Loading...
HomeMy WebLinkAboutDowney AB 1484 - DDR FinalSUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY Independent Accountants' Report on Applying Agreed -Upon Procedures On the Downey Redevelopment Agency's and The Successor Agency to the Downey Redevelopment Agency's Low and Moderate Income Housing Fund Pursuant to California Health and Safety Code Section 34179.5 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY AGREED -UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND Table of Contents Page Independent Accountants' Report on Applying Agreed -Upon Procedures Related to the Low and Moderate Income Housing Fund Attachment A - Agreed -Upon Procedures and Findings Related to the Low and Moderate Income Housing Fund 2 SUPPORTING SCHEDULES: Schedule 1 - Listing of Assets Transferred to Successor Agency as of February 1, 2012 Schedule 2 - Transfers to Housing Successor Schedule 3 - Listing of Assets as of June 30, 2012 Schedule 4 - Schedule of Cash Balances for Retention to Meet Enforceable Obligations in Fiscal Year 2012 -2013 Schedule 5 - Summary of Balance Available for Allocation to Affected Taxing Agencies Independent Accountants' Report on Applying Agreed -Upon Procedures Related to the Low and Moderate Income Housing Fund Oversight Board of the Successor Agency to the Downey Redevelopment Agency Downey, California We have performed the minimum required agreed -upon procedures (AUP) enumerated in Attachment A, which were agreed to by the California Department of Finance, the California State Controller's Office, the Los Angeles County Auditor - Controller, and the Successor Agency to the Downey Redevelopment Agency (Successor Agency), (collectively, the Specified Parties), solely to assist you in meeting the statutory requirements of Health and Safety Code Section 34179.5 related to the Low and Moderate Income Housing Fund of the former Downey Redevelopment Agency and Successor Agency. Management of the Successor Agency is responsible for meeting the statutory requirements of Health and Safety Code Section 34179.5 related to the Low and Moderate Income Housing Fund. 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 scope of this engagement was limited to performing the agreed -upon procedures as set forth in Attachment A. Attachment A also identifies the findings noted as a result of the procedures performed. We were not engaged to and did not conduct an audit, the objective of which would be the expression of an opinion on the Successor Agency meeting the statutory requirements of Health and Safety Code Section 34179.5 related to the Low and Moderate Income Housing Fund. 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 Oversight Board and management of the Successor Agency to the Downey Redevelopment Agency, the California Department of Finance, the California State Controller's Office, and the Los Angeles County Auditor - Controller, and is not intended to be, and should not be, used by anyone other than these specified parties. 4 tt4 Irvine, California September 27, 2012 2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893 Offices located in Arrange and San Diego Counties SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 1. Procedure: Obtain from the Successor Agency a listing of all assets that were transferred from the former redevelopment agency's Low and Moderate Income Housing Fund 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. Finding: We agreed the amounts listed on Schedule 1 to account balances as established in the accounting records of the Successor Agency. The former redevelopment agency transferred $3,273,556 in assets to the Successor Agency as shown in Schedule 1. 2A. Procedure: Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Low and Moderate Income Housing Fund of the former redevelopment agency to the city that formed the redevelopment agency 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. Finding: This procedure is not applicable as the former redevelopment agency did not make any transfers from the Low and Moderate Income Housing Fund other than payments for goods and services to the City of Downey during the period from January 1, 2011 through January 31, 2012. 2B. Procedure: Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Low and Moderate Income Housing Fund of the Successor Agency to the city that formed the redevelopment agency 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. 2 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 2B. Finding: This procedure is not applicable as the former redevelopment agency did not make any transfers from the Low and Moderate Income Housing Fund other than payments for goods and services to the City of Downey during the period from February 1, 2012 through June 30, 2012. 2C. Procedure: For each transfer, obtain the legal document that formed the basis for the enforceable obligation that required the 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. Finding: This procedure is not applicable since no transfers were identified as a result of Procedures 2A and 2B. 3A. Procedure: Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Low and Moderate Income Housing Fund of 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. Finding: This procedure is not applicable as the former redevelopment agency did not make any transfers from the Low and Moderate Income Housing Fund other than payments for goods and services to other public agencies or private parties for the period from January 1, 2011 through January 31, 2012. 3B. Procedure: Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Low and Moderate Income Housing Fund of the Successor Agency to any other public agency or to 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 described 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. 3 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 3B. Finding: The former redevelopment agency transferred assets as shown in Schedule 2 to the Housing Successor (Downey Community Development Commission - Housing Authority) authorized under Health and Safety Code Section 34176(a)(2) pursuant to AB 1484. The transfer of these assets was reported on the Housing Asset List form filed August 1, 2012. The California Department of Finance has reviewed and approved the transfers reported on the Housing Asset List with exception of two real properties listed in Exhibit A (of the Housing Asset List) totaling $2,205,182. The Successor Agency does not agree with the Department of Finance's decision and in a letter dated September 4, 2012, the Successor Agency requested a meet and confer to resolve this matter. 3C. Procedure: For each transfer, obtain the legal document that formed the basis for the enforceable obligation that required the 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. Finding: Schedule 2 in the report shows the enforceable obligation /other legal requirement supporting the transfers. 4. Procedure: Obtain from the Successor Agency a summary of the financial transactions of the Redevelopment Agency and the Successor Agency for the fiscal periods ended June 30, 2010, June 30, 2011, January 31, 2012 and June 30, 2012. Ascertain that for each period presented, the total of revenues, expenditures and transfers account fully for the changes in equity from the previous fiscal period. Compare amounts for the fiscal period ended June 30, 2010 to the state controller's report filed for the Redevelopment Agency for that period. Compare the amounts for the other fiscal periods presented to the account balances in the accounting records or other supporting schedules. Finding: This procedure is required by Section 34179.5(c)(4) for the Successor Agency as a whole and therefore will be addressed in the AUP report associated with all other funds of the Successor Agency due December 15, 2012. rd SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 5. Procedure: Obtain from the Successor Agency a listing of all assets of the Low and Moderate Income Housing Fund (excluding assets held by the entity that assumed the housing function previously performed by the former redevelopment agency) as of June 30, 2012. Agree the assets on listing to the accounting records of the Successor Agency. Finding: As of June 30, 2012, the Successor Agency's total assets related to the former redevelopment agency's Low and Moderate Income Housing Fund amounted to $3,395,854 as shown in Schedule 3. 6. Procedure: Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that were restricted for the following purposes: • unspent bond proceeds, • grant proceeds and program income restricted by third parties, and • Other assets with legal restrictions. 6A. Procedure - Unspent Bond Proceeds: Obtain the Successor Agency's computation of the restricted balances and trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation. Obtain the legal document that sets forth the restriction pertaining to these balances. Finding: This procedure is not applicable as the Successor Agency's assets related to the former redevelopment agency's Low and Moderate Income Housing Fund did not have unspent bond proceeds as of June 30, 2012. 613. Procedure - Grant Proceeds and Program Income Restricted by Third Parties: Obtain the Successor Agency's computation of the restricted balances and trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation. Obtain a copy of the grant agreement that sets forth the restriction pertaining to these balances. 5 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 6B. Finding - Grant Proceeds and Program Income Restricted by Third Parties: This procedure is not applicable as the Successor Agency's assets related to the former redevelopment agency's Low and Moderate Income Housing Fund did not have grant proceeds and program income restricted by third parties as of June 30, 2012. 6C. Procedure - Other Assets Considered to be Legally Restricted: Obtain the Successor Agency's computation of the restricted balances and trace individual components of this computation to related account balances in the accounting records or other supporting documentation. We obtained the legal document that sets forth the restriction pertaining to these balances. Finding: This procedure is not applicable as the Successor Agency's assets related to the former redevelopment agency's Low and Moderate Income Housing Fund did not have other assets considered to be legally restricted as of June 30, 2012. 7. Procedure: Obtain from the Successor Agency a listing of assets of the former redevelopment agency's Low and Moderate Income Housing Fund as of June 30, 2012 that are not liquid or otherwise available for distribution and ascertain if the values are listed at either purchase cost or market value as recently estimated by the Successor Agency. For assets listed at purchased cost, trace the amount to a previously audited financial statement or other accounting records of the Successor Agency and note any differences. For any differences noted, inspect evidence of asset disposal subsequent to January 31, 2012 and ascertain that the proceeds were deposited into the Successor Agency's trust fund. For assets listed at recently estimated market value, inspect evidence supporting the value and note the methodology used. Finding: This procedure is not applicable as the former redevelopment agency's Low and Moderate Income Housing Fund did not have any assets that were not liquid or otherwise available for distribution as of June 30, 2012. 31 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 8A. Procedure: If the Successor Agency identified that existing asset balances were needed to be retained to satisfy enforceable obligations, obtain an itemized schedule of asset balances (resources) as of June 30, 2012 that were dedicated or restricted for the funding of enforceable obligations. Compare the information on the schedule to the legal documents that formed the basis for the dedication or restriction of the resource balance in question. Compare all current balances which needed to be retained to satisfy enforceable obligations to the amounts reported in the accounting records of the Successor Agency or to an alternative computation. Compare the specified enforceable obligations to those that were included in the final Recognized Obligation Payment Schedule (ROPS) approved by the California Department of Finance. If applicable, identify any listed balances for which the Successor Agency was unable to provide appropriate restricting language in the legal document associated with the enforceable obligation. 8A. Finding: This procedure was not applicable as the Successor Agency did not identify any assets to be retained to fund enforceable obligations. 8B. Procedure: If the Successor Agency identified 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 include a projection of the annual spending requirements to satisfy each obligation and a projection of the annual revenues available to fund those requirements. Compare the enforceable obligations to those that were approved by the California Department of Finance for the six month period from January 1, 2012 through June 30, 2012 and for the six month period July 1, 2012 through December 31, 2012. Compare the forecasted annual spending requirements to the legal document supporting the enforceable obligation and obtain the Successor Agency's assumptions relating to the forecasted annual spending requirements. Obtain the Successor Agency's assumptions for the forecasted annual revenues. Disclose the major assumptions for the forecasted annual spending requirements and the forecasted annual revenues in this AUP report. Finding: This procedure is not applicable as the Successor Agency did not identify any assets to be retained under this procedure. 7 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 8C. Procedure: If the Successor Agency identified 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 a schedule demonstrating this insufficiency. Compare the timing and amounts of bond debt service payments to the related bond debt service schedules in the bond agreement. Obtain the assumptions for the forecasted property tax revenues and other general purpose revenues and disclose them in this AUP report. Finding: This procedure is not applicable as the Successor Agency did not identify any assets to be retained under this procedure. 8D. Procedure: If Procedures 8A, 8B and 8C were performed, calculate the amount of unrestricted balances necessary for retention in order to meet enforceable obligations. Combine the amount identified as currently restricted balances and the forecasted annual revenues to arrive at the amount of total resources available to fund enforceable obligations. Reduce the total resources available by the amount of forecasted annual spending requirements. Include the calculation in this AUP report. Finding: This procedure is not applicable as Procedures 8A, 8B and 8C were not required to be completed. 9. Procedure: If the Successor Agency identified 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 ROPS 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, the Successor Agency should identify (a) any dollar amount of existing cash that was needed to satisfy the obligation, and (b) the Successor Agency's explanation as to why the Successor Agency believes that such balances were needed to satisfy the obligation. Include this schedule as an attachment to this AUP report. Finding: As of June 30, 2012, the Successor Agency's cash balances to be retained in order to satisfy obligations on ROPS 1, 2 and 3 are detailed in Schedule 4. E? SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 10. Procedure: Present a schedule detailing the computation of the Balance Available for Allocation to Affected Taxing Agencies. Amounts included in the calculation should agree to the results of the procedures performed above. Agree any deductions for amounts already paid to the County Auditor - Controller on July 12, 2012 as directed by the California Department of Finance to evidence of payment. 10. Finding: The schedule detailing the computation of the Balance Available for Allocation to Affected Taxing Agencies is shown in Schedule 5. The computation shows that the Successor Agency does not have balance available for allocation to affected taxing agencies. 11. Procedure: Obtain a representation letter from management of the Successor Agency acknowledging their responsibility for the data provided and the data presented in the report or in any schedules or exhibits to the report. Included in the representations is 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 this AUP report and its related schedules or exhibits. Management's refusal to sign the representation letter should be noted in the AUP report as required by attestation standards. Finding: No exceptions were noted as a result of this Procedure. 0j SCHEDULE 1 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY AGREED -UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND LISTING OF ASSETS TRANSFERRED TO SUCCESSOR AGENCY As of February 1, 2012 Total Assets as of February 1, 2012 Cash and investments ASSETS $ 3,273,556 NOTES: (A) For accounting purposes, the following assets recorded in the Low and Moderate Income Housing Fund at January 31, 2012 were transferred to the City of Downey (Housing Successor) on February 1, 2012 pursuant to Health and Safety Code Section 34176(a)(2): Loans receivable Property held for resale $ 3,454,101 (B) 3,598,332 $ 7,052,433 (B) The loans receivable balance of the Low and Moderate Income Housing Fund at January 31, 2012 includes loans that were funded by set -aside fund and monies received under the federal government's HOME program. The loans receivable balance above includes only the loans that were funded by Low and Moderate Income Housing set -aside funds. SCHEDULE 2 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY AGREED -UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND TRANSFERS TO THE HOUSING SUCCESSOR ( DOWNEY COMMUNITY DEVELOPMEN COMMISSION - HOUSING AUTHORITY) FOR THE PERIOD FEBRUARY 1, 2012 THROUGH JUNE 30,2012: Date of Transfer Description of Transfer Purpose of Transfer 2/1/2012 Transfer of Land Held for Resale to Downey Community Development Commission - Housing Authority Transfer Housing Assets to Housing Successor (Downey Community Development Commission - Housing Authority) 2/1/2012 Transfer of loans receivables to Downey Community Development Commission - Housing Authority Transfer Housing Assets to Housing Successor (Downey Community Development Commission - Housing Authority) Enforceable Obligation/Other Amount Legal Requirement Supporting Transfer $ 3,598,332 $ 3,454,101 Health and Safety Code Section 34176(a)(2) Property transferred and reported on Housing Asset List filed with Department of Finance Health and Safety Code Section 34176(a)(2) Property transferred and reported on Housing Asset List filed with Department of Finance SCHEDULE3 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY AGREED -UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND LISTING OF ASSETS As of June 30, 2012 Total Assets as of June 30, 2012 ASSETS Cash and investments $ 3,395,854 SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY AGREED -UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND SCHEDULE OF CASH BALANCES FOR RETENTION TO MEET ENFORCEABLE OBLIGATIONS IN FISCAL YEAR 2012 -2013 Project Name Payee Purpose of Transaction The View/DDA National Construction of 50 new housing Community units Renaissance The View/DDA National Construction of 50 new housing Community units Renaissance SCHEDULE 4 Enforceable Obligation/ Other Legal Requirement Amount Supporting Retention $ 1,275,000 Reported on ROPS 1, page 2, line 3 ($2,000,000). Remaining unpaid balance or $1,275,000 was reported on ROPS 3, prior period payments tab. 3,000,000 Reported on ROPS 2, Form A, Line 1 Total $ 4,275,000 SCHEDULES SUCCESSOR AGENCY TO THE DOWNEY REDEVELOPMENT AGENCY AGREED -UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND SUMMARY OF BALANCE AVAILABLE FOR ALLOCATION TO AFFECTED TAXING AGENCIES Total amount of assets held by the Successor Agency as of June 30, 2012 - (Procedure 5) $ 3,395,854 Less assets legally restricted for uses specified by debt covenants, grant restrictions, or restrictions imposed by other governments - (Procedure 6) - 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) - Less balances needed to satisfy ROPS for the 2012 -13 fiscal year - (Procedure 9) (4,275,000) Less the amount of payments made on July 12, 2012 to the County Auditor - Controller as directed by the California Department of Finance - Add the amount of any assets transferred to the City 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) - Amount to be remitted to County for disbursement to taxing agencies $ (879,146)