HomeMy WebLinkAboutStaff Report 4.C 10/01/2012 Agenda/Iteww#4.0
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DATE: October 1, 2012
TO: Honorable Chair and Members of the Petaluma Community Development
Successor Agency Board through Executive Director
FROM: Sue Castellucci, Housing Coordinatoryv
SUBJECT: A Resolution of the Petaluma Community Development Successor Agency
Accepting the Due Diligence Review of the Low and Moderate Income Housing
Fund Pursuant to Health and Safety Code Section 34179.5
RECOMMENDATION
It is recommended that the Successor Agency adopt the attached Resolution Accepting the Due
Diligence Review of the Low and Moderate Income Housing Fund Pursuant to Health and Safety
Code Section 34179.5.
BACKGROUND
On June 27, 2Q12, the State enacted AB 1484 which provides significant revisions to the
Dissolution Act — ABx 1 26. One of the new requirements under AB 1484 is that the Successor
Agency must conduct a due diligence review of the Low and Moderate Income Housing Fund
and of all other funds and accounts of the former Petaluma Community Development
Commission (PCDC) to determine the unobligated balances available for transfer to taxing
entities.
DISCUSSION
Successor Agency staff has contracted with the firm of Pun & McGeady, LLP, a licensed
accounting firm to perform the due diligence review of the former PCDC funds and. The
Sonoma County Auditor-Controller has approved the use of this firm for the due diligence •
review.
The due diligence review separately covers the Low and Moderate Income Housing Fund and the
other(Non-I-lousing) funds of the former redevelopment agency. Both reviews must be
approved by the Oversight Board and the approved reviews must be sent to the California
Department of Finance (DOF), State Controller, and the County Auditor-Controller.
Agenda Review:
City Attorney _ a, _ Finance Director City Manager
The Housing review must be completed and provided to.the Oversight Board, the County
Auditor-Controller, the State Controller, and DOF by October 1,2012. The review must be
approved by the Oversight Board following a public comment session which is scheduled to be
held on October 3,2012. The Oversight Board will consider approval of the review at their
October 10, 2012 meeting. Upon approval by the Oversight Board the review will be transmitted
to DOF and the County Auditor-Controller by October 15, 2012. The Oversight Board shall also
consider any opinions of the County Auditor-Controller, may adjust amounts in the review and
request additional materials, and may authorize the Successor Agency to retain certain specified
assets and funds. DOF must complete the review of the Oversight_Board's determinations with
respect to the Low and Moderate Income Housing fund by November 9, 2012. Unless the
Successor Agency requests a "meet and confer" with DOF.by November 16, 2012, the Successor
Agency shall transmit the required amount of funds to the County Auditor-Controller within five
business days of DOF'sdetermination. The due diligence review of the other former PCDC
funds will have a similar process with approval by the Oversight Board due by January 15, 2013.
FISCAL IMPACTS
The preparation of this staff report is an administrative,activity of the Successor Agency staff;
which is included in the Agency Administrative Allocation budget approved on the ROPS. The
cost to contract with the licensed accountant to'perform the required due diligence review will
not exceed $10,000 and will be paid by the Successor Agency's administrative funds as part of
its 2012-2013 budget.
The outcome of the Due_Diligence Review shows that the Successor Agency will be sending
$672,528 to the County-Auditor for distribution among the taxing entities. This amount is the
total of unencumbered Housing funds as of 1131/2012.'.
ATTACHMENTS
1. Exhibit#1: Resolution accepting the Due Diligence Review
2. Due Diligence Review (to be submitted'prior to the Successor Agency meeting)
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ATTACHMENT #1
PETALUMA COMMUNITY DEVELOPMENT
SUCCESSOR AGENCY
RESOLUTION NO. -2012
A RESOLUTION OF THE PETALUMA COMMUNITY DEVELOPMENT SUCCESSOR AGENCY
ACCEPTING THE DUE DILIGENCE REVIEW OF THE LOW AND MODERATE INCOME HOUSING
FUND PURSUANT TO HEALTH AND SAFETY CODE SECTION 34179.5
WHEREAS, Assembly Bill ABx1 26 (ABx1 26) was enacted by the State Legislature and signed by
the Governor as of.June 29, 2011; and
WHEREAS, ABx1 26 dissolved redevelopment agencies, including the former Petaluma
Community Development Commission (PCDC), effective February 1,2012; and
WHEREAS, pursuant to California Health and Safety Code § 34173(d), the City of Petaluma
elected to serve as the successor agency to the PCDC by City Council Resolution No. 2012-007
adopted on January 9, 2012, and has been serving in this capacity following PCDC dissolution on
February 1, 2012; and
WHEREAS, pursuant to Assembly Bill 1484 enacted on June 27, 2012, the City Council of
Petaluma on August 6, 2012, established and acknowledged the "Petaluma Community
Development Successor Agency"(PCDSA) as the successor agency to the former PCDC, separate
and distihetfrom the City of Petaluma, and to provide for its governance; and
WHEREAS, California Health and,Safety Code section §34179.5 requires each successor agency
to employ a licensed accountant, approved by the county auditor-controller, to conduct a due
diligence review to determine the unobligated balances in the low and moderate income
housing fund and the other funds and accounts of its former redevelopment that are available
for transfer to taxing entities; and
WHEREAS, the PCDSA has contracted with Pun & McGeady, LLP, Certified Public Accountants,
to complete 'the due diligence review of the former PCDC Low and Moderate Income:Housingr
Fund by October 1;2012; and
WHEREAS, the Sonoma County Auditor-Controller has approved Pun & McGeady, LLP for the
purpose of undertaking such due diligence review; and
WHEREAS, the Successor Agency'has reviewed the results of the due diligence review.
NOW, THEREFORE, BE IT RESOLVED by the Petaluma Community Development Successor
Agency that the above recitals and findings are adopted as part of this resolution and are true
and.that it hereby:
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1. Accepts the resolution accepting the due diligence review of the former.PCDC Low and
Moderate Income Housing Fund as;performed by Pun & McGeady, LLP
2. Directs the Executive Director of the Successor Agency, or his designees to transmit a
copy of the due diligence review to the Oversight Board, the County auditor-controller,
the State Controller and the Department of Finance pursuant to §Section 34179.5
It is hereby certified that the foregoing Resolution No. -2012 was duly introduced and
adopted by the Petaluma Community Development Successor Agency at a regular meeting held
on the 24th day of September, 2012, by the following vote:
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Petaluma
Community Development
fr
Successor Agency%
Petaluma, Califor�ni'a
Independent Accountant's Report on
ApplyingAgreedd;Upon Procedures relating to
the Due Diligelit Review in accordance with AB 1484
applied todew; and Moderate Income Housing Fund
For the year ended June 30, 2012
PUN MaGEADY
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Petaluma Community Development
Successor Agency
Table.of Contents
Page
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED-UPON PROCEDURES 1
ATTACHMENT A- AGREED-UPON PROCEDURES AND FINDINGS 2-15
EXHIBITS
Exhibit A - Low and Moderate Income Housing AssebListing as of Januuar031,2012
Exhibit B - Transfers list to the city that formed the redevelopmen agency for the period from
January 1, 2011 through June30, 2012 ~
Exhibit C - Housing Assets Transfer Form I.��,,
Exhibit D - Department Finances Review of the Housing Assets Transfer Form
Ne
Exhibit E -Low and Moderate Income Housu� ' Asset Listing as of June 30, 2012
Exhibit F -Summary of Balances Available for Allocation
Exhibit G - Management.Representation Letter
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9 Corporate Park kvi Suite 130
Irvine, California 92606
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PUN&"McGEADY Phone: (949) 777-8800
Fax: (949) 777-8850
www.pm-11p.com
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED-UPON PROCEDURES
To the Oversight Board of the
Petaluma Community Development Successor Agency
Petaluma,California
We have performed the required agreed-upon procedures ("ADP") enumerated in Attachment A,
which were agreed to by the California State Controller's Office and thMalifgitria State Department of
Finance, solely to assist the Oversight Board of the Petaluma Community Development Successor
Agency ("Successor A"gency") that: the dissolved Petaluma Com nunity Development Commission
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("Agency") of the City of Petaluma, California ("City") is complying� ith its statutory re uirements
with respect to Assembly Bill ("AB") 1484. Managemenhof the @ity is responsible for the accounting
records pertaining to statutory compliance pursuant toyCalifornia Health and Safety Code section
34179.5(c)(1)through.34179.5(c)(6).
These procedures only applied to the Low and lyl."'Moderate Income Housing Fund, not the Successor
Agency as a whole. ll���e�11'
This agreed-upon procedures engagement -was conducted in accordance with attestation standards
established by the American Instit�trtetof Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility ofjthose parties specified in the report..Consequently, we make
no,representation regarding the sufficiency of the procedures described below either for the purpose
for which-this report has beetrec uisted or for any other purpose.
ANc
We were not engaged<to ndd;did not conduct an audit, the objective•oiwhich would be the expression
of an opinion as to the ppropriateness'of the financial information summarized in Exhibits, as listed in
the table of contents..Accordingly, we do not express such an opinion Had we performed additional
procedures,other natters!might have come to our attention'that would have been to-you
This report is"intended;solely for the information and use of the Successor Agency, the Agency, the
City, California State Controller's Office and the California State Department of Finance, 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.
Irvine,California
September 26, 2012
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ATTACHMENT A-AGREED-U ON PROCEDURES AND FINDINGS
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Petaluma.Community Development Successor Agency
Agreed Upon,Procedures -AB.1484.Due Diligence Review
Low and,Moderate Income Housing Fund
Page 3
Citation:
341 79.5(c)(1) The'dollar value of assets transferred from the former redevelopment agency to the successor agency
on or about February 1, 2012.
Procedures Performed:
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.
Results:
See Exhibit A for the Low and Moderate Income Housing AssebListiirg•as of January 31,2012.
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Petaluma Community Development Successor Agency
Agreed.Upon Procedures - AB 1484 Due Diligence Review
Low and;Moderate:Income Housing Fund
Page 4
Citation:
34179.5(c)(2) The dollar value of 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. The:review shall provide documentation of any
enforceable obligation that required the transfer.
Procedures Performed:
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, attachta 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 o�t\nnsfer (excluding payments for
goods and services) from the former redevelopmentsagg`ncy\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• uccessor Agenylshould describe the purpose of the
transfer and describe in what sense, the tratessferc as required by one of the Agency's
enforceable obligations or other legal requiirementtss. 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 Successg9 gency to the city, county, or city and county that
formed the redevelopment agency forethe 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,Gobtait� legal document that formed the basis for the enforceable
obligation that requird,any transfer. Note in the AUP report the absence of any such legal
document or tll e absence of language in the document that required the transfer.
Results:
See Exhibit B attached for the transfers list to the City that formed the redevelopment:agency for the
period from January 1, 2011 through June 30, 2012. Reviewed the Housing. Assets,Transfer .Form
(Exhibit C) certified by housing staff on July 24, 2012 for the period from January 1, 2011 through June
30, 2012 and a,letter from the Department of Finance (DOF) dated August 29, 2012 (Exhibit D) and
noted no'assets transferred from the Low and Moderate Income I-Iousing Fund to the City and DOF is
not objecting to any assets or transfers of assets identified on the form.
la
PetalumatCommunity Development Successor.Agency
Agreed Upon Procedures;-AB 1484'Due.Diligence Review
Low andModerate Income Housing Fund
Page 5
Citation:
34179;5(c)(3) The dollar value of any cash or cash equnvalents'transferred after January 1, 2011, through lune30,
2012, by the redevelopment agency or the successor agency to a ny other public agency or private party and the
purpose of each transfer. The review shall provide documentation of any enforceable obligation that required the
transfer.
Procedures Performed:
3. If the.State Controller'sOffice 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 folloriiingApprocedures:
A. Obtain a listing prepared by the Successor Agency of transfers�(excluding payments for
goods and services) [from the former redevelopment o
t t any other public agency or
to private parties for the'period from_January 1, 201`jtthroutgh 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.offthe 4gen y'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 Successor4Agecy to any other public agency or private
parties for the period from February 4 2012 through June 30, 2012. For each transfer, the
Successor Agency should describe thepurpose,of the transfer and describe in what sense the
transfer was required by oneof the Agency's enforceable obligations or other legal
requirements. Provide'thi//s5�li'sg as amattachment to the AUP report.
C. For each, transfer; obtain" the tin legal document that formed the basis for the enforceable
obligation that requir c 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.
Results:
There were no transfers from the former redevelopment agency to any other public agency or to
private parties for the
N,..\
private January 1, 2011 through June 30, 2012. Therefore, these procedures
are not applicable. v
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Petaluma Community Development Successor Agency
Agreed Upon Procedures- AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 6
Citation:
34179.5(c)(4)The review shall provide'expenditure and revenue accounting information and identify transfers
and finding sources for the 2010 111 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.
Procedures Performed:
4. Perform the following procedures:
A. Obtain from the Successor Agency a summary of the 4%.financial transactions of the
Redevelopment Agency'and the Successor Agency in the,format•pset forth in the attached
schedule for the fiscal periods indicated in the;scheduleffbrpuurrposes of this summary, the
financial transactions should be presented using the:modi red accrual basis of accounting.
End of year balances for capital assets (in total) andolong rm liabilities (in total) should be
presented at the bottom of this summary schedule for:Information purposes.
B. Ascertain that for each period presented, the 51 f 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 Redeye/lb mentiAgency for that period.
D. Compare amounts in the schedule forrathe other fiscal periods presented to account balances
in the accounting records or other supporting'schedules. Describe in the report the type of
support provided foneach f c I pe4iod.
Results:
Because these procedures regue d$ Section 34179.5(c)(4) pertain to the Successor Agency as a whole,
these procedures will be addresseddn the report that is due on December 15,2012.
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Petaluma Community. Development Successor Agency
Agreed Upon Procedures-AB 1484 Due Diligence Review
Low and Moderate Income HousingFund
Page 7
Citation:
34179.5(c)(5) A separate accounting for the balance for the Low and Moderatedncome Housing Fund for all other
fiends and accounts combined shall be made as follows:
(A)A statement of the total value of each fund as of June 30, 2012
Procedures Performed:
5. Obtain from the Successor Agency a listing of all assets of the Low'and Moderate Income I-Iousing
Fund as of June 30, 2012 for the report that is due October 1, 2012 andaa listing of all assets of all
other funds of the Successor Agency as•ofJune,30, 2012 (excluding the(rey usly reported assets of
the Low and Moderate Income Housing Fund) for the report that ikdue'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 theThow and Moderate Income Housing Fund that were
nv.
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 acco nting records of the Successor Agency.
The listings should be attached as an exhibit tothe�pY old ate AUP report.
Results: )
We noted in our review that cash and inveesstmentslin the amount Of$672,528 were transferred from the
Agency to the Successor Agency in March 2012.
See Exhibit E for the Low and Moderate Income Housing Asset Listing as of June 30, 2012.
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Petaluma Community Deyelopment Successor Agency
Agreed Upon Procedures'-.AB;1484 Due Diligence:Review,
Low.and:Moderate:Ineome :Jousing'Fund
Page 8
Citation:
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.
Procedures Performed:
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:
1. Obtain the Successor- Agency's computation of the frestrieted balances (e.g., total
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proceeds less eligible project expenditures,.:amounts setka ide,fordebt service payments,
etc.)
2. Trace individual components of this computation to .related account balances in the
accounting records, or to other supporting:doc�e,tation (specify in the AUP report a
ctidescription of such documentation).
3. 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 balanees,,thatCryere identified by the Successor Agency as
restricted.
Results:
There were no unspent bond proceeds at June 30, 2012. Therefore, these procedures are not
applicable.
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B. Grant proceeds and program income that are restricted by third parties:
i. Obtain tithe 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 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.
Results:
There were no,grant proceeds and program income that are restricted by third parties at June
30, 2012. Therefore, these procedures are not applicable.
Petaluma Community.Development Successor Agency
Agreed Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 9
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 tecords,..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.
Results:
1/4.n
There are no other assets considered to be legally restricted atg ie 31'2012. Therefore, these
procedures are notapplicable.
D. Attach the above, mentioned Successor Agency, prepare schedule(s) as an exhibit to .the
AUP report: For each restriction identified onktliese schedules, indicate in the report the
period of time for which the restrictions are n?eeffe t. If the restrictions are in effect until the
related assets are expended for their intended' purpose, this should be indicated in the
report. �0 '7
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Results:
There are no restricted assets on June 30, 2012. Therefore, these procedures are not
applicable.
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Petaluma Community Development Successor Agency.
Agreed Upon Procedures- AB 1484 Due Diligence Review
Low aiid.Moderate Income Housing Fund
Page 10
Citation:
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 he
valued at purchase cost or at any recently estimated market value. The statement shall list separately housing-
related assets,
Procedures Performed:
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7. Perform the•following procedures:
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, and held for resale, long-term
receivables, etc.) and ascertain if the values are listed at eitherpurchase cost (based on book
V.value reflected in the accounting records of the Successor; Agency) or market value as
recently estimated by the Successor Agency.
Results: ®
There are no assets as of June 30, 2012 t/thakare not liquid or otherwise available for
distribution. Therefore, these procedures are n t applicable.
B. If the assets listed at 7(A) are listedkat purchase cost, trace the amounts to:a previously
audited financial statement(orito the accounting records of the Successor Agency) and note
any differences.
Results:
There are no assets as of■June 30, 2012 that are not liquid or otherwise available for
distribution. Them e,these procedures are not applicable.
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C. For any differrei cee 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.
Results:
There: are no assets as of June 30, 2012 that are not liquid or otherwise available for
distribution. Therefore, these procedures are not applicable.
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.
Results:
There are no assets as of June 30, 2012 that are not liquid or otherwise available for
distribution. Therefore, these procedures are not applicable.
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Petaluma Cominunity.Development Successor Agency
Agreed,Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 11
Citation:
34179.5(c)(5)(D) An itemized listing of any current balances that are legally or contractually dedicated or
restricted for the fuitding,of an enforceable obligation that identifies the nature of the dedication or restriction and
the specific enforceable obligation. lit addition, the successor agency ,shall provide a listing of all approved
enforceable obligations that includes.a projection of annual spending.requirements to satisfi/each obligation and a
projection of annual revenues available to fund those requirements. If a revieiu finds that future revenues together
• with dedicated or restricted halonces•are insufficient to fund fit hr re obligations and thus retention of current
balances is required, it.slinll ideritifij tlie_aumutit of current Balances necessary for retention. The review shall also
detail the projected property tax revenues and other general purpose revenues to he received by the successor
agency, together with both the amount and tiniing of the bond'debt service-payinen%of the successor agency,for
the period in r.yinclr the oversight hoard anticipates the successor agency will ve insufficient property tax
revenue to pay the specified.obligdtioris. 1✓,�
Procedures Performed:
8., Perform the following procedures:
A. If the Successor Agency believes that asset balancessneed to be retained to satisfy enforceable
obligations, obtain front the Successor Age an) itemized schedule of asset balances
(resources) as of June 30, 2012'that are dedicateor restricted for the funding of enforceable
obligations and perform the following procedures. The schedule should identify the amount
dedicated or restricted, the nature of Ytlededication or restriction, the specific enforceable
obligation to which the dedicatio r 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 th obligation.
i. Compare all informatiomon the schedule to the.legal documents that.form the basis for
\1�S .�D
the dedication orirestriction of the.resource,balance in"question.
ii. Compare all cO n[�balances to the amounts reported•in the accounting records of the
Successor Agency y o to an alternative computation.
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iii. Compare th�specifiedenforceable obligations to those that were included in the final
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Recognized�Obligation Payment Schedule approved by the California Department of
Finance.
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'iv. Attached 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.
Results:
Obtained,and Reviewed'Recognized Obligation Payment.Schedules (ROPS) for the periods of
July 1, 2012 to Deceniber 31, 2012 and January 1,2013 to June 30, 2013. Noted all obligations
listed in the ROPS related to Low & Moderate Income Housing Fund were disqualified by
California Department'of Finance as Enforceable Obligation.
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Petaluma Community.DevelopmentSuccessor Agency
Agreed Upon Procedures - AB:1484 Due Diligence Review
Low and Moderate.Income Housing.Fund
'Page.i2
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 thismay include reviewing the letter
from the California Department of Finance approving the Recognized Enforceable
Obligation PaymentSchedules for the six month period from January 1, 2012 through
June 30, 201 2 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 disclos,e 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 refiort major assumptions associated with the
projections.
Results:
Obtained and Reviewed Recognized Obligation Payment Schedules (ROPS) for the periods of
July 1, 2012 to December 31„2012 and3January 1, 2013 to June 30,2013. Noted all obligations
listed in the ROPS related 'to t & Moderate Income Housing Fund were disqualified by
California Department of Financeias'Enforceable Obligation.
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C. If the SuccessorAgency believes that projected property tax revenues and other general
purpose revenues tobe received by the Successor Agency are insufficient to pay bond debt
service paymeaonsidering 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 reflected in that schedule.
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 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.
Results:
No debt services payment were pledged by the Property Tax Increment of the Low and
Moderate Income Fund.
020
Petaluma Community Development Successor Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 13
D. If procedures A, 13, 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.
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 AUP report. n
Results: (� 'N\\ ie Not Applicable ///
�� v
4 V A
al
Petaluma Community Development Successor Agency
Agreed'Upon Procedures - A[3 1484 Due Diligence Review
Low and Mederate-Inconie Housing Fund
Page 14
Citation:
34179.5(c)(5)(E)An itemized list and analysis of any mnoiuits of current balances that are needed to satisfy
obligations that will be placed on the Recogni±ed Obligation Payment Schedules for the current fiscal year.
Procedures Performed:
9. If the Successor Agency, believes thatcaah balances:as of June 3Q, 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 shouldJadd columns identifying
(1) any dollar amounts of existing cash that are needed to satisfVlat obligation and (2) the
Successor Agency's explanation as to why the Successor Agencyll�elieves that such balances are
needed to satisfy the obligation: Include this schedule`as an�atta lament to the AUP report.
Results: k Obtained and Reviewed .Recognized.Obligation Pa men H
y, ch 1ules!(ROPS) for the periods of July 1,
2012 to December 31, 2012 and:January 1, 2013 to b
June)30*2013. Noted all obligations listed in the
ROPS related to Low & Moderate-Income Housing•Fund�were disqualified by California Department of
Finance as Enforceable Obligation. v
k
1 k
Petaluma•Community DevelopmentSuccessorAgency
Agreed Upon Procedures- ABr1484 Due Diligence Review
Uow and`Moderate.income•Housing Fund
Page 15 •
Citation:
34179;5(c)(6) The review shall' total the net balances available after deducting the total amounts described in
subparagraphs (B) to (E), inclusive;of paragraph (5). The review shall addany amounts that were transferred as
identified in paragraphs(2) and (3) of subdivision (c).;ifan enforceable obligation to make that transfer did not
exist. The resulting same shall'be available for allocation to affected taring entities pursuant to Section 34179.6..It
shall be a rebuttable presumption that cash.and cash equivalent balances available to the successor agency are
available and sufficient-to disbnrse.theanrount determined in this paragraphrtoi taxing entities. If the review finds
that there are insufficient cash balances to:transfer or that cash qr cash equivalents are specifically obligated to the
purposes described in subparagraphs (B), (D), and (E) of paragraph (5) in such amounts that there is insufficient
cash to provide the fill amount deterr'inned pursuant to this paragraph, that amount�11 he demonstrated in an
additional itemized schedule.
Procedures Performed:
10. Include (or prese_nt),a_schedule detailing the computation o�f�e Balance Available for Allocation to
Affected Taxing Entities., Amounts includedn the calculati&nshould agree to the results of the
procedures performed in each section above: The schedule should also include a deduction to
Air recognize amounts already paid to'the County Auuditorz9ontroller 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'complete for the Low and Moderate Income Housing Fund
and for all other funds combined (exclutling the'Low•and Moderate Income I-lousing Fund).
Results: /
No exceptions were noted.
See Exhibit F forschedule deter inch e'computation of the Balance Available for Allocation to Affected
Taxing Entities.
Management Representation,Letter
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. Managernentsrefusal to sign the representation letter should be noted in the AUP report
as required by attestation standards.
Results:
See Exhibit G for Management Representation Letter.
�3
rtio
EXHIBITS
It
Exhibit A- Low and Moderate Income Housing Asset s\ting'as of January 31, 2012
/1V
Exhibit.B -Transfers list.tothe city that forkthe redevelopment agency
for the period from January 1,20birtthroughJune 30,2012
Exhibit C -Housing.Assets Transfer Form
Exhibit D - DepartmentFinan e s Review of the Housing Assets Transfer Form
eN
Exhibit E - Low and Modeerrato Income Housing Asset Listing as of June 30, 2012
Exhibit F -Summary of Balances Available for Allocation
G - Managenient Representation Letter
4
ay
Successor Agency to the Fairfield Redevelopment-Agency
Low and Moderate Income.Housing
Agreed Upon Procedures - AB 1484
For the.year ended June:30,2012'-
EXHIBIT A
Low and Moderate Income Housing Asset Listing as of January 31, 2012
Low and Moderate
Income Housing
Fund
ASSETS
Cash and investments $ 733,602
Loans receivable 23,202,528
Interest receivable 3,380,195
Total assets $ 27,316,325
Principal (Interest
Loans Receivable
First Time.Homebuyer-loans $ 3,736,875 $ -
Old Elm Village-loan 1,305,961+ 407,889
Round Walk Village- loan . 933!400 -
Boulevard Apts-loan n 480,200 90,565
Park Lane Apartments-loan 164,486 (4,841)
575 Vallejo Associates-loan \7 851,184 457,856
579 Vallejo Associates-loan 990,000 394,388
Edith Street Apts Inc-loan 889,964 285,980
4sS
Lieb Senior Apts Inc-loo 810,241 182,257
Casa Grande Sr.-Apts Inc-fan 198,445 -
Downtown River LPc�loan; 3,662,836 858,022
Kellgren Sr. Apartments-loan 1,347,512 103,271
Salishan Apartments -loan 388,380 151,468
Logan Place-loan 2,943,219 204,230
VintageChaV'9 u II LP-loan 4,499,825 249,110
Total loans receivable $ 23,202,528 $ 3,380,195
25—
Petaluma:Community-Development Successors Agency
Low and Moderate Income Housing
Agreed Upon Procedures- AB 1484
For the year ended.June-30,2012
EXHIBIT B
Transfers list•to,the City that formed the redevelopment agency
for the period from January 1,2011 through January 31,2012
Principal Interest
Loans Receivable
First Time Homebuyer-loans $ 3,736,875 $ -
Old Elm Village- loan 1,305;961 407,889
Round Walk Village—loan 933;400 -
Boulevard Apts-.loan 480,200 90,565
Park Lane Apartments-loan 164,486 (4,841)
575 Vallejo Associates-loan 851,184 457,856
579 Vallejo'Associates-loan 990;000 394,388
Edith Street Aptslnc-loan 889,964 285,980
Lieb Senior Apts Inc-loan 810,241 182,257
Casa Grande Sr. Apts Inc-loan 49 j 5 -
Downtown River LP-loan 3,662,836 858,022
Kellgren Sr.Apartments-loan t� 1"347 512 103,271
Salishan Apartments-loan 388,380 151,468
Logan Place-loan 2,943,219 204,230
Vintage Chateau II LP- loan 1 4,499;825 249,110
itTotal loans,receivable z $ 23,202,528 $ 3380,195
•
Petaluma Community Development Successor Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30, 2012
a' v
er
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Petaluma Community Development Successor Agency
Low and Moderate Income Housing
Agreed Upon Procedures:- AB 1484
For the year ended June 30, 2012
0
EXHIBIT=DN
Department of Finance s Reew of the Form
oV
<1/4
N
31
ENT O,.
W 1111. n
* DEPARTMENT .OF ELMUNO G. BROWN JR. • GOVERNOR
C9l,FOR4,P F 9 NJ A NI C,!E 915 L STREET® SACRAMENTO CA..195014-370613 WWW.DOF.CA.GOV
August 29, 2012
MS..Sue Castellucci, Housing'Coordinator
City of Petaluma
27 Howard Street
Petaluma, CA 94952
Dear Ms. Castellucci:
i Subject: Housing Assets Transfer Form N Ir
Pursuant to Health and Safety Code (HSC) section 34176 (a;ov.�. ) Jity of Petaluma
submitted a Housing Assets Transfer Form (Form) to the c 't∎ 4r Department of Finance
(Finance) on July 30, 2012 for the period February 1, 2 . ugh July.30, 2012.
Finance has completed its review of your Form, wh''f m liave'included obtaining clarification
for various items. Based.on.a'sample of line ite' s i` eed and the application of law, Finance
s not objecting to any assets ortransfers of ao 4> er tified on your Form.
Please direct inquiries to Nichelle Thom ; Su,,_rvisor or Wendy Griffe, Lead Analyst at
(916)445-1546.
Sincerely,
,C), )
STEVE SZALAY
, Local Government kit'u -mt
cc: Mr. John C. Brown,City Manager, City of Petaluma
Ms. Ingrid Alverde, Redevelopment Manager City of Petaluma
Mr.,:Eric< Rdeser, Property Tax Manager, Sonoma County
California State'Cohtroller's Office
3?
1
Petaluma Community Development Successor Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30,2012
EXHIBIT E
Low and Moderate Income Housing Asset Listing as of June 30, 2012
Redevelopment
Obligation
Retirement Fund
ASSETS
Cash and investments $ 672,528
Total assets $ 672,528
Ng/
ct:7
•
33
PetalumaCommunity DevelopmentSuccessor.Agency
Low and Moderate Income Housing
Agreed Upon Procedures = AB 1484,
For the year ended June 30,2012
EXFIBIT F
Summary ofBalances Available for Allocation
Total amount of assets held by the 5uccessot Agency as of June 30,2012 $ 672,528
Less assets legally restricted for uses specified by debt
covenants,grant restrictions,or restrictions imposed by other
governments. -
Less assets that are not cash or cash equivalents (i.e.physical.assets) -
Less balances that are legally restricted for the funding of an enforceable
obligation(net of projected annual revenues available to fund those obligations) -
Less balances needed to satisfy ROPS for the current fiscal year -
Add the amount of any assets transferred to the city for which an enforceable
obligation with a third.parly requiring such transfer and obligating the9usefr
of the transferred assets did not exist g .,Q -_
Amount to be remitted to county for uiisbu rsem ent to taxing entities $ 672,528
Note that separate comjiutntinis are required for the Low and Modernte Income Housing Furst held by the
Successor Agency and for all other firnds held by the Sucre ess Agency.
NOTES: For each line shown above,an Exhibit is attached showing the composition of the sum inarized amount.
If the review finds that thefe,are insufficient funds available to provide the full
amount due,the cause of thAntfiferency should be demonstrated in a.separate schedule.
alqj
3
Petaluma community Development Successor Agency
Low and Moderate Income Housing
Agreed Upon Procedures_- AB 1484
For the year ended.June r30/2012
Narit
Al
EXHBIT+G4
Management Representation Letter
35
4 ccitp-LU4
r' CITY OF PETALUMA
• A4 ^ f.
try " POST OFFICE Box 61
/859 PETALUMA,°CA 94953-0061
•
David Glass September 26, 2012
Mayor
Chris Albertson
Teresa Barrett
Mike Ilarris
Mike Mealy Pun& McGeady LLP
Cabe Kearney 9 Corporate Park, Suite 130
Tiffany tubers Irvine, California 92606
Comicilmembers
In connection with your engagement to apply agreed-upon procedures relating to
the Low and Moderate Income.Housing Fund Due Diligence Review as of June 30,
2012, which were agreed to by the California State Controller's Office and the
California State Department of Finance, solely to assist us in ensuring that our
dissolved redevelopment agency is complying with its statutory requirements
with respect to Assembly Bill ("AB") 1484 and we confirm to the best of our
knowledge and belief, the following "representations made to you during your
engagement.
1. The City of Petaluma is-responsible for compliance with California Health and
Safety Code (HSC)Section 34179.5.
city Manager's Office
I English Street 2. We are responsible for adherence.to the requirements of AB 1484 as applicable
Petaluma.CA 94952 p
to the successor agency and the sponsoring organization of the dissolved
Phone(707) 778-4345 redevelopment agency.
Fax(707) 778-4419
cj,yn1gr(wlci.Pelahuna ca.us
3. We are responsible for the presentation of the exhibits in the low and Moderate
Income Housing Fund Due Diligence agreed-upon procedures report in
Erononne Development accordance with the California Health and Safety Code (HSC) Section 34179.5
Phone(707)778-4549
Fax(707)778-4586 Exhibit A - Low and Moderate Income Housing Asset Listing;as of January
31,>2012
Housing Division Exhibit B - Asset Transfer Assessment Form
Phone(707)778-4555 - -Fax(707)778-4586 Exhibit C- Housing Assets Transfer Form
Exhibit D - Department Finance's Review of the Housing Assets Transfer
Human Resources Division Form
Phone(707) 778-4534 Exhibit E -Low and Moderate Income Housing Asset Listing as of June 30,
Far(707) 778-4539 2012
Exhibit F - Summary of Balances Available for Allocation
Information Technology Division. -
Phone(707)778-41117 Exhibit"G - Management Representation Letter
Fax.(707).776-3623
Risk Management Division
Phone(707) 776-3695
Fax(707) 776-3697
At
Pun& McGeady LLP
Management Representation Letter
Page 2
4. As of June 30, 2012, we are not aware of any modifications that need to be
made to the Low and Moderate Income Housing Fund Due.Diligence Review
exhibits for them to be presented in accordance with California Health and
Safety Code Sections 34179.5(c)(1) through 34179.5(c)(3) and Sections
34179.5(c)(5)through 34179.5(c)(6);
5. The City of Petaluma approves the acceptability of the procedures that have
been developed by the California Department of Finance in accordance with
California Health and Safety Code (HSC) Section 34179.5.
6. We have disclosed to you any known matters contradicting the information
contained in the Low and Moderate Income Housing Fund Due Diligence
Review.AUP report.
7. There have been no communications from regulatory agencies, internal
auditors, and other independent practitioners or consultants relating to Low
and Moderate Income Housing Fund Due Diligence Review, including
communications received between June 30, 2012 and August 27, 2012.
8. We have made available to you all information that we believe is relevant to
Low and Moderateincome Housing Fund Due Diligence Review.
9. We have responded fully to all inquiries made to us by you during the
engagement.
10. No events have occurred subsequent to June 30, 2012 that would require,
adjustment to or modification of the information contained in the Low and
Moderate Income Housing Fund Due Diligence Review AUP report and its
related exhibits.
11. 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.
12. Your report is intended solely for the information and use of the City of
Petaluma, the California Department of Finance, the California State
Controller's Office, and the County of Sonoma's Auditor-Controller's Office•
and is not intended to be and should not be used by anyone other than those
specified parties.
37
Pun'& McGeady LLP
Management Representation Letter
Page 3'
To the best of our knowledge and belief, no events have occurred subsequent to
• the date of your report that would have a significant impact upon the agreed upon
procedures that you performed.
City of Petaluma,.as the sponsoring organization and as representatives of the
Successor Agency for the City of Petaluma Redevelopment Agency:
5? -oz-
John C. Brown, City:Manager Date
4a
Bill Mushallo, Finance Director Date
gtic lver economic.Development Manager Date
•
3