HomeMy WebLinkAbout2012-10-19 e-packetSPECIAL MEETING
y
4 OVERSIGHT BOARD FOR THE
SUCCESSOR AGENCY TO THE CITY OF
SOUTH SAN FRANCISCO
REDEVELOPMENT AGENCY
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
CITY HALL
LARGE CONFERENCE ROOM, TOP FLOOR
400 GRAND AVENUE
FRIDAY, OCTOBER 19, 2012
2:00 p.m.
NOTICE IS HEREBY (LIVEN, pursuant to Section 54956 of the Government Code of the State
of California, the Oversight Board for the Successor Agency to die City of South San Francisco
Redevelopment Agency will hold a Special Meeting on Friday, the 19th day of October, 2012, at 2:00 p.m.,
in the Large Conference Room, 'Fop Floor at City Hall, 400 Grand Avenue, South San Francisco,
California.
In accordance with California Government Code Section 54957.5, any writing or document that is a public
record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular
meeting will be made available for public inspection in the City Clerk's Office located at City Hall. If,
however, the document or writing is not distributed until the regular meeting to which it relates, then the
document or writing will be made available to the public at the location of die meeting, as listed on this
agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080.
In coInpliance with Americans with Disabilities Act, if you need special assistance to participate in this
meeting, please contact the South San Francisco City Clerk's Office at (650) 877 -8518. Notification 48
hours in advance of die meeting will enable the City to make reasonable arrangements to ensure
accessibility to this meeting.
Chairman: Selected by:
Neil Cullen Largest Special District of the type in H &R
Code Section 34188
Vice Chair
Denise Porterfield San Mateo County Superintendent of Schools
Deputy Superintendent, Fiscal and Operational Services
San Mateo County Office of Education
Board Members:
Mark Addiego
Councilmember, City of South San Francisco
Alternate: Barry Nagel
City Manager, City of South San Francisco
Gerry Beaudin
Principal Planner, City of South San Francisco
Barbara Christensen
Director of Community /Government Relations,
San Mateo County Community College District
Reyna Farrales
Deputy County Manager, San Mateo County
Paul Scannell
Counsel
Craig Labadie
Selected by:
Mayor of the City of South San Francisco
Mayor of the City of South San Francisco
Chancellor of California Community College
San Mateo County Board of Supervisors
San Mateo County Board of Supervisors
(Public Member)
Advisory:
Marty Van Duyn — Assistant City Manager, City of South San Francisco
Jim Steele — Finance Director, City of South San Francisco
Steve Mattas — City Attorney, City of South San Francisco
Krista Martinelli — City Clerk, City of South San Francisco
Armando Sanchez — Redevelopment Consultant, City of South San Francisco
CALL TO ORDER
ROLL CALL
PLEDGE OF ALLEGIANCE
AGENDA REVIEW
PUBLIC COMMENTS
Comments from members of the public on items not on this meeting agenda. The Chair may set time
limit for speakers. Since these topics are non - agenda items, the Board may briefly respond to statements
made or questions posed as allowed by the Brown Act (Government Code Section 54954.2). However,
the Board may refer items to staff for attention, or have a matter placed on a future agenda for a more
comprehensive action report.
OVERSIGHT BOARD MEETING OCTOBER 19, 2012
AGENDA PAGE 2
MATTERS FOR CONSIDERATION
Resolution certifying and approving a Due Diligence Review of the Former Low and
Moderate Income Housing Fund of Cash and Cash Equivalents Available for Disbursement to
Taxing Entities.
2. Closed Session. Real Property Negotiations
(Pursuant to Government Code Section 54956.8)
Related to: 1 Chestnut Avenue
Negotiating Parties: Oversight Board and Successor Agency for the former
South San Francisco Redevelopment Agency and Red Cart Market Inc., dba
Pet Club Stores.
Agency Negotiator: Marty VanDuyn.
Red Cart Market Inc., dba Pet Club Stores Negotiator: Vic Catanzaro.
ADJOURNMENT
OVERSIGHT BOARD MFF nNG OCTOBER 19, 2012
AGENDA PAGE 3
Redevelopment Successor Agency Oversight Board
Staff Report
DATE: October 19, 2012
TO: Members of the Oversight Board
FROM: Jim Steele, Finance Director
SUBJECT: RESOLUTION CERTIFYING AND APPROVING A DUE DILIGENCE REVIEW
OF THE FORMER LOW AND MODERATE INCOME HOUSING FUND OF
CASH AND CASH EQUIVALENTS AVAILABLE FOR DISBURSEMENT TO
TAXING ENTITIES
RECOMMENDATION
It is recommended that the Oversight Board approve the attached resolution which certifies the
Low and Moderate Income Housing Fund Due Diligence Review.
BACKGROUND /DISCUSSI
On October 9, 2012, the Oversight Board of the South San Francisco Redevelopment Successor Agency
was presented with the Low and Moderate Income Housing Fund (LMIHF) Due Diligence Review
(DDR) performed by Badawi Associates. The Board heard the presentation on this item in an agendized
public meeting of the Oversight Board. A period for comments or questions from members of the public
was allowed at the meeting on this item, but no members of the public wished to speak. Under the terms
of AB 1484, now that a 5 day public comment and review period has lapsed, the Board may certify the
report for turning into the State Department of Finance (DOF) and to the County Auditor's Office. Once
the DOF accepts the DDR, a total of $27.8 million may be paid by the Successor Agency to the County
for distribution to taxing entities.
FISCAL IMPACT
The table in the October 9th staff report summarizes Exhibit 4 in the DDR which shows changes to fund
equity in the LMIHF over the past three fiscal years, from before the RDA dissolution discussions began,
to the final cash balance to be distributed to taxing entities. That total is $27.8 million.
Staff Report
Subject: Fortner Low and Moderate Income Housing Fund Due Diligence Review
Page 2
The complete staff report from October 9th is attached again for the Board's information, along with the
DDR.
By: _
Jim eele
Fin e Director
Attachments: Resolution
Js/Mv: ed
Approved:
Marty Van Duyn
Assistant City Manager an Director of
Economic and Community Development
October 9th Staff Report and Due Diligence Review
RESOLUTION NO.
OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO
RESOLUTION CERTIFYING AND APPROVING A DUE DILIGENCE REVIEW
OF THE FORMER LOW AND MODERATE INCOME HOUSING FUND OF CASH
AND CASH EQUIVALENTS AVAILABLE FOR DISBURSEMENT TO TAXING
ENTITIES
WHEREAS, AB 1484 contains procedures for a due diligence review (DDR) of the
former Low and Moderate Income Housing Funds of the former Redevelopment Agency
( LMIHF); and
WHEREAS, Successor Agency staff acquired the services of a Certified Public
Accountant approved by the County of San Mateo, Badawi and Associates ( Badawi); and
WHEREAS, Badawi performed the DDR; and
WHEREAS, an initial public meeting was duly noticed and agendized and held on
October 9, 2012 in which the DDR was presented to the Oversight Board (the Board); and
WHEREAS, a public comment period was also incorporated into the October 9 meeting,
and
WHEREAS, a follow -up public meeting was held on October 19, 2012, which was more
than the required five days after the initial meeting date; and
WHEREAS, the results of the DDR, once certified by the Board and ultimately by the
State of California Department of Finance (DOF), will result in distribution of funds from the
former LMIHF to the respective taxing entities.
NOW, THEREFORE, the Oversight Board for the Successor Agency to the
Redevelopment Agency of the City of South San Francisco does hereby certify and approve the
DDR performed by Badawi and Associates dated October 1, 2012, and does hereby approve the
determination of the amount of cash and cash equivalents that are available for disbursement to
taxing entities as determined in that review, and which is attached hereto and incorporated herein
by reference, and the Oversight Board Chairperson is authorized to sign this Resolution. That
amount to be remitted to the County for distribution is listed on Exhibit 9 of the DDR, and is
$27,802,350.
I hereby certify that the foregoing Resolution was regularly introduced and adopted by
the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of South
San Francisco at a special meeting held on 19th day of October, 2012 by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST:
1981629.1
Clerk
Redevelopment Successor Agency Oversight Board
y
s° Staff Report
DATE: October 9, 2012
TO: Members of the Oversight Board
FROM: Jim Steele, Finance Director
SUBJECT: TRANSMITTAL OF FORMER LOW AND MODERATE INCOME HOUSING
FUND DUE DILIGENCE REVIEW OF CASH AND CASH EQUIVALENTS
AVAILABLE FOR DISBURSEMENT TO TAXING ENTITIES
RECOMMENDATION
It is recommended that the Oversight Board review the attached Low and Moderate Income
Housing Fund Due Diligence Review. Staff will present this report at the October 9th meeting, and
after a five working day public comment period, the Board will be asked at a later meeting to
certify this Review.
BACKGROUND /DISCUSSION
Assembly Bill 1484 (AB 1484) lays out procedures for the verification of available fund balances from
the former Redevelopment Agencies in California, and further lays out a process for those funds' review
by a licensed accountant to determine the unobligated balance available from former LMIHF dollars for
distribution to taxing agencies. On October 1, 2012, staff transmitted the attached Low and Moderate
Income Housing Fund ( LMIHF) Due Diligence Review (DDR) to the State Department of Finance, State
Controller, and the County Auditor Controller as required under AB 1484. Staff had contracted with the
firm of Badawi and Associates Certified Public Accountants to complete the DDR, which is attached.
The following is a summary of the results.
Exhibit 9 of the DDR identifies the total assets held by the Successor Agency as of June 30, 2012 at
$30,789,162. Of that amount, $27,802,350 in unobligated funds will be distributed to taxing agencies in
November 2012. The Agency will retain the remaining $2,986,812 in assets consisting of:
1) $2,707,690 which is the unspent 1999 housing bond proceeds of $2,381,532 and the bond reserve of
$326,158 outlined further in Exhibit 6; and
2) $270,372 which includes $210,000 of debt service principal, $42,465 of debt service interest, and
$17,907 of accounts payable outlined further in Exhibit 7; and
Staff Report
Subject: Former Low and Moderate Income Housing Fund Due Diligence Review
Page 2
3) $8,750 of Redevelopment Property Tax Trust Fund (RPTTF) already provided to the Successor
Agency in FY 11 -12 to cover FY 12-13 carryover expenses outlined further in Exhibit 8, that is,
expenses not completed as of the end of FY 11 -12.
The table below summarizes Exhibit 4 in the DDR which shows changes to fund equity in the LMIHF
over the past three fiscal years, from before the RDA dissolution discussions began, to the final cash
balance to be distributed to taxing entities.
S in Millions
Beginning LMIHF Fund Equity FY 09 -10 $31.8
+ 20% Housing Set Aside Revenue in 10 -11 $7.5
- Net Operating Results of 10 -11 -$0,6
= Beginning Equity FY 10 -11 $38.7
+ 20% Housing Set Aside Revenue $7.5
-Mid Pen Loan and Loan Forgiveness for 636 El
Camino 48.6
+ Net Operating Results of 11 -12 $0.2
Beginning Equity FY 11 -12 $37.8
- Prior Period Accounting Adjustment (1) -$1.9
- Less Loans Receivable Which Go to City Housing
Fund -$5.1
= Ending Equity FY 11 -12 $30.8
- Assets Retained (2) for ROPS Obligations: -$3.0
To be Disbursed To Taxing Entities $27.8
Notes:
1. To correct for an accounting error from the prior
year, in which a developer contribution of a land
parcel in lieu of a cash contribution into the Housing
In Lieu Fund was erroneously recorded as a Low
Moderate Income Housing Fund contribution.
2. Assets retained are described above.
Staff Report
Subject: Former Low and Moderate Income Housing Fund Due Diligence Review
Page 3
No exceptions were found by the accounting firm in their due diligence review ofthe Successor Agency's
financial records. One finding was noted. The Board may recall that initially, the Successor Agency's
ROPs included provisions for paying off the 1999 Housing Bonds. When the RON associated with the
third time period (January through June 2013) were adopted in August 2012, the Board approved the
retention of those housing bonds for use for affordable housing purposes. However, the August 2012 debt
service needed to be paid, which weren't on the former ROPs for the second time period, because the
bonds were going to be paid off. Therefore, Agency staff is requesting that sufficient funds be retained to
make that debt service payment, which the City has made with its own funding as an advance. That
request is made as a finding in this DDR.
Pursuant to AB 1484, the October 9 meeting serves as the Oversight Board's introduction of the item to
allow for a five day public comment period that is required to take place before the Oversight Board
meeting to vote on the LMIHF DDR. AB 1484 requires the Oversight Board to transmit the approved
LMIHF DDR to the State and County no later than October 15, 2012. However, due to scheduling
constraints and timing limitations due to the Columbus Day holiday, that meeting will occur late, and as
of the time of writing this staff report, has been tentatively scheduled for October 19, 2012.
By:
Jim eele
Fin ce Director
Attachment: LMIHF DDR
KR/75/MV:ed
Approved:
Marty Van Duyn
Assistant City Manage d Director of
Economic and Community Development
511
City of South
San Francisco
Redevelopment
Agency's
Successor Agency
South San. Francisco, California
Independent Accountants' Report on Applying
Agreed -Upon Procedures on the Low and
Moderate .Income .Housing Fund of the RDA
Successor Agency in Accordance with
California Assembly Bill No. 1484
'�> MDAWI&ASSOCLknS
_Z.
AdL
< ► BADAWI &ASSOCIATES
CERPFIFD ?jBDC ACCO J! 4TANTS
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED -UPON PROCEDURES ON THE
LOW AND MODERATE INCOME HOUSING FUND OF THE RDA SUCCESSOR AGENCY IN
ACCORDANCE WITH CALIFORNIA ASSEMBLY BILL NO. 1484
To the Oversight Board of
the City of South San Francisco Redevelopment Agency's Successor Agency
South San Francisco, California
We have performed the procedures enumerated below, which were agreed to by the City of South San
Francisco Redevelopment Agency's Successor Agency (Successor Agency), solely to assist you in meeting the
requirement of the due diligence review of the Low and Moderate income Housing Fund of the Successor
Agency, as required by the California Assembly Bill No. 1484. The Successor Agency's management is
responsible for all schedules and exhibits prepared for this due diligence review. 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 is solely the responsibility of those parties
specified in the report. Consequently, we make no representation regarding the sufficiency of the procedures
described below, either for the purpose for which this report has been requested or for any other purpose.
The procedures performed and our findings are described below:
1. Obtain from the Successor Agency a listing of all 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 that date in Exhibit 1.
Findings. No exceptions were noted as a result of our procedures.
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 that report as an
exhibit to the AUP report. The State Controller's Office review has not occurred, therefore we will
perform the following procedures:
A. Obtain a listing 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 period from January 1, 2011 through January 31, 2012. For each
transfer, determine that the Successor Agency described the purpose of the transfer and described
in what sense the transfer was required by one of the Agency's enforceable obligations or other
legal requirements, See Exhibit 2 for the listing,
Address ; . Phone:,.'.... I. . fax, .
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To the Oversight Board of
the City of South San Francisco Redevelopment Agency's Successor Agency
South San Francisco, California
Page 2
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, determine that the Successor Agency described the purpose of the transfer and described
in what sense the transfer was required by one of the Agency's enforceable obligations or other
Iegal requirements. See Exhibit 3 for the listing.
C. For each transfer, obtain the legal document that formed the basis for the enforceable obligation
that required any transfer.
Findings: No exceptions were noted as a result of our procedures.
3, 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 that report as an
exhibit to the AUP report. The State Controller's Office review has not occurred, therefore we will
perform the following procedures:
A. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and
services) from the former redevelopment agency to any other public agency or to private parties for
the period 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 any other public agency or private parties 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.
Findings: Procedures not applicable. There were no transfers made to public agencies or to private
parties.
-4-
To the Oversight Board of
the City of South San Francisco Redevelopment Agency's Successor Agency
South San Francisco, California
Page 3
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 for the following fiscal periods: June 30, 2010; June 30, 2011,
January 31, 2012 and June 30, 2012,
B. Ascertain that for each period presented, the total of revenues, expenclitures, and transfers accounts
fully for the changes in equity from the previous fiscal period by comparing to the Successor
Agency's accounting records.
C. Compare amounts in the schedule relevant to the fiscal year ended June 30, 2010 to the state
controller's report filed for the Redevelopment Agency for that period.
D. Compare amounts in the schedule for the other fiscal periods presented to account balances in the
accounting records or other supporting schedules.
Findings: No exceptions were noted as a result of our procedures. See Exhibit 4.
Obtain from the Successor Agency a listing of all assets of the Low and Moderate Income Housing
Fund as of June 30, 2012 for the report that is due October 1, 2012, For the Low and Moderate Income
Housing Fund, the schedule attached as an exhibit will include only those assets of the Low and
Moderate Income Housing 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 listed to recorded balances reflected in the
accounting records of the Successor Agency, See Exhibit 5 for the listing.
Findings: No exceptions were noted as a result of our procedures.
6. Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that are restricted for
the following purposes:
A. Unspent bond proceeds:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less
eligible project expenditures, amounts set aside for debt service payments, etc.)
ii. Trace individual components of this computation to related account balances in the accounting
records, or to other supporting documentation
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the restriction
pertaining to these balances.
Findings: No exceptions were noted as a result of our procedures.
-5-
To the Oversight Board of
the City of South San Francisco Redevelopment Agency's Successor Agency
South San Francisco, California
Page 4
B. Grant proceeds and program 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 accouunt balances in the accounting
records, or to other supporting documentation.
iv. Obtain from the Successor Agency a copy of the grant agreemertt that sets forth the restriction
pertaining to these balances, and verify the existence of language restricting the use of the
balances.
Findings: Procedures 6B- i,ii,iii were not performed because there were no applicable asset balances that
are restricted.
C. Other assets considered to be legally restricted:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less
eligible project expenditures).
u. Trace individual components of this computation to related account balances in the accounting
records, or to other supporting documentation.
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the restriction
pertaining to these balances, and verify the existence of language restricting the use of the
balances.
Findings: Procedures were not performed because there were no applicable asset balances that were
restricted.
D. Attach the above mentioned Successor Agency prepared schedule(s) as an exhibit to the AUP report.
For each restriction identified on these schedules, we 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 is indicated in the report.
Findings: The schedule is attached as Exhibit 6.
7. Perform the following procedures:
A. Obtain from the Successor Agency a listing of assets as of June 30, 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.
-6.
To the Oversight Board of
the City of South San Francisco Redevelopment Agency's Successor Agency
South San Francisco, California
Page 5
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 differences.
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 note
the circumstances.
D. If the assets listed at 7(A) are listed at recently estimated market value, inspect the evidence (if any)
supporting the value and note the methodology used. If no evidence is available to support the
value and /or methodology, note the lack of evidence.
Findings: Procedures 7A -D were not performed because there were no applicable assets as of June 30,
2012.
8. Perform the following procedures:
A. If the Successor Agency believes that 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 of enforceable obligations and perform 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 in the legal document that is associated with the enforceable obligation that
specifics the dedication of existing asset balances toward payment of that obligation.
L Compare all information on the schedule to the legal documents that form the basis for the
dedication or restriction of the resource balance in question.
ii. Compare all current 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 that were included in the final
Recognized Obligation Payment Schedule approved by the California Department of Finance.
iv. Attach as an exhibit to the report the listing obtained from the Successor Agency. Identify in the
report any listed balances for which the Successor Agency was unable to provide appropriate
restricting language in the legal document associated with the enforceable obligation,
Findings: Management has represented to us that they do not have any dedicated or restricted assets
balances which need to be retained to satisfy enforceable obligations. No procedures performed.
_7.
To the Oversight Board of
the City of South San Francisco Redevelopment Agency's Successor Agency
South San Francisco, California
Page 6
B. If the Successor Agency believes that future revenues together with balances dedicated or restricted
to an enforceable obligation are insufficient to 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 month period from January 1, 2012 through June 30, 2012 and for the six month
period from 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 revenue:
a. Obtain from the Successor Agency its assumptions for the forecasted annual revenues
and disclose in the report major assumptions associated with the projections.
Findings: The Successor Agency has noted that assets must be retained to fund future obligations for
debt service payments which were not included on the Recognized Enforceable Obligation Payment
Schedules for the period from January 1, 2012 through December 31, 2012.
Successor Agency Response: Under the terms of South San Francisco's ROPS I and II, the Successor
Agency originally intended to retire the outstanding 1999 Housing Bonds; ROPS I and II reflected
paying off those bonds. Pursuant to the new provisions of AB 1484 (Sections 34176(g)(1)(A) and
34176(g)(2), the South San Francisco Successor Agency Oversight Board on August 14, 2012 approved
ROPS III, which allows the Agency to retain unspent bond proceeds to fund needed of €ordable
housing units in South San Francisco (line # 77 on ROPS III). However, the debt service payment for
those bonds that became immediately due on September 1, 2012 did not appear on ROPS II, due to the
tuning of ROPS II's adoption. Therefore, the Successor Agency is seeking approval to retain the
$252,465 to pay for the September 1, 2012 debt service, since that debt service became an enforceable
obligation when ROPS III was adopted on August 14, 2012. (The City has already made the September
1 debt service payments by advancing cash to the Successor Agency for that purpose).
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To the Oversight Board of
the City of South San Francisco Redevelopment Agency's Successor Agency
South San Francisco, California
Page 7
C. If the Successor Agency believes that projected property tax revenues and other general purpose
revenues to be received by the Successor Agency are 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 in that schedule,
i. Compare the timing 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 disclosed major
assumptions associated with the projections.
hi. Obtain the assumptions for the forecasted other general purpose revenues and disclosed major
assumptions associated with the projections.
Findings: Management has represented to us that they do not have any outstanding bond issues. No
procedures performed.
D. If procedures A, B, or C were performed, calculate the amount of current unrestricted balances
necessary for retention in order to meet the enforceable obligations by performing 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 obligations.
ii. Reduce the amount of total resources available by the amount forecasted for the annual
spending requirements. A negative result indicates the amount of current unrestricted balances
that needs to be retained.
iii. Include the calculation in the AUP report.
Findings: See Exhibit 7 for procedures performed.
If the Successor Agency believes that cash balances as of June 30, 2012 need to be retained to satisfy
obligations on the Recognized Obligation Payment Schedule (ROPS) for the period of July 1, 2012
through June 30, 2013, obtain a copy of the final ROPE for the period of July 1, 2012 through December
31, 2012 and a copy of the final ROPS for the period January 1, 2013 through June 30, 2013. For each
obligation listed on the ROPS, verify the Successor Agency added 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.
Findings: Management has represented to us that they believe cash balance as of June 30, 2012 do need
to be retained to satisfy obligations on the Recognized Obligation Payment Schedule (BOPS) for the
period of July 1, 2012 through June 30, 2013. No exceptions were noted as a result of our procedures.
See Exhibit 8.
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To the Oversight Board of
the City of South San Francisco Redevelopment Agency's Successor Agency
South San Francisco, California
Page 8
10. Obtain a schedule detailing the computation of the Balance Available for Allocation to Affected Taxing
Entities. Amounts included in the calculation have been agreed to the results of the procedures
performed in each section above. The schedule included a deduction to recognize 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 has been agreed to evidence of payment. Schedule
was attached as Exhibit 9.
Findings: No exceptions were noted as a result of our procedures.
11. Obtain a representation letter from Successor Agency management acknowledging their responsibility
for the data provided to us and the data presented in the report or in any attachments to the report.
Determine that management representations included an acknowledgment that management is not
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.
Findings: Management provided a representation letter on October 1, 2012.
We were not engaged to and did not conduct an examination, the objective of which would be the expression
of an opinion on the accompanying schedules attached to this report. 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 State of Califorrtia Department of Finance, the
Successor Agency Oversight Board and management of the Successor Agency and is not intended to be and
should not be used by anyone other than these specified parties. However, this report is a matter of public
record and its distribution is not limited.
B)OMiL 4 J 04
Badawi and Associates
Certified Public Accountants
Oakland, CA
October 1, 2012
City of South San Francisco Redevelopment Agency's Successor Agency
Exhibit 1- Listing of All Assets Transferred From the Former Redevelopment Agency (LMiHF) to the Successor Agency
on February 1, 2012
Assets
11101
Cash and Investments
11105
Restricted Cash
11110
Cash with Fiscal Agent
11116
Cash Premium /Discount
11117
Cash unrealized Gains / bosses
Loans Receivable
11210
Accrued interest Receivable
Fund
862
2$,297,017
2,373,122
318,524
(289,627)
395,860
5,107,950
137,310
Total Assets $ 36,340,156
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City of South San Francisco Redevelopment Agency's Successor Agency
Exhibit 4-Su _t= of the Financial Transactions of the Redevelopment Agena and the Successor ARenry
(1) Correction to a prior year's financials wherein a developer's land contribution to the In lieu Housing Fund was incorrectly shown as a Redevelopment traruactior.
LMIRP
LMIFIF
LM} gp
LMItIF
Redevelopment Agency
Redevelopment Agency
Redevelopment Agency
Successor Agency
12 Months Ended
12 Months Ended
7 Months 73nded
5 Months Ended
June 30, 2010
June 30, 201]
January 31, 2012
Jurte 30,2M2
Fund 630 and 460
Fund 630 and 460
Fund 862 and 630
Fund 862 and 630
Assets (modified accrual basis)
Cash and investments
S
25,141,735
$
27,962,924
$
78,297,017
$
28,095,703
Receivables:
Accounts
-
91000
_
Accrued interest
146,758
137,310
137,310
237,567
Loans receivable
9,24$524
5,090,617
5,107,950
Restricted cash and investments
2,721,703
2,755,935
Z373,172
2,38],532
Land held for redevelopment
1,900A00
1,900,000
_
Cash with fiscal agent g
318,524
326,158
Cash unrealized gain/premiauldiscount
-
I06,233
(251,798)
Total assets
$
39,158,720
6
37,855,786
$
36340,156
$
30769,162
Liabilities (modified accrual basis)
Accounts payable
$
25,268
$
4,106
$
7,726
$
I7,907
Accrued expenses
27,055
27,055
3,575
_
Deferred reverie
50,000
50,WD
_
_
Advance from the City
346,748
Total liabilities
449,071
81,161
11,300
17,409
Equity
38,709,649
37,774,625
36,328,855
30,773,255
Total Liabilities and equity
$
39,158,724
$
37$55,786
$
3,155
$
30,789,162
Totalrevenues
$
1,008,083
$
846,115
$
860,879
$
28,453
Tots! expenditures
1,571,034
4,WA03
405,649
133,253
Total transfers/endraordinary item
7,477,922
3,067,264
-
30,876,055
Net change in equity
6,908,971
(935,024)
454,230
30,771,255
Beginning equity.
31,800,678
38,709,649
37,77462;
Prior period adjustment (1)
-
_
(1,900)ODO)
_
Ending equity:
$
38,709,649
$
37,774,625
$
36328,855
$
30,771,255
other information
Capital assets as of end of year
$
9,405,603
$
4,470,000
$
-
$
Long-term debt as of end of year
$
2,120,000
$
1,925,000
$
1,720,000
$
1,720,000
(1) Correction to a prior year's financials wherein a developer's land contribution to the In lieu Housing Fund was incorrectly shown as a Redevelopment traruactior.
City of South San Francisco Redevelopment Agency's Successor Agency
Exhibit 5- Listing of All Assets of the Low and Moderate Income Housing Fund as of June 30, 2012
Assets (modified accrual basis)
Cash and Investments
Receivables:
Accrued interest
Restricted cash and investments
Cash with fiscal agent
Cash Unrealized Gain /premium /discount
Total Assets
Redevelopment Agency
5 Months Ended
June 30, 20]2
Fund 862
$ 28,095,703
237,567
2,381,532
326,158
(251,798)
30,789,162
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City of South San Francisco Redevelopment Agency's Successor Agency
Exhibit 9- Summary of Balances Available for Allocation to Affected Taxing Entities
Period ended June 30, 2012
SUMMARY OF BALANCES AVAILABLE FOR ALLOCATION TO AFFECTED TAXING ENTITIES
Total amount of assets held by the successor agency as of June 30, 2012 (procedure 5) $ 30,789,162
Add the amount of any assets transferred to the city or other parties for which an enforceable
obligation with a third party requiring such transfer and obligating the use
of the transferred assets did not exist (procedures 2 and 3)
Less assets legally restricted for uses specified by debt (2,707,690)
covenants, grant restrictions, or restrictions imposed by other
governments (procedure 6)
Less assets that are not cash or cash equivalents (e.g., physical assets) - (procedure 7)
Less balances that are legally restricted for the funding of an enforceable
obligation (net of projected annual revenues available to fund those obligations) - (procedure 8) (270,372)
Less balances needed to satisfy BOPS for the 2012 -13 fiscal year (procedure 9) (8,750)
Less the amount of payments made on July 12, 2012 to the County Auditor - Controller as
directed by the California Department of Finance
Amount to be remitted to county for disbursement to taxing entities $ 27,802,350