The Dissolution of Redevelopment: Where Have We Been? What Lies Ahead?*

As of the date of dissolution of redevelopment (February 1, 2012), all city operated redevelopment agencies, except Mission Viejo and Seal Beach, were exceeding the administrative costs limit of 5% of the tax increment distributed related to the ROPS as authorized by ABX1 26. Response: The City of La Palma agrees in part with this finding. We cannot verify other agencies' administration costs as a percent of tax increment. In regards to the City of La Palma, the report indicates that La Palma's Redevelopment Administrative costs as a 16.71% of tax increment revenue. We do not know how the Grand Jury arrived at this figure or what is included in it. On a going forward basis, we note that the La Palma Successor Agency submitted an Oversight Board approved ROPS to the DOF reflecting an Administrative Cost Allowance of the minimum $250,000 as authorized by AB1X 26.

Of the agencies surveyed, only Costa Mesa and Santa Ana reported having a citizen involvement committee along the line of a Project Area Committee as authorized by Section 33385 of the Health and safety Code. www.cityoflapalma.org PHONE 714 690 3300 7822 Walker Street FAX La Palma, CA 90623-1771 714 523 2141 Grand Jury Response August 7, 2012 Response: The City of La Palma agrees in part with this finding. We do not know the status of other Redevelopment Agencies and having citizen involvement committees. In regards to the City of La Palma, when the project areas were established and when specific plans were established in these project areas, there were citizen involvement committees used for input. However, the City does not maintain an on-going committee subsequent to the plans being approved.

) Grand Jury Response August 7, 2012 Response: This recommendation has been implemented by the City of La Palma. The La Palma Successor Agency and Oversight Board have reviewed the ROPS and determined what obligations are deemed enforceable. The La Palma Redevelopment Agency was a very well run entity. The property tax increment from its project areas exceeded debt service. As such the La Palma ROPS is well below the property tax increment generated from the project area and will result in residual payments to other taxing agencies after enforceable obligations are paid. R.4 Successor agencies and oversight boards should critically review the Recognized Obligations Payment Schedule (ROPS) to evaluate the need for debt owed to the city. (See F8.) Response: This recommendation has been implemented by the City of La Palma. The La Palma Successor Agency and Oversight Board have reviewed and approved the debt owed to the City on the ROPS. Further, we note that since the preparation of the Grand Jury Report, AB 1484 was signed into law which contains a safe harbor provision for City debt. R.5 Successor agencies and oversight boards should critically review the Recognized Obligations Payment Schedule (ROPS) to evaluate the need for incentive payments to commercial entities. (See F9.) Response: The recommendation will not be implemented because the La Palma Successor Agency does not have any incentive payments to commercial entities. If you have any questions regarding the responses provided herein, please do not hesitate to contact Douglas D. Dumhart, Community Development Director at (714) 690-3322 or via his e-mail at [email protected] Respectfully submitted, lm G. Henry Charoen Mayor City Council CC Terry Matz, Interim, City Manager Douglas D. Dumhart, Community Development Director Roy B. Baker III, Foreman, Orange County Grand Jury, 700 Civic Center Drive West, Santa Ana, CA 92701