HomeMy WebLinkAbout4/9/2013 - STAFF REPORTS - 3.A. OVERSIGHT BOARD
FOR THE SUCCESSOR AGENCY TO THE
PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY
BOARD REPORT
MEETING DATE: April 9, 2013 NEW BUSINESS
TITLE: APPROVING THE DUE DILIGENCE REVIEW OF THE OTHER
REDEVELOPMENT AGENCY FUNDS OF THE FORMER COMMUNITY
REDEVELOPMENT AGENCY, PURSUANT TO SECTION 34179.5(C)(1)
THROUGH 34179(C)(6) OF ASSEMBLY BILL 1484 OF 2012
INITIATED: Department of Community & Economic Development
RECOMMENDATION:
Adopt Resolution No. 014, "A RESOLUTION OF THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE PALM SPRINGS COMMUNITY REDEVELOPMENT
AGENCY, APPROVING THE DUE DILIGENCE REVIEW OF THE OTHER
REDEVELOPMENT AGENCY FUNDS, PURSUANT TO SECTION 34179.5(C)(1)
THROUGH 34179(C)(6) OF ASSEMBLY BILL 1484 OF 2012."
BACKGROUND AND ANALYSIS:
In June, 2012 the Governor signed Assembly Bill 1484, a redevelopment reform act
which created new reporting and audit requirements for Successor Agencies and
Oversight Boards. Section 34179.5 of AB 1484 provides new procedures for reviewing
the available cash assets of the dissolved RDA (the "Review"). This Review is to be
conducted by each Successor Agency with the goal of distributing available cash assets
to the taxing entities during Fiscal Year 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.
The Successor Agency hired auditors to complete the review. The auditors performed
the procedures enumerated in the Review titled List of Procedures for the Due Ditigence
Review. These 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.
The approval of the Non-Housing (other funds) Due Diligence Review is in addition to
the Due Diligence review of the Housing Funds, approved by the Board in
October, 2012,
Oversight Board Report
April 9, 2013 -- Page 2
Approval of Due Diligence Review
Once the DOF has received the Non-Housing Due Diligence Review (the "Other
Funds') it will determine the amount of the payment due from the Successor Agency
from those funds and issue a demand letter for the payment of non-housing dollars.
Based upon this non-housing DDR, the principal amount demanded is expected to be
$4,127,192, plus any applicable interest.
The Successor Agency is requesting the Oversight Board approve the Due Diligence
Review so that it can not only submit it to the DOF, but also take the budget
appropriation of the expected payment to the Successor Agency Board on
April 17, 2013.
RESOLUTION NO. 014
A RESOLUTION OF THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE PALM SPRINGS COMMUNITY
REDEVELOPMENT AGENCY APPROVING "THE DUE
DILIGENCE REVIEW OF THE OTHER REDEVELOPMENT
AGENCY FUNDS, PURSUANT TO SECTION 34179.5(C)(1)
THROUGH 34179(C)(6) OF ASSEMBLY BILL 1484 OF 2012.
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," for the Other Redevelopment Agency Funds; 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.
WHEREAS, DOF is to complete its review 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.
Resolution No. 014
Page 2
SECTION 2. The Due Diligence Review for the Other Redevelopment Agency
Funds in the form of attached as Attachment "A" to this Resolution for, which is attached
hereto and incorporated by reference, is hereby approved and adopted.
SECTION 3. 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 1484.
SECTION 4. This Resolution shall take effect three days after its adoption.
PASSED, APPROVED AND ADOPTED BY THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE PALM SPRINGS COMMUNITY REDEVELOPMENT
AGENCY THIS 9T" DAY OF APRIL, 2013.
CHAIRPERSON
ATTEST:
CLERK/SECRETARY
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, Clerk/Secretary, to the Oversight Board of the Successor
Agency to the Palm Springs Community Redevelopment Agency, hereby certify that
Resolution No. 014 is a full, true and correct copy, and was duly adopted at a regular
meeting of the Oversight Board on April 9 2013, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
JAMES THOMPSON
Oversight Board Clerk/Secretary
City of Palm Springs, California
CERTIFIED PUBLIC ACCOUNTANTS
Successor Agency of the Former
Commuhity Redevelopment Agency of the
City of Palm Springs
Due Diligence Review
of the Other Redevelopment Agency Funds
Pursuant to Sections 34179.5(c)(1) through 34179.5(c)(6)
of Assembly Bill No. 1484 of 2012
Orange County
Successor Agency of the Former
Community Redevelopment Agency of the
City of Palm Springs
Due Diligence Review
of the Other Redevelopment Agency Funds
Pursuant to Sections 34179.5(c)(1)through 34179.5(c)(6)
of Assembly Bill No. 1484 of 2012
LSL 04
CERTt FIED PUBLIC ACCOUNTANTS
Brandon W.Burrows.CPA
David E.Hale.CPA.CFP
A Professional Corporation
_>Donald G.Slater CPA
Richard K.Kikuchi CPA
>Susan F Matz.CPA
=Shelly K.Jackley.CPA
*B,yan S.Gruber,CPA
DeooraB 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 Other Redevelopment Agency
Funds,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.
Brea, California
December 11, 2012
_—..-- -------------— --..._ __.-. _------ .. .. .-....- ___ .. . ------- ----- - — -
Lance,Soil&Longhand,LLP 203 North Brea Boulevard • Suite 203 • Brea CA 92821 TEL: 714 672.0022 Fax 714.672 0331 www.lslcpas.com
Orange County • Temecula Valley Silicon Valley
ATTACHMENT A
List of Procedures for Due Diligence Review of the Other Redevelopment Agency Funds
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 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 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 the AUP report.
c. For each transfer,obtain the legal document that formed the basis for the enforceable obligation that
required anytransfer. Note in the AUP report the absence of anysuch legal document orthe 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 SuccessorAgency 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
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 Other Redevelopment Agency Funds (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 shoull 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 Other Redevelopment Agency Funds (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 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.
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(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.
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 Other Redevelopment Agency Funds(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 thatwere 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 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 propertytax 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 Other Redevelopment Agency Funds (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 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 ALP 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 CountyAuditor-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 Loy,,and Moderate Income Housing Fund and for all other funds combined(excluding
the Low and Moderate Income Housing Fund).
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 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 B1
List of Assets Transferred from the Former Redevelopment Agency to the Successor Agency
Other Redevelopment Agency Funds
As of February 1, 2012
Asset Balance at 2/1/2012
Cash $ 7,138,803
Cash with fiscal agent 4,590,363
Total Assets transferred: $ 11,729,166
Procedure 2 ATTACHMENT 132
Listing of Transfers(Excluding Payments for Goods and Services)to the City
Other Redevelopment Agency Funds
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 Anencv to City for January 1. 2011 through January 31, 2012
Personnel Costs-Employee costs for RDA personnel LR $ 415,716 Y
Office space rental- Rental of office space for RDA purpose LR 23,750 Y
Insurance-Insurance for office space LR 19,449 Y
Admin Services-City overhead costs for RDA personnel LR 108,736 Y
CRA Admin Sery Chr-CRA overhead costs for RDA personnel LR 139,533 Y
General Fund loan-Merged area#1 Principal LR 1,466,785 Y
General Fund loan-Merged area#1 Interest LR 88,007 Y
General Fund loan-Merged area#2 Principal LR 545,000 Y
General Fund loan -Merged area#2 Interest LR 32,700 Y
Wastewater Loan-Merged area#1 Interest only LR 24,810 Y
Wastewater Loan- Merged area#2 Interest only LR 48,810 Y
City of PS Pass Through-SB 211 -Tax Sharing Pursuant to Section 33607.7 LR 27,321 Y
Repayment of 11/29/06 loan balance LR 1,095,759 Y
Annual principal and interest payment on 11/29/06loan LR 101,106 Y
Interest payment on 11/29/06loan LR 29,677 Y
PSL-315 Subleasehold (land) LR 7,800,000 Y a
Cork n Bottle (land held for resale) LR 619,125 Y a
Prairie Schooner Parcel (land held for resale) LR 2,378,893 Y a
Plaza Theater(building) LR 895,220 Y a
Casa del Camino Property(land held for resale) LR 593,871 Y a
McKinney Parcel (land held for resale) LR 6,325 Y a
Catholic Church Parking Lot(Land held for resale) LR 685,000 Y a
Blue Coyote Parking Lot(land held for resale) LR 141,500 Y a
Vineyard Parking Lot(land held for resale) LR 482,457 Y a
Food Court Parking Lot(land held for resale) LR 341.826 Y a
Desert Hotel Property(land held for resale) LR 263,026 Y a
Henry Frank Arcade Parking Lot(land held for resale) LR 266,673 Y a
Village Green (land and building) LR 184,495 Y a
Palm Springs visitor center(land) LR 1,206,943 Y a
Convention center parking lot(land) LR 2,585,890 Y a
Frances Stevens Park(land) LR 525,575 Y a
Sunrise Park(land and building) LR 3,302,981 Y a
Sweeper/Scrubbers LR 100,309 Y a
Procedure 2 ATTACHMENT B2
Listing of Transfers (Excluding Payments for Goods and Services)to the City
Other Redevelopment Agency Funds
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)
Prairie Schooner Parcel Lease Revenue from Tribe LR 49,833 Y a
Palm Springs Fudge Shope Revenue LR 21,481 Y a
Cork n Bottle Revenue LR 35,750 Y a
Various street projects LR 761,880 Y a
Storm drain improvement projects LR 570,666 Y a
Animal shelter LR 943,655 Y a
Downtown trash enclosure LR 387,354 Y a
Foster leasehold LR 372,383 Y a
Sub-total: 29,690,270
a.At its December 4, 2012 oversight board meeting,the oversight board approved the transfer of these properties.
`o From Successor Agency to City for February 1 2012 through June 30,2012
Personnel costs-Employee costs for RDA personnel EO 148,948 Y
City of PS Pass Through-SB 211 -Tax Sharing Pursuant to Section 33607.7 EO 130,235 Y
Sub-total: 279,183
Total Transfers to City for 111/2011 through 6/3 012 01 2: $ 29,969,453
Procedure 3 ATTACHMENT B3
Listing of Transfers(Excluding Payments for Goods and Services)to Other Public Agencies or Private Parties
Other Redevelopment Agency Funds
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
PS Unified School District LR $ 882,250 Y
Desert Water Agency LR 736,864 Y
Riverside County LR 3,377,229 Y
W E O'Neill LR 2,758,894 Y
Sub-total: 7.755,237
From Successor Agency to other public agencies or private parties for February 1 2012 through June 30, 2012
0
Riverside County-deducted from tax increment based on their calculations LR 1,667,098 Y
Sub-total: 1,667,098
Total Transfers to other public agencies or private parties for 1/1/2011 through 6/3 012 01 2: $ 9,422,335
Procedure 4 ATTACHMENT B4
Summary of the Financial Transactions of Redevelopment Agency and Successor Agency
All Funds
Per schedule attached to List of Procedures for Due Diligence Review
Redevelopment Agency Redevelopment Agency Redevelopment Agency Successor Agency
12 months ended 12 months ended 7 months ended 5 months ended
6/30/2010 6/30/2011 1/31/2012 6/30/2012
Assets (modified accrual basis)
Cash and Investments $ 20,813,312 $ 19,496,778 $ 14,996,021 $ 14,128,560
Cash and investments with trustee 9,392,410 3,471,199 5,542,209 4,428,432
Accounts Receivable 109,507 4,524 - -
Interesl Receivable 47,868 38,305 - 11,258
Loans Receivable 5,700,473 5,675,472 5,395,814 -
Due from other governments - 49,950 -
Due from Debt Service Fund 5,895,648 - - -
Other Assets 49,950 - 1,566,437 -
Land Held for Resale 5,747,500 672,479 672,479 -
Advances to Tax Increment Fund - 5,856,319 5,856,319 -
Total Assets $ 47,756,668 $ 35,265,026 $ 34,029,279 $ 18,568,250
Liabilities(modified accrual basis)
Accounts Payable $ 4,457,703 $ 3,792,954 $ 2,095,876 $ 1,862,349
Loans Payable 92,678 92,729 - -
Due to Low/Mod Fund 5,895,648 5,856,319 5,856,319 -
Total Liabilities 10,446,029 9,742,002 7,952,195 1,862,349
Equity 37,310,639 25,523,024 26,077,084 16,705,901
Total Equity 37,310,639 25,523,024 26,077,084 16,705,901
Total Liabilities+Equity $ 47,756,668 $ 35,265,026 $ 34,029,279 $ 18,568,250
Total Revenue: $ 21,964,309 $ 19,459,232 $ 11,661,002 $ 3,255,383
Total Expenditures: 30,662,869 25,468,151 6,787,335 3,757,587
Total Transfers: - (5,778,696) (3,927,757) 17,208,105
Net change in equity (8,698,560) (11,787,615) 945,910 16,705,901
Beginning Equity as restated: 46,009,199 37,310,639 25,131,174 -
Ending Equity: $ 37,310,639 $ 25,523,024 $ 26,077,084 $ 16,705,901
Other information (show year end balances for all four periods presented):
Capital assets as of end of year $ 28,956,370 $ 2,189,449 $ - $ -
Long-term debt as of end of year 50,745,709 49,069,921 43,345,000 47,848,628
Procedure 5 ATTACHMENT B5
Listing of All Assets
Other Redevelopment Agency Funds
As of June 30,2012
Assets Amount
Cash
870-11010 Cash $ 1,030,716
871-11010 Cash 390,324
872-11010 Cash 1,759,323
873-11010 Cash 942,608
TOTAL CASH: $ 4,122,971
Investments
870-11110 Unrealized Investments 3,164
871-11110 Unrealized Investments (15,815)
873-11110 Unrealized Investments (9,972)
TOTAL\NVESZEMENTS•. (22,623)
Cash with fiscal agent
N 872-11030 Cash with Fiscal Agent 1,456,068
872-11092 Cash Fiscal Agent CRA 2007A 619,225
872-11093 Cash Fiscal Agent CRA 2007B 117,293
873-11030 Cash with Fiscal Agent 837,742
873-11094 Cash Fiscal Agent CRA 2007C 523,340
AL CASH WITH FISCAL AGENT: 3,553,668
Interest receivable
870-12215 Accrued Interest 363
871-12215 Accrued Interest 153
872-12215 Accrued Interest 2,425
873-12215 Accrued Interest 1,280
'OTAL INTEREST RECEIVABLE: 4,221
TOTAL ASSETS AT 6/30/2012: $ 7,658,237
Procedure 6 ATTACHMENT B6
Listing of Assets that are Restricted
Other Redevelopment Agency Funds
As of June 30, 2012
Legal
Documentation Documentation
Item# Description Referenced Amount Purpose Obtained?(YIN)
1 Cash with fiscal Agent
a) Reserve account Procedure 5 $ 708,531 Held in trust by fiduciary per bond restrictions Y
b) Reserve account Procedure 5 309,613 Held in trust by fiduciary per bond restrictions Y
c) Reserve account Procedure 5 58,647 Held in trust by fiduciary per bond restrictions Y
d) Reserve account Procedure 5 441,364 Held in trust by fiduciary per bond restrictions Y
e) Reserve account Procedure 5 196,670 Held in trust by fiduciary per bond restrictions Y
f) Debt Service Payment Procedure 5 747,537 Held in trust by fiduciary per bond restrictions Y
g) Debt Service Payment Procedure 5 309,612 Held in trust by fiduciary per bond restrictions Y
h) Debt Service Payment Procedure 5 58,647 Held in trust by fiduciary per bond restrictions Y
i) Debt Service Payment Procedure 5 396,378 Held in trust by fiduciary per bond restrictions Y
j) Debt Service Payment Procedure 5 326,669 Held in trust by fiduciary per bond restrictions Y
TOTAL: $ 3,553,668
w
Procedure 7 ATTACHMENT B7
Listing of Assets That Are Not Liquid or Otherwise Available for Distribution
Other Redevelopment Agency Funds
As of June 30,2012
Variance Noted?
Item# Description Reference Amount Value Method (Y/N)
1 Unrealized Investments Procedure 5 $ (22,623) Market N
TOTAL RESTRICTIONS OF NON-CASH ITEMS $ (22,623)
a
Procedure 8a ATTACHMENT B8a
Listing of Assets(resources)that are dedicated or restricted for the funding of enforceable obligations
Other Redevelopment Agency Funds
As of June 30,2012
Amount
Restricted for
Amount Paid in Obligation for Legal
Approved Period Ending June 30,2012 Documentation
Item# Project Name Reference Obligation Amount June 30,2012 Balance Obtained?(Y/N)
None noted
N
Procedure 8b ATTACHMENT 68b
Listing of Assets(resources)that need to be retained due to insufficient funding for the funding of enforceable obligations
Other Redevelopment Agency Funds
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?(YIN)
None noted
rn
Procedure 8c ATTACHMENT 88c
Listing of Assets(resources)that need to be retained due to projected insufficient property tax revenues for bond debt payments
Other Redevelopment Agency Funds
As of June 30,2012
Amount Needed to
Estimated be Retained from Legal
Approved Future Revenue June 30,2012 Documentation
Item# Project Name Reference Obligation Amount Revenues Source Balance Obtained?(YIN)
None noted
Procedure 9 ATTACHMENT B9
Listing of Assets(resources)that need to be retained due to projected insufficient property tax revenues for future ROPS
Other Redevelopment Agency Funds
As of June 30,2012
Amount Needed to
Estimated be Retained from Identified on
Approved Future Revenue June 30,2012 the ROPS 2
Item# Project Name Reference Obligation Amount Revenues Source Balance or 3?
None noted
m
Procedure 10 ATTACHMENT B10
Summary of Other Redevelopment Agency Funds Available for Allocation to Affected Taxing Entities
Total amount of assets held by the successor agency as of June 30, 2012 (procedure 5) $ 7;658,237
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 -
Less assets legally restricted for uses specified by debt
covenants,grant restrictions, or restrictions imposed by other
governments (procedure 6) (3,553,668)
Less assets that are not cash or cash equivalents (e.g., physical assets)-(procedure 7) 22,623
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) -
to 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 $ 4,127,192
i
ATTACHMENT B11
OppALM Spy
'2 City of Palm Springs
u N
* * Department of Finance and Treasury
,cOq•°an+Eo'°�• * 3200 E.Tahquitz Canyon Nay • Palm Springs,California 92262
Cg1rFOR N�P Tel:(760)323.8229 • Fax:(760)322-8320 • Web:www.palmspringsca.gov
December 11, 2012
Lance, Sell &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
Other Redevelopment Agency Funds 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:
i
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
i
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 Palnp6prings, California 92263-2143
f. 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 iq 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 affedir)g 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 frauq, illegal acts, violations
of provisions of contracts or grant agreements,or abuse that you have reportetl to us.
8. 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.
i
i
i
21
i
i
I
I
M 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 AS 1X 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 AB 1X 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: DfR Cc-To/( o Title:
Rrp 7-Afr/4fMeR
I
22