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City of San Leandro Notes to Basic Financial Statements For the year ended June 30, 2012 89 NOTE 16 –SUBSEQUENT EVENTS, Continued C. Demand for True-up Payment Pursuant to Health and Safety Code section 34183.5(b), Successor Agencies are required to remit a True -up Payment representing a calculation of tax increment collected in December 2011 by the former Redevelopment Agency in excess of enforceable obligations, as approved by the County Auditor/Controller. On March 2012, the Successor Agency received a Demand from the County Auditor/Controller that had calculated a True-up Payment of $6,519,397. Management reviewed the calculation and believes it is inaccurate. Management’s calculation of the True-up Payment amounted to $521,589 and on April 2012 the Successor Agency remitted that amount to the County Auditor/Controller. The remaining unpaid balance of the Demand has not been recorded in the accompanying financial statements as management believes its calculation is accurate. This matter is governed by an area of unsettled law and the amount of the unpaid demand, if any cannot be determined at this time. NOTE 17–JOINTLY GOVERNED ORGANIZATIONS The City of San Leandro participates in the East Bay Dischargers Authority established on February 15, 1974. The Agency Members of the Joint Powers are the City of Hayward, City of San Leand ro, Oro Loma Sanitary District, Castro Valley Sanitary District, and Union Sanitary District. The authority has the powers to plan for, acquire, construct, manage, maintain, operate, and control facilities for the collection, transmission, treatment, reclamation, sale and disposal of waste water. No debt, liability, or obligation of the Authority shall constitute a debt, liability or obligation of any Agency. The Authority shall have the additional power and authority to issue Grant Anticipation Notes and to issue revenue bonds in accordance with the following laws: a) Article 2, Chapter 5m Title 1, Division 7 of the California Government Code, commencing with Section 6540. b) Chapter 6, Title 5, Division 2 of the California Government Code commencing with Section 54300. The boundary of the Authority shall be the consolidated boundaries of the Agencies. In the event of withdrawal by an Agency from the agreement, the boundary shall be revised to exclude the area under jurisdiction of said Agency. The Authority shall be governed by the East Bay Dischargers Commission (Commission). The Commission shall consist of five members, one from each Agency. The ownership of the Joint Facilities is as follows: 18.6 %, City of San Leandro; 29.7% Oro Loma/Castro Valley; 33.0% City of Hayward; and 18.7% Union Sanitary District. The City’s shares of the expenses are recorded as expenses of the Water Pollution Control Fund. NOTE 18 – REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES A. Redevelopment Suspension In an effort to balance its budget, the State of California adopted ABx1 26 on June 28, 2011, which suspended all new redevelopment activities except for limited specified activities as of that date and dissolves redevelopment agencies. On July 18, 2011, the California Redevelopment Association, the League of California Cities and others challenged the validity and constitutionality of ABx1 26 to the California Supreme Court on numerous grounds, including that the ABx1 26 violated certain provisions of the California Constitution. On December 28, 2011, the Court validated the provisions of ABx1 26 and extended the date of dissolution to January 31, 2012.