HomeMy WebLinkAbout2 - AB 1484 TRUE UP PROCESSREQUEST FOR
SUCCESSOR AGENCY
ACTION
MEETING DATE:
AUGUST 20, 2012
TITLE:
AB 1484 TRUE UP PROCESS
CITY MANAGER
RECOMMENDED ACTION
Receive and file.
DISCUSSION
CLERK OF THE COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Implementing Resolution
? Other
CONTINUED TO
FILE NUMBER
On August 2, 2012, the City of Santa Ana acting as Successor Agency responded to the Orange
County Auditor-Controller's Office for a demand for payment in the amount of $1,160,097, and
complied with such request, stating our disagreement with the calculation.
The Department of Finance (DOF) considers the property tax increment revenues received by
the former redevelopment agencies from July 2011 through January 2012 as part of the
Redevelopment Property Tax Trust Fund (RPTTF) that can be distributed to various taxing
entities. However, the RPTTF did not exist until February 1, 2012; the effective date of AB 1x 26.
DOF's calculation does not factor in the possibility that former redevelopment agencies may have
needed to utilize the tax increment revenues received during July 2011 through January 2012 to
make enforceable obligation payments due during the same period.
In addition, the Successor Agency is involved in pending litigation regarding various agreements
included on the Recognized Obligation Payment Schedules (ROPS) that DOF has disallowed as
enforceable obligations. The Successor Agency is still disputing DOF's decision, but has been
unsuccessful in engaging DOF in further dialogue to remedy the problem. Therefore, the
amounts approved by DOF on both the January to June 2012 and July to December 2012 ROPS
are not reflective of the true obligation amounts for each respective period. If the correct ROPS
amounts are used in the AB 1484 "True Up" process calculation, the County would have not
needed to demand the return of any prior tax increment revenues from the Successor Agency.
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AB 1484 True Up Process
August 20, 2012
Page 2
Pursuant to the attached letter to the County Auditor-Controller dated August 2, 2012, the
Successor Agency reserved the right to pursue all available legal remedies in opposition to any
wrongful demand for payment that may be made by the County Auditor to the Successor Agency
pursuant to the true-up process in Section 34183.5(b)(2)(A).
Nancy T. ards
Interim Exe utive Director
Community Development Agency
NTE/kg
Exhibit 1. Copy of Correspondence to OC Auditor-Controller
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MAYOR
Miguel A. Pulido
MAYOR PRO TEM
Claudia C. Alvarez
COUNCILMEMBERS
P. David Benavides
Carlos Bustamante
Michele Martinez
Vincent F. Sarmiento
Sal Tinajero
August 2, 2012
Jan E. Grimes
Chief Deputy Auditor-Controller
Orange County Auditor-Controller
12 Civic Center Plaza, Room 200
Santa Ana, CA 92702-0567
RE: AB 1484 DEMAND FOR PAYMENT
Dear Ms. Grimes:
CITY MANAGER
Paul M. Walters
CITY ATTORNEY
Sonia R. Carvalho
CLERIC OF THE COUNCIL
Maria D. Huizar
Via Hand-Delivery
The City of Santa Ana acting as Successor Agency to the former Community Redevelopment Agency
("Successor Agency") is in receipt of correspondence dated July 27, 2012 demanding payment in the
amount of One Million One Hundred Sixty Thousand and Ninety-Seven Dollars ($1,160,097.00) by
August 3, 2012. The Successor Agency has enclosed a check in the requested amount, but hereby asserts
its disagreement with the calculation and submits this check under protest.
The Department of Finance (DOF) considers the property tax increment revenues received by the former
redevelopment agencies from July 2011 through January 2012 as part of the Redevelopment Property Tax
Trust Fund (RPTTF) that can be distributed to various taxing entities. However, the RPTTF did not exist
until February 1, 2012; the effective date of AB lx 26. In addition, DOF's calculation does not factor in
the possibility that former redevelopment agencies may have needed to utilize the tax increment revenues
received during July 2011 through January 2012 to make enforceable obligation payments due during the
same period.
In addition, the Successor Agency is involved in current and pending litigation regarding various
agreements included on the Recognized Obligation Payment Schedules (ROPS) that DOF has disallowed
as enforceable obligations. The Successor Agency is still disputing DOF's decision, but has been
unsuccessful in engaging DOF in further dialogue to remedy the problem. Therefore, the amounts
approved by DOF on both the January - June 2012 and July - December 2012 ROPS are not reflective of
the true obligation amounts for each respective period. If the correct ROPS amounts are used in the AB
1484 "True Up" process calculation, the County would have no need to demand the return of any prior tax
increment revenues from the Successor Agency.
CITY OF SANTA ANA
20 CIVIC CENTER PLAZA • P.O. BOX 1988
SANTA ANA, CALIFORNIA 92702
EXHIBIT 1
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County Auditor-Controller
August 2, 2012
Page 2
The Successor Agency reserves the right to pursue all available legal remedies in opposition to any
wrongful demand for payment that may be made by the County Auditor to the Successor Agency
pursuant to the true-up process in Section 34183.5(b)(2)(A).
If you have any questions regarding this matter, please do not hesitate to contact Nancy Edwards at (714)
647-5360 or Francisco Gutierrez at (714) 647-5420.
Sincerely,
PAUL M. WALTERS
City Manager
cc: Nancy T. Edwards, Interim Executive Director, Community Development Agency
Francisco Gutierrez, Executive Director of Finance & Management Services
Sonia Carvalho, City Attorney
Frank Davies, Manager, County Auditor-Controller Property Tax Unit
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