HomeMy WebLinkAboutDiscussion of Assembly Bill ABx1 26 and Assembly Bill AB1484 i
AGENDA REPORT
Huntington Beach Oversight Board of the Successor Agency
to the Redevelopment Agency
MEETING DATE: August 23, 2012
4) SUBJECT/ ACTION: Overview of Assembly Bill 1484
BACKGROUND AND DISCUSSION:
As part of the FY 2012-13 State budget package, on June 27, 2012, the
Legislature passed and the Governor signed Assembly Bill 1484 (AB 1484,) the
primary purpose of which is to make technical and substantive amendments to
AB 26 based upon experience to-date at the State and local level in
implementing AB 26. In addition, AB 1484 has required that additional
requirements be completed by the City prior to moving forward with completing
activities, projects, and programs. These requirements include, among other
things, the following:
1) Preparing a list of housing assets that will need to be submitted and
approved by the Department of Finance (DOF);
2) Conducting an audit of the Low and Moderate Income Housing Fund
and Non-Housing Funds;
3) Oversight Board approval of the Recognized Obligation Payment
Schedule (ROPS) for the time period of January — June 2013; and
4) The City receiving a "finding of completion" from the DOF regarding
completing of the previous tasks.
Upon receiving the finding of completion from the DOF, the Successor Agency
will prepare a Property Management Plan for the disposition of former Agency
properties.
Pursuant to Assembly Bill 1484 (Assembly Bill X1 26 clean-up legislation,) the
Board will need to consider approval of the housing fund audit that will be
completed by October 1, 2012. This will require two special meetings (including
a public comment session) tentatively scheduled for Thursday, October 4, 2012,
and Thursday, October 11, 2012.
FINANCIAL IMPACT: Not Applicable.
Redevelopment Dissolution
ABx1 26
AB 1484
i
State Budget Adoption
FY 2011 / 2012
• ABx1 26 (Dissolution Act)
Immediate suspended RDA Activities and from
incurring new indebtedness
Successor Agency
• RDA dissolved on Februaryl, 2012
Successor Agency (the City) charged with
unwinding RDA obligations
L] Paying off existing obligations
Disposing of properties and assets
State Budget Adoption
FY 2012 / 2013
• AB 1484
Made technical amendments in the
implementation of the Dissolution Act
Designated Successor Agencies as a separate legal
entity
Added significant new deadlines with compliance
consequences
III 'I
AB 1484 New Additions
Property Tax Recovery "True Up"
■ Due Diligence Review
■ Finding of Completion
Other Loans Agreements
Repayment Conditions for Other Loan
Agreements
Property Disposition
Preserves Affordable Housing Funding
Deadlines
Penalties
Property Tax Recovery j
"True Up " �
• Recovery of property taxes that should have
been distributed to the other taxing entities
during lst ROPS period.
Ej July 9 — County Auditor-Controller (CAC) demand
letter
13 July 12 — Payment from Successor Agency due
July 16 — Distributions to taxing entities
13 July 18 — Non-payment penalties
Huntington Beach's demand letter = $629,466
WMI'll
Due Diligence Review
• Successor Agency to hire accountant and
conduct Due Diligence Review of unobligated I,
fund balances (accountant approved by CAC)
o LMIHF (Low Moderate Income Housing Fund)
o Other funds
Fund Balance Review is different from the
agreed-upon procedure audit (AUP) currently
under way by the County.
Finding of Completion
• Upon Completion of the Property Tax Recover
and Due Diligence Review, DOF will issue a
"Finding of Completion". Incentives include:
Reinstating loans between the RDA and City that
were previously disallowed
Retaining RDA properties with an approved
property management plan
i
Other Loan Agreements
• Agreements that were not previously recognized
shall be deemed enforceable obligations
• Oversight Board makes a finding that Agreement
was for legitimate redevelopment purposes
(Section 34191.4(b))
Places repayment conditions on agreements that
are reinstated
i
Repayment Conditions for
Other Loan Agreements
• Accumulated interest recalculated from
origination at the Local Agency Investment Fund
(LAIF) interest rate
Going forward interest limited to LAIF rate
Delayed until IFY 2013/14
Not to exceed 50% of increase in property in
property tax distribution to taking entities from
FY 2012/13 base year
20% of any loan repayment placed in LMIHF
N
Property Disposition
• After receiving a Finding of Completion
Ei Develop along-range property management plan
(approved by the Oversight Board and DOF)
• Retention of property for governmental use
• Retention of property for future development
• Sale of property
• Use of property to fulfill an enforceable obligation
Property identified in an approved
redevelopment plan can be transferred to the
City for that purpose
Preserves Affordable Housing Funding
• Expands list of housing assets that maybe transferred to
the Successor Housing Agency by August i, 2012
1-1 Real Property Assets
Encumbered Funds
, Loan or Grant Receivables
Rents and Payments from Operations
Amounts Owed to LMIHF
r Clarifies repayment of obligations owed shall be directed
to a new LMIH Asset Fund
Deadlines
• August 1, 2012 — Provide DOF a list of assets transferred
to Housing Successor Agency Since February 1, 2012
• September i, 2012 — Approval of 3rd ROPS for 1/1/13 to
6/30/13
• October i, 2012 — Submit Due Diligence Review on
LMIHF to Oversight Board, CAC, State Controller and
DOF
October 15, 2012 — Oversight Board approval of the
LMIHF Due Diligence Review
Public review meeting required 5 business days in advance of
Oversight Board
Deadlines ( cont . )
• December 15, 2012 — Submit Due Diligence
Review of all other funds to Oversight Board,
CAC, State Controller and DOF
January 15, 2013 — Oversight Board approval of
Due Diligence Review for all other funds
Public review meeting required 5 business days in
advance of Oversight Board meeting
• March 3, 2013 — Approval of 4th ROPS for 7/1/13
- 12/31/13
Penalties
ROPS
$1o,000 per day penalty for each day the ROPS are
late
25% reduction of the maximum administrative cost
allowance after 10 days late
Property Tax Recovery
Subject to civil penalty of 1o% of the amount owed
Plus 1.5% of amount owed for each month payment is
late
No payment for enforceable obligations (except bonds)
Sales tax and property tax offsets