HomeMy WebLinkAboutItem 3b: Audit of Redevelopment low and moderate income housing funds.Au {u st 5, 1�0)
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DATE: October 2, 2012 Development Services Department
TO: Honorable Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager /Development Services Directof3qK
By: Jerry Schwartz, Economic Development Manager
SUBJECT: AUDIT OF REDEVELOPMENT LOW AND MODERATE INCOME
HOUSING FUNDS PER AB 1484
Recommended Action: Receive and File
SUMMARY
On February 1, 2012, redevelopment in California, and in Arcadia, ceased to exist.
Prior to that time, on January 3, 2012, the City Council voted to become the Successor
Agency to the Arcadia Redevelopment Agency. As the process to unwind the Arcadia
Redevelopment Agency began, the prevailing legislation was Assembly Bill X1 26 (AB
26). On June 27, 2012, the Governor signed into law Assembly Bill 1484 (AB 1484),
which created new requirements and timeframes for the dissolution of redevelopment.
One of the requirements is the completion of two audits of redevelopment funds; the
first examines the low and moderate income housing funds, and the second will
examine the non - housing funds. The audit of housing funds has been completed and is
presented to be received and filed.
BACKGROUND
One of the main reasons that the Governor advocated the dissolution of redevelopment
in California was to transfer the former tax increment funds to the various taxing entities,
including K -12 school districts, counties, and special districts. AB 26 was designed to
force redevelopment agencies to sell properties quickly so that proceeds could be
shared with the taxing entities, and to give up any redevelopment funds that were being
held to also share with the taxing entities.
AB 1484 slowed those processes down significantly, and created a number of new
requirements. One such requirement is that remaining redevelopment funds are subject
to audits by an outside firm. The Low and Moderate Income Housing funds are audited
first and separately from the non - housing funds. The audit has to be approved by the
Oversight Board after they have separately held a meeting to take testimony about the
audit. Those two meetings must be at least five business days apart. The housing
SA — Audit Redevelopment Low
and Mod Income Housing Funds
October 2, 2012
Page 2 of 3
audit is due to the Department of Finance (DOF) by October 15, 2012, with Oversight
Board approval. This process will be repeated for the non - housing funds, which must
be submitted to the DOF by January 15, 2013.
DISCUSSION
The audit of the Redevelopment Low and Moderate Income Housing funds was
prepared for the City by its auditors, Pun & McGeady, based on procedures that were
developed by the DOF, the State Controller, and the CPA Society. The audit
procedures were not completed and available to audit firms until August 27, 2012.
Overall, Pun & McGeady did not find any irregularities in the Low and Moderate Income
Housing funds and or affordable housing projects. The audit addressed the fact that the
Low and Moderate Income Housing funds were not transferred to the Successor
Agency and have been held separately because the City Council chose not to become
the Successor Agency for Housing, and that the assets would be transferred to the Los
Angeles County Housing Authority. The Housing Authority has not yet acted to accept
the City's affordable housing assets. The Oversight Board has approved the transfer of
the housing assets to Los Angeles County, and the County has been provided detailed
information about the Arcadia housing assets. As part of AB 1484, the County was
required to submit a new form regarding its housing assets, including those in Arcadia,
to the DOF. Once that process is completed, the asset transfer should be able to take
place. The Arcadia Redevelopment Agency had over $6.7 million in affordable housing
funds when redevelopment was eliminated. The audit reviewed the affordable housing
projects that will be transferred to the LA County Housing Authority and the receivables
that are part of those projects. No issues were raised with the funds or projects.
As mentioned above, the Oversight Board is required to take public testimony on the
audit before it can be approved. The Oversight Board will hold that meeting on October
2. Subsequently, as required by law, a second meeting is scheduled on October 9 to
consider approving the audit. Once approved, it can be forwarded to the DOF by the
October 15 deadline. This process will be repeated for the non - housing funds audit.
FISCAL IMPACT
Once the Department of Finance approves the audit, the Successor Agency will be
required to forward its Low and Moderate Income Housing funds for distribution to the
taxing entities. The audit does recommend that the Successor Agency be able to keep
sufficient funds on hand to pay the remaining approximate $3.4 million Campus
Commons obligation in January 2015.
SA — Audit Redevelopment Low
and Mod Income Housing Funds
October 2, 2012
Page 3 of 3
RECOMMENDATION
Receive and File.
Approved by:
Dominic Laz a o
City Manager
Attachment A: Draft Low and Moderate Income Housing Funds Audit
Successor Azency to the
Arcadia Redevelopment
Arcadia, California
Agency
Independent Accountant's Report on
Applying Agreed -Upon Procedures relating to
the Due Diligence Review in accordance with AB 1484
applied to Low and Moderate Income Housing Fund
For the year ended June 30, 2012
FAA
PUPS & McGEADY
Successor Agency to the
Arcadia Redevelopment Agency
Table of Contents
Page
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED -UPON PROCEDURES ............................................................. ..............................1
ATTACHMENT A - AGREED -UPON PROCEDURES AND RESULTS ...................... ..............................2
EXHIBITS
Exhibit A - Successor Agency Resolution No. 6
Exhibit B - Letter from California Department of Finance dated August 31, 2012
Exhibit C - Housing Assets Transfer Form
Exhibit D - Listing of all assets of Low and Moderate Income Housing Fund as of June 30, 2012
Exhibit E - Non - Liquid Assets Available for Distribution
Exhibit F - Computation of the Balance Available for Allocation to Affected Taxing Entities
Exhibit G - Management Representation Letter
F(M
PUN & McGEA.DY
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED -UPON PROCEDURES
To the Oversight Board of the
Successor Agency to the Arcadia Redevelopment Agency
Arcadia, California
9 Corporate Park
Suite 130
Irvine, California 92606
Phone: (949) 777 -8800
Fax: (949) 777 -8850
www.pm-llp.com
We have performed the required agreed -upon procedures ( "AUP ") enumerated in Attachment A,
which were agreed to by the California State Controller's Office and the California State Department of
Finance, solely to assist the Oversight Board of the Successor Agency to the Arcadia Redevelopment
Agency ( "Successor Agency ") that the dissolved Arcadia Redevelopment Agency ( "Agency ") of the
City of Arcadia, California ( "City ") is complying with its statutory requirements with respect to
Assembly Bill ( "AB ") 1484. Management of the City is responsible for the accounting records
pertaining to statutory compliance pursuant to California Health and Safety Code section 34179.5(c)(1)
through 34179.5(c)(6).
These procedures only applied to the Low and Moderate Income Housing Fund, not the Successor
Agency to the Arcadia Redevelopment Agency as a whole.
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.
We were not engaged to and did not conduct an audit, the objective of which would be the expression
of an opinion as to the appropriateness of the financial information summarized in Exhibits, as listed in
the table of contents. 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, the Successor
Agency, the Agency, the City, California State Controller's Office and the California State Department
of Finance, and is not intended to be, and should not be used by anyone other than these specified
parties. This restriction is not intended to limit distribution of this report, which is a matter of public
record.
Irvine, California
September 27, 2012
ATTACHMENT A - AGREED -UPON PROCEDURES AND RESULTS
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 3
Citation:
34179.5(c)(1) The dollar value of assets transferred from the former redevelopment agency to the successor agency
on or about February 1, 2012.
Procedures Performed:
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.
Results:
Arcadia Successor Agency asserts that the Low and Moderate Income Housing Fund was not
transferred to the Successor Agency. Therefore, assets hold by form Arcadia Redevelopment Agency
( "RDA ") did not transfer the assets of the Low and Moderate Income Housing Fund to the Successor
Agency on February 1, 2012 nor have the assets been transferred as of June 30, 2012.
The County of Los Angeles Housing Authority ( "LACHA ") becomes the Housing Successor to the
former Arcadia RDA's Low and Moderate Income Housing Fund. However, as of the date of this
report, the LACHA has not adopted a resolution accepting the former Arcadia RDA Low and Moderate
Income Housing Fund assets.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 3
Citation:
34179.5(c)(2) The dollar value of assets and cash and cash equivalents transferred after January 1, 2011, through
June 30, 2012, by the redevelopment agency or the successor agency to the city, county, or city and county that
formed the redevelopment agency and the purpose of each transfer. The review shall provide documentation of any
enforceable obligation that required the transfer.
Procedures Performed:
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. If this has not yet occurred, 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, 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 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, 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.
Results:
Arcadia Successor Agency asserts that the Low and Moderate Income Housing Fund was not
transferred to the Successor Agency. Therefore, assets hold by form Arcadia Redevelopment Agency
( "RDA ") did not transfer the assets of the Low and Moderate Income Housing Fund to the Successor
Agency on February 1, 2012 nor have the assets been transferred as of June 30, 2012.
The County of Los Angeles Housing Authority ( "LACHA ") becomes the Housing Successor to the
former Arcadia RDA's Low and Moderate Income Housing Fund. However, as of the date of this
report, the LACHA has not adopted a resolution accepting the former Arcadia RDA Low and Moderate
Income Housing Fund assets.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 3
Reviewed the Successor Agency's Resolution No. 6 dated May 22, 2012, A Resolution by the Oversight
Board to the Successor Agency of the Arcadia RDA directing and confirming the transfer of housing
assets and functions to the Los Angeles County Housing Authority, and noted that the City of Arcadia
adopted Resolution No. 6815 on January 31, 2012, wherein the City of Arcadia elected to transfer all
the "rights, powers, assets, liabilities, duties and obligations associated with the housing activities of
the Agency (referring to the dissolved Arcadia RDA), excluding any amounts on deposit in the Low
and Moderate Income Housing Fund to the Los Angeles County Housing Authority."
See Exhibit A attached for the Successor Agency Resolution No. 6
Reviewed letter from Department of Finance Housing ( "DOF ") dated August 31, 2012 to the LACHA
regarding the Housing Assets Transfer Form submitted to the DOF on August 1, 2012 and the Housing
Assets Transfer Form and noted that the LACHA failed to provide all the required information on
Exhibit A, instead marking the information as TBD. The information was marked TBD since the assets
had not yet been transferred to the LACHA.
See Exhibit B attached for the Letter from the Department of Finance dated August 31, 2012, and
Exhibit C attached for the Housing Assets Transfer Form.
Reviewed the Agreed -Upon Procedures Report ( "AUP Report "), prepared pursuant to ABx1 26, the
Redevelopment Dissolution Bill and noted that the former Arcadia RDA did not transfer the housing
activity and assets of the former Low and Moderate Income Housing Fund.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 3
Citation:
34179.5(c)(3) The dollar value of any cash or cash equivalents transferred after January 1, 2011, through June 30,
2012, by the redevelopment agency or the successor agency to any other public agency or private party and the
purpose of each transfer. The review shall provide documentation of any enforceable obligation that required the
transfer.
Procedures Performed:
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. If this has not yet occurred, 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.
Results:
See Finding as listed for Procedures 2 relating to the Citation 34179.5(c)(2).
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 3
Citation:
34179.5(c)(4) The review shall provide expenditure and revenue accounting information and identify transfers
and funding sources for the 2010 -11 and 2011 -12 fiscal years that reconciles balances, assets, and liabilities of
the successor agency on June 30, 2012 to those reported to the Controller for the 2009 -10 fiscal year.
Procedures Performed:
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 in the format set forth in the attached
schedule for the fiscal periods indicated in the schedule. For purposes of this summary, the
financial transactions should be presented using the modified accrual basis of accounting.
End of year balances for capital assets (in total) and long -term liabilities (in total) should be
presented at the bottom of this summary schedule for information purposes.
B. Ascertain that for each period presented, the total of revenues, expenditures, and transfers
accounts fully for the changes in equity from the previous fiscal period.
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. Describe in the report the type of
support provided for each fiscal period.
Results:
Because these procedures required by Section 34179.5(c)(4) pertain to the Successor Agency as a whole,
these procedures will be addressed in the report that is due on December 15, 2012.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 3
Citation:
34179.5(c)(5) A separate accounting for the balance for the Low and Moderate Income Housing Fund for all other
funds and accounts combined shall be made as follows:
(A) A statement of the total value of each fund as of June 30, 2012
Procedures Performed:
5. 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 and a listing of all assets of all
other funds of the Successor Agency as of June 30, 2012 (excluding the previously reported assets of
the Low and Moderate Income Housing Fund) for the report that is due December 15, 2012. When
this procedure is applied to 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.
The listings should be attached as an exhibit to the appropriate AUP report.
Results:
At June 30, 2012, a summary of assets of the Low and Moderate Income Housing Fund is as follows:
Low and
See Exhibit D for a listing of all assets of the Low and Moderate Income Housing Fund as of June 30, 2012.
Moderate Income
Housing Fund
ASSETS
Cash and investments
$ 6,766,911
Market value adjustments
9,456
Interest receivable
17,558
Notes receivable
7,168,983
Notes receivable - Offset
(7,168,983)
Property held for resale
1,268,272
Total assets
$ 8,062,197
See Exhibit D for a listing of all assets of the Low and Moderate Income Housing Fund as of June 30, 2012.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 4
Citation:
34179.5(c)(5)(B) An itemized statement listing any amounts that are legally restricted as to purpose and cannot
be provided to taxing entities. This could include the proceeds of any bonds, grant funds, or funds provided by
other governmental entities that place conditions on their use.
Procedures Performed:
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:
1. 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.)
2. Trace individual components of this computation to related account balances in the
accounting records, or to other supporting documentation (specify in the AUP report a
description of such documentation).
3. Obtain from the Successor Agency a copy of the legal document that sets forth the
restriction pertaining to these balances. Note in the AUP report the absence of language
restricting the use of the balances that were identified by the Successor Agency as
restricted.
Results:
There were no unspent bond proceeds at June 30, 2012. Therefore, these procedures are not
applicable.
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 account balances in the
accounting records, or to other supporting documentation (specify in the AUP report a
description of such documentation).
iii. Obtain from the Successor Agency a copy of the grant agreement that sets forth the
restriction pertaining to these balances. Note in the AUP report the absence of language
restricting the use of the balances that were identified by the Successor Agency as
restricted.
Results:
There were no grant proceeds and program income that are restricted by third parties at June
30, 2012. Therefore, these procedures are not applicable.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 5
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).
ii. Trace individual components of this computation to related account balances in the
accounting records, or to other supporting documentation (specify in the AUP report a
description of such documentation).
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the
restriction pertaining to these balances. Note in the AUP report the absence of language
restricting the use of the balances that were identified by Successor the Agency as
restricted.
Results:
There were no other restricted assets at June 30, 2012. Therefore, these procedures are not
applicable.
D. Attach the above mentioned Successor Agency prepared schedule(s) as an exhibit to the
AUP report. For each restriction identified on these schedules, 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 should be indicated in the
report.
Results:
There were no unspent bond proceeds, no grant proceeds and program income that are
restricted by third parties and no other legally restricted assets at June 30, 2012. Therefore, these
procedures are not applicable.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 6
Citation:
34179.5(c)(5)(C) An itemized statement of the values of any assets that are not cash or cash equivalents. This may
include physical assets, land, records, and equipment. For the purpose of this accounting, physical assets may be
valued at purchase cost or at any recently estimated market value. The statement shall list separately housing -
related assets.
Procedures Performed:
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.
Results:
See Exhibit E attached for a listing of all Arcadia RDA Low and Moderate Income Housing Fund
assets that are not liquid or otherwise available for distribution as of June 30, 2012.
Note that all the non - liquid or otherwise unavailable assets of the Arcadia RDA Low and
Moderate Income Housing Fund are listed at purchase cost.
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.
Results:
No differences were noted.
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.
Results:
No differences were noted.
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.
Results:
The assets listed at 7(A) are not listed at recently estimated market value.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 7
Citation:
34179.5(c)(5)(D) An itemized listing of any current balances that are legally or contractually dedicated or
restricted for the funding of an enforceable obligation that identifies the nature of the dedication or restriction and
the specific enforceable obligation. In addition, the successor agency shall provide a listing of all approved
enforceable obligations that includes a projection of annual spending requirements to satisfy each obligation and a
projection of annual revenues available to fund those requirements. If a review finds that future revenues together
with dedicated or restricted balances are insufficient to fund future obligations and thus retention of current
balances is required, it shall identify the amount of current balances necessary for retention. The review shall also
detail the projected property tax revenues and other general purpose revenues to be received by the successor
agency, together with both the amount and timing of the bond debt service payments of the successor agency, for
the period in which the oversight board anticipates the successor agency will have insufficient property tax
revenue to pay the specified obligations.
Procedures Performed:
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 specifies the
dedication of existing asset balances toward payment of that obligation.
i. 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. Attached 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.
Results:
Reviewed Arcadia Successor Agency's Recognized Obligation Payment Schedules (ROPS) for
periods of July 1, 2012 to December 31, 2012 and January 1, 2013 to June 30, 2013 and noted an
enforceable obligation to be satisfied by cash and investments in the former RDA Low and
Moderate Income Housing Fund.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 8
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 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 revenues:
a. Obtain from the Successor Agency its assumptions for the forecasted annual
revenues and disclose in the report major assumptions associated with the
projections.
Results:
The Arcadia Successor Agency does not believe that future revenues together with balances
dedicated or restricted to enforceable obligations are insufficient to fund future obligation
payments and thus retention of current balances is required.
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 disclose major
assumptions associated with the projections.
iii. Obtain the assumptions for the forecasted other general purpose revenues and disclose
major assumptions associated with the projections.
Results:
The former Arcadia RDA Low and Moderate Income Housing Fund did not have any bond
debt service payments as of June 30, 2012. Therefore, these procedures are not applicable.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 9
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.
Results:
Reviewed Arcadia Successor Agency's Recognized Obligation Payment Schedules (ROPS) for
periods of July 1, 2012 to December 31, 2012 and January 1, 2013 to June 30, 2013 and noted an
enforceable obligation to be satisfied by cash and investments in the former RDA Low and
Moderate Income Housing Fund.
Reviewed the supporting documentation for the one ROP identified related to the former
Arcadia RDA Low and Moderate Income Housing Fund and noted that this supporting
documentation did not provide a basis for the amount claimed on the ROPS of $3,400,000. The
amount supported by the supporting documents was $3,355,565. Since this ROP is not payable
until January 2015, the Arcadia Successor Agency does not anticipate it will receive any monies
from the Redevelopment Property Tax Trust Fund and otherwise does not have any revenues to
pay this obligation. Therefore, cash balances as of June 30, 2012 need to be retained to satisfy
the obligation on the Recognized Obligation Payment Schedule (ROPS) for the period of July 1,
2012 through June 30, 2013. The Arcadia Successor Agency believes $3,355,565 should be
retained for the ROP identified as related to the former Arcadia RDA Low and Moderate
Income Housing Fund.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 10
Citation:
34179.5(c)(5)(E) An itemized list and analysis of any amounts of current balances that are needed to satisfy
obligations that will be placed on the Recognized Obligation Payment Schedules for the current fiscal year.
Procedures Performed:
9. 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 (BOPS) 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 BOPS, the Successor Agency should add 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. Include this schedule as an attachment to the AUP report.
Results:
Reviewed Arcadia Successor Agency's Recognized Obligation Payment Schedules (ROPS) for periods
of July 1, 2012 to December 31, 2012 and January 1, 2013 to June 30, 2013 and noted an enforceable
obligation to be satisfied by cash and investments in the former RDA Low and Moderate Income
Housing Fund.
Reviewed the supporting documentation for the one ROP identified related to the former Arcadia RDA
Low and Moderate Income Housing Fund and noted that this supporting documentation did not
provide a basis for the amount claimed on the ROPS of $3,400,000. The amount supported by the
supporting documents was $3,355,565. Since this ROP is not payable until January 2015, the Arcadia
Successor Agency does not anticipate it will receive any monies from the Redevelopment Property Tax
Trust Fund and otherwise does not have any revenues to pay this obligation. Therefore, cash balances
as of June 30, 2012 need to be retained to satisfy the obligation on the Recognized Obligation Payment
Schedule (ROPS) for the period of July 1, 2012 through June 30, 2013. The Arcadia Successor Agency
believes $3,355,565 should be retained for the ROP identified as related to the former Arcadia RDA
Low and Moderate Income Housing Fund.
Successor Agency to the Arcadia Redevelopment Agency
Agreed Upon Procedures - AB 1484 Due Diligence Review
Low and Moderate Income Housing Fund
Page 11
Citation:
34179.5(c)(6) The review shall total the net balances available after deducting the total amounts described in
subparagraphs (B) to (E), inclusive, of paragraph (5). The review shall add any amounts that were transferred as
identified in paragraphs (2) and (3) of subdivision (c) if an enforceable obligation to make that transfer did not
exist. The resulting sum shall be available for allocation to affected taxing entities pursuant to Section 34179.6. It
shall be a rebuttable presumption that cash and cash equivalent balances available to the successor agency are
available and sufficient to disburse the amount determined in this paragraph to taxing entities. If the review finds
that there are insufficient cash balances to transfer or that cash or cash equivalents are specifically obligated to the
purposes described in subparagraphs (B), (D), and (E) of paragraph (5) in such amounts that there is insufficient
cash to provide the full amount determined pursuant to this paragraph, that amount shall be demonstrated in an
additional itemized schedule.
Procedures Performed:
10. Include (or present) a schedule detailing the computation of the Balance Available for Allocation to
Affected Taxing Entities. Amounts included in the calculation should agree to the results of the
procedures performed in each section above. The schedule should also include 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 should be agreed to
evidence of payment. The attached example summary schedule may be considered for this
purpose. Separate schedules should be completed for the Low and Moderate Income Housing Fund
and for all other funds combined (excluding the Low and Moderate Income Housing Fund).
Results:
See Exhibit F attached for schedule detailing the computation of the Balance Available for Allocation to Affected
Taxing Entities.
Management Representation Letter
11. Obtain a representation letter from Successor Agency management acknowledging their
responsibility for the data provided to the practitioner and the data presented in the report or in
any attachments to the report. Included in the representations should be 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. Management's refusal to sign the representation letter should be noted in the AUP report
as required by attestation standards.
Results:
See Exhibit G attached for the Management Representation Letter.
EXHIBITS
Exhibit A - Successor Agency Resolution No. 6
Exhibit B - Letter from California Department of Finance dated August 31, 2012
Exhibit C - Housing Assets Transfer Form
Exhibit D - Listing of all assets of Low and Moderate Income Housing Fund as of June 30, 2012
Exhibit E - Non - Liquid Assets Available for Distribution
Exhibit F - Computation of the Balance Available for Allocation to Affected Taxing Entities
Exhibit G - Management Representation Letter
Successor Agency to the Arcadia Redevelopment Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30, 2012
EXHIBIT A
Successor Agency Resolution No. 6
t.
RESOLUTION NO. 6
A RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR
AGENCY TO THE ARCADIA REDEVELOPMENT AGENCY DIRECTING
AND CONFIRMING THE TRANSFER OF HOUSING ASSETS AND
FUNCTIONS TO THE LOS ANGELES COUNTY HOUSING AUTHORITY
WHEREAS, pursuant to Health and Safety Code section 34173(d), the City of
Arcadia ('RDA Successor Agency") is the successor agency to the dissolved Arcadia
Redevelopment Agency ( "Agency'), confirmed by a vote of the Arcadia City Council at
its meeting on January 3, 2012; and
WHEREAS, pursuant to Health and Safety Code section 34176, the City of
Arcadia, as the entity that authorized the creation of the Agency, elected not to retain
the housing assets and functions previously performed by the Agency, and instead
elected to transfer all rights, powers, assets, liabilities, duties and obligations associated
with the housing activities of the Agency, excluding any amounts on deposit in the Low
and Moderate Income Housing Fund, to the Los Angeles County Housing Authority
( "Authority"), as provided in Resolution No. 6815 adopted on January 31, 2012; and
WHEREAS, pursuant to Health and Safety Code section 34177(g), the RDA
Successor Agency is required to effectuate the transfer of housing functions and assets
to the appropriate entity designated pursuant to Health and Safety Code section 34176;
and
WHEREAS, a list of all Agency housing assets recommended to be transferred
by the RDA Successor Agency to the Authority is attached to this Resolution as Exhibit
"A ",; and
WHEREAS, pursuant to Health and Safety Code section 34181(c), the RDA
Successor Agency's Oversight Board ( "Oversight Board ") is to direct the RDA
Successor Agency to transfer housing responsibilities and all rights, powers, duties and
obligations to the appropriate entity pursuant to Health and Safety Code section 34176;
NOW, THEREFORE, THE OVERSIGHT BOARD TO THE SUCCESSOR
AGENCY TO THE ARCADIA REDEVELOPMENT AGENCY, DOES HEREBY
RESOLVE AS FOLLOWS:
SECTION 1. Recitals. The Recitals set forth above are true and correct and
are incorporated into this Resolution by this reference.
SECTION 2. CEQA Compliance. The recommendation to transfer housing
assets and functions and encumbered Housing Fund monies through this Resolution
does not commit the RDA Successor Agency to any action that may have a significant
effect on the environment. As a result, such action does not constitute a project subject
to the requirements of the California Environmental Quality Act. The Oversight Board
Secretary, acting on behalf of the RDA Successor Agency, is authorized and directed to
prepare a Notice of Exemption within five (5) days following the date of adoption of this
Resolution.
SECTION 3. Designation and Transfer of Housing Assets and Functions. The
Oversight Board hereby directs and confirms the transfer of the designated assets set
forth in Exhibit A attached to this Resolution as the housing assets of the Agency to be
transferred to the Authority, along with the transfer of all rights, powers, liabilities, duties
and obligations associated with the housing activities of the Agency, to the Authority
pursuant to Health and Safety Code sections 34176, 34177 and 34181.
2
SECTION 4. Implementation. The City Manager or his designee, acting on
behalf of the RDA Successor Agency, is hereby authorized and directed to take any
action necessary to carry out the purposes of this Resolution and comply with
applicable law.
SECTION 5. Severability. If any provision of this Resolution or the application
of any such provision to any person or circumstance is held invalid, such invalidity shall
not affect other provisions or applications of this Resolution that can be given effect
without the invalid provision or application, and to this end the provisions of this
Resolution are severable. The Oversight Board declares that the Oversight Board
would have adopted this Resolution irrespective of the invalidity of any particular portion
of this Resolution.
SECTION 7. Effective Date. This Resolution shall become effective three
days after submission to
the
Department of Finance provided the Department
of
Finance does not exercise
its
right under Health and Safety Code Section 34181
to
challenge this action by the Oversight Board,
SECTION 8. Certification. The Oversight Board Secretary, acting on behalf
of the Oversight Board shall certify to the adoption of this Resolution.
[SIGNATURES ON THE NEXT PAGE]
3
Passed, approved and adopted this �? z� day of a 2012.
le-
it of th versight Boar
ATTEST'
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS:
CITY OF ARCADIA )
I, JERRY SCHWARTZ, Secretary of the Oversight Board of the Successor Agency
to the Redevelopment Agency of the City of Arcadia, hereby certifies that the
foregoing Resolution No. 6 was passed and adopted by the Oversight Board of the
Successor Agency to the Redevelopment Agency of the City of Arcadia, signed by
the Chairperson and attested to by the Secretary at a regular meeting of said Board
held on the 22nd day of May, 2012 and that said Resolution was adopted by the
following vote, to wit:
AYES: Board Members Kovacic, Kruckeberg, Beranek, vanPelt, and Chapman
NOES: None
ABSENT: Board Member Hwang
ABSTAIN: Board Member Shawn
R
EXHIBIT A
OUSING ASSETS Qr THE DISSOLVED ARCADIA RED;rv;=t NT AGENCY
[Attached behind this page)
Exhibit A to Oversight Board Resolution No. 6
Affordable Housing Assets — Successor Agency to the Arcadia Redevelopment Agency
On February 1, 2012, the Arcadia Redevelopment Agency had a financial interest in three completed
affordable housing projects owned by private parties, and it owned two adjoining vacant parcels on
which it had pursued an affordable housing project when new redevelopment agreements became
prohibited. Pictures or aerial photographs are included as part of Exhibit A. These properties will be
transferred to the Los Angeles County Housing Authority with the approval of Resolution No. 6.
1. Heritage Park Senior Housing Project — 54 unit low income senior housing project located at 150
West Las Tunas Drive, west of Santa Anita Avenue. Heritage Park was built with a combination
of financing mechanisms, including, low income housing tax credits, 4% tax exempt bonds,
conventional bank loan, and a long term loan from redevelopment low /mod funds ($1.8
million). The current owner and property manager is USA Properties. The Agency's loan is
secured by residual receipts from the project. Residual receipts have been received on an
annual basis by the Agency since 2009. Heritage Park opened in 2004. The project has a 55 year
affordability covenant that was required by the Agency and the tax credit investor.
2. Campus Commons Senior Housing Project — 43 unit low income senior housing project located
at 16 Campus Drive, next to Arcadia High School. Campus Commons was built with a
combination of financing mechanisms, including low income housing tax credits, 4% tax exempt
bonds, conventional bank loan, and a long term loan from redevelopment low /mod funds ($6.9
million). The Agency has given the developer $3.5 million of the loan to date, with the rest to be
paid in January 2015. This is due to the rule of proportionality, in which Arcadia had spent all
that it could on affordable senior housing through 2014. The owner is Ashwood Construction,
and the property is managed by Winn Property Management. The Agency loan is secured by
residual receipts from the project. Campus Commons opened in April 2012. The project has a
55 year affordability covenant that was required by the Agency and the tax credit investor.
3. Alta Street Classics Townhome Project — Six (6) unit moderate income, first time homebuyer,
townhome project. It is located at 119 -121 Alta Street. The project includes three 2 bedroom,
2 bath townhomes, and three 3 bedroom, 2 bath townhomes. The Agency provided silent
second trust deeds to keep the units affordable to moderate income buyers. The silent second
trust deeds on the initial purchases were the equivalent to 2/3 of the value of the unit. Two of
the six units have sold and are now on their second owners. The Agency receives 2/3 of any
profits when a unit is sold as a return on its investment in the silent second trust deeds. Alta
Street Classics opened in 2008. The project is intended to remain affordable for 45 years.
4. 15 & 19 Lucile Street Properties — Two adjoining vacant residential properties owned by the
Agency. The total site is 13,440 sq. ft. As the result of an RFP process, the Agency selected
Gangi Development of Burbank to develop a nine (9) unit low income family apartment project.
The project received its entitlements in 2011. The Agency and Gangl had virtually completed an
Affordable Housing Agreement for the project when the State Supreme Court put a stay on new
agreements, keeping the final agreement from being considered by the Arcadia City Council.
Successor Agency to the Arcadia Redevelopment Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30, 2012
EXHIBIT B
Letter from California Department of Finance dated August 31, 2012
Q �,NT , A,
a u i
N4 1) o
i D E PA R /T�MN C E NT OF
August 31, 2012
Mr. Daniel Rofoli, Consultant
Housing Authority of Los Angeles County
2 Coral Circle
Monterey Park, CA 91755
Dear Mr. Rofoli:
Subject: Housing Assets Transfer Form
EDMUND G. BROWN JR. - GOVERNOR
9l 5 L STREET [ SACRAMENTO CA E 95814-37De N www.DOr.C^.r.Dv
Pursuant to Health and Safety Code (HSC) section 34176 (a) (2), the Housing Authority for the
County of Los Angeles (Authority) assuming the housing functions of the City of Arcadia
Successor Agency submitted a Housing Assets Transfer Form (Form). The Authority submitted
the Form to the California Department of Finance (Finance) on August 1, 2012 for the period
February 1, 2012 through August 1, 2012.
HSC section 34176 (e) defines a housing asset. Assets transferred deemed not to be a housing
asset shall be returned to the successor agency. Based on a sample of line Items reviewed and
the application of law, Finance is objecting to the following assets or transfers of assets
identified on your Form:
All items listed on Exhibits A— The Authority did not complete the required information for each
of the line items listed in Exhibits A. The required information was marked "TBD." As such, we
could not determine the appropriateness of the transfers of the assets.
With respect to the items objected to above, please provide pertinent information to
demonstrate that these items are for low and moderate income housing purposes. The
additional information should be provided to Finance during the Meet and Confer process which
should be requested within five business days of receiving this letter.
Please direct inquiries to Kylie Le, Supervisor or Michael Barr, Lead Analyst at
(916) 445 -1546.
Sincerely,
STE E S; -
Local Government Consultant
cc: On following page
Mr. Rofoli
August 31, 2012
Page 2
cc, Ms. Jacquieline Rodarte, Project Manager, Los Angeles County
Ms. Kristine Burns, Manager, Community Redevelopment Administration Section,
Property Tax Division, Los Angeles County Auditor Controller's Office
Mr. Jerry Schwartz, Economic Development Manger, City of Arcadia
California State Controller's Office
Successor Agency to the Arcadia Redevelopment Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30, 2012
EXHIBIT C
Housing Assets Transfer Form
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Successor Agency to the Arcadia Redevelopment Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30, 2012
EXHIBIT D
Listing of All Assets of Low and Moderate Income Housing Fund
As of June 30, 2012
See Inventory of Assets Received Pursuant to Health and Safety Code
section 34176 (a)(2) for Notes Receivable Details.
Low and
Moderate Income
Housing Fund
ASSETS
Cash and investments
$ 6,766,911
Market value adjustments
9,456
Interest receivable
17,558
Notes receivable
7,168,983
Notes receivable - Offset
(7,168,983)
Property held for resale
1,268,272
Total assets
$ 8,062,197
Property Held for Resale
19 Lucille Street
$ 1,268,272
Total property held for resale
$ 1,268,272
See Inventory of Assets Received Pursuant to Health and Safety Code
section 34176 (a)(2) for Notes Receivable Details.
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Successor Agency to the Arcadia Redevelopment Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30, 2012
EXHIBIT E
Non - Liquid Assets Available for Distribution
As of June 30, 2012
See Inventory of Assets Received Pursuant to Health and Safety Code
section 34176 (a)(2) for Notes Receivable Details.
Non - Liquid
Assets as of June
30, 2012
ASSETS
Market value adjustments
$ 9,456
Notes receivable
7,168,983
Notes receivable - Allowance
(7,168,983)
Property held for resale
1,268,272
Total assets
$ 1,277,728
Property Held for Resale
19 Lucille Street
$ 1,268,272
Total property held for resale
$ 1,268,272
See Inventory of Assets Received Pursuant to Health and Safety Code
section 34176 (a)(2) for Notes Receivable Details.
74
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Successor Agency to the Arcadia Redevelopment Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30, 2012
EXHIBIT F
Computation of the Balance Available for Allocation to Affected Taxing Entities
Total amount of assets held by the Successor Agency as of June 30, 2012 $ 8,062,197
Less assets legally restricted for uses specified by debt
covenants, grant restrictions, or restrictions imposed by other
governments.
Less assets that are not cash or cash equivalents (i.e. physical assets) (1,277,728)
Less balances that are legally restricted for the funding of an enforceable
obligation (net of projected annual revenues available to fund those obligations)
Less balances needed to satisfy ROPS for the current fiscal year (3,355,565)
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
Amount to be remitted to county for disbursement to taxing entities $ 3,428,904
Note that separate computations are required for the Low and Moderate Income Housing Fund held by the
Successor Agency and for all other funds held by the Successor Agency.
NOTES: For each line shown above, an Exhibit is attached showing the composition of the summarized amount.
If the review finds that there are insufficient funds available to provide the full
amount due, the cause of the insufficiency should be demonstrated in a separate schedule.
Successor Agency to the Arcadia Redevelopment Agency
Low and Moderate Income Housing
Agreed Upon Procedures - AB 1484
For the year ended June 30, 2012
EXHIBIT G
Management Representation Letter
September 27, 2012
�de�n+tN
Pun & McGeady LLP
f. HQS
9 Corporate Park, Suite 130
Irvine, California 92606
Cityof In connection with your engagement to apply agreed -upon procedures relating to
Arcad'a the Low and Moderate Income Housing Fund Due Diligence Review as of June 30,
2012, which were agreed to by the California State Controller's Office and the
California State Department of Finance, solely to assist the Oversight Board of the
Successor Agency to the Arcadia Redevelopment Agency ( "Successor Agency ") that
our dissolved redevelopment agency is complying with its statutory requirements
Administrative with respect to Assembly Bill ( "AB ") 1484 and we confirm to the best of our
Services knowledge and belief, the following representations made to you during your
e
Department ngagement.
1. The City of Arcadia is responsible for compliance with California Health and
Hue C. Quach Safety Code (HSC) Section 34179.5.
Director of
Adminirtratine Services 2. We are responsible for adherence to the requirements of AB 1484 as applicable to
the successor agency and the sponsoring organization of the dissolved
redevelopment agency.
3. We are responsible for the presentation of the exhibits in the Low and Moderate
Income Housing Fund Due Diligence agreed -upon procedures report in
accordance with the California Health and Safety Code (HSC) Section 34179.5
4. As of June 30, 2012, we are not aware of any modifications that need to be made
to the Low and Moderate Income Housing Fund Due Diligence Review exhibits
for them to be presented in accordance with California Health and Safety Code
Sections 34179.5(c)(1) through 34179.5(c)(3) and Sections 34179.5(c)(5) through
34179.5(c)(6).
5. The City of Arcadia approves the acceptability of the procedures that have been
developed by the California Department of Finance in accordance with
California Health and Safety Code (HSC) Section 34179.5.
6. We have disclosed to you any known matters contradicting the information
contained in the Low and Moderate Income Housing Fund Due Diligence
Review AUP report.
7. There have been no communications from regulatory agencies, internal auditors,
Finance and other independent practitioners or consultants relating to Low and Moderate
(626) 574 -5424 Income Housing Fund Due Diligence Review, including communications
(626) 821 -0092 Fax received between June 30, 2012 and September 27, 2012.
Human Resources
(626) 574 -5405
(626) 445 -4918 Fax
240 West Huntington Drive
Post Office Box 60021
Arcadia, CA 91066 -6021.
www 6arcadia.ca.us
Pun & McGeady LLP
Management Representation Letter
Page 2
8, We have made available to you all information that we believe is relevant to Low
and Moderate Income Housing Fund Due Diligence Review.
9. We have responded fully to all inquiries made to us by you during the
engagement.
10. No events have occurred subsequent to June 30, 2012 that would require
adjustment to or modification of the information contained in the Low and
Moderate Income Housing Fund Due Diligence Review AUP report and its
related exhibits.
11, 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, 201.2 that have not been
properly identified in the AUP report and its related exhibits.
12. Your report is intended solely for the information and use of the City of Arcadia,
Los Angeles County Housing Authority, the California Department of Finance,
the California State Controller's Office, and the County of Los Angeles' Auditor -
Controller's Office and is not intended to be and should not be used by anyone
other than those specified parties.
To the best of our knowledge and belief, no events have occurred subsequent to the
date of your report that would have a significant impact upon the agreed upon
procedures that you performed.
City of Arcadia, as the sponsoring organization and as representatives of the
Successor Agency to the Arcadia Redevelopment Agency:
Hue Qua
Administrative Services Director
Shannon Huang
Financial Services Manager
a /,q 7 //.P-
Date
q1 �7 If 1�
Date