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To: Memo to Successor Agency Clients <br />From: Susan E. Bloch <br />Re: AB 1484— Redevelopment Budget Trailer Bill <br />Date: July 5, 2012 <br />Page: 8 <br />5. Penalties for Failure to Pay Amounts Determined by Due Diligence Review. <br />If the Successor Agency fails to remit the amounts determined to be payable as a result of the <br />Due Diligence Review by the specified deadlines, and is unable to recover funds that were <br />transferred to other public agencies without an enforceable obligation, any public agency to <br />which funds were transferred without an enforceable obligation may be subject to an offset of <br />its sales and use or property tax allocations . 31 In addition, if the Sponsoring Jurisdiction is <br />performing the duties of Successor Agency, the Sponsoring Jurisdiction may be subject to an <br />offset of its sales and use or property tax allocations. Alternatively, DOF may direct the <br />County auditor - controller to deduct unpaid amounts from future allocations of property tax to <br />the Successor Agency . Furthermore, for funds transferred to private parties absent an <br />enforceable obligation, the County auditor - controller and DOF may demand the return of <br />funds, pursue collection actions, and charge a penalty and interest if the funds are not repaid <br />within 60 days . 34 <br />FINDING OF COMPLETION ( "SAFE HARBOR ") <br />Issuance of Finding of Completion. After the Successor Agency pays (i) the housing <br />fund balance as determined by Due Diligence Review, (ii) the non - housing fund <br />balance as determined by Due Diligence Review, and (iii) the balance of any <br />outstanding taxing entity passthrough obligations and residual payments, DOF will <br />issue a Finding of Completion ( "FOC "). <br />2. Repayment of City Loans. Upon issuance of an FOC, loans made by the Sponsoring <br />Jurisdiction to the former redevelopment agency may be repaid if the Oversight <br />Board finds that the loan was for a legitimate redevelopment purpose . Repayment <br />is subject to the following limitations: (i) interest is recalculated from the origination <br />date at the Local Agency Investment Fund (LAIF) rate, (ii) payments may begin no <br />earlier than the 2013 -14 fiscal year, (iii) 20% of the repayment must be deposited into <br />31 Section 34179.6(h)(1)(A). <br />32 Section 34179.6(h)(1(C). <br />33 Section 34179.6(h)(2). DOF may agree to an installment plan if it determines that payment of enforceable <br />obligations would otherwise be jeopardized. <br />34 Section 34179.6(h)(1)(B). <br />35 Section 34179.7. <br />36 Section 34191.4(6)(1). <br />A PROFESSIONAL LAW CORPORATION OAKLAND LOS ANGELES SACRAMENTO SAN FRANCISCO SANTA ROSA FRESNO <br />