HomeMy WebLinkAboutResolution No. OB-12-12RESOLUTION NO. OB -12-12
A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR
AGENCY TO THE FORMER DEVELOPMENT AGENCY OF THE CITY
OF AZUSA ACKNOWLEDGING THE RECEIPT OF THE REVIEW OF THE
LOW AND MODERATE INCOME HOUSING FUND CONDUCTED
PURSUANT TO HEALTH AND SAFETY CODE SECTION 34179.5
WHEREAS, pursuant to Health and Safety Code Section 34175(b) and the California
Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosanlos,
et al. (53 CalAth 231(2011)), on February 1, 2012; all assets, properties, contracts, leases,
books and records, buildings, and equipment of the former Redevelopment Agency transferred
to the control of the Successor Agency to the former Redevelopment Agency ("Successor
Agency') by operation of law.
WHEREAS, Health and Safety Code Section 34179.5 requires the Successor Agency to
employ a licensed accountant, approved by the county auditor -controller, to conduct a due
diligence review ("DDR") to determine the unobligated balances available for transfer to taxing
entities.
WHEREAS, Health and Safety Code Section 34179.6 requires the Successor Agency to
submit the results of the review conducted pursuant to Section 34179.5 for the Low and
Moderate Income Housing Fund ("LMIHF") and specifically the amount of cash and cash
equivalents determined to be available for allocation to taxing entities to the Successor
Agency's Oversight Board ("Board") for the Board's review and approval.
WHEREAS, Pursuant to Health and Safety Code Section 34179.6(b), upon receipt of the
DDR, and at least five business days before the Board considers the approval of the DDR, the
Board must hold a public comment session (the "Public Comment Session") at which time the
public has an opportunity to hear and be heard on the results of the DDR.
WHEREAS, On the date of this Resolution, the Board will hold the Public Comment
Session pursuant to Health and Safety Code Section 34179.6(b).
NOW; THEREFORE, the Oversight Board of the Successor Agency to the farmer
Redevelopment Agency of the City of Azusa does hereby resolve as follows:
Section 1. The above recitals are true and correct and are a substantive part of this
Resolution.
Section 2. The Oversight Board hereby acknowledges receipt of the Due Diligence
Review.
Section 3. The Successor Agency and staff are hereby authorized and directed,
jointly and severally, to do any and all things which they may deem
necessary or advisable to effectuate this Resolution.
APPROVED AND ADOPTED THIS 4th day of October, 2012.
Chair
Oversight Board
Successor Agency to the Former Redevelopment Agency
of the City of Azusa
ATTEST:
As Stant City Clerk
Oversight Board
Successor Agency to the Former Redevelopment Agency
of the City of Azusa
I, HEREBY CERTIFY that the foregoing Resolution No. OB -12-12 was duly adopted by
the Board Members of the Oversight Board of the City of Azusa at a special meeting thereof on
the 4th day of October 2012, by the following vote of Board Members:
AYES: BOARD MEMBERS: GONZALES, LOWE, PARAGAS, WOODS
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: FRICK, ENGLUND, ROMERO
Assistant City Clerk
Oversight Board
Successor Agency to the Former Redevelopment Agency
of the City of Azusa
EXHIBIT A
COUNTY AUDITOR -CONTROLLER ACCOUNTING FIRM APPROVAL
[Attached behind this page]
Exhibit A
°F,DSgH COUNTY OF LOS ANGELES
%p °> DEPARTMENT OF AUDITOR -CONTROLLER
i KENNETH HAHN HALL OF ADMINISTRATION
y 500 WEST TEMPLE STREET, ROOM 525
+x - LOS ANGELES, CALIFORNIA 90012-3873
�4UTOR PHONE: (213) 974-8301 FAX: (213) 626-5427
WENDY L. WATANABE
ADDRESS ALL CORRESPONDENCE TO:
AUDITOR -CONTROLLER
AUDIT DIVISION
350 S. FIGUEROA ST„ BT" FLOOR
JUDI E. THOMAS
LOS ANGELES, CA 90071
CHIEF DEPUTY
September 6, 2012
VIA ELECTRONIC MAIL
TO: Susan Paragas
Interim Finance Director
City of Azusa
FROM: Robert Campbell, Chief
Audit Division 1
SUBJECT: APPROVAL OF SIMPSON & SIMPSON CPAs TO CONDUCT A DUE
DILIGENCE REVIEW PURSUANT TO AB 1484
We have reviewed and approve your request to hire Simpson & Simpson CPAs to
conduct a due diligence review of the successor agency for the City of Azusa, in
accordance with Health and Safety Code Section 34179.5(a).
We have verified that Simpson & Simpson CPAs is licensed and in good standing with
the California Board of Accountancy, and does not have any disciplinary actions or
license restrictions as of the date of our review. We also reviewed information you
provided regarding the firm's local government accounting experience and its
relationship, if any, to the former redevelopment agency of the City of Azusa, the
successor agency, and the City of Asuza.
Based on our review, we found nothing that would disqualify Simpson & Simpson CPAs
from conducting the due diligence review.
Please contact Ken Van Orden of my staff at kvanorden(a?auditor.lacounty.4ov or (213)
253-0160, if you have questions or need additional information.
RGC:MP:KVO
c: Wendy L. Watanabe, Auditor -Controller
Help Conserve Paper— Print Double -Sided
"To Enrich Lives Through Effective and Caring Service"
EXI41BIT B
SIMPSON & SIMPSON ENGAGEMENT LETTER
[Attached behind this page]
Exhibit B
3600 VALSHIAEBOULEVAFD. SUITE 1710
LOS ANGELES, CA 90010
(2131736-6664 TELEPHONE
1213) 7366692 FAX
ww.JmP�anantltlmisoncPa+Lom
SIMPSON & SIMPSON
cERnFgDPusucAccou�rtuns
FOUADINGPARTNERS
0RAL4ARDC.S%P60N.CPA
MELBA W. SIMPSON, CPA
September 6, 2012
City of Azusa- Successor Agency
Ms. Susan Paragas
Interim Finance Director
213 E. Foothill Blvd.
Azusa, CA 91702
We are pleased to confirm our understanding of the nature and limitations of the services we are
to provide for the City of Azusa Successor Agency (Successor Agency).
We will apply the agreed-upon procedures associated with AB 1484 Section 34179.5(c)(1)
through 34179.5(c)(3) and Section 34179.5(c)(5) through 34179.5(c)(6) separately to (a) Low
and Moderate Income Housing Fund of the Successor Agency and to (b) all other funds of the
Successor Agency combined (excluding the Low and Moderate Income Housing Fund); and
Section 34179.5(c)(4) to the Successor Agency as a whole. These procedures, as listed in the
attached Exhibit A, were developed by the California Society of CPA with input from the State
Controller's Office and the Department of Finance. This engagement is solely to assist the
Successor Agency, State Controller's Office, Department of Finance, and County of Los Angeles
(County) to determine the unobligated balances available for transfer to taxing entities. Our
engagement to apply agreed upon procedures will be conducted in accordance with attestation
standards established by the American Institute of Certified Public Accountants. The sufficiency
of the procedures is solely the responsibility of the State Controller's Office and Successor
Agency. Consequently, we make no representation regarding the sufficiency of the procedures
described in Exhibit A either for the purpose for which this report has been requested or for any
other purpose. If, for any reason, we are unable to complete the procedures, we will describe any
restrictions on the performance of the procedures in our report, or will not issue a report as a
result of this engagement.
Because the agreed-upon procedures listed in Exhibit A do not constitute an audit as defined
under Generally Accepted Accounting Principles, we will not express an opinion on the
procedures performed. In addition, we have no obligation to perform any procedures beyond
those listed in Exhibit A.
We will submit a report listing the procedures performed and our findings. This report is
intended solely for the use of the Successor Agency, City of Azusa, applicable State agencies,
and County, and should not be used by anyone other than these specified parties. Our report will
contain a paragraph indicating that had we performed additional procedures under Generally
CPAW
Tho CPA. Nr Umlarc¢t w TM Value`
Exhibit B
Cip, ojAEusa Srrccessnr Agency, Engageareal Lerlery Agreed -Upon Prncerinres 09/6/12
Page 2 of 3
Accepted Accounting Principles, other matters might have come to our attention that would have
been reported to you.
You are responsible for the compliance with Section 34179.5(c)(1) through 34179.5(c)(6). You
are responsible for the presentation of the unobligated balances available for transfer to taxing
entities in accordance with the criteria set forth in AB 1484. You are also responsible for the
preparation of the expenditure and revenue accounting information which identifies transfers and
funding sources for the 2010-2011 and 2011-2012 fiscal years reconciled balances, assets and
liabilities of the Successor Agency on June 30, 2012 to those reported to the State Controller for
the 2009-10 fiscal year. You are also responsible for making all management decisions and
performing all management functions; for designating an individual with suitable skill,
knowledge, and/or experience to oversee the services we provide; and for evaluating the
adequacy and results of those services and accepting responsibility for them.
The attest documentation (working papers) for this engagement is the property of Simpson &
Simpson, CPAs and constitutes confidential information. However, we may be requested to
make certain attest documentation available to the County Auditor -Controller, the State
Controller's Office or the Department of Finance pursuant to authority given to it by law or
regulation. If requested, access to such attest documentation will be provided under supervision
of Simpson & Simpson's personnel. Furthermore, upon request, we may provide copies of
selected attest documentation to the County Auditor -Controller, the State Controller's Office or
the Department of Finance. We will notify you of any such request in advance. The County
Auditor -Controller, the State Controller's Office and the Department of Finance may intend, or
decide, to distribute the copies or information contained therein to others, including
governmental agencies.
Grace Yuen is the engagement partner and is responsible for supervising the engagement and
signing the report or authorizing another individual to sign it. We expect to begin our review on
approximately September 10, 2012, and complete the review of the Low and Moderate Income
Housing Fund by September 24, 2012. We expect to complete the review of the remaining funds
and accounts no later than October 31, 2012.
At the conclusion of our engagement, we will require a representation letter from the Successor
Agency management that, among other things, will acknowledge the management's
responsibility for the data provided to us and the data presented in the agreed-upon procedures
report or in any attachments or exhibits to the report. Also to be included in the representation
letter 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 the agreed-upon procedures report and its related exhibits.
Our fees for these services will be $18,000. The fee estimate is based on anticipated cooperation
from your personnel and the assumption that unexpected circumstances will not be encountered
during the engagement. If significant additional time is necessary, we will discuss it with you
007 of Azusa SuccessorAgency, Engagement Letter, Agreed -Upon Procedures 09/6/12
Page 3 of 3
Exhibit B
and arrive at a new fee estimate before we incur the additional costs. Our invoices for these fees
will be rendered each month as work progresses and are payable on presentation. In accordance
with our firm policies, work may be suspended if your account becomes 30 days or more
overdue and will not be resumed until your account is paid in full. If we elect to terminate our
services for nonpayment, our engagement will be deemed to have been completed upon written
notification of termination, even if we have not completed our report.
We appreciate the opportunity to assist you and believe this letter accurately summarizes the
significant terms of our engagement. If you have any questions, please let us know. If you agree
with the terns of our engagement as described in this letter, please sign the enclosed copy and
return it to us.
If the need for additional procedures arises, our agreement with you will need to be revised. It is
customary for us to enumerate these revisions in an addendum to this letter. If additional
specified parties of the report are added, we will require that they acknowledge in writing their
responsibility for the sufficiency of procedures.
Very truly yours,
This letter correctly sets forth th nderstanding of the City of Azusa- Successor Agency.
By:
Title:
Date: 01 / 0(. 11 Z
Exhibit B
Attaclunent A
List of Procedures for Due Diligence Review
General information regarding these procedures:
1. The procedures associated with Sections 34179.5(c)(1) through 34179.5(c)(3) and
Sections 34179.5(c)(5) through 34179.5(c)(6) are to be applied separately to (a) the Low
and Moderate Income Housing Fund of the Successor Agency and to (b) all other funds
of the Successor Agency combined (excluding the Low and Moderate Income Housing
Fund).
2. The due date for the report associated with the Low and Moderate Income Housing Fund
is October 1, 2012.
3. The due date for the report associated with all other funds of the Successor Agency
combined (excluding the Low and Moderate Income Housing Fund) is December 15,
2012.
4. Because the procedures required by Section 34179.5(c)(4) pertain to the Successor
Agency as a whole, these procedures should be addressed in the report that is due on
December 15, 2012.
Fiscal year references below refer to fiscal years ending on June 30. This language should be
modified for those agencies that have a different fiscal year-end.
For purposes of the procedures below and the related exhibits, the amount of the assets presented
should be based upon generally accepted accounting principles (GAAP), unless otherwise noted.
To the extent the procedures listed below are duplicative to the agreed upon procedures that were
performed pursuant to HSC 34182 (a)(1), it is acceptable to obtain and use information from the
HSC 34182 (a)(1) procedures for purposes of this due diligence review without having to re-
perform the procedures. When this is done, the due diligence report should refer to the report that
was issued for the agreed upon procedures performed under HSC 34182 (a)(1).
Certain assets may qualify as a deduction under more than one category of deduction. In such
cases, care should be taken to ensure that such assets have been included as a deduction in the
summary schedule only once.
Citation:
34179.5(c)(1) The dollar value of assets transferred from the farmer redevelopment agency
to the successor agency on or about Februmy 1. 2012.
Suggested Procedure(s):
I. 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.
=11141M
Attachinent A
Citation:
34179.5(c)(2) The dollar value of assels and cash and cash equivalents transferred after
Janna)), 1, 2011, through Jure 30, 2012, bit the redevelopment agency or the successor
agency to the city, counly, or cit), and county that formed the redevelopment agency and the
ptapose gjeach transfer. The review shall provide documentation of any enforceable
obligation that required the transfer.
Suggested Procedure(s):
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.
Citation:
34179.5(c)(3) The dollar vahte of m(), cash a• cash equivalents transferred after January 1,
2011, through June 30, 2012, by the redevelopment agenci, 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.
Suggested Procedure(s):
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:
Exhibit B
Attachment A
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.
Citation:
34179.5(c)(4) The review shall provide expenditure and revenue accounting information and
identh, transfers and fording sources for the 2010-11 and 2011-12 fiscal years that
reconciles balances, assets, and liabilities of the successor agennl om June 30, 2012 to dose
reported to the Controller for the 2009-10 fiscal year.
Suggested Procedure(s):
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.
Exhibit B
Attachment A
Citation:
34179.5(c)(5) A separate accounting for the balance for the Loin and Moderate Income
Housing Find for all other.fiurnds and accounts combined shall be made as follows:
(A) A statement of the total value of each fiord as of June 30, 2013.
Suggested Procedure(s):
5. Obtain from the Successor Agency a listing of all assets of the Low and Moderate
Income Housing Fund as of June 30, 2012 forthe 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.
Citation:
34179.5(c)(5)(B)An itemized statement listing any amounts that are legally restricted as to
prnpose and cannot be provided to taxing entities. This could include the proceeds of any
bonds, grant frads, or finds provided by other governmental entities that place conditions on
their ase.
Suggested Procedure(s):
6. Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that
are restricted for the following purposes:
A. Unspent bond proceeds:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total
proceeds less eligible project expenditures, amounts set aside for debt service
payments, etc.)
ii. Trace individual components of this computation to related account balances in
the accounting records, or to other supporting documentation (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 the Successor
Agency as restricted.
Exhibit B
Attachment A
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.
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.
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.
Citation:
34179.5(c)(5)(C) An itentifed statentent of the values of any assets that are not cash or cash
equivalents. This may include phnvsical assets, land, records, and equipment. For the purpose
of this accounting, physical assets may be valued at purchase cost or at mry recently
estimated market ralite. The statement shall list separately housing -related assets.
Suggested Procedure(s):
7. Perform the following procedures:
A. Obtain from the Successor Agency a listing of assets as of .lune 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,
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.
Exhibit B
Attachment A
C. For any differences noted in 7(B), inspect evidence of disposal of the asset and
ascertain that the proceeds were deposited into the Successor Agency trust fund. If the
differences are due to additions (this generally is not expected to occur), inspect the
supporting documentation and note the circumstances.
D. If the assets listed at 7(A) are listed at recently estimated market value, inspect the
evidence (if any) supporting the value and note the methodology used. If no evidence
is available to support the value and\or methodology, note the lack of evidence.
Citation:
34179.5(c)(5)(D) An itemized listing of any current balances that are legally or contractually
dedicated or restricted for the f aiding of an enforceable obligation that identifies the nalure
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 arcual spending requirements to satisfy each obligation and a projection of
annual revenues available to f and those requirements. If a review finds that future revenues
together with dedicated or restricted balances are insuficieni to fiord fttture obligations and
thus retention of current balances is required, it shall identi i, the anount of current balances
necessary for retention. The review shall also detail the projected property tax revenues and
other general propose revenues to be received by the successor agency, together with both
the anount and tinning of the bond debt service payments of the successor agency, for the
period in which the oversight board anticipates the successor agencv will have insufficient
property, tax revenue to pay the specified obligations.
Suggested Procedure(s):
8. Perform the following procedures:
A. If the Successor Agency believes that asset balances need to be retained to satisfy
enforceable obligations, obtain from the Successor Agency an itemized schedule of
asset balances (resources) as of June 30, 2012 that are dedicated or restricted for the
funding of enforceable obligations and perform the following procedures. The
schedule should identify the amount dedicated or restricted, the nature of the
dedication or restriction, the specific enforceable obligation to which the dedication
or restriction relates, and the language in the legal document that is associated with
the enforceable obligation that specifics the dedication of existing asset balances
toward payment of that obligation.
L Compare all information on the schedule to the legal documents that form the
basis for the dedication or restriction of the resource balance in question.
ii. Compare all current balances to the amounts reported in the accounting records of
the Successor Agency .or to an alternative computation.
iii. Compare the specified enforceable obligations to those that were included in the
final Recognized Obligation Payment Schedule approved by the California
Department of Finance.
iv. Attach as an exhibit to the report the listing obtained from the Successor Agency.
Identify in the report any listed balances for which the Successor Agency was
Exhibit B
Attachment A
unable to provide appropriate restricting language in the legal document
associated with the enforceable obligation.
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.
C. If the Successor Agency believes that projected property tax revenues and other
general purpose revenues to be received by die 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.
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.
Exhibit B
Attaclunent A
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.
Citation:
34179.5(c)(5)(E) Air itemized list and analysis of arty amounts of current balances that are
needed to salisf, obligations that will be placed on the Recognized Obligation Paynhent
Schedules for the current.liscal pear.
Suggested Procedure(s):
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 (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 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.
Citation:
34179.5(c)(6) The review shall total the net balances available after deducting the total
amounts described in subparagraphs (B) to (E), inchisive, ofriaragraph (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 at, that
cash or cash equivalents are specifically obligated to the piaposes described in
subparagraphs (B), (D), and (E) ofpaagraph (5) in such amounts that there is insntfciew
cash to provide the fill amamt determined pursuant to this paragraph, that amount shall be
demonstrated in an additional itemized schedule.
Suggested Procedure(s):
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).
8
r RIM.
Attachment A
Suggested Procedure(s):
11. Obtain a representation letter from Successor Agency management acknowledging their
responsibility for the data provided to the practitioner and die 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 ALT report as required by attestation
standards.
EXHIBIT C
LOW TO MODERATE INCOME HOUSING FUND DUE DILIGENCE REVIEW DRAFT
PA00)m
[Attached behind this page]
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, C
Low and Moderate IncomiRdi sing Fund
Agreed -Upon Procedures' ngagement
Pursuant to Assembly Bill 14841''11;,.,
TO REV-, PRIQR TO .yili� I
MISSION LO,�FI,FIINA RDPORT:
I' RETURN)IDITO SINPSQN &
'UPSON AND NOT TO BE
OPUCED OIC OISTRIBUTED IN
�WTOh M WITHOUT OUR
PURMISSION.
,VERSI6I4'3'(9/27 3:30 pm)
Exhibit C
Exhibit C
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
Table of Contents
Independent Accountant's Report on Applying Agreed -Upon Procedures
Exhibit A - Agreed -Upon Procedures and Results 2
Exhibit B - Listing of All Assets of the Low and Moderate Income Housing Fund
as of June 30, 2012 17
Exhibit C - Listing of Assets that are Not Liquid
18
Exhibit D - Recognized Obligation Payment Schedules (ROPS) III 19
Exhibit E - Summary of Balances Available for Allocation to Affected Taxing
Entities as of June 2012 20
2
Exhibit C
Oversight Board of the
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Independent Accountant's Report on Apolvine Agreed -Upon Procedures
We have performed the agreed-upon procedures enumerated in Exhibit A, which was generally agreed to
by the California State Controller's Office, Department of Fida'nce; and the Successor Agency to the
Former Redevelopment Agency of the City of Azusa, Califomia'i(Successor Agency, City of Azusa),
solely to assist you in ensuring that the Successor Agency;1City of Asirsa is complying with its statutory
requirements with respect to AB 1484. Management of the Successor Agency, City of Azusa is
responsible for the Listings, Summary, and SchedulaJm Exhibits B, C ,D,Land E and the accounting
records pertaining to statutory compliance pursuaitt to AB 1484. This;ilagreed-upon procedures
engagement was conducted in accordance with attestation standards established.byithe American Institute
of Certified Public Accountants. The sufficiency of t}iese procedures. is solely the. responsibility of those
parties specified in the report. Consequently, we make no're1111presen anon regarding ihe'"sufficiency of the
ll
any
procedures
described in Exhibit A either';f';rllthe =purpose foriw+hii1ih this report has been requested or for
Allpurpose.�' �����Ili:.
The scope of this engagement was limited
set forth in Exhibit A. Exhibit A,;dentifies
procedures at your direction as
the procedures performed.
Exhibits B, C, D, and E cojuisted of Likings, Suinuiijry;Land Schediile that were prepazed in accordance
with Health and Safety Code Sections 34179.5(c)(5) through 34179.5(c)(6).
'� (hili,,. I I IUI I:,, 1111 Ii
We were not engaged• to and did rioftond>lct an,audit, the objective of which would be the expression of
an opinion; ori the Listings; Summary,; and Schedule in Exhibit B, C, D, and E or as to the appropriateness
of the results summarized'im. Exhibit A, 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 ii ill
� j �lih I Il�a'III,
This report is intended solely foi,he information and use of the California State Controller's Office,
Department of Finaille •',County rift Los Angeles and the Successor Agency to the Former Redevelopment
Agency of the City of'AiusaI California, and is not intended to be, and should not be used by anyone
other than these specified 1parties7{ 'his restriction is not intended to limit distribution of this report, which
is a matter of public record. ` li!ii:1'I
Los Angeles, California
September 27, 2012
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
1. Obtain from the Successor Agency a listing of all assets (Low and Moderate Income Housing Fund
only) that were transferred from the former redevelopment agency to the Successor Agency on
February 1, 2012. Agree the amounts on the listing to account balances established in the accounting
records of the Successor Agency. Identify the amount of the assets transferred to the Successor
Agency as of that date.
Result
The Successor Agency, City of Azusa has represented to us that the Low & Moderate Income
Housing Fund (LMH -IF) assets have not been transferred to the Successor Agency, City of Azusa as
of the date of this agreed-upon procedures report.
Per Resolution No. 12-C7 dated January 23, 2012, the City of Azusa declined assuming the housing
assets and functions of the former redevelopment agency. On July 26, 2012, the Oversight Board of
the Successor Agency, City of Azusa adopted the Resolution No. OB -07-13, directing the transfer of
housing assets and functions to the Housing Authority of the County of Los Angeles. However, the
transfer has not taken place due to issues arising over titles. The Successor Agency, City of Azusa is
still waiting for further clarification.
The Successor Agency, City of Azusa provided us with the trial balance of the LMIHF (Fund 81)
and a listing of all assets of the LMIHF as of February 1, 2012. We agreed the amounts on the listing
to account balances in the trial balance of Fund 81. No exceptions were found as a result of applying
the procedure.
Assets
Balance as of
February 1, 2012
Cash
$ 128,924
Notes Receivable/Deferred Loans
1,082,880
Land Held for Resale
12,898,382
Total Assets for Fund 81
$ 14,110,186
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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:
Result
The Successor Agency, City of Azusa has represented to us that the State Controller's Office has not
completed its review of transfers required under both Sections 34167.5 and 34178.8; therefore, we
performed procedures 2.A, 2.B, and 2.C.
A. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for
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.
Result
The Successor Agency, City of Azusa, has represented to us that there were no transfers
(excluding payments for 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; therefore, the procedure was not performed.
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.
Result
The Successor Agency, City of Azusa, has represented to us that there were no transfers
(excluding payments for goods and services) from the Successor Agency, City of Azusa to the
city, county, or city and county that formed the redevelopment agency for the period from
February 1, 2012 through June 30, 2012; therefore, the procedure was not performed.
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
C. For each transfer, obtain the legal document that formed the basis for the enforceable obligation
that required any transfer. Note in the AUT report the absence of any such legal document or the
absence of language in the document that required the transfer.
Result
The Successor Agency, City of Azusa, has represented to us that there were no transfers
(excluding payments for goods and services); therefore, the procedure was not 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:
The Successor Agency, City of Azusa has represented to us that the State Controller's Office has not
completed its review of transfers required under both Sections 34167.5 and 34178.8); therefore, we
performed procedures 3.A, 3.13, and 3.C.
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.
Result
The Successor Agency, City of Azusa, has represented to us that there were no transfers
(excluding payments for 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;
therefore, the procedure was not performed.
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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 AUT report.
Result
The Successor Agency, City of Azusa, has represented to us that there were no transfers
(excluding payments for services) from the Successor Agency to any other public agency or
private parties for the period from February 1, 2012 through June 30, 2012; therefore, the
procedure was not performed.
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.
Result
The Successor Agency, City of Azusa, has represented to us that there were no transfers
(excluding payments for goods and services); therefore, the procedure was not performed.
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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.
Result
The result will be presented in the Agreed -Upon Procedures Report for All Other Funds of the
Successor Agency, City of Azusa, which is due on December 15, 2012.
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. 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.
Result
We obtained a listing of all assets of the LM1HF as of June 30, 2012 and we agreed the assets
listed to the trial balance of Fund 81 as of June 30, 2012. No exceptions were found as a result of
applying the procedure. The listing of all assets of the LMIHF as of June 30, 2012 is in Exhibit B.
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
6. Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that are
restricted for the following purposes:
A. Unspent bond proceeds:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total
proceeds less eligible project expenditures, amounts set aside for debt service payments,
etc.)
ii. Trace individual components of this computation to related account balances in the
accounting records, or to other supporting documentation (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 the Successor Agency as
restricted.
Result
The Successor Agency, City of Azusa, has represented to us that there are no asset balances held
on June 30, 2012 that are restricted for unspent bond proceeds; therefore, the procedures were not
performed.
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.
Result
The Successor Agency, City of Azusa, has represented to us that there is no asset balances held
on June 30, 2012 that are grant proceeds and program income restricted by third parties; therefore,
the procedures were not performed.
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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 the Successor Agency as
restricted.
Result
The Successor Agency, City of Azusa, has represented to us that there are no asset balances
held on June 30, 2012 that are considered to be legally restricted; therefore, the procedures
were not performed.
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.
Result
Procedures 6.A, 6.13, and 6.0 were not performed; therefore, procedure 6.1) is not applicable.
10
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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.
Result
We obtained a listing of non -liquid assets as of June 30, 2012. The Successor Agency, City of
Azusa has represented that these non -liquid assets were recorded at cost. The listing of non -
liquid assets as of June 30, 2012 is presented in Exhibit C.
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.
Result
The land held for resale balance at June 30, 2012 agreed with the amounts in the previously
audited financial statements as of June 30, 2011. The notes receivable/deferred loans balance at
June 30, 2012 is $23,236 less than the previously audited financial statements as of June 30, 2011.
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.
Result
The difference in notes receivable/deferred loans balance noted in procedure Th. is due to the
receipt of principal repayment for one of the loans. The amount was received prior to the
dissolution of the RDA as evidenced by a bank deposit dated September 27, 2011. The proceeds
in the amount of $19,500.72 were deposited into the former RDA's checking account. The
remaining difference of $3,735 was recorded as a loan write-off.
I1
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
D. I£ 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.
Result
The assets are listed at costs, not estimated market value; therefore, the procedure was not
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. Attach as an exhibit to the report the listing obtained from the Successor Agency. Identify in
the report any listed balances for which the Successor Agency was unable to provide
appropriate restricting language in the legal document associated with the enforceable
obligation.
Result
The Successor Agency, City of Azusa has represented to us that they do not believe that assets
balances need to be retained to satisfy enforceable obligations; therefore, the procedures were not
performed.
12
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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 theprojections.
Result
The Successor Agency, City of Azusa has represented to us that they do not believe 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; therefore, the procedures were not performed.
13
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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.
Result
The Successor Agency, City of Azusa has represented to us that they believe that projected
property tax revenues and other general purpose revenues to be received by the Successor
Agency are sufficient to pay future bond debt service payments; therefore, the procedures were
not performed.
D. If procedures A, B, or C were performed, calculate the amount of current unrestricted balances
necessary for retention in order to meet the enforceable obligations by performing the following
procedures.
i. Combine the amount of identified current dedicated or restricted balances and the amount of
forecasted annual revenues to arrive at the amount of total resources available to fund
enforceable obligations.
ii. Reduce the amount of total resources available by the amount forecasted for the annual
spending requirements. A negative result indicates the amount of current unrestricted
balances that needs to be retained.
iii. Include the calculation in the AUP report.
Result
Procedures 8.A, 83 and 8.0 were not performed; therefore, procedure 8.D is not applicable.
14
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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 (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 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.
Result
The Successor Agency, City of Azusa has represented to us that cash balances as of June 30, 2012
need to be retained to satisfy obligations on the Recognized Obligation Payment Schedule (ROPS)
III for the period of January 1, 2013 through June 30, 2013. See ROPS III in Exhibit D.
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. 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).
Result
We performed the procedure and the result is presented in Exhibit E.
The Successor Agency, City of Azusa has represented to us that they have elected not to recognize a
deduction for the amount paid to the County Auditor -Controller in regards to the Low and Moderate
Income Housing Fund. The amount paid will be deducted from the All Other Funds calculation.
15
Exhibit C
Exhibit A
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
AGREED-UPON PROCEDURES AND RESULTS
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 AUT
report as required by attestation standards.
Result
We obtained a representation letter from the Successor Agency, City of Azusa.
16
Exhibit C
Exhibit B
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
LISTING OF ALL ASSETS OF THE LOW AND MODERATE INCOME HOUSING FUND
As of June 30, 2012
Cash
Notes Receivable/Deferred Loans
Land Held for Resale
17
$ 128,924
1,082,880
12,898,382
$ 14,110,186
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
LISTING OF ASSETS THAT ARE NOT LIQUID
As of June 30, 2012
Notes Receivable/Deferred Loans
Land Held for Resale
18
Exhibit C
Exhibit C
$ 1,082,880
12,898,382
$ 13,981,262
Exhibit D
Nam of Successor Agenry: son )INF—Retl—In—m aeo, of,. CA
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i I I The Suommor Agency, City of Azusa. has mpmsewed tom that cash balances as of Jule 30. 2012 ate needed to he retained to sans% the required debt s ice payments for the Housing Tat, Allocation Bonds
Series 200813 due Feta mry 2013. The S..sAor Ag<Nys expcclalion is for the Low and Moderate Income Homing aot0ure to rmcivc RPTTF in the amount of $243,179.40 wUIlha r w@h the rash halanee retained of S128,924 to pay
for IM required debt a ioe imtallmem.
AE
19
Exhiff*Wbit E
Successor Agency to the
Former Redevelopment Agency of the
City of Azusa, California
Low and Moderate Income Housing Fund
Agreed -Upon Procedures Engagement
Pursuant to Assembly Bill 1484
SUMMARY OF BALANCES AVAILABLE FOR ALLOCATION TO AFFECTED TAXING ENTITIES
As of June 30, 2012
Total amount of assets held by the successor agency as of June 30, 2012 (procedure 5) (see Exhibit B) $ 14,110,186
Add the amount of any assets transferred to the city or other parties for which an enforceable
obligation with a third parry requiring such transfer and obligating the use
of the transferred assets did not exist (procedures 2 and 3)
Less assets legally restricted for uses specified by debt
covenants, grant restrictions, or restrictions imposed by other
governments (procedure 6)
Less assets that are not cash or cash equivalents (e.g. physical assets) - (procedure 7) (see Exhibit C) (13,981,262)
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) (See Exhibit D) (128,924)
Less the amount of payments trade on July 12, 2012 to the Coupty Auditor -Controller as
directed by the California Department of Finance (1) -
Amount to be remitted to county for disbursement to taxing entities $ (0)
Note that separate computations are required for the Low and Moderate Income Housing Fund held by the
Successor Agency and for all other finds held by the Successor Agency.
NOTES: For each line shown above, an exhibit should be 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.
20