Boomerang Funds: Residual property taxes distributions under the Redevelopment Dissolution Laws Karen Tiedemann Goldfarb

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Boomerang Funds Residual property taxes
distributions under the Redevelopment Dissolution
LawsKaren TiedemannGoldfarb Lipman1300
Clay Street, 11th FloorOakland, CA
94612510-836-6336ktiedemann_at_goldfarblipman.com

• goldfarb lipman attorneys

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Overview

• What are boomerang funds?
• How are boomerang funds distributed to taxing
  entities?
• Exploring opportunities and restraints on use of
  boomerang funds
• Open Dialogue

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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).

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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

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Biannual RPTTF ROPS Distributions
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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 doesnt provide for other use
RPTTF Residual Distribution Subject to availability based on RPTTF Residual Distributions January 2 and June 1 of every year
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Hypothetical distribution of property taxes in
City a

• 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

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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

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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

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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