Receiived Council President Scott H. Peters Sep 2 4 2008 Cityo F Sand Iego

Since CCDC is authorizing the expenditure ofpublic Redevelopment Agency funds for contracted services, there should be more oversight by the Redevelopment Agency. Response: The City agrees with the finding. It is anticipated that recommendations for improvement will be included as part of the current and upcoming audits on SEDC and CCDC. If not, the City will independently move forward with greater oversight in the future.

The lack of current auditedfinancial statements opens the Redevelopment Agency to law suits andjnes and hinders public oversight of revenues collected and expended, indebtedness and allocations for low and moderate income housing. Response: The City agrees with the finding; however, the City and the Agency are actively working to expedite the Annual Financial Statements, Agency Annual Reports and submittals to the State.

There is no timetable for repayment of these loans to the City. Response: The City partially disagrees with the finding. California Redevelopment Law - Health and Safety Code 33492.1 3 provides, among other things, limitations on the duration of redevelopment plans, tax increments, and incurring and repaying indebtedness. Redevelopment plans adopted on or after January 1, 1994, must contain a time limit, not to exceed 45 years from the date of adoption of the plan, to repay indebtedness with tax increment revenues. Redevelopment plans adopted prior to January 1, 1994 may receive tax increment for an additional 10 years from the date of termination of the effectiveness of the redevelopment plan for the purpose of repayment of debt. In the IBA's review of the Redevelopment Agency's FY 2008 Budget, we noted the lack of a specific repayment schedule and recommended that the Agency discuss the development of a plan to repay outstanding debt for each project area. This

This misrepresentation has sometimes misled the public and the media as to the true role of CCDC as an agent, planner and project manager for the Redevelopment Agency. Response: The City agrees with the finding; however, the City and the Agency are continually working toward eliminating this confusion. The current CCDC web site and publications consistently state that CCDC provides staff services on behalf of the San Diego Redevelopment Agency to facilitate downtown redevelopment.

A single tiered Redevelopment Agency for all 17project areas can be operated with greater efficiency than the present three-tiered model. Response: The City does not have adequate information and analysis to enable it to agree or disagree with the finding. Over the past three years, the Public Safety and Neighborhood Services Committee, Land Use and Housing Committee, and the Redevelopment Agency have discussed several topics associated with redevelopment restructuring. The primary focus has been the Redevelopment Division of the City. Consolidating the three redevelopment operating divisions (CCDC, SEDC, and the City Redevelopment Division) will require additional, extensive review and analysis.