence Review (DDR)to the California
Department of Finance (Finance) on June 3, 2013. The purpose of the review was to determine
the amount of cash and cash equivalents available for distribution to the affected taxing entities.
Since the Agency did not meet the January 15, 2013 submittal deadline pursuant to HSC
section 34179.6 (c), Finance is not bound to completing its review and making a determination
by the April 1, 2013 deadline pursuant to HSC section 34179.6 (d). However, Finance has
completed its review of your DDR, which may have included obtaining clarification for various
items.
HSC section 34179.6 (d) authorizes Finance to adjust the DDR's stated balance of OFA
available for distribution to the taxing entities. Based on our review of your DDR, the following
adjustments were made:
• Transfers in the amount of$5,078,834 to the City of Huntington Beach (City) are not
allowed. The former redevelopment agency (RDA)transferred a total of$5,485,765 in
cash to the City during the period January 1, 2011 to September 30, 2011. Of the total
cash transferred, only$406,931 was supported by an enforceable obligation, payments
for the 2010 Series A Lease Revenue Refunding Bond. Therefore, $5,078,834
($5,485,765- $406,931) is not an allowable transfer.
® The request to retain balances totaling $12,241,970 to satisfy future enforceable
obligations has been adjusted by$8,813,384. The Agency is allowed to retain
$3,428,586 that was distributed for the July through December 2012 Recognized
Obligation Payment Schedule period. However, the Agency's request to retain current
unencumbered OFA balances of$8,813,384 ($12,241,970--- $3,428,586) to cover future
obligations is not allowed. The cash flow analysis provided does not adequately
incorporate all the requirements detailed in HSC section 34179.5 (c) (5) (D). HSC
section 34179.5 (c) (5) (D) requires an extensive analysis before retention of current
unencumbered balances can be contemplated. This includes but is not limited to,
providing a detail of the projected property tax revenues and other general purpose
revenues to be received by the Agency, together with both the amount and timing of the
HB -395- Item 10. - 8
Ms. Kellee Fritzal
August 15, 2013
Page 2
bond debt service payments, for the period in which the oversight board anticipates the
Agency will have insufficient property tax revenue to'pay the specified obligations. As
such, it is not evident that future property tax revenue will be insufficient or that there is
an immediate need to retain these balances.
Should a deficit occur in the future, HSC provides successor agencies with various
methods tee-address short term cash flow issues. These may include requesting a loan
from the city pursuant to HSC section 34173 (h), or subordinating pass-through
payments pursuant to HSC section .34183 (b). The Agency should seek counsel from
their oversight board todetermine.the solution most appropriate for their situation if a
deficiency were to occur.
Since the Agency has not met the requirements detailed in HSC section 34179.5 (c) (5)
(D) and possesses alternatives to address short term cash flow shortages, Finance
deems it is not necessary for Agency to retain $8,813,384 in OFA unencumbered
balances.
If you disagree-with Finance's adjusted amount of OFA balances available for distribution to the
taxing entities, you may request a Meet and Confer within five business days of the date of this
letter. The Meet and Confer proce'ss,and guidelines are available at Finance's website below:
http://www.dof.ca.gov/redevelopment/meet and,confer/
The Agency's OFA balance available for distribution to the affected taxing entities is
$13,231,359 (see table below).
OFA Balances Available For Distribution To Taxing Entities
Available Balance per DDR: $ (660,859)
Finance Adjustments
Add:
Disallowed transfers $ 5,078,834
Requested retained balance not supported 8,813,384
Total OFA available to be distributed: $ 13,231,359
Absent a Meet and. Confer request, HSC section 34179.6 (f) requires successor agencies to
transmit to the county auditor-controller the amount of funds identified in the above table within
five working days, plus any interest
rest those sums accumulated while in the possession of the
recipient. Upon submission of payment, please provide proof of payment to Finance within five
business days,
If funds identified for transmission are in the possession of the successor agency, and if the
successor agency is operated by the city or county that created the former redevelopment,
agency, then failure to transmit the identified funds may result in offsets to the city's or the
county's sales and use tax allocation, as well as its property tax allocation. If funds identified for
transmission are in the possession of another taxing entity, the successor,agency is required to
take diligent efforts to recover such funds. A failure to recover and remit those funds may result
in offsets to the other taxing entity's sales,and use tax allocation or to its property tax allocation.
If funds identified for transmission are in the possession of a private entity, HSC 34179.6 (h)(1)
(6) states that any remittance related to unallowable transfers to a private party may also be
subject to a 10 percent penalty if not remitted within 60 days.
Item 10. - 9 HB -396-
Ms. Kellee Fritzal
August 1.5, 201`3
Page.3
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 redevelopment agency (RDA) and
the city, county, or city and county that created the RIBA 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 section 34167.5 and 34178.8, the California State Controller's Office
(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 Nichelle Thomas, Supervisor or Alex Watt, Lead Analyst at.
(91 6)445-1546'.
Sincerely;
STEVE SZALAY
Local Government Consultant
cc: Ms. Lori Ann Farrell, Director of Finance, City of Huntington.Beach
Mr. Frank Davies., Property Tax Manager, Orange County
California State Controller's:Office
HB -397- Item 10. - 10
Huntington Beach Successor Agency
Non Housing DDR Final
�. Determination
October 7. 2013
r
r
On June 27, 2012, the governor signed AB 1484
modifying provisions of the Dissolution Act and
imposing new requirements on successor agencies.
AB 1484 requires successor agencies to remit
unobligated balances of redevelopment agency funds
to the County Auditor-Controller for distribution to the
taxing entities.
Successor Agencies had to prepare two Due Diligence
Reviews (DDR's) one of housing assets and one of all
L
er non-housing assets, including unencumbered
h balances
Will
DDR Summary
As required staff submitted the DDR for both the Non-
Housing and Housing Funds
On August 15, 2013 the City/Successor Agency received the
DOF Letter stating that the City/Agency was required to
submit$13,231,359
On September 4, 2013, the City and DOF held a Meet and
Confer regarding the DDR Determination Response. The
amount owed was reduced to $11,071,092
Disallowed Transfers—General Fund
➢ Transfers in the amount of$4,669,451 to the City of
Huntington Beach were disallowed.
➢ The Redevelopment Agency legally made loan
repayments to the City between the period of January 1,
2011 to September 30, 2011.
> The loan payments were considered enforceable
obligations at the time they were made pursuant to State
Law.
r All of the transfers questioned by DOF occurred before
February 1, 2012, the formal date of dissolution.
2
Disallowed Transfers - General Fund
➢ However, AB1484 retroactively disallowed transfers
from the redevelopment agency to the City
➢ As such, staff recommends the appropriation, transfer
and subsequent remittance of$4,669,851 from the
City's General Fund, to the Successor Agency
➢ Primary source of funding is the Budget Stabilization
Fund of$3,100,000
➢ The balance of the payment, or $1,569,851, will be
funded from FY 2012/13 General Fund revenues
projected to be available and unencumbered at year-
end
Retentionof Funds . Agency
➢ In addition, based upon the Meet and Confer of
September 4, 2013 DOF reduced the demand from
$8,813,384 to $7,062,500
➢ After applying a small credit, the remaining $6,401,641
payment will be funded from the former redevelopment
agency's fund balances
➢ The Successor agency will accept the General Fund
transfer of$4,669,451 and approve a Budget
appropriation to make the $11,071,092 payment for
remittance to the County Auditor-Controller.
3
➢ The City and Successor Agency will be making the
payment under protest and will reserve the rights to
future litigation
This option is being recommended in order to avoid a
claw back of the City's sales taxes and property taxes
that fund most public services
Huntington Beach Successor Agency
QUESTIONS?
4