3 - CERTIFIED ROPS AND ADMIN BUDGET

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Santa Ana Successor Agency General Dispute Issue: DOF Waiver of Obiections to ROPS Pursuant to Section 34179, as it read prior to June 27, 2012, the DOF had three business days to request review of the ROPS and, if it requested review within that three day time period, the DOF had ten days to approve or reject enforceable obligations included on the ROPS.I The ROPS for January-June 2012 was submitted to the DOF on April 16, 2012. DOF did not submit a request to review the January-June 2012 ROPS until April 23, 2012 at 5:22 p.m., via e-mail; thus, DOF's request to review the January-June 2012 ROPS was received more than three business days (in fact, a full week) following submission of this ROPS to the DOF. The Successor Agency did not receive a letter from the DOF rejecting items included on the January- June 2012 ROPS until May 3, 2012 at 7:33 p.m., after close of business on the tenth day following DOF's request to review this ROPS. Further, the Successor Agency submitted the July-December 2012 ROPS to the DOF on May 9, 2012. The DOF requested review of this ROPS on May 14, 2012, but did not provide a response rejecting items on the July-December 2012 ROPS until after close of business (at 9:34 p.m.) on May 24, 2012. We hereby reserve our right to challenge the DOF's requests for review and rejections of the ROPS as untimely and to assert that the DOF waived its right to object to the inclusion of enforceable obligations on the ROPS. Santa Ana Successor Agency Dispute on Overall Project Costs Items: In our first two ROPS, DOF moved legitimate project costs into "Administrative" costs. This was contrary to DOF's own position (set forth in "Exhibit 4" on the DOF webpage devoted to ABX1 26 issues) which treats such costs as "specific project implementation activities such as construction inspection, project management or actual construction [which] would not be viewed by Finance as `administrative."' Recently enacted AB 1484 further reinforces this position. AB 1484 extended these time periods to five business days for the DOF to request review and 45 days to respond with approvals and/or disapprovals of specified items on the ROPS; however no part of AB 1484 was made retroactive; therefore the DOF was required to act within the time periods in effect at the time the ROPS was submitted, and resubmitted, to the DOF. Page 1 of 9 3-19