HomeMy WebLinkAboutStaff Report 10/10/2012 AGENDA-
OVERSIGHT BOARD
TO THE PETALUMA COMMUNITY DEVELOPMENT
SUCCESSOR AGENCY
Wednesday, October 10; 2012 9:00 A.M.
Petaluma City Hall: Council Chambers
11 English;Street,,Petaluma CA 94952
(707)778-4549 /;Fax (707) 778-4586
1. ROLL CALL:
Grant Davis; Scott Duiven; Mike Healy; Steve Herrington; Kate Jolley; David Rabbitt;
John Scharer
2. APPROVAL OF MINUTES:
A. Approval of Minutes of the Regular Oversight Board to the Successor Agency of the
Former Petaluma Community Development Commission of Wednesday, August 22, 2012..
3. PUBLIC COMMENT:
The Board will hear public comments only on matters over which it has jurisdiction. There
will be no-Board discussion or action. The Chair will allot no-more than three minutes to any
individual. if more than three persons wish to speak, their time will be allotted so that the
total amount of time allocated to this agenda item will be 15 minutes.
4. DUE DILIGENCE REVIEW OF THE LOW AND MODERATE INCOME HOUSING
FUND:
A. Pursuant to California Health and Safety Code Section 34179:6, review and adopt
resolution approving the due diligence review for the Low and.Moderate Income Housing
Fund and;approving-transmittal to State Department of Finance. (Alverde)
Page 1
5. CORRESPONDENCE TO DEPARTMENT OF:FINANCE
A. Review ofSuccessor Agency correspond'ence to DOF requesting ROPS 3:approval, and
consideration of Oversight Board action related to Successor Agency correspondence to
Department of Finance. (Alverde)
6. STAFF UPDATES
7. ADJOURNMENT
For accessible meeting°information,
please call (707) 778-4360.6r
TDD (707) 778-4480.
In accordance with the Americans-with Disabilities Act, if you require special assistance to participate in this
meeting,please contact the City Clerk's Office:at(707) 7-78=4360 (voice) or (707) 778=4480 1(TDD). Translators,
American.Sign Language;interpreters, and/or.assistive listening;.devices;for individuals-with hearing disabilities will
be available-upon request. .A minimum of 48'hours is needed to-ensure the availability of translation services. In
consideration of those with,multiple chemical sensitivities or'other environmental illness; it is requested that you
refrain from wearing scented products: The City Clerk hereby certifies that this agenda h'as been,posted in
accordance with the requirements of the Government Code
Please Note: Ins accordance with Government Code,§54957!5, any materials of public-record relating,to an agenda
item for a-regular meeting of the Petaluma Oversight Board that are provided to a majority of the members less
than`72 hours before the meeting will be made availableatthe City'Clerk's.Office, 1.1 English Street,during;normal
business.hours.,Materials of public record.that are distributed during,the meeting shall be made.:available for public
inspection,at the meeting if prepared by the,City or a member of,its legislative/advisory body or the neKt business
day after the meeting ifprrepared by some otherf person.
Page 2
August 22: 2012 Vol. 1, Page 21
Petaluma, California
OVERSIGHT BOARD TOTHE
PETALUMA COMMUNITY DEVELOPMENT SUCCESSOR AGENCY
• 1 Draft Minutes
2 Wednesday,August 22, 2012
3 Regular Meeting
4
5
6 CALL TO ORDER-9:00 A.M.
7
8 1. Roll Call
9
10 Present: Grant Davis; Scott Duiven; Mike Healy; Steve Herrington;
11 David Rabbitt; John Scharer
12 Absent: Kate Jolley
13
14 2. APPROVAL OF MINUTES
15
16 A. Approval of Minutes of the Regular'Meeting of the Oversight Board to the
17 Petaluma Community Development;Successor Agency of Wednesday,
18 July 11, 2012.
19
20 MOTION:.Approve A. Minutes of the Regular Meeting of the Oversight
21 Board,to the Petaluma Community Development Successor Agency of
22 Wednesday, July.11, 2012, as presented.
23
24 Moved by David Rabbitt, with John Scharer seconding the motion.
25
26 Vote: Motion carried 6-0
27
28 Yes: Grant Davis; Scott Duiven;Mike Healy; Steve Herrington;
29 David Rabbitt; John Scharer •
30 No: None
31 Abstain: None
32 Absent: Kate Jolley
33
34 3. PUBLIC COMMENT
35
36 None.
37
38 , Mike Healy
39
Vol. 1, Page 22 August 22, 2012
1 4. COOPERATIVE AGREEMENT BETWEEN THE CITY OF PETALUMA AND THE
2 PETALUMA'COMMUNITY'DEVELOPMENT.SUCCESSOR AGENCY
3
4 A. Petaluma Oversight Board Resolution 2012-07 Authorizing the,
5 Execution of an Amended and.Restated Cooperative Agreement between
6 the'City of Petaluma and the Petaluma:Community:Development
7 SuccessorAgency. (Alverde)
8
9 Ingrid Alverde
10
11 Grant Davis
12
13 Ingrid Alverde
14
15 David.Kahn.
16
17 David Babbitt
18
19 Ingrid Alverde
20
21 Mike Healy
22
23 Ingrid Alverde
24
25 MOTION:,Approve Petaluma Oversight Board Resolution 2012-07
26 Authorizing the Execution ofan:Amended and.Restated Cooperative
27 Agreement between the City of Petaluma and the Petaluma Community
28 Development Successor.Agency.
29
30 Moved by Scharer,with Grant Davis seconding the motion.
31
32 Vote:Motion-carried 6=0
33
34 Yes: Grant Davis; Scott:Duiven;;Mike Healy; Steve Herrington;
35 David Rabbitt; John Scharer
36 No: None
37 Abstain: None
38 Absent: Kate,Jolley
39
40 5. APPROVAL OF SUCCESSOR-AGENCY BUDGET ANDRECOGNIZED OBLIGATION.
41 PAYMENT SCHEDULE FOR THE PERIOD IANUARY 1 - IUNE 30. 2013 (ROBS#3):
42
43 A. Petaluma Oversight Board Resolution 2012-08 Approving the ROPS#3.
44 and the Successor Agency Administrative Budget (Alverde/Castellucci)
45
46 Mike Healy
August 22, 2012 Vol. 1, Page 23
1
2 Ingrid Alverde
3
4 Sue Castellucci
5
6 Steve Herrington
7
8 Sue Castellucci
9
10 Steve Herrington
11
12 Sue Castellucci
13
14 Steve Herrington
15
16 Sue Castellucci
17
18 Mike Healy
19
20 Ingrid Alverde
21
I 22 Mike Healy
23
24 David Rabbitt
25
26 Ingrid Alverde
27
28 David Rabbitt
29
30 Ingrid Alverde,
31
32 Mike Healy
33
34 Steve Herrington
35
36 Ingrid Alverde
37
38 Steve Herrington
39
40 Mike Healy
i 41
42 MOTION: Approve.A. Petaluma Oversight Board Resolution.2012-
' 43 08 Approving"the ROPS#3 and the Successor Agency Administrative
44 Budget.
45
46 Moved by John Scharer,with Grant Davis seconding the motion.
Vol. 1, Page 24 August 22, 20)2
1
2 Vote::•Motion carried 6-0
3
4 Yes: Grant Davis; Scott Duiven, Mike Healy; Steve Herrington;
5 David Rabbitt; John Scharer
6 No: None
7 Abstain: None
8 Absent: Kate Jolley'
9
10 Mike Healy
ii
12 Ingrid,Alverde•announced that there would be no,Oversight Board,meetings,in
13 September or in November.
14 •
15 Discussion ensued regarding scheduling for two meetings in October and one in
16 December.
17
18 Ingrid Alverde explained that there will be two meetings in October„both of which will
19 include,the Due Diligence Review of the Low- and Moderate-Income Housing
20 Funds.The first will be either October 2, 2012 or,preferably, October 3,,2'012 at 9:00
21 a.m: and public,comment on this review will be accepted at that meeting.A confirmation
22 email will be sent The second will`be;October 10, 2012 at 9:00 a.m. and atthat meeting,
23 the Oversight-Board;will be scheduled to take action on this Due Diligence:Review. There
24 will'be one:meeting in December- December 19, 2012 at 9:00 aim. This;will be the first;of
25 two,meetings regarding the.Due Diligence Review of Non-Housing,Funds:The Oversight
26 Board will hear public comment regarding this Due Diligence Review at that time At the
27 regular meeting in'January 2013,the Board will be scheduled to take action on this second
28 Due Diligence Review.
29
30 ADIOURNMENT
31.
32 The meeting was adjourned at 9:39 a.m.
33
34
35
36
37 Mike Healy,Chair
38
39 ATTEST:
40 •
41
42
43
44' Claire Cooper, Recording Secretary
45
46
Item #4
Oversight Board to the Petaluma Community
Development Successor Agency
DATE: October 10, 2012
TO: Members of the Oversight Board
FROM: Ingrid Alverde, Economic & Redevelopment Manager
SUBJECT: Due Diligence Review of the Housing Assets Pursuant to Health and Safety Code
Section 34179:5 and 34179.6
RECOMMENDATION
It is recommended that the Oversight Board adopt the Resolution approving the Due Diligence
Review (Review) (Attachment 1) Pursuant to Health and Safety Code Section 34179.5 and
34179.6.
BACKGROUND
On June 27, 2012, the State enacted AB 1484; which provides significant revisions to the
Dissolution Act — ABx1 26. One of the new requirements underAB 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 contracted with, the firm Pun & McGeady, LLP, a licensed accounting
firm, to perform the Review of the former PCDC funds. The Sonoma County Auditor-Controller
has approved the,use of this firm for the Review.
The Review separately covers the Low and Moderate Income Housing Fund and the other(Non-
Housing) funds of the former redevelopment agency. Both reviews must be approved by the
Oversight Board and sent to the California Department of Finance.(DOE), State Controller, and
the County Auditor-Controller.
As required by the statute, the Oversight Board held.a public comment session on October 3,
2012 but where no one attended to provide comment.
Item
Page 2
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, 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 theSuccessor Agency
requests a "meet and confer" with DOF by November 16, 2012, the Successor Agency shall
transmit the identified, unencumbered funds to the County Auditor-Controller within five
business days of DOF's determination. The Review of the other former PCDC funds will have a.
similar process with approval by the OversightBoard 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
perform required to contract with the, licensed accountant to erform-the re wired 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 1/31/2012.
ATTACHMENTS
1. ,Due Diligence Review— Low/ Mod Housing,Funds of Former PCDC
2. Resolution Approving the Due Diligence Review
Petaluma
Community Developmertt
Successor Agency
Petaluma, California
Independent Accountant's Report on
Applying Agreed-Upon Procedures relating to
the Due Diligence Re View in accordance with AB 1484
applied to Low. and Moderate Income Housing Bind
For the;year ended June 30; 2012
EM
PUN- mcGi;:ADY
Petaluma Community Vevelopment
•
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 Asset Listing as of January 31, 2012
Exhibit B-Transfers listttotthe:city that formed the redevelopment agency for the period from
January 1,2011 through June 30, 2012
Exl iliit C -Housing Assets'Ti mnsfer Form
ExhibitD -Departmerit`Financ&s Review of the Housing Assets Transfer Form
Exhibit E--Low and Moderate Income Housing Asset',Listing as of June 30,2012
Exhibit F-Summary of Balances Available for Allocation
ExhibitG - Management Representation Letter
M,,,,M< :-
9 Corporate Park
Suite 130
Irvine, California 92606
PUN & M GLAD)' Phone:-(949);777 8800
Fax:-',(949)177718850
www.pm_llp.com
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED-UPON PROCEDURES
To the Oversight Board of the
Petalin'na,ConuiuniityDevelopment Successor-Agency
Petaluma,California .
We have performed the required agreed-upon procedures ("AUP") enumerates in Attachment A,
which were agreed Ito bythe.California State Controller's Office and the California State Deparuilent-of
Finance, solely to assist the Oversight Board of the Petaluma Community Development Successor
Agency esSuccessor Agency") that the dissolved.Petaluma Community Development Commission
("Agency") of the City of Petaluma, California ("City")"is-complying with its statutory requirements
with respect to Assembly Bill ('AB")'1484. Management,of the City is responsible for'the;accounting
records pertaining to statutory compliance pursuant to California Health and Safety Code section
3417915(c)(1) through-34179.5(c)(6).
These procedures only applied to the Low and Moderate Income Housing Fund,.hot the'Successor
Agencyas:a whole.
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these
procedures issolely the responsibility:of those parties specified iii the report. Consequently;we drake
no representation regarding the sufficiency-of the procedures described below'either for•the purpose
for which this report has been requested odor any other purpose.
We were not engaged to and did not conduct-an audit, the objective of which would(be the expression
of an opinion as to the appropriateness Of the financial information summarized in Exhibits,as listed m
the table of contents. 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 you.
This report-is intended solely for the:information and. use of the Successor Agency, the Agency; the
City, California State Controllers Office,;and the California State Department of Finance; and is not
intended,to be, and should not be used.by.anyone-other thanahese specified parties. This=restriction is
not intended to limit'distribution of this•report, which is-a matter of public record.
6,tri 1 itk 61 t-I
Irvine,California
September 26,2012
Petaluma,Community Development Successor Agency
Agreed Upon Procedures-AB 1484 Due Diligence Review
Low and Moderate lncome Housing Fund
Page 3
Citation:
342795(0(1) The dollar value of assets,transferred from the former redevelopment agencyto the successor agency
on(mahout tehi•uary 1,2012.
Proce d ure sPerfor me d:
1. Obtain froth the Successor Agency .a listing of till 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,thaf;:date.
Results:'
See Exhibit A,for.:the Low•and Moderatehlcome 1-lousing Asset.Listing as.of Jamiary'31;,2012.
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, 2011 by the redevelopntent:agency or the successor agency to the city, county, or city and county that
formed the redeveiopthent agency and.the purpose of each transfer. Thea.eview 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,attach:a copy of.thatreport as an
exhibit to the AUP report. Ifthis has not yet occurred,;perform thefollowing procedures:
A. Obtain aJistuig 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"perio-'d,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 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:
See Exhibit B attached for the transfers list to the City that formed the redevelopment agency for the
period from January 1, 201.T .through.June 30, 2012. Reviewed the Housing Assets Transfer Form
(Exhibit C) certified:byhousing staff on July 24, 2012 for the period. 1, 2011 through June
30, 2012 and a letter from the Department of Finance (DOE) dated August 29,-2012 (Exhibit D) and
nofed.no assets transferred from the Low-and.Moderate Income Housing Fund tothe City and,DOF is
not objecting-toanyassets or''transfers of assets identified on the form.
•
Petaluma Community Deselopment Successor Agency
Agreed•Upon Procedures:-A13 1484 Due Diligence Review
I.ow=and Moderate Income Housing Fund
Page 5
'Citation:
34179,5(c)(3) The dollar'uralne of any cash or cash equirialents°transferred after January 1,2011; through June 30,.
2012, by[11e.redevelopiiient:agency,or the succcssor-agenc�iy�to'ariy other public agencytor;prrwate;party and the
purpose of each transfer. Tre.,review shall provide docunrentatr na of any enforceable obligation that required the
_transfer:
Procedures Performed:
3. If the State Controller's Office has completed its ievie% of transfers required under both Sections
34167.5 and34178.8 and'issued,its-report iregardina such review, attach'a copy of that repordas an
exhibitdo the AU P:report. If'this hasmotyef occurred, perform the following procedures:
A. Obtain a listing,prepared by the,SUccessor Agency of transfers (excluding payments for
goods andiservices) [from the:former redevelopment agency to any other public agency or
to private parties for the period from:January 1,201=1 through January;31, 2012. For-each
transfer, the Successor Agencyshould describe the purpose of the transfer.and describe-in
what sense the transfer was required,by o e of the Agency s enforceable obl-igationsortother
legal'•req uirements. Providethis listing as an,attachment•to the.AUP report..
B. Obtain a listing prepared by the Successor Agency of transfers (excluding,pay_ments for
goods and services) [from the Successor Agency to any other public agency or private
parties for the period from February 1, 2012 through June 30, 2012. For each.transfer, the
Successor Agencyrshoulddescribethe.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 asan attachment to-the AIIP: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.
Results:
There were no transfers from the former redevelopment agency to any other public agency ;or to
private parties for the period from January 1, 2011 through June 30, 2012. Therefore, these procedures
are not applicable.
Petaluma Community Development.Successor Agency
Agreed'Upon Procedures -AB:1484 Due''Diligence Review,
Low and ModerateIncomeliousing Fund
Page 6
Citation:
34179.5(c)(4) The review shall provide expenditure and revenue accounting'information and idea ti j transfers
and funding sources for the 201041: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 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'sched'ule. For purposes of this summary, the
financial transactions,should`be presented using the modified accrual basis of accounting.
End ofyear balances)for capital,assets;(in total) and long-term liabilities (in total) should be
presented at the bottom of this summary schedule.for informationpurposes.
B. Ascertain that foie=each period'presented, the total of-re&enues, expenditures, and transfers
accounts fully for the changes in equity from the previous'fiscal period.
C. Compare amountsiin the schedule relevant to the fiscal yearrended'June 30, 2010 to the state
controller's report filed for the Redevelopment>Agencyfor thatperiod.
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.
Results:
Because these procedures requirecfbySection 34179.5(c)(4) pertain to the Successor Agency as a whole,
these procedures will be addressed in the report that is due on December 15,2012.
Petaluma Community•DevelopmentSuccessor Agency
Agreed Upon Procedures- AB 1484:Due Diligence:Review
Low and Moderate IncomeHousing Fund
Page 7
Citation:
34179.5(e)(5).A,separate accounting for the balance for-the'Loio and Moderate Iheome Housing Fund;for all other
funds and accounts combined shall be nmdeas follows:
•
(A)A statement of the total Milne of each fund as-of June 30, 2012
Procedures Performed:
5. Obtain from the.Successor Agency a listing of altassets oldie Low and Moderate.IncometHousing
Fund as of June 30, 2012 for the report that'is clue October 1, 2012. and a listing of all assets of all
other funds oftheSuccessor Agencyas of June30, 2012`(excluding the previously reported assets of
the low and Moderate Into ne;Housing Fund) forthelreport that is due December 15,;2012:When
this'procedure is applied to the Low•and;'Moderate.lncome Housing Fund, thescheduleatfached as
an exhibit will include only those of the!Low and Moderate IncomeHousing 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 hsted`to recorded balances=reflectediii the:accounting records'ofaheSuccessor Agency.
The listings should'be attached as an exhibit to thc,appropriate AUP report.
Results:
We=noted in our review thatcash and itivestnrents in the amount of$672;528 were transferred froth the
Agency to the Successor Agency in March 2012.,
See Exhibit E for the Low and Moderate Income Housing Asset Listing as of June30, 2012.
•
Petaluma'Conununitv.Pevelopinent Successor Agency
Agreed Upon Procedures AB 1484,Due Diligence Review
Low and Moderate.IncomerEtousingPund
Page.8
Citation:
34179.5(c)(5)(13) An itemized statement listing any anronnts that are legally'restricted as to purpose and cannot
he provided to taxing entities. TIdA could include the,pror_eeds of any hands, grant funds, or pads provided by
other governmental entities thdfplace conditions on their use.
Procedures Performed:
6. Obtain from the. Agency a listing of asset balances: held on June 30, 2012 that are
restricted for.the:followingpurposes:
A. Unspent bond proceeds:
1. Obtain the Successor Agency's computation of the restricted balances (e.g., total
proceeds lesseligible project expenditures,.amounts,set aside for debt service payments,
etc.)
2. 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 fsucl 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 tfse 61 the balances that were -identified. by the Successor Agency as
restricted.
Results:
There were no unspent bond proceeds at June 30, 2012. Therefore, these procedures are not
applicable.
B. Grant proceeds and 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 jecords, 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 Upon Procedures -AB 1484 Due Diligence Review
Low and Moderate-Income Housing Fund'
Page 9
C. OthetasSets'considered to be legally restricted:
i. Obtain the Successor Agencys 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.docuniei totion)
ii. 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:
There are no other assets considered to be legally restricted at June 30, 2612. Therefore, these
procedures are not applicable.
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.
Results:
There are no restricted assets held on June 30, 2012. Therefore, these procedures are not
applicable.
Petaluma Community DevelopniehhSriccessor Agency
Agreed Upon Procedures--AB 4184 Due Diligence Review,
Low and Moderatelncotne Housing Fund
Page 10
Citation:
34179.5(c)(5)(C)An iterwiaed statement,of-the values of any assets thakare not.egsh or cash equivalents. This may
include physical assets, land, records„ant equipment. For the purpose,:of this aecorinting, physical assets may be
valued al purchase cost or at any recently:estinmted market milne. The statement shall list separately housing-
related assets.
Procedures Performed:
7. Perform the following procedures:
A. Obtain from the Successor Agency a listing of assets as,of June30, 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.
Results:
There are no assets as of June 30, 2012 that are not liquid or otherwise available for
distribution. Therefore, these procedures are hot.applicable.
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-d ifferences.
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:
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 nete the circumstances.
Results:
There are no assets as of June 30, -2012 that are not- liquid or otherwise available for
distibution. Therefore, these procedures are not applicable.
D. If,the assets,listed-at7(A)rare listed at recentlytestimated market value, inspect the evidence
(if-any)rsupporting the value and note thehicthodology'used. If no evidenc •is available to
:support,the valueand\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'applieable.
Petaluma Community DevelopmentSuccessor.Age,ncy
Agreed Upbtf Procedures - AB'1484 Drielpiligehee•Review
Low and:Moderate Income Housing-Fund
Page 11
Citation:
34179.5(c)(5)(I))An itemized listing of.any current-balances that are legally or contractuallyidedicated or
restricted f'or tlw finding ifan enforceable obligation that identifies the nature of the'dedication or restriction-and
the specific enforceable obligation, in additiOri, the s"iiccessoi' agency shall pro hie a listing Of itlt approved
enforceable obligations that.inchtdes.a projection of annual spending requirements:to'satisfij;each:obligationiand'a
projection:of annual revenues available to furid;those requirements. If review.finds thatfuture revenues together
bith dedicated or restricted balances are nasiffacient to hind fits re obligations mid thus-retention of current
balances is-required; it-shali,iiientify the amound°f current balances necessary for retention. The reviczo shall also
detail file projected property tax revenues;;and other_general purpose revergtes_to be:received,by the successor
agency, together with both the amount and timing of the bond debt sermcc payments of the°'snccessor agency for
the period:in wine/i the oversight board anticipates the successor agency will have insufficient property tax
revenue to pay the'speciied obligations:
Procedures Performed:
8. Perform the following procedures::
A. If the Successor Agency believesthat 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 oftenforceable
obligations 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 in4the legal;document
that is associated with the enforceable obligation that specifies the dedication of existing asset
'balances toward payment of that'obtigation.
is Compare all information on the schedule to the legal documents that`form the basis for
thededicatien or-restriction of the resource balance in question.
ii:. Compare all cunent 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 thatrwere:included in the final
Recognized Obligation Payment Schedule approved by the California.Department of
Finance.
iv. Attached as an.exhibit to- the report the?listing obtained from the-Successor Agency.
Identify•in,the report any listed'balances forwhich the Successor Agency wasrunable:to
provide appropriate restricting language in the legal document associated with the
enforceable obligation.
Results:
Obtained and Reviewed Recognized Obligation Payment Schedules (RO1'S) for the periods of
July 1, 2012 to December°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 Financeas Enforceable Obligation.
Petalunia.Community Development Successor Agency
. Agreed Upon Procedures.-i AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 12
B. If the Successor Agency believes that future,revenues together with balances dedicated or
restricted to an enforceable obligation are insufficient tCy 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 monthiperiod 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.
Results:
Obtained and Reviewed Recognized Obligation I'aymerit'Schedules (ROT'S) for the periods df
July 1, 2012 to December 31,'2012'and January 1, 2013 to June 30, 201-3. Noted all obligations
listed in the ROPS related to Low & Moderate 'Income dousing Fund were disqualified by
California Departmentof Finance as Enforceable Obligation.
C. If the Successor Agency believes that `projected property tax revenues and other general
purpose revenues to be received' by the Successor Agency ate 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 intthat sailed Lite.
i. Compare the tieing 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.
in Obtain the assumptions for the forecastedpother 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
Modefate:lricoine Fund.
Petaluma Community•Development Successor Agency
Agreed Upon Procedures`-AB 1434 Due Diligence Review
• Low and Moderate liicomeHousingRiind
Page 13
D. If procedures•A-, B, Or C were performed„,calculate the ambunt:oicurrent ithratieted balances
necessary for retention in order tomeet the-enforceahleobligations by performirigi 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..dbligationS.
ii. Reduce the amount of total resources+available+by the amount forecasted forrthe annual
spending=requirements. A negative result indicates the amount of,curfent unrestricted
balances that needs to be retained.
iii. 1nclude1he calculation in the.AUPIeport.
Results:
Not Applicable
•
Petaluma Community Development Successor Agency.,
Agreed Upon Procedures° A$.14S4•DueDiligence Review
Low and. Moderateh comeelousing Fund
Page 14
• Citation:
34179.5(c)(5)(E) An itemized list and analysis of any amounts of current halanees that are needed to satisfy
obligations that will be placed-on the Reco'gn'ized-Obligation Payment Schedules forthe enrren(fiscal year.
Procedures Performed:
9. If the Successor Agency believes that cash balances as of June 30,2012 need to be retained to satisfy
obligations ohtthe`Recognized Obligation Payment.Schedule (ROPS) for the period of July 1, 2012
through June 30, 2013, obtain-a- copy of the final ROPS for' Hid period of July 1, 2012 through
December 31, 2012 and a copy of;the'.finat ROT'S for the period January 1,2013 through June 30,
2013.For each obligation listed on the ROT'S, the SuccessorrAgency 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.
Results:
Obtained and Reviewed Recogri ned Obligation;Payment.Schedules (ROE'S) for the periods of July 1,
2012 to December 31, 2012 and JSnuary 1, 2013 to June:30, 2013., Noted all obligations listed in the
RODS related to Low &-Moderate_Lncomellousing Fund were disqualified'by California Department of
Finance as-Enforceable Obligation.
Petaluma Community Development Successor,Age ey
Agreed Upon Procedures- AB 1484 Due.Diligence Review
'Low and'Moderate;h come Housing Fund
Page 15
Citation:
34179`5(c)(6) The review.tchall total the net palances!avilable after deducting:the total amounts described in
subparagraphs(B) to (E), inclusive, of paragraph (5) 71le,reviety shall add any`amtountsdhat-were transit-red ns
identi ta'in. aragrn list/ 2) and (3) of subdivision (c i tan enforceable obligation to ruake thnt tran_sfir did not
fr p o p ( f' ) f f 8
exist.The resulting sunnslmll he available for allocation to.affecfed taxing entities,pursuant to Section 34179:6.It
shall be a rehuttble'presuniption that cash and cash equivalent:balances available to the successor agency'are
.available`ari l'suffirtent,to disburse the an alinitdeternuned in this paragraph to:ta nrb,entifies. If the finds
that<there•are;insufficient.cash.balancestortransfer'orlthatcash m:cnsh equivalents areepecifically-bhligirted to the
purposes described in subparagraphs (B), 0),find (E).°ofparagraph (5) in such amounts;that there is-insufficient
cash to prooiide the fit!!atnount-determined pursuant to;thi,s,paragraph, that amount shall be demonstrated in'an
additional itemized schedule.
Procedures Performed:
g computation
P_ Available for Allocation to
10. Affected Taxi g Ent ties.e Amountt t included"1n the calculation should agree
( present) n the coal utation of the Balance gvaila
g i to the:results Of the
;procedures performed in each section above. The schedule should also include a deduction:to
recogntze,amounts'already paid to the County Auditor-Controller.on July 12, 2012 as directed by
the California Department of Finance. The,amount of`this..deduction;presented>should:be.agreed to
evidence of payment. The attached example: summary schedule may be considered felt this
purpose. Separate schedules should-be completed for the,..Low and Moderatedncome Housing Fund
and forall other funds combined (excluding'the Low and Moderate Income Housing Fund):;
Results:
Nolexceptions were noted.
See Exhibit F for schedule detailing the computatiomoHhe.: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,dhe.report. Included.`in the representations'should be an,acknowledgment that
management is:not aware of any transfers tis defined by Section 34179:5) from"either-the former
Y )
redevelopment agency or theSticcessorAgencyto other par ties 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.. Managements'.refusal to,sign the re presentation''letter should'be noted in the AUP report
as.requiied by attestation standards.
Results:,
See Exhibit C for Management Representation Letter.
EXHIBITS
Exhibit A - Low and Moderate Income Housing Asset Listing,as of January 31, 2012
Exhibit B-Transfers list to the city that formed the redevelopment agency
for the period from January 1,2011 through June 30,2012
Exhibit C - Housing Assets Transfer Form
Exhibit D.- Department Finance's Review of the Housing Assets Transfer Form
Exhibit F -Low and Moderate Income Housing Asset Listing as of June 30,2012
Exhibit F—.Summary of Balances Available for Allocation
Exhibit C —Management Representation Letter
Successor:Agency to the Fairfield-Redevelopment Agency
Low and Moderate:Income Housing
Agreed'Upoa Procedures-AB 1484
For the year ended'June 30,2012
EXHIBIT A
Low and Moderate Income Housing Asset Listing as of January-31,2012
Lour and Moderate
income I-lousing
Fund
ASSETS
Cash and investments $ 733,602
Loans receivable 23,202,528
Interest receivable 3,3801 95
Total assets $ - , 27,316,325
Principal Interest
Loans-Receivable
First Time Flomebuyer-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-StreetAptsInc-loan 889;964 285,980
Lieb Senior Apts Inc-loan 810,241 182,257
Casa Grande Sr.AptsInc-loan 198,445 -
powntown River LP-loan 3,662,836 858,022
KellgrenSr.Apartmenti-loan 1,347,512 103,271
Sa l ishan Apartments-loan 388;380 151,468
Logan Place-loan 2,943,219 204,230
Vintage Chateau II LI'-loan 4,499,825 249110
Total loans receivable $ 23,202,528 $ '3,380,195
Petaluma-Community Development Successor Agency
Low and Moderate Income:Housing
Agreed Upon Procedures - AB1.484
For the year ended Juner30, 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 Honiebiiyer loans $ 3,736,875 $
Old Elm Vipage-loan 1,305;961 407,889
Round Walk Village.-loan 933,400.
13oulevard Apes-loan 480,200 90,565
Park Lane Aparhnents-loan 164,486 (4,841)
575 Vallejo Associates-loan 851;184. 457;856
579 Vallejo Associates-loan 990,000 394,388
Edith Street Apts,Inc-loan 889,964 285,980
Lieb Senior Apts Inc-loan 810,241 182,257
Casa Grande Sr.opts Inc-loan 198,445 -
Downtown Rivet LP-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. 2,943219 204,230
Vintage Chateau 11 LP-loan :4,499,825 249,110
Total loanrereceivable • $ 23,202528 $ 3,380,195
Petalitina Cominunity Devel'opinent Successor Agency
Low and Moderate fncome,ldousing
Agreed Upon Procedures - AB 1484
For:the year ended?f tine 30,2012
EXHIBIT C
Housing.Assets Transfer Form
t
I x
O 00— al J 0) P A W— N' 2, —,O O co V 0 rn A CO N 3 a-
K 5
m
H d o d 9. m 9. �.
a 3 3 5 — m = o m
S n x o S' :'m. n Aa O
R, a a s a 0 a j <' 0
3 m - 0 'S'o. m 3 'm
Err a- B 3 N,2N' 3
0 m 3 .o m, .. m
o
3 r o a m O
A m,.o 9 w
-o 0 3 3 g . d N S.-Ow
3 'm A 9
CD D � '.3_Nm a v sa bt d o m
. o O} 'g c as ?,. . n a.
a '3: co to �c p O
5 IO 'n d = O t1 K
w F o•a.m .� m O..
n
o m w v o m
CV n
O. 0 P 0 , . N
m 5 q n - A
8 z n m a co
m
Err 9 o m m
3
_P 3 -.._n m A a . V
a 3 N O r m '� .v.
C no �'tn N 0
N II
O. o 3. C
o to
=, m o a
o
C• N N S
CD
m 3 O' K
N (J' C S 0
0- a m O O
to mn 0.
o m
CD 8 cr, m
'< c 0
n
'. . _. _ . . K ... a o
> a
O m mmmm (nmm 1D n"m cm' o 'm A n T
5 X_X X X X- X X-. :a9'-
< m
Er; a `Omm0n W D w 24'Z,'N Zny oi.N O O A
a r .O z A o o, m �' io ? B'. 9 3 , 3
m a n. a a0 o z. a m m m I S'
..:;,'\J g ? m m o N 2 r S 3 m
(p CO �btp O N
0
w s ai _
c
J --4 y' CO CO
.... ..
<n S
m n
c ao c
m m m . o D m IX X m >a D O
N y N N
-i.
_. _ 5, 5 r m D >
a c
C p 0 0
a or CA ° D C C
aN z z
0
0 o b
5m m m
'' m m
F m ^. m v m
R ' ' m m m m i m
o N = z z c, w
C m C cn n a co o
�; = Z n E a r D
G m y A N T X v
E E ce; p Q O a - z
m ZZ mom O
D .1
D. p z m cn N z ..
a 7J � C g N. z
co CO m
o
O o r
m 5 a
o
0 0 a
a w
CO J A
N O J
8 J
O -& .
E m y•a p lri
a �'
m'
W
u)
a-
0
C
CO co
• M m
a N N
O > D-
° a. a
N a a
N (D
CO i CO
N 0
If
rc
o
N
L_
:Y
I(l
Y`_,
IC
tP
9,
Ii
LL
t.
m. X
'0 (0 W ;-I 0) N A W N a 0 (O O) V m (n A W N-) -. 3_ D"
k _
. < r n c co m ricc n 'O Co A0T
J yO m m. o o (U O. O N °) c° Oc 0- y- a pj r
N a m urk ; a 6 7' . F >„ 1'.2., O
N .0 N <3 a o 0 fD a s a 3 - a m •
J < 3 a
rn D boo ao Co, 0 as < m y o )ir
S' Q m m m A A m ➢ A A D-o 1 o ° £ a) t.f k,F.,
ry O< C O 3 a N N 0 y:O O .1-' w < O m d_mac w A'
0 - o J 3 r D J! S O. 0 3 O O{. O C- O 2. .0 or 0
O <
-< 0 O N , 3 er or J J o N 0 J. O 0 a- a
O( J 3 J O: > > > j
NR J a 0.,
�
N3 0
03 C a , 3
0
J 3, 0 c
P- r.c N fA Vf EA EA : EA fA (7 ^`
Cr co W a Ni (A C) fA EA-EA CC 0) di a Ce .� • N Etn Ni A (D W W O) W m O W A o) W 3
j . O CO A W A 0) CO CO CO (T O) CO W O W 0
S - -' N (O W O V N CO O CO O a A O W
n O I (flNJ W NCO AN in NA (th � ;.
y
- C
N N -. CO a. CO A A C) O CO COO 0 O) ..
C(0 O (P O O N O) (n - A O A O) O O a _ . _, ...
0,0 - l
?) p w..0
d a
S N O
n N
O ' C00 A J N 0 0 0 CO CO a 0 0 7
3 N O w Na (O [O W N N a O j N W O 0 - G'
CO 1 NN 0 NNNN N + . -:+ Na NV- CO -�O
S 0 0 0 0 0 0 0 0 (0 c 0 (0 O 0 O . C. 0 0
- C - 0 0 (0 0 0 0 0 0 (0 (0 (0 0 (0 O m-'0
y m.. . : CO O) CO CO W V CO O O W A (n N - O. ._
X
FP CU
'o n 500300915 r xo C) mm (n (n -p W W _ - ➢
O 'c . 0: N V N O C O � CO
.,. ill : m 0 CO (0, o -- 0 lD fT F C'a 2 , O�:V m
o '.m om. 'm'. ^ G, m v aw <,m' 3, 3a a
y b J, o; o , - - .,-_,. m o J m x 3 n 5'..0 ',A Err 6
a 'o A a D D o; - o n
a m r �'b> 2 m -a y N y m m 05 (o o x u m
O C 'n J' N ;co 7 CO N. O' O g rl o, m VI A o m pa
m: c aQ a
a
co n n N o o r' < m' o N
,c n
D A ➢ D ➢ DD -..
[n £ 7.
m x = 'm mob m x mD m O ,�'(T a '°,
O. o, o o; o' O oa O� O o g- Oi o- o J '- p C,
a a_ a a a a a a a a a' a a a Cl m Ci 1
q A a m In CO CO 0' a m. a' m Co Cu O) a N) a O (a S. oi
0 0 0 CO 0 0 m no m. co m. 0' 0 0 y▪ m = :.. N', -r C
xxxxxx ± xxxxxxx aa,c' o ,m. 3
m o CO O-CO CO W y N0 0. CO 0 N. O a v 'J Do
a.
0 00 00 0: 0. 0' car' or 0 0' 0 0. 10 O N.
3'' 0'..o o''x. '.o'
m: > IoO,a a.8 a
m a 0 .2' 0 ^ m'
L.,
Cn
m 9
E...,=
• ,m
a! m a.
Ni N N N NJ Ni N N N N N N.) N> N a.
0 0 0 0 0 0 0 0 0 0 0 0 0 O ' O EDN
0) 0) CO 0) (n o) m C) CO Ni W 0 Co CO
W CO (D W CO N) CO 0 0) Co A N 0 a
a m
m. _ 'm
' a
y in W W CO 0) 0 W CO w 0) 0) Co o w m
o o a° o o o o w e e s s o o m-
w
N fA fA En EA 69.0 07 *A EA d C
W J N C,4.9 o EH to -N J ? N N CO(O V 0) C d ..
Co A A CO N CO CO J O) 0 (n N CO c. (0 CO J m W O V O0 O N7 01 A (0 0 0 CO W 0) u, a 4 A Co V co a 0 co W O CO 0) A CO W O! .•
N 0) A A O N A 0 A w A A 0) O N V nel
Ca (n 0 03 w OD m CO A. N 0 N 0 0 0 N 0 H. . .....
l.
I .. . -
Petaluma Community Development Successor Agency
Low and Moderate Income Housing
Agreed Upon Procedures —AB'1484
For the year ended.June 30,2012'
E;CIIIBI'F D
Department.of Finance's Review of'the:Form
041. OF.
At
a "`t ati i
w Illl n
4, DEPARTMENT OF EDMUND G, .BROWN JR. •` GOVERNOR
c94FORMP�.� �j;j� N 915 L annkr'CrSACRAMENTO CA 09SH'14-39069 WWW.uvr:ca:wv
August 29, 2012
Ms..Sue•Castellucci, Housing Coordinator
City of Petaluma
27 Howard'Street
Petaluma, CA 94952
Dear Ms. Castellucci:.
Subject: Housing Assets Transfer Form
Pursuant•to Health and Safety Code (HSC) section 34176 (a) (2), the City of Petaluma,
submitted•a Housing Assets Transfer Form (Form) to the California Departmental Finance
(Finance) on July 30, 2012 for the period February 1, 2012 through July 30, 2012.
Finance hascompleted its review.of•your Form, which::may have included obtaining clarification
for various items, .Based'on»a sample of line items reviewed and the application of,law,Finance
is not objecting to any assets or transfers of assets identified on your Form:
Please direct inquiries to Nichelle Thomas, Supervisor or WendyGriffe, Lead Analyst at
(916)"'445-1546.
Sincerely;
_eV STEVE;SZALAY
Local Government Consultant
cc: Mr. John C. Brown, City Manager, City of:•Petaluma
Ms IngridAlverde, Redevelopment Manager, City of;Petaluma
Mr. Erick Roeser, Property Tax:Manager; Sonoma County
CaliforhiaState Controller's Office
•
d'etaluma Comtiiunity Development Successor Agency
Low and Moderate Income Housing
Agreed Upon Procedures- AP 4484
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
I
Petaluma Community Development Successor,Agency
Low and Moderate-Income Housing
Agreed Upon Procedures-=MI 1484
For theyeat ended June 30,2012
EXHBPF F
Summary of-Bala ncest Avaliable for-Allocation
"I'oIal,amouiu.of;assets,held by the'Succe.4sor Agency asofJune,30,2012 s- '672,524
Lcss assets legally,restrutedfor uses specified,by'debt
covenants,grant-restrictions,tit?restncuons.i'inposedtby other
governments. -
Less;assets that are not cash or cash equiv aleints assets) • -
Less halal I110 ' ure,legally°restricted for the funding pf an enforceable
obligation (net of projected annual ii.viAl Lies a'ii hbli to fund those:obi iga bons)
L ss.Galances neededto satisfy ROTS for the cnnent fist l yelri -
Add,he amount ofany assets transferred to'the.city.for which art enforceable
obligation v,nth a-third pat ty iequirmg such ti'ad'-fei andobligi ting the use
Attie-transferred assets did not exist
Amount;to be remitted to county fin disbursent cot to taxing entities 5 67Z573
Note that separate.rouymfntions are rcgtticed;for the Low and Moderate.lurowr Hon sing Fund held by.the
SU cress&Agency and for nil other.fiends field,by flu St ccessor,A geucy.
NOTES:For each line shown above;an Exhibit is attached showing the composition of tlie.sununarized-amount.
If.the ievneiv finds tiiat there are insufficient hinds available to provide the full'
amount due,the cause of the insufficiency should be demonstrated.in a separate schedule.
'Petaluma..Community Development Successor Agency
Low and Moderate Income housing
Agreed Upon Procedures -AB 1484
Fol the year ended June30,2012
EXHBIT G
Management Representation Letter
4 AI Ups,
CITY OF PETALUMA
POST OFF1 E BOX,61
Pr[ALu%IA,CA 94953-0061
David Class September 26,2012
Mayor
Chris Albertson
Teresallarrelt
Alike Harris
AIikeileat5 Ptua kMcGeady LLP
Gibe Kearny 9 Corporate Park,Sage 130
Tiffany,Renee
frnmcamembers Irvine,California 92606
In:cpnnection with your'engageinent.to apply agreed-upon procedures relating to
the Low and Moderate Income Housing Fund Due Diligence Reviewers of June30,
2012: which were agreed 7to by the California State Controller-s Office and the
California State Department,of Finance; solely to assist us in ensuring thattour
dissolved redevelopment agency is complying with its statutory requirements
with respect to Assembly Bill CAB') 1434 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 341795.
City Vla,tngei's Office
nTi,gna4snret 2 We are responsible for adherence to the requirements of AB.=1484 as applicable
Petntt,na CA 94952
1 l.P
to the successor agency and the sponsoring organization of the dissolved
Fho'ne(707)-778-1305 redeJelo relent agency.
Fix"(707):,78--1419 p
c099)&6thc i Petah i,nd elms
3. We are responsible.tor the presentation of the exhibits in the low andModerate
Income Housing Fund Due Diligence agreed upon procedures report in
8conarntt Devet6 „etrl accordance with the CalrforniacHealth and.Safety Code (HSC)'Section 34_179th-
Phone( 071718 45.9
Fax(207)778-4586 Exhibit A - Low and Moderate Income Flousing Asset Listing as of January
31,2012
/Imrcwg oitisii Exhibit B- Asset Transfer.Assessrrient.Form
Phone(707).778-4555
Fax(707)778-1586 Exhibit C.-Housing Assets'Transfer Form
Exhibit D Department Finance's.Review of the Hoiising.Assets Transfer:
thiman Resources Dirhinh Form
Phone(707,1 778-4534 , Exhibit E- Lowiand Moderate Income Housing set'L stir as 1
of. une:30,
Fax(707).778=4539 ' -�
2012
Exhibit F-Summary of Balances Available for Allocation
Lejormation Technningy'Divisiofi
Phalli(7071775-4417 Exhibit G-Management Representation Letter
Fax(7074'776-3623
Risk Mrnragenreiri Division
Phone:(707)'776-3695
Fax(707f776-3697
Pun&:McdeadyLLP
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 FlousingFund 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 AUR 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 Dine Diligence Review, including
cominunicationsreceived between June,30, 2012.and•August 27, 2012.
8. We have made available to you all inforrrtation.that we believe is relevant to
Low and Moderate Income 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 riot 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 therCounty 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.
Pun k Gi.,aciv LLP
Manzigetrtunt.Reprtentation Letter
Page 3
To we best of our knowledge mici:00ker, no events have occuTrect-subsevent to
the date of catty report that WCRlid have a significant impact upon the agrecd'upon
,procechn-es that you performed.
City of Petaluma, as the.sponsoring,organization and.as representatives of-the
Successor Agency for the.Cily.of Petaluma Redeveleptaeut Aeney:
John C Elrown, aty Mithaper
)
41 7
E1111:1\lusha1lo,Finance director Datt
. ,
Alvercle;I:Econoillic Development Nianager
A� h ^ 2
•
OVERSIGHT BOARD RESOLUTION Nth
RESOLUTION OF THE OYERSIGHT`BOARD FORMED,PURSUANT'TO HEALTH,AND,SAFETY'CODE
SECTION 34179 APPROVING'ANDTRANSMITTING'THE DUE DILIGENCE REVIEW PURSUANT TO HEALTH
AND SAFETY`CODE"SECTIONS34179.5 AND 34179.6
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 tmthePCDC by City Council Resolution No. 2012-007
adopted on January l9,,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:suctessor agency to the former PCDC, Separate
and distinct!frorii the City of Petaluma, and;to provide for its governance; and
WHEREAS;,California-Health and Safety:Code,section §34179.5 requires eachsuccessoragency to
employa licensed accountant, approved by the county auditor-controller, to conduct a due
diligence review:to determine the unobligated`balances.in'the low and moderate,lncome housing
fund and the other'funds:and accounts'of itsforrner redevelopment that are available'-for transfer'
to taxing entities and to review, approve and transmit the due diligence review pursuant to
Health and SafetyCode;Section 34179:6; 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 Housing
Fund by October 1,'2012;;!and
WHEREAS, the Sonoma County Auditor-Controller, has approved Pun t& McGeady, LLP for the
purposes of undertaking such due diligence review;•and
WHEREAS; the Successor Agency reviewed and accepted the results of the due diligence review'
on.October 1, 2012 by Resolution-2012-04.
WHEREAS; AB. 1484 requires that the Oversight Board hold a public comment session-at least.
five days priorto,approving.the due diligence review; and
WHEREAS, the Oversight Board, noticed'and conducted a meeting to hear public comment on
the due diligence review on:October 3; 2012; and
1928584.1.
WHEREAS, the;Oversight=Board has reviewed the due;diligence:review and considered options
to make adjustments to certain amounts or retain specific assets; and
NOW, THEREFORE, BE IT RESOLVED by the Petaluma Community Development Successor
Agency Oversight Board that the above recitals and findings are adopted as part of this
resolution and are true and thatit hereby:
1. Adopts the resolution approving 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 County auditor-controller, the State Controller and the
Department of Finance pursuant to §Section 34179.6.
It is hereby certified that the foregoing Resolution No. -2012 was duly introduced and
adopted by the Petaluma Community Development Successor Agency Oversight Board at a
regular meeting held on tn'e.10th day of October, by the following vote:
•
1928584.1
Item # 5
Oversight Board to the Successor Agency
of the Dissolved
Petaluma Community Development Commission
DATE: October 10, 2012
TO: Members of the Oversight Board
FROM'' Ingrid Alverde; Economic'& Redevelopment Manager
SUBJECT: Review and Consideration of Action Related to Petaluma Community
Development Successor Agency (PCDSA) Correspondence to the State
Department of Finance (DOF) Requesting Approval of the Petaluma Community
'Development Successor Agency' Recognized Obligation Payment Schedule
CROPS).
RECOMMENDATION
It is recommended that the Oversight Boarcradopt;the attached resolution (Attachment No 1)
endorsing the PCDSA Letter Dated September 26, 2012 (Attachment No 2) Requesting that
DOF Approve Petaluma's ROPS 3 for the'Period January Through June 2013..
DISCUSSION
On August20, 2012, PCDSA staff and representatives, met with the Department of Finance to
review Petaluma's;ROPS and discuss the,merits ofth'e PCDSA's position-thatthe items listedon
the RODS 3, particularly the East Washington and Old Redwood Highway Interchanges, should
qualify as enforceable obligations. The DOF:staff rstated that they were working quickly to
resolve disputes between Successor Agencies and the DOF: Staff provided the DOF with copies
of all pertinent contracts and fact sheets and emphasized the urgent need for resolution of the
ROPS 3 enforceable obligations,because of the status of the projects (one is under construction
and the other is going to bid in October;,2012).,
Staff submitted the approved ROPS 3 to the DOF on August 23, 2012. Despite promising a
prompt.review,;the DOF has not yet responded to the latest ROPS submittal. Their response is
due in mid-October 2012. In September, the PCDSA considered alternative options for •
resolving this matter with the DOE and after a closed session discussion, publiclydisclosed the
direction by the.Successor Agency, Board to pursue litigation if needed to resolve the,ongoing
dispute. Prior to initiating litigation, the;PCDSA issued one final letter to the DOF in hopes of
resolving the matter without litigation (Attachment N'o. 2).
IternW 5
Page`2
By design, the State legislation dissolving redevelopment .agencies, ABxl 26 and AB 1484,
established and empowered the Oversight Board to determine which enforceable obligations
are consistent with the legislation and to consider what is in the best interest of the taxing
agencies affected by redevelopment dissolution. As the Oversight Board, you have already
determined the importance and necessity for the projects identified on PCDSA's various ROPS
and approved them as enforceable obligations. However, the DOF to date has rejected the
Board's approval of these enforceable obligations. The purpose of this report is to provide you
the opportunity to endorse the PCDSA correspondence,already sent to the DOF.
ATTACHMENTS
1. Oversight Board Resolution endorsing PCDSA letter to'DOF'dated.September 26, 2012
2. Petaluma Community Development Successor Agencyletterdated September 26, 2012
OVERSIGHT BOARD RESOLUTION.NO.
RESOLUTION OF THE-OVERSIGHT BOARD FORMED PURSUANT TO HEALTH AND SAFETY CODE
SECTION 34179 ENDORSING THE;PETALUMA COMMUNITY DEVELOPMENT SUCCESSOR
AGENCY'(PCDSA)LETTER;DATED SEPTEMBER 26,.2012
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 PCDG 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 distinct from the City of;Petaluma, and to provide for its governance; and
WHEREAS, the Oversight Board for.the Petaluma Community Development Successor Agency
was established pursuant to AB xl 26 and AB 1484 to oversee the dissolution of the former
Petaluma Community Development Commission; and
WHEREAS, on April 25, 2012 by Resolution No. 2012-03, the Oversight Board approved the
Recognized Obligation Payment.Schedule for the period January through June 2012 (ROPS 1);
and
WHEREAS, Resolution No. 2012-03',makes findingsthat-all of the projects contemplated in ROPS
1 are in the best interest of the taxing agencies, qualify as enforceable obligations and should
be honored; and
WHEREAS, on May 9, 2012 by Resolution No. 2012-05, the Oversight Board approved the
Recognized Obligation Payment Schedule for the period June through December 2012 (ROPS 2);
and
WHEREAS, on August;22, 2012 by Resolution No. 2012-08, the Oversight Board approved the
Recognized Obligation Payment Schedule for the period January through June 2013 (ROPS 3);
and
WHEREAS, on September 26, 2012, the PCDSA issued a letter to the DOF requesting prompt
review and approval of the BOPS 3 with particular attention paid to the East Washington and
Old Redwood Highway Interchange Projects due to the.critical timing issues of`those projects
(Exhibit A); and
WHEREAS, the Oversight Board has fully considered the interests of all taxing entities in
receiving`addifional property taxes, as.well as.the health and safety interests.of the public'in the
enforceable obligations'the Board approved in ROPS 1-3;
NOW, THEREFORE, BE IT RESOLVED that the Oversight Board, formed pursuant to California
Health and Safety Code Section 34179'to°oversee:the Successor Agency for'the form er PCDC,
hereby finds,'resolves, and determines as follows:
1. Adopts this Resolution Endorsing the Petaluma Community Development Successor
Agency (PCDSA) Letter Dated September 26,`2012(Exhibit A) and requesting that DOF
promptly approve ROPS3.
It is hereby certified that the foregoing Resolution No. -2012 was dully introduced and
adopted by the ';Petaluma Oversight Board at a regular meeting held on the 10th day of
October, by the following vote:
•
p,..L0-
CITY OF PETALITNIA
Pos r OFFICE Box 61
.X85 g PFTALUMA,CA 94953-0061
David Glass
Muy`or
September 26, 2012
Chris Albertson
Teresa-Buren.
Mike'Harris
Mike Iiealy
Gabe Kearney
Tiffany lien& Steve Szalay, Program Budget Manager
Goune,hnemers '- -Chicago'Takagi-Galamba; Lead Analyst
Department of Finance
915 L. Street
Sacramento, CA 95814
Via E=Mail,at steve.szalay @dof.ca.gov and
Redevelopment_Adihinistiation @dof.ca.gov and U.S..Mail
RE: Disputed Tax-Increment Funding Obligated to City-of
Petaluma/Highway 101 Interchange Projects
Dear Mr. Szalay and Ms. Takagi-Galamba:
city/tanager'.sOffice. This"letter-concerns the meeting we had,in Sacramento on August.20,;2012; to.
lr-F.ngluh Street ( discuss two public infrastructuieJprojects critical to the City of Petaluma ("City").
Petaluma,C.3 94952
The projects are referred to as the East Washington.and OId'Redwood"Highway
Phone(707)778-4345 Interchange projects (collectively the "Projects"). The Projects are part of
Fax(707)778-4419
' ) p
euwng-1)crneroluma.eaus widening improvements to State Highway 101 that are currently under way.
However, the contracts for the Projects ("Contracts") have been disallowed by
the Department of Finance ("DOE") as,enforceable obligations on the
keoanmlc Development Recognized Obligation Payment Schedules submitted by the Petaluma.
Phone(707)778-4549. Community Development Successor Agency("Successor Agency"):for the
Fax(707)778-4586
periods anuar une 2012 ("ROPS I" and uly-December 2012 (" ROPS II").
Since our August 20 meeting,.the Successor Agency-has sent DOF the Oversight
Housing(07) 7845,5 Board-a roved ROPS for-thee-period anuat une, 2013 ("ROPS III"
Phone{70 71 7 78 455 5 PP P J �-J ( )
Fox(707)778-4586
Our August 20 meeting was attended by Assembly Members Allen;and Yamada,
Human Resources Division SenatorWolk, and staff for Assembly Member,Huffman, as well as Mayor Glass,
Phone(707)7.78-4534
Fax(707)-778-4539 Council.Me her Healy, t-he City's Economic:DevelopmenrManager,the City
Attorney and special redevelopment counsel, and myself on behalf of the City of
Information Technology Division Petaluma, along with Bimla Rhinehart, Executive Director of the.California
P8me4787)778-4417 Transportation.Commission ("CPC"), Suzanne Smith, Executive Director of the
Fat(707)776-3613
SonornaCounty Transportation Agency ("SCTA") and Dan McElhinny,Deputy
Risk Management Dinisi ,, Duector of District 4 of the State Department of Transportation ("animus").
Phone(707)776=3695
Fax(707)776-3697
•
The SCTA and Caltrans have Contracted with the City regarding fuinding;,design, right of way
acquisition, and construction of the Projects. The Cl c is;preparing to-actin a matter of days on
State/Local Partnership Program funding of$4:6=million for the Old:Redwood Highway
interchange. At.our August 20 meeting;.weprevided additional copies of documentation we
previously provided to DOB supportingour assertions, that the Contracts are-enforceable
obligations requiring the use of redevelopmenetaxincrement, that the DOJi lacks a legal basis
for challenging the long-standing Contracts; that damages may be sought from the City if its
contractual obligations are not timely fulfilled (although the City would'no doubt cross-claim
against DOF for preventing th e City from fulfilling its•Contract obligations); and that the
Projects are critical to major state highway system.iMptoyement work currently under way in
Sonoma County that•affects the economic development of'the North Bay region.
At our meeting, we discussed three main topics concerning:IDOF's;disallowance of the
Contracts: I) the fact tharthe Contracts;were entered in accordance with the Community
Redevelopment Law ("CRT]Thmonths (and in some cases years) beforetheredevelopment
dissolution law (ABx1-26)=took effect; 2) that although,Caltrans3and SCTA refer to the
Contracts as "cooperative agreements," the Contracts,are a not agreements between a
redevelopment agency•and the body that created it,and,that'are treated as void under the CRL,
but are in fact legally binding contracts between independent public agencies; and 3) that the fact
that the City, rather than the fornier,Petaluma Community Development'Comniission
("Agency") is party to the Contractsris entirely•consisstent with the CRL and not a basis for
challenging:the Contracts: In this letter we briefly summarize each of these three topics. We
have attached relevant supporting materials.
1. ABxI-26 and AB-1484 Do Not Apply;to the Disputed Contracts Because They
Were Binding Before ABx1-26 Took:Retroactive Effect.
At the meeting; we explained that-.the.City as Successor Agency,is:subjectto a series of
1 binding, third-party agreements between the,City and the SCTA and/or Caltrans; entered
long before AB x1-26 was even on the drawing board,;and well outside the effective
period of that legislation. ABx1-26^was+enacted on.June 30;:2011, and purports to take
effect on January 1, 2011.. As discussed';further below, the Contracts were approved and
executed in accordance with:all:applicable formalities and legal,requirements necessary
for them to become effective and bind the Contract parties. The City signed Contracts
with SCTA and Caltrans concerning the East Washington Interchange and the Old
Redwood Highway Interchange Projects. The Citv's•Contract with Caltrans for the East
Washington.Interchange was fully executed on Jurie 3,2009 (Exhibit A). The City's
Contract with SC'I':1 for the East Washington Interchange was fully executed on
October26,,2009.(Exhibit B). The City also executed two amendments to the
Contract with SCTA for the East Washington.Interchange. Amendment 1 was fully
executed-o i;May 10, 2010'(Exhibit C). Amendment 2 was fully executed November
29, 2010 (Exhibit D). The City's.Contract with SCI'A far the Old Redwood Highway
Interchange was fully executed on May-7, 2010 (Exhibit E), 'l he City's Contract with
Caltrans for the Old Redwood Highway Interchange was fully executed on May 19, 2010
(Exhibit.F). The Contracts the City entered regarding the Projects:were.all in effect and
legally binding months, and in some cases years, before ABx1-26 took effect. As a result,
ABx1-26, and.AB-1484 do not apply to the Contracts, and provide DOE no authority to
it
•
challengethe!Contracts. The City; the SCTA and Goitrous will he damaged if DOF
persists•in•refusing to recognizerhe.legally binding nature of the Contracts.
2. Even ifABxl-26,and AB-1484,Applied to the"Disputed Contracts, the Disputed
Contracfs Are:_Not Void.
At our August 20 meeting,Ms.;Rockwell„legal counsel for DOE, asserted that
Contracts are void under.section 34178(a)'of the::CRL: However, as we immediately
pointed out that section only applies to agreements between a government body'that
•created a°redevelopment agency and'theredevelopment agency. The Contracts are
between the City and:indeperidentgovernment agencies (SC'I A and Calttans). Itappears
DOF staff assumed that section 34178(a)ivoidded'the disputed Contracts because they are
;referred to as "cooperative 'igreements" as ate some agreements between redevelopment
(agencies and°the agencies that-created them. However, section 34178(a).applies to
agreements,;contracts.and,other arrangements{(not just "cooperativeiagreements"), but
only those between a redevelopment agency and the government agency that created•it.
Section,34178 does,not apply to the disputed Contracts. The;Contracts,remain legally
binding. SCTA and Calts;ms refexao the Contracts'as "cooperative•agreeiiients, ,n
keeping with long-established Caltrans.practice. However, the Contracts have been
entered byauthoiizedbrepresentatives of independent government bodies in accordance.
with=all applicable legal:requirements and.are legally binding and fully enforceable
contractual,obligations.
3.. The Disputed Contracts Were,Authoriied.in Accordance with,the CRL. There Is
No Legal Basis-for Invalidating Them:Because They-Are Contracts.of the,City
and Not the,,Former Redevelopment Agency:
At;our August 20 meeting, following our discussion of items 1.and 2sabove in response
to:questioning by Senator WolkDOE staff stated that the sole remaining issuc for
consideration is the-fact that the former-Agency is,not a signatory to the Contracts:_ We
coinmented,at:therime,•andJwish to reiterate, as follows. Section 33445 of the CRL,
which authorizes use of redevelopment tax increment in payment of cityJand other
public entity,infrastructure such as the-Projects, never-required that a redevelopment
agency be a contract signatory,as,long as the specified statutory findings;aremade and
city council consent in accordance with that section, As evidence of such
compliance,concerning the disputed Contracts;•we have previously provided you with
copies of iesoluuons evidencing compliance with the.;CRL in:the obligation of tax
increment uiding for the Projects. Attached is City Resolution no. 2009-013;
consenting to allocationiof tax increment•to ythe East Washington interchange (Exhibit
G), and Agency Resolutions nos. 2005=20 and 2009-02 approving the obligation
(Exhibit,H). Also attached is City Resolution_no 2007-109 consenting;to allocation.of
tax increment to'the Old Redwood Highcay interchange (Exhibit I) and Agenci
Resolution no. 2007-10 approving the obligation (Exhibit J),
.`ys'the,attached resolutions show„therequired statutory findings were made,,including;'findings
that, other than redevelopment'tax increment, no reasonable-means of financing the Contracts
was available to the City. As-we explained on August 20, this:method of committing.,tax
increnientfundls is entirely consistenmwith the CRL, and commonplace for infrastructure
improvements like the Projects. Accordingly, the tax increment funding for the Contracts,
which as noted.above were binding well befdre.ABx1-26 took effect;was obligated in complete
accordance with the CRT,. There is no legal authority for-;the DOF'to.disp'ute these obligations
merely because the former Agency was'not a Contract party. That was never a requirement of
the CRL.
Conclusion
We appreciate Mr. Szalay's commitment at our August'20 meeting to priotitize DOE's review of
the City's ROPS III in ltghtof the critical timing issues'affecting ehe.Projects. Currently,
however,DOE has had-the Successor Agency's draft ROPS III since August 16, 2012. The
Successor Agency submitted'the Oversight Board approved (and unchanged) RODS.III to DOE
on August 22; 2012. Meanwhile,the East Washington Inteiehangc is under construction, and
we are informed by out colleagues atSC"I'A that finalization'of<project materials and solicitation
of bids for the Old Redwood Highway Interchange is iin minent.
In the absence of immediate_confirmation from DOE, we will have-no choice but to seek
intervention from the courtsto resolve the outstanding issues given the status and timing of the
City's and Successor Agency's obligations regarding the Projects. Neither the City nor the State
is in.a financial position to waste public funds on avoidable litigation. We would prefer to
resolve the dispute regarding the Contracts cooperatively. We believe that is how Government
agencies should-function,particularly in these fiscally challenging times. Nonetheless,DOE
appears to be leaving us no option but litigation. If-there is any potential;for-promptly reaching
a satisfactory conclusion regarding the City's East Washington and Old Redwood Highway
obligations without resorting to the courts, please contact me-by/close of business October 1,
2012.
Sincerely,
John C. Brown
City Manager
cc: Mayor Glass and Petaluma'City Council/Successor Agency Board
Oversight Board cordite Petaluma Community Development Successor Agency
1-Ion. Lois\Folk
Hon. Michael Allen
Hon.Jared Huffman
Hon. Mariko Yamada
Jennifer K. Rockwell, Esq., Department of Finance
That:Rhinebart;Execudve Director,CTC
Suzanne5inith;Executive Director, SC;I'A
Dan McElhetiny,Deputy-Director of District 4, Caltrans
David Kahn,Counsel for the Oversight Board for the Petaluma Community Development
Successor Agency
Eric Danly;City Attorney
1964754.2
INDEX OF EXHIBITS.
Exhibit A Cooperative Agreement between City of Petaluma and Caltrans, for East
Washington interchange, executed'June 3, 2009
Exhibit B Cooperative,Funding Agreement Between The Sonoma County Transportation
Authority And City-of Petaluma, for East Washington interchange,•executed
October 26, 2009
Exhibit C Amendment 1 to Cooperative Funding Agreement Between The,Sonoma County
Transportation Authority And City of Petaluma,for Ea st Washington
interchange, executed on May 10,2010 •
Exhibit D Amend t 2 to r
Coope agye,Funding Agreement Between The'Sonoma County
Transportation Authority And City of Petaluma, for East Washington
•
• interchange, executedNovember 29, 2012
Exhibit E Cooperative Funding.Agreement Na SCTA10021 Between The Sonoma.County
•
.Transportation AuthorityAnd City of Petaluma, for Old Redwood Highway
interchange, executed May 7, 2010 •
. ExhibitT • Cooperative Agreement between City of Petaluma and Caltrans, for Old
Redwood Highway interchange; executed May 19, 2010
Exhibit G - City of Petaluma Resolution No 2009-013,,consenting to allocation of tax
. increment to the East Washington interchange
Exhibit H , Agency (Petaluma Community Development Commission) Resolutions nos.
2005 20 and 2009 02, approving the fundinggof the East Washington-interchange
•
Exhibit I City of Petaluma Resolution No 2007 109, consenting to allocation,of tax
increment to the Old Redwood Highway interchange
. ` Exhibit J. Agency (Petaluma Community Development Commission) Resolution Na 2007- '
10.approving the funding of the Old:Redwood Highway interchange
•
Ter to M O) (0O O O 0 0 0 0 0 0 0 0 0 0 N O 0 0 0 ,0 0 0 0 O O u) O O O O O O O O O O
"8 N V C O O N O O 0 0 0 0 O O O O O O N O O 0 N O O O V o O N 0 0 0 0 0 0 0 0 O O
( CO coo) n o N O r O O N O N N O O V O O M 7 O O O O uN O ,- ul O N (O 0 0 0 0 r r r r r r
I-
V W N N fj INj V O M co-O I: N f. 0 (n N V (n O 0 O (A 0 0 6 N u) M N cc; N 0 0 0 u)
L O V N O O) c`) co u) u) O 0 co CO N to O V O) N 0 u) n •- .- N .- 1- 6- to O N
N N- N N- N ,- ,- .- ,- r u) CO C) N V M co N 0 v-
,..
o V
2
X_
C1 lA
a)
L_
O
e
M (() M O) (D O 0 O 0000 0 0 0 0 0 0 0 0 O (0 0 0 ,00000000 V
u) N V (0 O N O 0 0 ..000 0 0 0 0 0 0 0 0 N O O O (V 0 0 0 0 0 0 0 O
u7 n CO CO O) r- u) N O N- O O up O u) N O O u) O co u) O w) N o r LC) O (V u) O CO
u- V V 0 N N N n V O M 0 0 N. N N O O N N D 0 0 O N o M N O N O O
1- O V N 0 C M M u) u7 0 0 M (0 N ■1') V N u) N v- ,- u)
N N u) N. N a- a- a- .. a- u) co CO
a N N
CC
a) () (fl
U
3 0 o
0 41 0 O
CO 0 c c u7 u)
O) E (0 N N
c 3
o ¢ o
C a
u_ (4
1 .
O co O o C) O O O
2 a) C N m O co 0 0 (D
O r
C n M O 6 O 0
> N co 0 co . N O V
2 O 0 O N r N
a DC m
< (fl
c V N O O N
O W 0 0 O rn
In O) C) O O O)-
L D a) O 0 O u) V
01 c a) 6 N N- CO
E, O U
D7 2 n N N
> a
O e»
L.L.
2
J
b9
m N 0 0 0 0 0 0 0 0 0 0 0 O O O O O (D .4- 0 O O M N O O m O O O O O O O O O O O O
C N 0 0 0 0 0 0 O 0 0 0 0 00000 ,- N- 0 O 0 u) 0 0 0 V O 0 0 0 0 0 0 0 0 0 0 0
•'- (d O O (D 01 0 0 O O u) O O O O O V O O N- O O O (0 u) O O m O 0 to O N O O V 0 0 0 0
O O C) C u) co M .- V O 0 O h O 0 u) V u> N O V co r N O O CP O o a- 0 u) N O (D u) N N u) O O O
} - r- 0 CO N. CO V 1- CO O 0 O ,- O N- M to O .- W ,- O V o6
u) N N u) N (V 0 0
C O 0 N.u- N 6(c M ,- N N M N ,- 1- CO
0-
l O V CO to O
O ,- O) C ^ aN. ,- N
O U O N V V O (n
_ N 7 7 7r 7 7
O
H
0 0 O N c0 40 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 01 0 0 0 0 0 0 0 0 0 0 0 0
N. 000 ,- .70 O 0 0 0 0 0 0 0 0 0 0 0 0 O O 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0
cn
C 0O 0 O 0 O 0 0 00 0 0 0 00 N O OO 0 O O N V 0 0 O 0 O O 0 O O O N 0 0 N C O 0 0 0 0 0 0 0 (n 00 o 0 O O O
_ . -0 0 '.0 M O O N s- 0 0 0 N O O O O O N O O O ,- V O ,- u 0 0 .- CD O O O O 0 0 c0 0 0 0 O•
c d O u 0 O u co- O 0 N 0 0 u N u n co V h N CO CO V O O M N N u O .7 O O V O O O O
O@
ca M N O) 0 V u) IN O N O O V .- N 0 u) O N 0 N C N. V O u) N CO N V O M u) O CO r 0 0
U) H LO ,- CO ,O V CO N O V o CO N W N a- M CD V a- V M (N 1- O u)
- c 0 o t(i
6 V N - r` ,- ,- n
0 O N N N
CL (A
r •
W J C.') (6 "O O 0 D C "O 'O -0 -O -O -6 0 "O 0 a 0 a a 'O 13 a '0 '0 'O a 'O a -0 -0 -0 6 -0 -0 0 -0 'O 0 'O 'O
a) a> a) o a) C0 a) Q) Q) a) a) Q) N CU a) a) a> CU a Q N a CU Q O (1) N 0) Q) O Q m a CU N CU a U CU
M O ` m 0 m P O T O Q ` o O O °' El Q) O' E 2' 0) O) `1) O 7 O 0 O' m OaI O' 2'2) 0 0 OY T O s m
pN < a Q) a) a) a) cu m va� m Q) 0)00 a 00 0 a) a) maa) a) am ) mmma CU a P. a
CU
1.11 C 222222 2 2222 22222222 2 2 222222222222222222
x a a> 000000 0 0000 0 0 0 0 0 0 0 0 0 V 000000000000000000
U M O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O O O O O O O O O O O O O O O O O
cn 2 a 000000 0 0000 00000000 0 0 000000000000000000
F 3 a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a
Z ) _ - _
W r
Q O a
4. c ¢
a
Z M c E
0 _ c'
O a) n El
a
N N N) n(cu 0(n, Q o O< O N c U =
(/) O O O O O :N $ V o co
J L''' U a a a a al N iri
CO (9 O O 2' m 0 9N ` U U U U C p
-O
0 Q •r .N .N CO c . I' ` @ N 6 C U co
C E cu 7 7 7 7 7 O C C H m O a a 0 2 U W C L L L L L < C C O O O
N o c c c c c U V >, >, >, ` ¢ L
O O O O O C r r r V, = CL � -
Z Q C C C C C (n O O ( (0 l0 c
3 c CO Cr,
0 �> N N N O) N 0 c c c -o n a E E E E E N N N
a CO c () a
F n
d 0 E
0 co 7 7 c 7 7 a C a) "2 2 P_ 0 ) a) a) Q) o c � a Q o a
U o E E L y Y C E E E E
C Om C U1 U a a
C O 0 E E E v N a o °
aO N p N m a
L11 m o o o ¢ ¢ ¢ ¢ ¢ o m A c . m )O) m O - E ¢
CC v v o v -0 m o)
a a O C N c a a a G C L c >-. C m m O . a_ o a) T N >
7 N co U U O > > > > > = o
.0 .m C m cc m m m m m o . -o .(o m a >o 6 co ca .5 ' N _? N
2 0 2 2 2 o-a) N m m
0 N C ,,F v, U U C C a N ) a C C '6 L o 'C ° m° U U U O ai Q VF; u' cc N iC Oc °c o C c p 3 o E E E o o o o o o - > c m c m L .o a 0 rn= E co c o
0 m O o O U w o a o . -1 0
00CmCa U 0_0 0 0 0 U U U o 2 d -J o t v o a a a a o � a v o¢ o <
T
U a) al N U a U U' U > O CO
O Q CO
C +O+ i .p+ U C Q) 0 N a)
CT a) m N O) m 0 ZT c W C
¢ L L V Z < 0 < ¢ (0 < O a) f0
N 6) u)(n CO O(n Q1 N -C C C C lC N U C G N 2
a) C a) a) C 0 U L C C c p c 3 c Q) E O c0
T .0 C N c c.. r C (0 C l0 l0 (0 C O a) 0 O T•C CO C
ca a
CI_ O c c c s O E p I` d H (� LT F-- D H 7 L. >¢ V C t 7 3
Y Y .x x Y o C C C a> 0_O) ° C c (i U d :_°- 0 -2 E 0 a o'U u a o u> m C 2 o V Ta a d
C co (0 C (0 co N) a a .�- co E p - O c0 O O co 7-,„1 S co O co c0 a > y N H w (n 2 .- a s
a) m to0mC C `o p E E E E o .c..- 0) 0 EE0 o E ov p o2 `_ w >o v 0_ 0 cry 0 `o `o
Q v vi n n n C Z o O O o C C O C a o a a o u) aa) o L ,n o ff 2'(n N a)2 a) m gal =Z
» j22V U UUV 0 coa ()UaIV) x 2 (n Uc� u) O ¢ (n2UxO2 (n ,2cta (nUU
o _ —. r
N
C O N
0
0 E (o
C C O V M O O) V co V r N N N (• N N N N O M M M (O M M c`) N.
C M M M N N V V V V V O O O 0 0 0— O O `r
O) O 0 0 0 0 0 ¢ < < < o 0 00000 N ¢ N N < N N ¢ O N 0 N O O O O C
C Q N -C1.4- --C"-1 N N N --C.- N N N N N N Z N Z N ¢ N ¢ N N Q
N a (0 Z Z Z Z - - (p CO-- W ,_ M Z M M Z M M Z O Z O Z 7) N Z - Z O M Z W
5 U _C (n (A.i) u7 to I� M - ! -- � N N N N N N O W -
(0 c0 (O (D c0 CO r. 0 cD N (O c0 CO
O C Q)
Tv'> U H
a)
O
c co 0
E E 00 0
E a) CO _
C a) 0 ,_ V V C] O co V O o 0 O O CO c0 b 00 0) O O) O - al co co N N co
O M to r O 0 0 O O o 0 0 . '5 `50 . ..,3- E, O O 0 0 0 0 0 0 0 0 C 0 0 0 0 0
m C o 0 0 0 NC N O N N N N N N N N N N N N N N N N N N N N N O N 0 N N N
0 Q .0 0 0 0 0 , N O N. O V u) 0 O_ (O co co 0)v co
(0 Ti N N N N .- (n (001s- s- M c` M CO M N ^ .- .- '- r_ s- N r (O s- N •- C s- a-- r N 0`')
(6 ` (•) O7 0) 70 r M (D to ■ (O 0 ^ rf! C) CO n Q) O M O■0_0 -CO t`
7 E
C O (3
CO U
0_ (n
U 2
`a c O C C CO c
C _ a) > 0 tT O) Q) a) Q) '- C
T. O ava a E 0) m CO 3
0 C C C C N E C L O a) C C6 C C C O E N
o a m m m m o U c o 0_N o r C a 3 3 C 0 0 2 m E (0 .F 2 m y
Q .J? 0 0 0 0�C C O ¢ a' U .2.2 T C C O O O — — — 0) N m a J d Q>7 ?.
O 0 (0 (0 0 W 4 E m ca c (G0_ m 0 ,n rn E 'rn E E E c . C -,c C c o O (4.3 Co 0 a
U U U U 0 N (� 10 O C 7 7 C C C H H H C C c N C Oj N C a) .E 112•N a) 0 0 0 0 0 E) .G 2 O J J Ct 1° x 2 x 0 O O a) a) m P. 0 0 (0 F O E a) v0i N a) .rn N (n .?
0 0 Q X C CgQ E mO O 0 E 'm 0_i m 0_)a pU o cJ > > � arm co 0, ca .a2 J _20_ m 0 a m C m m x Z ¢ ° x x x x ¢ .O p N 3 3 > > (> C la C .E C E °) o ° w a) H v_, m 'u E o ..n
U
5 _ H H H H CO 0 N a N ... d -0 ¢ < < E E E (0 m to ¢ N y�_ C[ p 0 7 C
C6 ¢ M I�H U ` H H D G cC L 2 .m a) al 7 7 5 J D C U W ¢ 2 N0 Li. Y0 o f
~ Oo °OOOOOO a) c 0000 2ccHF- � -° � m e, m (o m a) a C C ' -° c cu 3 20,1'u? _J00 wQ
E o N c mCI C th u' Uv V .1 > (7 C7 (�(�C7 o(x c ct CCL aaa w w 111 V Jm6006 VUUkj �
(o 0 2 `2 ¢ ¢ ¢ ¢ ¢ � � D) (nv> o f (9„)„9 n � da p d. g o n. aQaaddad (ncocou) cocou) co0
Z O d CDH HHHHO a ax = xv xSxxxUUU V vOUV 000 ° 0000o � 2222222 ¢
N M C u) (O n CD 0 0 .- N 0) V u) (O )N o M 0 ,- N M V u) c0 N C0 Cn O .- N M V u) c0 N O 0) 0 - N M V u) (O N n0 (A O ,- N M C tO (0 n C0 O O N M V u7 0
4* N N N N N N N N N N M 01 CO CO CO M CO to M CO V V V V V' V V V V V CO to to tf, LO N u) to to to CO CO CO (0 (D CO (D
E
a)