boomerang funds: residual property taxes distributions under the redevelopment dissolution laws...
TRANSCRIPT
Boomerang Funds: Residual property taxes distributions under the Redevelopment Dissolution Laws
Karen TiedemannGoldfarb & Lipman1300 Clay Street, 11th FloorOakland, CA [email protected]
goldfarb lipman attorneys
1
OVERVIEW
What are “boomerang funds”?
How are boomerang funds distributed to taxing entities?
Exploring opportunities and restraints on use of boomerang funds
Open Dialogue
2
WHAT ARE “BOOMERANG FUNDS”
Property taxes distributed to “affected taxing entities” under AB 1x 26 and AB 1484 that would formerly have been part of redevelopment “tax increment” system
Potential sources of boomerang funds:
July 12th True Up Payments (§34183.5); Due Diligence Review Payments (§34179.6); Land disposition under Long-Range Property
Management Plan (§34191.3); and Semiannual Residual Distributions from
Redevelopment Property Tax Trust Fund (RPTTF) (§34183).
3
LRPM PLAN LAND DISPOSITION
Four Tranches of Property Distribution under LRPM Plan: Public Use Project described in Redevelopment
Plan For Enforceable Obligation For Liquidation but plan can direct use of
sales proceeds for: Enforceable obligations; For project identified in approved redevelopment
plan; or Distribution to taxing entities
4
BIANNUAL RPTTF ROPS DISTRIBUTIONS
5
TIMING OF POTENTIAL DISTRIBUTIONS
Potential Source Date of Potential Distribution
July 12th True Up Payment
One time distribution made on or about July 16, 2012
Due Diligence Reviews Distributions made by Auditor- Controllers 5 days after receipt of DDR Payments from successor agency(Nov/Dec 2012 for Housing DDR and April 2013 for Non-Housing DDR)
LRPM Plan Land Disposition-
Distribution from sales proceeds but only if plan doesn’t provide for other use
RPTTF Residual Distribution
Subject to availability based on RPTTF Residual Distributions January 2 and June 1 of every year
6
HYPOTHETICAL DISTRIBUTION OF PROPERTY TAXES IN CITY “A”
7
Distribution of $1,000,000:•$495k will go to School Districts•$295k will go to the County•$95k will go City•$95k will go to “Other Taxing Entities”•$20k will go to “County ERAF”
POTENTIAL OPPORTUNITIES
Local Efforts: San Francisco Proposition C- Dedicated $50 million of residual
distributions and unspent bond proceeds to fund affordable housing
City of Fremont dedicated portions of residual from Housing Fund Due Diligence Review it received to fund economic development and affordable housing activities
County of Los Angeles dedicated $11 million to affordable housing; exploring ways to invest $200 million of residual funds for economic development and affordable housing purposes
Regional/State Efforts: No examples to date, but discussions on joint efforts
8
CONSIDERATIONS/RESTRAINTS
Part of “general fund” revenues Authority to spend on affordable housing is clear for
cities/counties but other taxing entities Subject to annual allocations and competition on general
fund demands Residual distributions are property taxes-
Issues arise in spending property taxes outside of jurisdiction
Residual distributions to school districts reduce State subvention
State realignment goals offsets amounts available to Counties
Bonding Restrictions on multi-year pledge Subject to general obligation bond 2/3 voter approval
9
DISCUSSION
Local focus and advocacy in short-term
Think about how the amounts and timing of potential residual distributions fit with affordable housing development processes and timelines
Underscores need for state-wide permanent source financing
10