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ROPS 13-14B & ADMINSTRATIVE BUDGET September 16, 2013 Page 2 itemized ROPS list, and a detail of funds expended in the ROPS 3 time period (January 1, 2013 through June 30, 2013). The DOF has added an additional page that accounts for any funds to be held in reserves for approved debt service. This "fund balance' page allows DOF and the Successor Agency to more closely track where reserves must be held in compliance with bond covenants or other valid agreements, as well as funds that were received for an approved ROPS item, but not spent in the ROPS period requested. The fund balance page also requires the Agency to project the expenditures of any reserves from the ROPS 3 period (January 1 through June 30, 2013) in the current ROPS 13-14A period (July 1 through December 31, 2013). Due to time constraints imposed by the DOF, the subject ROPS 13-14B and Administrative Budget are in draft form and presented for the Successor Agency to receive and file (Exhibit 1). Once the ROPS is finalized it will be forwarded to the Oversight Board for review and approval. Given the ROPS is due to the DOF by October 1, 2013, a special meeting of the Oversight Board will be scheduled before the end of September. Following action by the Oversight Board, the ROPS will be forwarded to the DOF, County, and other appropriate entities as required by AB 1484. The City Manager and/or Director of Finance need the ability to make modifications, additions or revisions to the ROPS in order to comply with direction received by the Oversight Board or DOF. In previous ROPS submittals, the DOF has objected to certain enforceable obligations, which subsequently led to Meet and Confer meetings where the Successor Agency was able to provide information that caused the reversal of most objections. The five project area Settlement Agreements remain in dispute, with the Successor Agency's lawsuit set for a December 20, 2013 court date. A recent demand letter from DOF received by the Successor Agency resulted in the remittance under protest to the County of $2.5 million in disputed housing funds tied to the Settlement Agreements. FISCAL IMPACT The Successor Agency is limited to making only payments listed on the approved ROPS for each six month period and the administrative expenditures of the Successor Agency are limited to items listed in the approved Administrative Budget for each six month period. Administrative expenses are capped by law at the greater of three percent of the property tax funds distributed for the ROPS, or $250,000 per year. Thus far, Santa Ana's Successor Agency has received the greater amount of three percent based on the approved property tax funds. .11 Nancy Fong,AjI e— / Interim Execute a erector Community Development Agency NF/SG/kg Francisco Gutierrez Executive Director Finance and Management Services Agency Exhibits: 1. ROPS & Administrative Budget 2-2