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Home My WebLink About AGENDA_2012-12-21_SPECIAL MEETINGSPECIAL MEETING OF THE Sal Tinajero Mayor Pro Tern — Ward 6 Michele Martinez Councilmember - Ward 2 P. David Benavides Councilmember - Ward 4 Sonia R. Carvalho City Attorney CITY COUNCIL AGENDA DECEMBER 21, 2012 OPEN SESSION CITY COUNCIL CHAMBER 22 Civic Center Plaza Santa Ana, California 11:00 AM Miguel A. Pulido Mayor Vincent F. Sarmiento Councilmember - Ward 1 Angelica Amezcua Councilmember - Ward 3 Roman A. Reyna Councilmember - Ward 5 Paul M. Walters Maria D. Huizar City Manager Clerk of the Council NOTE: If you need special assistance to participate in this Council meeting, please contact Ellen Smiley, City ADA Program Coordinator, at (714) 647 -5340. Please can prior to the meeting date, to allow the City enough time to make reasonable arrangements for accessibility to this meeting. (Americans with Disabilities Act, Title II, 28 CFR 35.104 Basic Meeting Information e of Ethics and Conduct - The people of the City of Santa Ana, at an election held on February 5, 2008, approved an amendment to the City Charter which established the Code of Ethics and Conduct for elected officials and members of appointed boards, commissions, and committees to assure public confidence. A copy of the City's Code can be found on the Clerk of the Council's webpage. The following are the core values expressed: Integrity • Honesty • Responsibility Fairness • Accountability • Respect • Efficiency ;nda Information - The agenda descriptions provide the public with a general summary of the items of business to be considered by the Council. The Council is not limited in any way by the "Recommended Action" and may take any action which the council deems to be appropriate on an agenda item. Except as otherwise provided by law, no action shall be taken on any item not listed on the agenda. ilic Comments /Public Input - Pursuant to Government Code Sec. 54954.3, the public may address the City Council on items listed on the Special Agenda. At the discretion of the Chair, at the first Public Comment portion of the meeting, all comments may be considered jointly. The public will be given the opportunity to speak three (3) minutes on any and all matters contained on the Agenda. All requests to speak shall be submitted in writing to the Clerk of the Council at the beginning of the meeting and before Public Comments begin. Speaker forms will be available at the meeting. REQUESTS TO SPEAK SHALL NOT BE ACCEPTED AFTER THE PUBLIC COMMENT SESSION BEGINS WITHOUT PERMISSION OF THE CHAIR. When speaking, all persons addressing the City Council shall follow the rules of decorum as detailed on the back of the speaker form. The presiding officer shall have the power and responsibility to enforce decorum and order of the meeting as set forth in Section 2- 104(c) of the Santa Ana Municipal Code. sent Calendar - All matters listed under the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion without discussion unless a member of the Council "pulls" an item(s) from the consent calendar for a separate vote. ate Bill 343 - As required by Senate Bill 343, any non - confidential writings or documents provided to a majority of the City Council members regarding any item on this agenda will be made available for public inspection in the Clerk of the Council Office during normal business hours. ;nda & Minutes - Staff reports and documents relating to each agenda item are on file in the Office of the Clerk of the Council and are available for public inspection during regular business hours, 8:00 a.m. - 5:00 p.m., Monday through Friday. 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SPECIAL MEETING AGENDA 2 DECEMBER 21, 2012 SPECIAL MEETING DECEMBER 21, 2012 REGULAR OPEN MEETING 11:00 a.m. CALL TO ORDER MAYOR PULIDO COUNCILMEMBERS: AMEZCUA, BENAVIDES, MARTINEZ, REYNA, SARMIENTO, TINAJERO PLEDGE OF ALLEGIANCE MAYOR PULIDO PUBLIC COMMENTS — See Page 2 for detailed information. BUSINESS CALENDAR 65A CALIFORNIA DEPARTMENT OF FINANCE'S DEMAND FOR PAYMENT OF LOW AND MODERATE INCOME HOUSING FUND RECOMMENDED ACTIONS: 1. Discussion and Action in response to Department of Finance's letter dated December 15, 2012. 2. Potential direction to staff to prepare resolution in support of City's position. COMMENTS 90A CITY MANAGER'S COMMENTS 90B COUNCILMEMBER COMMENTS ADJOURNMENT. SPECIAL MEETING AGENDA 3 DECEMBER 21, 2012 •'e'4T Op. 4 = Z W II n a ►� DEPARTMENT OF EDMUND G. BROWN JR. - GOVERNOR Q411f'ORN�r F I N A N C E 91 5 L STREET ■ SAURAMENT12 CA ■ 95814-3700 0 WWW.013F.13A.13mv December 15, 2012 Ms. Susan Gorospe, Senior Management Analyst Community Development Agency City of Santa Ana 20 Civic Center Plaza, M -25 Santa Ana, CA 92701 Dear Ms. Gorospe: Subject: Low and Moderate Income Housing Fund Due Diligence Review This letter supersedes Finance's original Low and Moderate Income Housing Fund (LMIHF) - Due Diligence Review (DDR) determination letter dated November 9, 2012. Pursuant to Health and Safety Code (HSC) section 34179.6 (c), the City of Santa Ana Successor Agency (Agency) submitted an oversight board approved LMIHF DDR to the California Department of Finance (Finance) on October 11, 2012. Finance issued a LMIHF DDR determination letter on November 9, 2012. Subsequently, the Agency requested a Meet and Confer session on one or more items adjusted by Finance. The Meet and Confer Session was held on December 4, 2012. Based on a review of additional or clarifying information provided to Finance during the Meet and Confer process, Finance continues to believe the adjustments made to the DDR's stated balance of LMIHF available for distribution to the taxing entities is appropriate. HSC section 34179.6 (d) authorizes Finance to make these adjustments. We maintain the adjustments continue to be necessary for the following reasons: Finance originally disallowed the Agency's improper transfers to the Santa Ana Housing Authority on February 1, 2012, and adjusted the amount available by $26,080,925. During the Meet and Confer process, the Agency stated that although the cash is currently unencumbered, it was received due to judgments, settlements, and agreements resulting from lawsuits against the former redevelopment agency, and therefore represent an enforceable obligation per HSC 34176 (e)(2). Further, the Agency contends the retention Is necessary for anticipated housing obligations. However, Finance contends that these funds are not encumbered by existing contracts, and per HSC 34163 (a) an agency shall not have the authority to enter Into contracts with, Incur obligations, or make commitments to any entity, for any purpose, including agreements for redevelopment activities. The Agency also Identified $438,954 as non -cash assets; the market value on investments in the amount of $179,704 is not cash, and the Multi- Famliy Mortgage Backed Securities in the amount of $259,250 is a housing revenue bond that does not Ms. Susan Gorospe December 15, 2.012 Page 2 mature until September 2031 and therefore currently unavailable. Finance has made the appropriate adjustments to reflect this information. The Agency's request to retain balances needed to satisfy enforceable obligations through June 2013 in the amount of $30,593,530 Is based on the total of all outstanding obligations. After further review, it was determined that the approved amount was incorrectly calculated. Based on the recalculation, Finance approves the retention of $200,000, as this amount was identified on the Recognized Obligation Payment Schedule for the period of January through June 2013; therefore, the remaining amount, $30,393,530 is denied. The Agency's LMIHF revised balance available for distribution to the affected taxing entities is $56,035,501 (see table below). LMIHF Balances Available For Dlstributlon To Taxing Entities Available Balance per DDR: $ - Fnance Adjustments Add: Disallowed transfers $ 25,641,971 Requested retained balance not supported 30,393,530 Total LMIHF available to be distributed: $ 56,035,501 This is Finance's final determination of the LMIHF balances available for distribution to the taxing entities. HSC section 34179.6 (f) requires successor agencies to transmit to the county auditor - controller the amount of funds identified in the above table within five working days, plus any interest those sums accumulated while in the possession of the recipient. if funds identified for transmission are in the possession of the successor agency, and if the successor agency is operated by the city or county that created the former redevelopment agency, then failure to transmit the identified funds may result in offsets to the city's or the county's sales and use tax allocation, as well as its property tax allocation. If funds identified for transmission are in the possession of another taxing entity, the successor agency is required to take diligent efforts to recover such funds. A failure to recover and remit those funds may result in offsets to the other taxing entity's sales and use tax allocation or to its property tax allocation. If funds Identified for transmission are in the possession of a private entity, HSC 34179.6 (h) (1) (B) states that any remittance related to unallowable transfers to a private party may also be subject to a 10 percent penalty if not remitted within 60 days. Failure to transmit the identified funds will also prevent the Agency from being able to receive a finding of completion from Finance. 'Without a finding of completion, the Agency will be unable to take advantage of the provisions detailed in HSC section 34191.4. Specifically, these provisions allow certain loan agreements between the former redevelopment agency (RDA) and the city, county, or city and county that created the RDA to be considered enforceable obligations. These provisions also allow certain bond proceeds to be used for the purposes in which they were sold and allows for the transfer of real property and interests into the Community Redevelopment Property Trust Fund once Finance approves the Agency's long - range property management plan. Ms. Susan Gorospe December 15, 2412 Page 3 In addition to the consequences above, willful failure to return assets that were deemed an unallowable transfer or failure to remit the funds identified above could expose certain Individuals to criminal penalties under existing law. Pursuant to HSC section 34167.5 and 34176.8, the California State Controller's Office (Controller) has the authority to claw rack assets that were Inappropriately transferred to the city, county, or any other public agency. Determinations outlined in this letter and Finance's Housing Assets Transfer letter dated August 31, 2012 do not In any way eliminate the Controller's authority. Please direct inquiries to Nichelle Thomas, Supervisor or Wendy Griffe, Lead Analyst at (916) 445 -1546. Sincerely, rY STEVE SZALAY y Local Government Consultant cc: Ms. Nancy Edwards, Interim Executive Director, Community Development Agency, City of Santa Ana Mr. Frank Davies, Property Tax Manager, Orange County California State Controller's Office