HomeMy WebLinkAbout10/15/2012 - RESOLUTIONS - 010 RESOLUTION NO. 010
A RESOLUTION OF THE OVERSIGHT BOARD FOR THE
SUCCESSOR AGENCY TO THE PALM SPRINGS
COMMUNITY REDEVELOPMENT AGENCY, APPROVING
THE DUE DILIGENCE REVIEW OF THE LOW AND
MODERATE INCOME HOUSING FUND, PURSUANT TO
SECTION 34179.5 AND 34179.6 OF CALIFORNIA HEALTH
AND SAFETY CODE
WHEREAS, The Community Redevelopment Agency of the City of Palm Springs
("Redevelopment Agency") was a redevelopment agency in the City of Palm Springs
("City"), duly created pursuant to the California Community Redevelopment Law [Part 1
(commencing with Section 33000) of Division 24 of the California Health and Safety
Code] ("Redevelopment Law"); and
WHEREAS, in June, 2012 the Governor signed Assembly Bill 1484, Chapter 26,
Section 17 (AB 1484), a redevelopment reform act which created new reporting and
audit requirements on Successor Agencies and Oversight Boards. Health and Safety
Code Section 34179.5 provides new procedures for reviewing the available cash assets
of the Dissolved RDA (the "Review"); and
WHEREAS, and this Review was to be conducted by each Successor Agency with
the goal of distributing available cash assets to the taxing entities during FY 2012-13.
At the conclusion of the Review, if the Successor Agency remits the cash assets to the
County Auditor Controller (CAC), and if the Successor Agency has also made certain
other payments, the DOF will issue a finding of completion for the Successor Agency (a
"Finding of Completion"); and
WHEREAS, the Successor Agency's auditors complete the reviewed by performing
the procedures enumerated in the Review itself, the "List of Procedures for the Due
Diligence Review," only for the Low and Moderate Housing Fund; and
WHEREAS, such procedures were agreed to by the State Controller's Office and the
State Department of Finance (SCO and DOF) to assist local agencies in ensuring that
the dissolved redevelopment agency is complying with this amendment to Section
34179.5; and
WHEREAS, upon completion of the Review, it is to be submitted to the Oversight
Board for review and approval. Additionally, the Successor Agency is to submit a copy
of the ROPS to the County administrative officer, the CAC and the DOF at the same
time the Successor Agency submits the Review to the Oversight Board; and
WHEREAS, a copy of the Review and the ROPS were submitted to the County
administrative officer, the CAC and the DOF on October 2, 2012; and
Resolution No. 010
Page 2
WHEREAS, upon receipt of the Review from the auditors, the Oversight Board is to
convene a public comment session to take place at least five business days before the
Oversight Board votes on approval of the Review. Such special public comment
session was conducted by Oversight Board staff on October 4, 2012; and
WHEREAS, The Oversight Board is to review, approve and transmit the Review by
October 15, 2012 for the LMIHF and by January 15, 2013 for all other funds.
WHEREAS, there is a single item in the Review shown to be "disallowed" by the
DOF, a Housing Fund loan approved by the former Agency on June 15, 2011, but which
closed escrow on August 3, 2011, after the "deadline' of June 27, 2011.
WHEREAS, Agency staff held a "Meet and Confer" call on the disallowed item on
the Housing Assets Transfer Form (Form), which was submitted to the California
Department of Finance (Finance) on July 31, 2012 for the period February 1, 2012
through July 31, 2012, pursuant to Section 34176(a)(2); and
WHEREAS, as of the date of this Resolution DOF has not made its final
determination, but except for the single disallowed item as noted above, DOF has not
objected to any of the remaining items listed on the Form; and
WHEREAS, DOF is to complete its review by November 9, 2012 for the LMIHF and
by April 1, 2013 for the remaining funds, and required to provide the Successor Agency
and the Oversight Board with an explanation of the basis for overturning or modifying
any findings or determinations of the Oversight Board.
NOW, THEREFORE, BE IT RESOLVED BY THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF PALM SPRINGS AS FOLLOWS:
SECTION 1. The Oversight Board hereby finds and determines that the foregoing
recitals are true and correct.
SECTION 2. The Due Diligence Review in the form of attached as Attachment "A" to
this Resolution for the period February 1, 2012 through July 31, 2012, prepared
pursuant to Section 34176(a)(2), which is attached hereto and incorporated by
reference, is hereby approved and adopted.
SECTION 3. The Successor Agency has disputed one item contained in the Housing
Asset Transfer Form that was disallowed by DOF, and held a "Meet and Confer" call on
the disallowed item with DOF. The Oversight Board agrees with the Successor
Agency's position on the item and disagrees with the State's determination with respect
to the disallowed item, and approves amending the Due Diligence Review to reclassify
the disallowed item if DOF reverses its determination.
Resolution No. 010
Page 3
SECTION 4. The Oversight Board may direct staff of the Successor Agency to
perform work in furtherance of the Oversight Board's duties and responsibilities under
AB X1 26.
SECTION 5. This Resolution shall take effect three (3) business days after its
adoption.
PASSED, APPROVED AND ADOPTED BY THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE PALM SPRINGS COMMUNITY REDEVELOPMENT
AGENCY THIS 15T" DAY OF OCTOBER, 2012.
HAIRPERS N
ATTEST:
YLE!RZSE-CRETARY
Resolution No. 010
Page 4
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, Clerk/Secretary, to the Oversight Board for the
Successor Agency to the Palm Springs Community Redevelopment Agency, hereby
certify that Resolution No. 010 is a full, true and correct copy, and was duly adopted at a
special meeting of the Oversight Board on October 15, 2012, by the following vote:
AYES: Board Members Foat, Marshall, Ready, and Chair Flavin.
NOES: None.
ABSTAIN: None.
ABSENT: Board Members Deas, Van Horne and Vice Chair Howell.
AMES THOMPSON, CITY CLERK
Oversight Board Clerk/Secretary
City of Palm Springs, California
LSL Ut
CERTIFIED PUBLIC ACCOUNTANTS
Successor Agency of the
Former Community Redevelopment Agency of the
City of Palm Springs
Due Diligence Review
of the Low and Moderate Income Housing Fund
Pursuant to Sections 34179.5(c)(1) through 34179.5(c)(3)
and Sections 34179.5(c)(5) through 34179.5(c)(6)
of Assembly Bill No. 1484 of 2012
Successor Agency of the
Former Community Redevelopment Agency of the
City of Palm Springs
Due Diligence Review
of the Low and Moderate Income Housing Fund
Pursuant to Sections 34179.5(c)(1)through 34179.5(c)(3)
and Sections 34179.5(c)(5)through 34179.5(c)(6)
of Assembly Bill No. 1484 of 2012
LSL1909
CERTIFIED PUBLIC ACCOUNTANTS
*Brandon W.Burrows,CPA
*David E.Hale,CPA,CFP
A Professional Corporation
4 Donald G.Slater,CPA
r Richard K.Kikuchi,CPA
Susan F.Matz.CPA
=Shelly K.Jackley,CPA
"Bryan S.Gruber,CPA
v Deborah A.Harper,CPA
INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING
AGREED-UPON PROCEDURES
To the Successor Agency of the Former
Community Redevelopment Agency of the City of Palm Springs
City of Palm Springs, California
We have performed the procedures enumerated in Attachment A for the Low and Moderate Housing Fund,
which were agreed to by the California State Controller's Office and the State of California Department of
Finance (State Agencies) solely to assist you in ensuring that the dissolved redevelopment agency is
complying with Assembly Bill 1484,Chapter 26,Section 17's amendment to health and safety code 34179.5.
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. Management of the successor agency
is responsible for providing all the information obtained in performing these procedures. The sufficiency of
these procedures is solely the responsibility of those parties specified in the report. Consequently,we make
no representations regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
As stated above, the scope of this engagement was limited to performing the procedures identified in
Attachment A, which specified the "List of Procedures for the Due Diligence Review" obtained from the
California Department of Finance Website.
The results of the procedures performed are identified in Attachment B1 through B11.
We were not engaged to and did not conduct an audit, the objective of which would be the expression of a
certified opinion as to the appropriateness of the results of the procedures performed. Accordingly,we do not
express such an opinion. Had we performed additional procedures, other matters might have come to our
attention that would have been reported to the Successor Agency.
This report is intended solely for the information and use of the Successor Agency Oversight Board, the
Successor Agency and the applicable State Agencies,and is not intended to be,and should not be used by
anyone other than these specified parties. This restriction is not intended to limit distribution of this report,
which is a matter of public record.
'04, /OIQF qre .gyp
Brea, California
September 21, 2012
Lance,Soil&Lunghard,LLP 203 North Brea Boulevard • Suite 203 • Brea, CA 92821 • TEL:714.672.0022 • Fax: 714.672.C331 www.lslcpas.uum
Orange County • Temecula Valley • Silicon Valley
ATTACHMENT A
List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund
1. Obtain from the Successor Agency a listing of all assets that were transferred from the former
redevelopment agency to the SuccessorAgency on February 1,2012.Agree the amounts on this listing to
account balances established in the accounting records of the Successor Agency. Identify in the Agreed-
Upon Procedures(AUP)report the amount of the assets transferred to the Successor Agency as of that
date.
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.
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 forthe 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 the AUP report.
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.
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 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 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 the AUP report.
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 forthe 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
the AUP report.
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.
2
ATTACHMENT A(Continued)
List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund (Continued)
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 the attached schedule 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.
5. 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 Low 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 Moderate 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 listing should be attached as
an exhibit to the appropriate AUP report.
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.
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).
3
ATTACHMENT A(Continued)
List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund (Continued)
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.
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.
d. Attach the above mentioned SuccessorAgency 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.
7. Perform the following:
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(orto 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.
8. Perform the following:
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.
4
ATTACHMENT A(Continued)
List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund(Continued)
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.
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.
a. 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:
a. Obtain from the Successor Agency its assumptions for the forecasted annual revenues and
disclose in the report major assumptions associated with the projections.
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 SuccessorAgency
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 forthe 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.
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.
5
ATTACHMENT A(Continued)
List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund(Continued)
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 forthe 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.
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 ROPS,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 believes that such balances are needed to satisfy the
obligation. Include this schedule as an attachment to the AUP report.
10. Include (or present) a schedule detailing the computation of the Balance Available for Allocation to
Affected Taxing Entities.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).
11. Obtain a representation letterfrom SuccessorAgency 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 34179.5) 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.
6
Procedure 1 ATTACHMENT 61
List of Assets Transferred from the Former Redevelopment Agency to the Successor Agency
Low and Moderate Housing Fund
As of February 1, 2012
Asset Balance at 211/2012
Cash $ 7,831,190
Cash w/Fiscal Agent 957,781
Unrealized Investment 20,093
Total Assets transferred: $ 8,809,064
V
Procedure 2 ATTACHMENT B2
Listing of Transfers(excluding payments for goods and services)to the City
Low and Moderate Housing Fund
For the Period from January 1, 2011 through June 30, 2012
Enforceable
Obligation(ED)/ Legal
Other Legal Documentation
Describe Purpose of Transfer Requirement(LR) Amount Obtained?(Y/N)
From former Redevelopment Agency to City for January 1.2011 through January 31, 2012:
None. $
Sub-total: -
From Successor Agency to City for February 1.2012 through June 30,2012
Notes Receivable-Merged Area#1 LR 93,225 Y
NotesRec-Hacienda Sunset LR 1,350,000 Y
NotesRec-Sunrise Village LR 342,144 Y
Notes Rec-Self Help LR 153,901 Y
w Notes Rec-Vista Sunrise Apt. LR 1,622,943 Y
Notes Rec-Saraha Mobile LR 709,546 Y
Notes Rec-Desert Highland LR 49,950 Y
Notes Rec-Desert Highland LR 1,199,999 Y
NotesRec-SERAF LR 4,230,425 Y
Deposits-Downpayment Assist LR 33,768 Y
Advances to Central Bus Dist LR 1,532,669 Y
Land Held for Resale LR 672,479 Y
Sub-total: 11,991,049
Total Transfers to City for 1/1/2011 through 6/3 012 01 2: $ 11,991,049
Procedure 3 ATTACHMENT B3
Listing of Transfers(excluding payments for goods and services)to Other Public Agencies or Private Parties
Low and Moderate Housing Fund
For the Period from January 1,2011 through June 30, 2012
Enforceable
Obligation (EO)/ Legal
Other Legal Documentation
Describe Purpose of Transfer Requirement(LR) Amount Obtained?(YIN)
From former Redevelopment Agency to other public agencies or private Parties for January 1. 2011 through January 31 2012:
OPA with PS Housing Partners, LP for a financial commitment for 23 unit low income
acquisition and rehab senior housing project EO $ 1,500,000 N a
Sub-total: 1,500,000
From Successor Agency to other public agencies or private parties for February 1 2012 through June 30,2012
None
Sub-total: -
m Total Transfers to other public agencies or private parties for 1/1/2011 through 6130/2012: $ 1,500,000
a) The Department of Finance, in their letter dated August 30,2012, objected to the item, stating,"the loan was issued
on August 3,2011 under an Owner Participation Agreement. HSC section 34163(b) prohibits an agency from
entering into agreements, obligations,or contracts with any entity for any purpose after June 27, 2011". The City disagrees
with the finding and requested a meet and confer with the Department of Finance. The item is pending as of the date of this report.
Procedure 4 ATTACHMENT B4
Summary of the Financial Transactions of Redevelopment Agency and Successor Agency
Low and Moderate Housing Fund
Per schedule attached to List of Procedures for Due Diligence Review
NOT APPLICABLE TO THE LOW AND MODERATE HOUSING FUND DUE DILIGENCE REVIEW
0
Procedure 5 ATTACHMENT B5
Listing of All Assets(excluding all assets held by the entity that assumed the housing function)
Low and Moderate Housing Fund
As of June 30, 2012
Asset Amount
Cash
875-11010 Cash $ 7,682,484
879-11010 Cash 2,500
875-11110 Unrealized Investments (6,675)
TOTAL CASH: 7,678,309
Cash with fiscal agent
879-11090 Cash Fiscal Agent 874,764
TOTAL CASH WITH FISCAL AGENT: 874,764
Interest receivable
875-12215 Accrued Interest Receivable 7,036
879-12215 Accrued Interest Receivable 1
TOTAL INTEREST RECEIVABLE: 7,037
TOTAL ASSETS AT 6/3 012 01 2: $ 8,560,110
Procedure 6 ATTACHMENT B6
Listing of Assets that are Restricted
Low and Moderate Housing Fund
As of June 30,2012
Legal
Documentation Documentation
Item# Description Referenced Amount Purpose Obtained?(YIN)
1 Cash with fiscal Agent
a) Reserve Account 879-11090 $ 501,979 Held in trust by fiduciary per bond restrictions Y
b) Debt Service Payment 879-11090 372,785 Held in trust by fiduciary per bond restrictions Y
2 Cash
a)Cash 879-11010 2,500 Bond trustee fees Y
TOTAL: $ 877,264
N
Procedure 7 ATTACHMENT B7
Listing of Assets That Are Not Liquid or Otherwise Available for Distribution
Low and Moderate Housing Fund
As of June 30,2012
Variance Noted?
Item# Description Reference Amount Value Method (YIN)
1 Unrealized Investment
a) Unrealized Investment 875-11110 $ (6,675) Fair Value N
TOTAL RESTRICTIONS OF NON-CASH ITEMS $ (6,675)
w
Procedure Sa ATTACHMENT B8a
Listing of Assets (resources)that are dedicated or restricted for the funding of enforceable obligations
Low and Moderate Housing Fund
As of June 30, 2012
Amount
Approved Amount Paid in Restricted for Legal
Obligation Period Ending June Obligation From Documentation
Item# Project Name Reference Amount 30, 2012 June 30, 2012 Obtained? (Y/N)
None.
A
Procedure 8b ATTACHMENT B8b
Listing of Assets (resources)that need to be retained due to insufficient funding for the funding of enforceable obligations
Low and Moderate Housing Fund
As of June 30, 2012
Amount Needed to
Approved Designated Amount be Retained From Legal
Obligation Plus Estimated Revenue June 30,2012 Documentation
Item# Project Name Reference Amount Future Revenues Source Balance Obtained?(Y/N)
None.
Procedure 8c ATTACHMENT 138c
Listing of Assets(resources)that Need to be Retained Due to Projected Insufficient Property Tax Revenues for Bond Debt Payments
Low and Moderate Housing Fund
As of June 30,2012
Amount Needed
Estimated To Be Rretained Legal
Approved Future Revenue From June 30, Documentation
Item# Project Name Reference Obligation Amount Revenues Source 2012 Balance Obtained?(Y/N)
None.
rn
Procedure 9 ATTACHMENT 69
Listing of Assets(resources)that Need to be Retained Due to Projected Insufficient Property Tax Revenues for Future ROPS
Low and Moderate Housing Fund
As of June 30,2012
Amount Needed To
Estimated Be Rretained From Legal
Approved Obligation Future Revenue June 30, 2012 Documentation
Item# Project Name Reference Amount Revenues Source Balance Obtained?(Y/N)
None.
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Procedure 10 ATTACHMENT B10
Summary of Low-Mod Balances Available For Allocation To Affected Taxing Entities
Total amount of assets held by the successor agency as of June 30, 2012(procedure 5) $ 8,560,110
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)
To City -
To other parties 1,500,000
Less assets legally restricted for uses specified by debt
covenants,grant restrictions,or restrictions imposed by other
governments(procedure 6) (877,264)
Less assets that are not cash or cash equivalents (e.g., physical assets)-(procedure 7) 6,675
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) -
Less balances needed to satisfy ROPS for the 2012-13 fiscal year(procedure 9) -
m Less the amount of payments made on July 12, 2012 to the County Auditor-Controller as
directed by the California Department of Finance -
Amount to be remitted to county for disbursement to taxing entities $ 9,189,521
ATTACHMENT B11
Ot V PA M SA4
'N City of Palm Springs
* « Department of Finance and Treasury
* �ApOgpT40 T, " 3200 E.Tahquitz Canyon Way • Palm Springs,California 92262
CqOFO P Tel:(760)323-8229 • Fax:(760)322-8320 • Web:w sv.palmspringsca.gov
September 21,2012
Lance,Boll&Lunghard, LLP
Certified Public Accountants
203 North Brea Boulevard,Suite 203
Brea,CA 92821-4056
We are providing this letter in connection with your performance of the Due Diligence Review of the Low
and Moderate Housing Fund in accordance with Assembly Bill 1484 for the Successor Agency of the
former Community Redevelopment Agency of the City of Palm Springs. We confirm that we are
responsible for the complete and fair presentation of the previously mentioned review in conformity with
the listed procedures of the Assembly Bill 1484 Due Diligence Review as published by the State
Department of Finance on August 27, 2012. We are also responsible for adopting sound accounting
policies, establishing and maintaining effective internal control over financial reporting, and preventing
and detecting fraud.
We confirm, to the best of our knowledge and belief, as of the date of this letter, the following
representations made to you during your review:
1. We have made available to you:
a. In accordance with 34179.5(c)(1), the dollar value of all assets transferred from the former
redevelopment agency to the successor agency on or about February 1,2012.
b. In accordance with 34179.5(c)(2), the dollar value of all 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. We have also provided the
documentation of any enforceable obligation that required the transfer.
c. In accordance with 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 any other public agency or private party and the purpose of each transfer.We have
also provided documentation of any enforceable obligation that required the transfer.
d. In accordance with 34179.5(c)(4), the expenditure and revenue accounting information and
have identified 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 2009-10 fiscal year.
e. In accordance with 34179.5(c)(5), 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 Low and Moderate Income Housing Fund)for the report that
is due December 15,2012.
Post Office Box 2743 0 Palm Springs, California 92263-2743
I. In accordance with 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.
g. In accordance with 34179.5(c)(5)(C), an itemized statement of the values of any assets that
are not cash or cash equivalents. This may include physical assets, land, records, and
equipment. For the purpose of this accounting, physical assets may be valued at purchase
cost or at any recently estimated market value.
h. In accordance with 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. In
addition, we have provided 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,
i. In accordance with 34179.5(c)(5)(E), 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 Payment Schedules for the current fiscal year.
2. There are no material transactions that have not been properly recorded in the accounting
records underlying this Due Diligence Review.
3. Management is not aware of any transfers(as defined by Section 34179.5)from either the former
Redevelopment Agency or the Successor Agency to the City, other agencies or private parties for
the period January 1, 2011 through June 30, 2012 that have not been identified in this report and
related exhibits.
4. We acknowledge our responsibility for the design and implementation of programs and controls to
prevent and detect fraud.
5. We have no knowledge of any fraud or suspected fraud affecting this Due Diligence Review
involving:
a. Management,
b. Employees who have significant roles in internal control,or
c. Others where the fraud could have a material effect on this Due Diligence Review,
6. We have no knowledge of any allegations of fraud or suspected fraud affecting the entity received
in communications from employees,former employees,analysts, regulators,or others.
7. When applicable, we have taken timely and appropriate steps to remedy fraud, illegal acts,
violations of provisions of contracts or grant agreements,or abuse that you have reported to us.
6. We have identified to you any previous audits, attestation engagements, performance audits,
state controller reports or other studies related to the objectives of this Due Diligence Review and
whether related recommendations have been implemented.
9. The Successor Agency of the former Community Redevelopment Agency of the City of Palm
Springs has no plans or intentions that may materially affect the carrying value or classification of
assets, liabilities,or fund equity.
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10. We are responsible for compliance with the laws, regulations, provisions of contracts and grant
agreements applicable to us, and all provisions related to the dissolution of the Redevelopment
Agency in accordance with ABx1 26 and AB 1484.
11. There are no known violations of:
a. Laws and regulations,
b. Provisions of contracts and grant agreements,
c. Provisions related to the dissolution of the Redevelopment Agency in ABx1 26 and AB 1484
whose effects should be considered for disclosure in this Due Diligence Review.
12. All bank accounts and investments associated with this review have been properly reflected in the
general ledger accounting records.
13. No events, including instances of noncompliance, have occurred subsequent to the performance
of this Due Diligence Review and through the date of this letter that would require adjustment to
or disclosure in the aforementioned Due Diligence Review.
Signed: Signed:
Title: Nxii-crox S /` f/P wrtf Title:
Ar> T,tta/a.tcR
I
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