1. D EPARTMENT OF F INANCE L OCAL G OVERNMENT U NIT R EDEVELOPMENT A GENCY D ISSOLUTION

2. O VERVIEW Local Government Unit Goals and Objectives Audits and Review Dispute Resolution/Property Disposition Program, Policy, and Budgets

3. O VERVIEW (C ONTINUED ) Current Projects July 2012 True Up Payments Housing Asset Transfer Forms ROPS Reviews Due Diligence Reviews Property Disposition Meet and Confer Sessions Finding of Completion Long-Range Property Management Plan Final and Conclusive Enforceable Obligation Determinations Questions and Answers

4. L OCAL G OVERNMENT U NIT (C ONTINUED ) Goals and Objectives Oversee the Winding Down of Redevelopment Agencies Protect Core Public Services by Ensuring Proper Collection of Former Redevelopment Agency Tax Increment and Liquidation of Property Assets for Distribution to Local Taxing Entities Developing Positive Working Relationships with Counties, Cities, and Other Stakeholders Protect Bond Holders Minimize Litigation when Possible

5. L OCAL G OVERNMENT U NIT (C ONTINUED ) Organization Chart Program Budget Manager Executive Assistant Attorney Office Technician Assistant Program Budget Manager Principal Program Budget Analyst Assistant Chief Program, Policy, and BudgetsDispute Resolution/Property DispositionAudits and Review Office Technician Budget Analyst Audit Managers Budget Analyst Audit Supervisors 45 Auditors and 20 Retired Annuitants

6. L OCAL G OVERNMENT U NIT (C ONTINUED ) Program, Policy, and Budget -- Responsibilities Performs Budget Related Activities During the Fall and Spring Budget Development Process Compiles, Tracks, and Disseminates Fiscal and Budget Information to Management and Stakeholders Serves as Primary Program Contact with Local Government Entities, Legislative Consultants, and the Legislative Analyst’s Office Represents the Administration During Budget and Committee Hearings Develops and Refine Program Policies Identify Issues with Enabling Legislation and Drafts Proposed Fixes Develop Reporting Forms and Assist with Establishing Review Criteria

7. L OCAL G OVERNMENT U NIT (C ONTINUED ) Audit and Review -- Responsibilities Develop Reporting Forms and Criteria for Review and Approval of Recognized Obligation Payment Schedules Develop Reporting Forms and Criteria for Review and Approval of Housing Entities Assets Inventory Submittals Develop Criteria for Review and Approval of True-Up Payment Protests Develop Criteria for Review and Approval of Due Diligence Reviews Develop Criteria for Review and Approval of Final and Conclusive Enforceable Obligations Participate in Meet and Confer Sessions when Needed

8. L OCAL G OVERNMENT U NIT (C ONTINUED ) Meet and Confer/Property Disposition -- Responsibilities Develop Forms and Processes to be Used for the Meet and Confer Sessions Coordinate Requests to Meet and Confer and Schedule Meetings with Appropriate Staff and Local Entities Draft Findings of Meet and Confer Issues for Distribution to Management and Requestors Establish Guidelines for Governmental Purpose Property Dispositions Develop Approval Process for Finding of Completion Issuances Develop Approval Process for Long-Range Property Management Plans

9. C URRENT P ROJECTS July 2012 True Up Payments Housing Asset Transfer Forms ROPS Reviews Due Diligence Reviews Property Disposition Meet and Confer Sessions Finding of Completion Long-Range Property Management Plan Final and Conclusive Enforceable Obligation Determinations

10. C URRENT P ROJECTS (C ONTINUED ) J ULY T RUE U P P AYMENT Health and Safety Code (HSC) section 34183.5 subdivision (b) as added by AB 1484 clarified that property tax distributed to redevelopment agencies in December 2011 or January 2012 should have been subject to distribution through the AB x1 26 mechanism. In part due to confusion about the Supreme Court’s order regarding the changes in deadlines under AB x1 26, very few, if any, counties correctly adjusted the June 1 property tax payments to successor agencies to capture the amount of funds owed to taxing entities for the January through June period.

11. C URRENT P ROJECTS (C ONTINUED ) J ULY T RUE U P P AYMENT No later than July 9, 2012, county auditor- controllers were required to notify each successor agency of the “residual” amount it still owes to affected taxing entities (ATEs), if anything, for the period covered by the January 2012 to June 2012 ROPS, after the payment of property tax-funded enforceable obligations and agency administrative costs that were approved by Finance. Failure to remit the residual amount to the county auditor-controller could result in penalties for the successor agency and/or the city that created the RDA 27 Successor Agencies failed to remit payment To date no penalties have been levied against these Successor Agencies

12. C URRENT P ROJECTS (C ONTINUED ) H OUSING A SSET T RANSFERS Pursuant to HSC section 34176 (a) (2), the entity assuming the housing functions of the former redevelopment agency is required to submit to the Department of Finance a list of all housing assets by August 1, 2012. The list must adequately detail how the housing asset meets the criteria specified in HSC Section 34176 (e) and must also include all assets transferred between February 1, 2012 and the date upon which the list is created.

13. C URRENT P ROJECTS (C ONTINUED ) H OUSING A SSET T RANSFERS DOF has 30 days to review and object to any transfers included on the Housing Asset Transfer Form. If there is any disagreement with our determination the Housing Entity assuming the functions may request a meet and confer on the issue. To date Finance has issued over 360 determination letters and has received over 150 requests to meet and confer.

14. Due DateDocumentTime Period September 1 ROPS 3 January to June 2013 March 1ROPS 4July to December 2013 October 1ROPS 5January to June 2014 March 1 & October 1 Subsequent ROPS Every 6 months until all obligations are paid C URRENT P ROJECTS (C ONTINUED ) ROPS R EVIEW

15. By September 1 ROPS 3 for the period January to June 2013 is due to DOF for review and approval. Late Penalty $10,000 for each day late after September 1 After 10 days, maximum administrative costs allowed is reduced by 25 percent.

16. C URRENT P ROJECTS (C ONTINUED ) ROPS R EVIEW Upon receipt of ROPS forms, DOF has 45 days to complete review and deny any ROPS items. Agencies are not allowed to make payments on items denied by DOF. Items not denied can be reviewed and denied during a subsequent ROPS review. DOF’s final determination must be communicated to successor agencies and county auditor-controllers 15 days before the date of property tax distribution.  January 1: January – June ROPS  June 1: July – December ROPS

17. C URRENT P ROJECTS (C ONTINUED ) ROPS R EVIEW Successor agency may request to meet and confer with department to resolve any disputes. Request within 5 business days of determination. Department shall either confirm or modify determinations within 30 days of request.

18. C URRENT P ROJECTS (C ONTINUED ) O THER ROPS N OTABLES ROPS Database HSC 34186 (a) – Differences between actual payments and past estimated obligations HSC 34182.5 – County A/C review of ROPS ROPS III forms and Review Letters on Website Exhibit 12 ROPS Review Distributions

19. C URRENT P ROJECTS (C ONTINUED ) D UE D ILIGENCE R EVIEWS HSC Section 34179.5 requires each Successor Agency to employ a licensed accountant, approved by the county auditor-controller and with experience and expertise in local government accounting, to conduct a due diligence review to determine the unobligated balances available for transfer to taxing entities. As an alternative, an audit provided by the county auditor-controller that provides the information required by this section may be used to comply with this section with the concurrence of the oversight board.

20. C URRENT P ROJECTS (C ONTINUED ) D UE D ILIGENCE R EVIEWS There are two Due Diligence Reviews to be conducted Low-Moderate Income Housing Fund (LMIHF) All other Funds and Accounts The LMIHF review is due to Finance by October 15, 2012 The all other Funds and Account review is due by January 15, 2013 DOF is required to review the Due Diligence Reviews and make determinations related to the unobligated balances available for transfer to taxing entities If there is a disagreement with DOF’s determination a request to meet and confer may be made within 5 business days of DOF’s determination.

21. C URRENT P ROJECTS (C ONTINUED ) P ROPERTY D ISPOSITION Property Disposition Upon approval of the Long-Range Property Management Plan, the successor agency may begin to dispose of and sell property pursuant to their approved plan. Long-Range Property Management Plan Within six months of receving a finding of completion, the successor agency shall develop a long-range property management plan and submit the plan to the Oversight Board and DOF for approval. Finding of Completion DOF will issue a finding of completion to the successor agency once the full amount as determined during the due diligence reviews has been paid, the county auditor-controller has reported those payment to DOF, and the full amount of the July True-Up determinations have been paid. Due Diligence Review of Other Account and Funds By April 20, 2013, the county auditor-controller shall provide DOF a report detailing the amount submitted by each successor agency pursuant to the due diligence review determination of all other funds and accounts, and specifically noting those successor agencies that failed to remit the full required amount. Due Diligence Review of Low and Moderate Income Housing (LMIH) Fund By December 1, 2012, the county auditor-controller shall provide DOF a report specifying the amount submitted by each successor agency pursuant to the due diligence review determination of the LMIH Fund, and specifically noting those successor agencies that failed to remit the full required amount. The following outlines the steps a successor agency must follow prior to being allowed to dispose of non-housing related property that is not for governmental purposes.

22. C URRENT P ROJECTS (C ONTINUED ) P ROPERTY D ISPOSITION Outcomes of DOF Review If DOF objects to the transfer, the property shall remain with the successor agency for inclusion in the Long Range Property Management Plan. If no action or objection is made by DOF, the Oversight Board action shall be considered final and conclusive. DOF Reveiw of Oversight Board Action The actions of the Oversight Board shall be subject to review by DOF pursuant to Section 34179, except that the department may extend its review period by up to 60 days. Submit to the Oversight Board for Approval All successor agency actions to transfer ownership of those assets that were constructed and used for a governmental purpose, such as roads, school buildings, parks, police and fire stations, libraries, and local agency administrative buildings, to the appropriate public jurisdiction pursuant to any existing agreements relating to the construction or use of such an asset shall be submitted to the Oversight Board for approval. The following outlines the steps a successor agency can take to transfer property that is for governmental purposes.

23. C URRENT P ROJECTS (C ONTINUED ) M EET AND C ONFER S ESSIONS AB 1484 allows for meet and confer with the Department of Finance on specified issues. Meet and Confer can only be used for new determinations and cannot be used to change decisions made prior to the enactment of AB 1484. The specific topics authorized in AB 1484 for meet and confer include: ROPS submittals, beginning with the January 2013 through June 2013 ROPS. See HSC Section 34177 (m). Previous ROPS are not authorized for meet and confer. Housing Assets Submittals. See HSC Section 34176 (a) (2). Due diligence reviews. See HSC Section 34179.6 (e).

24. C URRENT P ROJECTS (C ONTINUED ) M EET AND C ONFER S ESSIONS Formal Request Must Submitted to DOF (Standardized Form Must be Completed and Submitted along w/ Request) DOF Will Review Request and Determine if it is Valid If Request is Valid DOF will Schedule Meeting and/or Conference Call w/ Successor Agency If Request is not Valid DOF will Notify Successor Agency that Meet and Confer Request is Denied DOF Will Develop Draft Findings Based on Meet and Confer Session and Share the Draft Findings w/ the Successor Agency Successor Agency will be Provided Time to Respond to Draft Findings DOF will Issue and Communicate Final and Conclusive Decision to Successor Agency

25. C URRENT P ROJECTS (C ONTINUED ) F INDING OF C OMPLETION The Department of Finance will issue a finding of completion within five business days, once the following conditions have been met: The successor agency has paid the full amount as determined during the due diligence reviews and the county auditor- controller has reported those payments to the Department of Finance. The successor agency has paid the full amount as determined during the July True-Up process. Or The successor agency has paid the full amount upon a final judicial determination of the amounts due and confirmation that those amounts have been paid by the county auditor- controller.

26. C URRENT P ROJECTS (C ONTINUED ) F INDING OF C OMPLETION Once a Finding of Completion is Made: Real property can be transferred to the Community Redevelopment Property Trust Fund and used in accordance with the Long Range Property Management Plan. Loans between the former RDA and the Sponsoring Entity can become enforceable. Bond proceeds from bonds issued before Dec 31, 2010 can be used for the purposes in which they were sold.

27. C URRENT P ROJECTS (C ONTINUED ) L ONG -R ANGE P ROPERTY M ANAGEMENT P LAN The successor agency shall prepare a long-range property management plan that addresses the disposition and use of the real properties of the former redevelopment agency. The report shall be submitted to the oversight board and the Department of Finance for approval no later than six months following the issuance to the successor agency of the finding of completion.

28. C URRENT P ROJECTS (C ONTINUED ) F INAL AND C ONCLUSIVE EO D ETERMINATIONS A Successor Agency can request to have an Enforceable Obligation be determined to be final and conclusive. If DOF were to agree to the request, the Enforceable Obligation would no longer be subject to DOF rejection during ROPS reviews. DOF would only be allowed to object to the dollar amount listed for EO in the future. There is no timeline specified for DOF to make determinations related to this type of request when they come in.

29. A DDITIONAL I NFORMATION DOF public website (www.dof.ca.gov/redevelopment)www.dof.ca.gov/redevelopment  FAQs  Templates  DOF Letters Contact Information  (916) 445-1546  Redevelopment_Administration@dof.ca.gov Redevelopment_Administration@dof.ca.gov

30. Q UESTIONS