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RDA Asset Transfer Review 1/1/2011 - 1/31/2012POWAY REDEVELOPMENT AGENCY Review Report ASSET TRANSFER REVIEW January 1, 2011, through January 31, 2012 Betty T. Yee California State Controller May 2015 BETTY T. YEE California State Controller May 19, 2015 Scott Edwards, Director of Administrative Services Successor Agency /City of Poway 13325 Civic Center Drive Poway, CA 92064 Dear Mr. Edwards: Pursuant to Health and Safety Code section 34167.5, the State Controller's Office (SCO) reviewed all asset transfers made by the Poway Redevelopment Agency (RDA) to the City of Poway (City) or any other public agency after January 1, 2011. This statutory provision states, "The Legislature hereby finds that a transfer of assets by a redevelopment agency during the period covered in this section is deemed not to be in furtherance of the Community Redevelopment Law and is thereby unauthorized." Therefore, our review included an assessment of whether each asset transfer was allowable and whether the asset should be turned over to the Successor Agency. Our review applied to all assets including, but not limited to, real and personal property, cash funds, accounts receivable, deeds of trust and mortgages, contract rights, and rights to payment of any kind. We also reviewed and determined whether any unallowable transfers to the City or any other public agency have been reversed. Our review found that the RDA transferred $159,522,094 in assets after January 1, 2011, including unallowable transfers totaling $135,831,880, or 85.15% of transferred assets. The unallowable transfers included $96,502,200 to the City and $39,329,680 to the Housing Authority. However, on and after February 1, 2012, the City and the Housing Authority turned over $135,831,880 in assets to the Successor Agency. Therefore, no further action is necessary. Scott Edwards -2- May 19, 2015 If you have any questions, please contact Elizabeth Gonzalez, Chief, Local Government Compliance Bureau by telephone at (916) 324 -0622 or by email at eonzalez @sco.ca.gov. Sincerely FF V. BROWNFIELD, CPA Chief, Division of Audits JVB /Is Attachment cc: Andrew White, Finance Manager Successor Agency /City of Poway Bruce Tarzy, Chair Oversight Board to Poway Successor Agency Richard J. Chivaro, Chief Legal Counsel State Controller's Office Elizabeth Gonzalez, Bureau Chief Division of Audits, State Controller's Office Scott Freesmeier, Audit Manager Division of Audits, State Controller's Office Trisha L. Quiambao, Auditor -in- Charge Division of Audits, State Controller's Office David Botelho, Program Budget Manager California Department of Finance Tracy Sandoval, CPA, Auditor Controller San Diego County Poway Redevelopment Agency Asse( Transfer Review Contents Review Report Summary............................................................................................. ............................... 1 Background......................................................................................... ............................... 1 Objective, Scope, and Methodology .................................................. ............................... 2 Conclusion........................................................................................... ............................... 2 Views of Responsible Officials .......................................................... ............................... 2 RestrictedUse ..................................................................................... ............................... 3 Findings and Orders of the Controller ................................................. ............................... 4 Schedule 1— Unallowable Asset Transfers to the City of Poway ....... ............................... 8 Schedule 2— Unallowable Asset Transfers to the Housing Authority .............................. 14 Attachment 1—City of Poway's Response to the Draft Review Report Poway Redevelopment Agency Asset Transfer Review Asset Transfer Review Report Summary The State Controller's Office (SCO) reviewed the asset transfers made by the Poway Redevelopment Agency (RDA) after January 1, 2011. Our review included, but was not limited to, real and personal property, cash funds, accounts receivable, deeds of trust and mortgages, contract rights, and rights to payments of any kind from any source. Our review found that the RDA transferred $159,522,094 in assets after January 1, 2011, including unallowable transfers totaling $135,831,880 or 85.15% of transferred assets. The unallowable transfers included $96,502,200 to the City of Poway (City) and $39,329,680 to the Housing Authority. However, on and after February 1, 2012, the City and the Housing Authority turned over $135,831,880 in assets to the Successor Agency. Therefore, no further action is necessary. Background In January of 2011, the Governor of the State of California proposed statewide elimination of redevelopment agencies (RDAs) beginning with the fiscal year (FY) 2011 -12 State budget. The Governor's proposal was incorporated into Assembly Bill 26 (ABXI 26, Chapter 5, Statutes of 2011, First Extraordinary Session), which was passed by the Legislature, and signed into law by the Governor on June 28, 2011. ABXI 26 prohibited RDAs from engaging in new business, established mechanisms and timelines for dissolution of the RDAs, and created RDA successor agencies and oversight boards to oversee dissolution of the RDAs and redistribution of RDA assets. A California Supreme Court decision on December 28, 2011 (California Redevelopment Association et al. v. Malosantos), upheld ABXI 26 and the Legislature's constitutional authority to dissolve the RDAs. ABXI 26 was codified in the Health and Safety (H &S) Code beginning with section 34161. H &S Code section 34167.5 states in part, "... the Controller shall review the activities of redevelopment agencies in the state to determine whether an asset transfer has occurred after January 1, 2011, between the city or county, or city and county that created a redevelopment agency or any other public agency, and the redevelopment agency." The SCO identified asset transfers that occurred after January 1, 2011, between the RDA, the City and /or any other public agency. By law, the SCO is required to order that such assets, except those that already had been committed to a third party prior to June 28, 2011, the effective date of ABX1 26, be turned over to the Successor Agency. In addition, the SCO may file a legal action to ensure compliance with this order. -1- Poway Redevelopment Agency Asset Tranwfer Review Objective, Scope, Our review objective was to determine whether asset transfers that and Methodology occurred after January 1, 2011, and the date upon which the RDA ceased to operate, or January 31, 2012, whichever was earlier, between the city or county, or city and county that created an RDA or any other public agency, and the RDA, were appropriate. We performed the following procedures: • Interviewed Successor Agency personnel to gain an understanding of the Successor Agency's operations and procedures. • Reviewed meeting minutes, resolutions, and ordinances of the City, the RDA, the Successor Agency, and the Oversight Board. • Reviewed accounting records relating to the recording of assets. • Verified the accuracy of the Asset Transfer Assessment Form. This form was sent to all former RDAs to provide a list of all assets transferred between January 1, 2011, and January 31, 2012. • Reviewed applicable financial reports to verify assets (capital, cash, property, etc.). Conclusion Our review found that the Poway Redevelopment Agency transferred $159,523,094 in assets after January 1, 2011, including unallowable transfers totaling $135,831,880, or 85.15% of transferred assets. The unallowable transfers included $96,502,200 to the City of Poway (City) and $39,329,680, to the Housing Authority. However, on and after February 1, 2012, the City and the Housing Authority turned over $135,831,880 in assets to the Successor Agency. Therefore, no further action is necessary. Details of our findings are described in the Findings and Orders of the Controller section of this report. Views of We issued a draft review report on December 17, 2014. Scott Edwards, Responsible Director of Administrative Services, responded by letter dated January 23, 2015, partially disagreeing with the review results. The Officials City's response is included in this final review report as an attachment. -2- Poway Redevelopment Agency Asset Transfer Review Restricted Use This report is solely for the information and use of the City of Poway, the Successor Agency, the Oversight Board, Housing Authority, and the SCO. It is not intended to be and should not be used by anyone other than these specified parties. This restriction is not intended to limit distribution of this report, which is a matter of public record when issued final. JEFFREY V. BROWNFIELD, CPA Chief, Division of Audits May 19, 2015 -3- Poway Redevelopment Agency Asset Trawler Review Findings and Orders of the Controller FINDING 1— The Poway Redevelopment Agency (RDA) made unallowable asset Unallowable asset transfers of $96,502,200 to the City of Poway (City). The transfers transfers to the occurred after January 1, 2011, and the assets were not contractually City of Poway committed to a third party prior to June 28, 2011. The unallowable transfers were as follows: On January 18, 2011, the RDA adopted Resolution No. R -11 -02 approving and restating the Cooperation Agreement between the RDA and the City and the repayment of a loan owed by the RDA to the City. A total of $18,778,448 in loan repayments were made on various dates during the period of January 1, 2011, through January 31, 2012. • On March 11, 2011, the RDA adopted resolution R11 -06, to amend the Cooperation Agreement between the RDA and the City, and resolution R11 -07, to transfer assets and obligations from the RDA and the City. Transfers were made on and after March 11, 2011. The transfers included the following: Cash $ 12,991,060 Note Receivable 7,680,253 Land held for resale 1,029,392 Land 17,527,517 Building and Improvements 17,581,602 Infrastructure 11,016,803 Construction in process 9,897,125 Total transfers $ 77,723,752 Pursuant to Health and Safety (H &S) Code section 34167.5, the RDA may not transfer assets to a city, county, city and county, or any other public agency after January 1, 2011. The assets must be turned over to the Successor Agency for disposition in accordance with H &S Code section 34177(d) and (e). Order of the Controller Pursuant to H &S Code section 34167.5, the City is ordered to reverse the transfers totaling $96,502,200 and turn over the assets to the Successor Agency. -4- Poway Redevelopment Agency Asset Transfer Review However, as of June 30, 2012, the City turned over $96,502,200 in assets to the Successor Agency. This amount included the following: Loan repayments $ 18,778,448 Cash 12,991,060 Notes Receivable 7,680,253 Land held for resale 1,029,392 Land 17,527,517 Building and Improvements 17,581,602 Infrastructure 11,016,803 CIP 9,897,125 Total $ 96,502,200 Therefore, no further action is necessary. City's Response The City's response in regard to the finding was, in part: The City respectfully disagrees with the SCO's determination for the following reasons: (1) balances were written off because expenditures for design had been capitalized, but no tangible asset had been produced, (2) assets had been sold or transferred to the other entities pre- dissolution, but had not been removed from the Redevelopment Agency's (the Agency) records, and (3) assets had been transferred to the City predissolution, but had not been removed from the Agency's records. In accordance with Health and Safety Code 34176 (b)(2), the City elected upon dissolution of the Redevelopment Agency on February 1, 2012, to transfer the housing assets and functions previously performed by the Redevelopment Agency to the Poway Housing Authority. Here, the Settlement Agreement, the Stipulation and the Judgment require that the funds be used for affordable housing purposes. Therefore, because the City elected pursuant to Health and Safety Code 34176, to transfer the housing assets and functions previously performed by the Redevelopment Agency to the Poway Housing Authority, the Smith Funds are required by California state law to be in the possession of the Poway Housing Authority. SCO's Comment The SCO acknowledges the receipt of additional documentation and agrees with the City's explanation related to the transfers of various capital assets. The Finding and Order of the Controller has been modified accordingly. -5- Poway Redevelopment Agency Asset Transfer Review With regards to the transfer of Smith Settlement funds, the SCO acknowledges that pursuant to H &S Code section 34176, these funds, which were required to be used for housing purposes, are to be transferred to the Entity Assuming the Housing Functions, the City's Housing Authority (Authority) elected to serve. However, it is noted that due to pending litigation between the Authority and the Department of Finance, the Authority has yet to execute a book transfer of these funds. We made necessary adjustments in the Order of the Controller and the Schedule 1— Unallowable Asset Transfers to the City of Poway sections of this report. No further action is necessary. FINDING 2— The RDA made unallowable asset transfers of $39,329,680 to the Poway Unallowable Housing Authority (Housing Authority). The transfers occurred after transfers to the January 1, 2011, and the assets were not contractually committed to a Poway Housing third party prior to June 28, 2011. Authority On March 11, 2011, the RDA adopted the following resolutions: • Resolution No. RI 1 -08 to transfer available funds to the Housing Authority for the implementation of the newly adopted Cooperation Agreement between the RDA and the Housing Authority. This transfer was accepted by the Housing Authority via adoption of Resolution No. Hl 1 -04 on the same date. Resolution No. RI 1 -09 to transfer various assets from the Low and Moderate Income Housing Fund to the Housing Authority. This transfer was accepted by the Housing Authority via adoption of Resolution No. H11 -05 on the same date. Transfers were made on and after March 11, 2011. The transfers included the following: Cash $ 19,168,950 Land 20,160,730 Total transfers $ 39,329,680 Pursuant to H &S Code section 34167.5, the RDA may not transfer assets to a city, county, city and county, or any other public agency after January 1, 2011, that were not contractually committed to a third party prior to June 28, 2011. The assets must be turned over to the Successor Agency for disposition in accordance with H &S Code section 34177 (d) and (e). In accordance with H &S Code section 34176(bx2): (b) If a city, county, or city and county does not elect to retain the responsibility for performing housing functions previously performed by a redevelopment agency, all rights, powers, assets, duties, and obligations associated with the housing activities of the agency, excluding enforceable obligations retained by the successor agency and any amounts in the Low and Moderate Income Housing Fund, shall be transferred as follows: 0 Poway Redevelopment Agency Asset Transfer Review. (2) If there is one local housing authority in the territorial jurisdiction of the former redevelopment agency, to that local housing authority. And In accordance with H&S Code section 34177(g): Successor agencies are required to do all of the following: (g) Effectuate transfer of housing functions and assets to the appropriate entity designated pursuant to Section 34176. Order of the Controller Pursuant to H &S Code section 34167.5, the Housing Authority is ordered to reverse the transfers totaling $39,329,680 and turn over the assets to the Successor Agency. However, on and after February 1, 2012, the Housing Authority turned over $22,033,709 in assets to the Successor Agency. This amount included the following: Cash $ 19,022,695 Land 2,864,759 Fiscal year end June 30, 2012 AP 16,953 Fiscal year end June 30, 2012 Lease Revenues 129,302 Total $ 22,033,709 In addition, on January 17, 2012, the Successor Agency effectuated the transfer of $17,295,971 in land by electing the Housing Authority to serve as the Housing Successor in accordance with H &S Code section 34176 (b)(2) and 34177 (g). Therefore, no further action is necessary. City's Response The City did not comment on this finding. -7- Poway Redevelopment Agency Asset Transfer Review Schedule 1— Unallowable Asset Transfers to the City of Poway January 1, 2011, through January 31, 2012 Unallowable Date Description Transfers Loan Repayments Fund 312 - City RDA Debt Service 702,823 03/09/11 RDA loan repayment to the City's Water Fund $ 1,539,889 03/09/11 RDA loan repayment to the City's Water and 258,227 various Drainage Funds 5,001,111 03/11/11 RDA loan repayment to the City's General, 6,020,831 various Drainage, Street, Water, and Sewer Funds 7,372,560 12/31/11 RDA loan repayment to the City's General Fund 516,356 01/31/12 RDA loan repayment to the City's Sewer Fund 4,348,532 various Subtotal Loan repayments 18,778,448 Cash transfers various Fund 312 - City RDA Debt Service 702,823 various Fund 417 - City RDA CIP Housing 2001 TABS 2,279 various Fund 424 - City RDA CIP 2001 TABS 258,227 various Fund 425 - City RDA CIP 2003 TABS 191,678 various Fund 426 - City RDA CIP Fund 6,020,831 various Fund 427 - City RDA CIP Housing 2001 TABS 2,272,935 various Fund 428 - City RDA Admin Fund 497,096 03/11/11 Fund 429 - City Special Programs (Smith various Settlement) 3,045,191 Subtotal Cash transfers 12,991,060 Notes Receivable transfers 03/11/11 Poinsettia note receivable 5,787,950 03/11/11 Hotel note receivable 1,892,303 Subtotal Note Receivable transfers 7,680,253 Land held for resale transfers 03/11/11 Property transfer 436 LHFR 474,974 03/11/11 Property transfer 438 LHFR 554,418 Subtotal Land held for resale transfers 1,029,392 Land transfers 03/11/11 Wanesta@Hilleary, 317 - 101 -27 202,121 03 /I1 /1I CIVIC CNT SITE -GAMMA 77 31419339/40/41 260,199 03/11/11 CIVIC CNT SITE -13620 TEMPLE /13621 ADRIAN 394,646 03/11/11 LAND,HILLEARY PMSOUTH ACCESS 32,000 03 /11 /I1 LIBRARY SITE,WESTERN LUMBER(POWAYRD) 375,000 03/11/11 SITE,COMMERCIAL,WESTERN LUMBER,13137 560,323 03/11/11 1.54Acres:NW ComerTamscan@PowayRd -13100 Poway Rd APN317 -101 -06 1,158,018 03/11/11 Auto Dealership Off -Site Storage Lot @ Business park 2,949,250 0 Poway Redevelopment Agency Asset Transfer Review Schedule 1 (continued) Unallowable Date Description Transfers Land transfers (continued 03/11/11 2 Acres Commercial Midland Road Old Poway 03/11/11 Park Agency Owned 03/11/11 Big Stone Lodge acquisition (Deposit) 03/11/11 14038 York Escrow Close on Field Property 03/11/11 Acquisition 03/11/11 14055 York Ave Escrow Close on Field Property 03/11/11 Acquisition 03/11/11 14152 Sycamore Ave 03/11/11 14152 Sycamore Ave Escrow Close on Field 03/11/11 Property Acquisition 03/11/11 14134 Sycamore Ave 03/11/11 Auto Dealership Off -Site Storage Lot (5 Acre 03/11/11 Industrial Park - RDA Owned) 03/11/11 14134 Sycamore Ave 314 - 201 -20 03/11/11 12237 Old Pomerado Road 317- 232 -22 (Big Stone 03/11/11 Lodge) 03/11/11 Dunster Property 317- 540 -73 03/11/11 13033 Poway Rd, 317 - 472 -18 03/11/11 14146 Sycamore. 314 - 201 -19 03/11/11 14056 York, 314 -214 -05 03/11/11 14049 York, 03/11/11 Property Field Acquisition 03/11/11 Dunster Property 317-540-73 03/11/11 Property Field Acquisition 03/11/11 LAND,BREIHAN PROPTY,ESCROW DEPOSIT(COMM) 03/11/11 LAND,E OF COMMUNITY,SOF CIVICCNT RD,BREI Subtotal Land transfers Buildin¢ and Improvement transfers 03/11/11 STARRIDGE PARK RESTROOM 03/11/11 GARDEN PARK RESTROOM 03/11/11 CHAIN LINK FENCE AT COMMUNITY PARK 03/11/11 JOINT USE FACILITY -CNT FOR PERF ARTS 03/11/11 TWIN PKS MULTI -PURP CNT IMPROVEMENTS 03/11/11 TWIN PKS MULTI -PURP CNT IMPROVEMENTS 03/11/11 COMMUNITY PARK REST ROOM BLDG 03/11/11 COMMUNITY PARK RST RM -BLDG UTILITIES 03/11/11 COMMUNITY PARK RST RM -BLDG 03/11/11 COMMUNITY PARK RSTRM -BLDG 03/11/11 BACKSTOP, INSATLL 03/11/11 RESTROOM COMPLETION 03/11/11 PERF ARTS CNT CIP CLOSED 03/11/11 CPA JOINT USE FACILITY in 1,348,988 50,000 312,198 321,400 5,000 296,115 5,000 7,695 343,800 809,671 160,000 4,601,382 458,026 412,672 5,000 570,200 88,950 140,638 84,250 1,574,975 17,527,517 105,030 104,005 9,620 180,039 6,340 14,834 13,467 48,383 6,768 7,384 9,539 11,250 7,923,004 82,213 Poway Redevelopment Agency Asset Transfer Review Schedule 1 (continued) -10- Unallowable Date Description Transfers Building and Improvement transfers (continued) 03 /I1 /I1 Meadowbrook Multi- Purpose Room 157,563 03/11/11 Meadowbrook Multi- Purpose Room 100,000 03/11/11 Meadowbrook Multi- Purpose Room 300,000 03/11/11 Meadowbrook Multi- Purpose Room 150,000 03/11/11 Meadowbrook Multi- Purpose Room 150,000 03/11/11 Meadowbrook Multi- Purpose Room 119,042 03/11/11 GYM,MEADOWBROOK SCHOOL,PO# 18602,PAY #6 49,579 03/11/11 GYM,MEADOWBROOK SCHOOL,PO# 18602,PAY #9 158,108 03/11111 GYM,MEADOWBROOK SCHOOL,PO# 18602,PAY# 10 118,295 03/11/11 TRACK RAILROAD,65LB,MISLAND RD PARK 13,359 03/11/11 RESTROOM BLDG,HILLEARY PRK,PAY #1 12,375 03/11/11 FENCE, 12' W /GATES &WINDSCREEN,HILLEARYPK 13,204 03/11/11 RESTROOM BLDG,HILLEARY PRK,PAY #3 4,950 03/11/11 GUARDRAIL,CABLE W/POSTS,HILLEARY PARK 8,910 03/11/11 PLAYSTRUCTURE,SERIES800,HILLRY PK,PAY #3 5,670 03/11/11 FENCE,12',HILLEARY PK,PAY #3 13,730 03/11/11 FENCE,8',CHAINLINK,HILLEARY PK,PAY #4 5,206 03/11/11 FENCE, I0',CHAINLiNK,HILLRY PK,ITM38,PAY4 6,458 03/11/11 GUARDRAIL,CABLE W/POSTS,HILLRY,ITM42,PY4 12,015 03/11/11 HANDRAIL W /CONNS,580LF,HILLRY,ITM43,PAY4 21,780 03111/11 RESTROOM BLDG,HILLEARY PRK,ITM8I,PAY4 7,425 03/11/11 BLEACHERS,2BANKS,3ROWS EA,MVBL W/PWR UNI 10,552 03/11/11 GUARDRAIL,CABLE W/POSTS,ITM #42,PAY #7 17,874 03/11/11 GUARDRAIL,CABLE W/POSTS,ITM #42,PAY #8 5,400 03/11/11 BLDG,CONCESSION,MAIN,13.5 %COMPLETE 58,003 03/11/11 BLDG,CONCESSION,MAIN, 17.5% COMPLETE 17,211 03/11/11 BATTING CAGE @ SPORTS PARK 8,257 03/11/11 BLDG,CONCESSION(MAW)SPORTS PARK,PAY #4 64,887 03/11/11 BLDG,CONCESSION(MAIN)SPORTS PARK,PAY #5 109,465 03/11/11 BLDG,RESTRM,HILL'RY PRK,ITM #81,FINAL PAY 2,750 03/11/11 BLDG,CONCSSN(MAIN)SPORTS PRK 24,871 03/11/11 SIGNAL,CROSSING,RAILROAD,MAT'L &LAB OR 21,825 03/11/11 CPA JOINT USE FACILITY:92 /93 CAPITALIZED 15,684 03/11/11 BLDG,CONCESSN,MAIN,S PWY SPORTS PARK 37,607 03/11/11 BLDG,MTCE,SOUTH POWAY SPORTS PARK 22,802 -10- Poway Redevelopment Agency Asset Transfer Review Schedule 1 (continued) Unallowable Date Description Transfers Buildine and Improvement transfers (continued 03/11/11 BLDG,CONCSSN,SMALL,S POWAY SPORTS PARK 5,898 03/11/11 BLDG,GYM,MEADOWBROOK MULTI- PURPOSE ROOM 77,346 03/11/11 BLDG,CONCESSION,MAIN,SPOWAY SPORTS PARK 21,643 03/11/11 BLDG,MTCE,SPOWAY SPORTS PARK 39,147 03/11/11 BLDG,CONCESSION,SMALL,SPOWAY SPORTS PARK 9,644 03/11/11 BLDG,CONCESSION,MAIN,SPOWAY SPORTS PARK 26,419 03/11/11 BLDG,MTCE,SPOWAY SPORTS PARK 2,489 03/11/11 BLDG,TICKET BOOTH,SPOWAY SPORTS PARK 9,735 03/11/11 GLDG,CONCESSION,MAIN,SPOWAY SPORTS PARK 47,374 03/11/11 BLDG,MTCE,SPOWAY SPORTS PARK 2,825 03/11/11 BLDG,CONCESSION,SMALL,SPOWAY SPORTS PARK 4,397 03/11/11 BLDG,TICKET BOOTH,SPOWAY SPORTS PARK 3,484 03111/11 BLDG,CONCESSION,MAIN,SPOWAY SPORTS PARK 18,502 03/11/11 BLDG,CONCESSION,SMALL,SPOWAY SPORTS PARK 865 03/11/11 BLDG,TICKET BOOTH,SPOWAY SPORTS PARK 549 03/11/11 HVAC REVISIIONS,PCPA(50° /a) 22,613 03/11/11 DOORDOUBLE,REMODEL@PCPA 5,000 03 /I1 /11 BUILDING ,CONCESSION,SPSPRK,MAIN,100% ,COM 4,303 03/11/11 BUILDING ,CONCESSION,SMALL,SPSPRK,100 %CO 185 03/11/11 BOOTH,TICKET,SPWYSPRTS PRK, I 00%COMP LETE 139 03/11/11 BACKSTOP ,CHAINLINK.30',70 ° /.,COMMPRK E BAL 18,207 03/11/11 PCPA HVAC, PAY #2 13,195 03/11/11 OLD POWAY PARK - GAZEBO 5,625 03/11/11 Bldg Gazebo,Old Poway Park 9,800 03/11/11 Improvements- Other.Fountain,Old Poway Park 13,940 03/11111 Bldg,Gazebo,Old Poway Park 5,625 03/11/11 Bldg,Gazebo,Old Poway Park 5,625 03/11/11 Non - Structural Improvements- Fencing,Old Poway Park 6,534 03/11/11 Bldg,Concession,Main,S Pwy Sports Prk:Cap retention 47,810 03/11/11 Bldg,Concession,SmaII,S Pwy Sports Prk:Cap retention 2,332 03/11/11 B1dg,Maintenance,S Pwy Sports Prk:Cap retention 7,474 03/11/11 Bldg,Booth,Ticket,S Pwy Sports Prk:Cap Retention 1,545 -11- Poway Redevelopment Agency Asset Transfer Review Schedule l (continued) Unallowable Date Description Transfers Buildine and Improvement transfers (continued 03/11/11 Improves ,Park,Fencing- OldPowayPark:3731f Pay #5 6,714 03/11/11 PCPA HVAC -Band Room Modification :Ducts;Tubing;Fittings 5,976 03/11/11 Bldg Main,Concessions,Spwy Sports Park:Curvilinear Stairway 14,576 03/11/11 Senior Cot Remodel:Pay#1- Framing,Plumbg,Electric,Etc 32,643 03/11/11 BIdg:SeniorCnt@CommunityPrk -95 Remodel 14,151 03111/11 Structure:Shade Structure @ Adobe Ridge Mini - Park 10,260 03/11/11 Equip,Playground,BT -5204B Tom Around Structure AdobeRidge 5,337 03/11/11 Expansion,Weingart Senior Cot 96 Upgrades 11,777 03/11/11 Weingart Sr Cnt Expansion - 94 /95:Concrete,Framing,Electrical 38,702 03/11/11 Atarm,Fire:Weingart Senior Cnt'96 Addition 23,030 03/11/11 Expansion ,WeingartSeniorCnt(CommPrk):'96 Improvements 115,689 03/11/11 Expansion ,WeingartSeniorCnt(CommPrk).'96 Improvements 37,350 03/11/11 Struct ure ,Shade,ArbolitosMiniPark,Pay#2 6,286 03/11/11 Expansion,Weingart Senior Cot 96 Improvements 24,772 03/11/11 Expansion,Weingart Senior Cnt,96Improvements 14,646 03/11/11 Expansion ,Weingart Cnt,96Improvements 19,760 03/11/11 PatioEnclsureElectricUpgrades HamburgrFact @OI dPwyPrk 5,000 03/11/11 PatioEnclsureHeating ,HamburgrFact @OldPwyPrk 7,000 03/11/11 8' ConcreteBlockWallAroundCo-GenerationUnit- 5534A (8325) 5,000 03/11/11 Netted Fence @SPSportsPark Proj 5620B (8325) 10,364 03/11/11 Restrooms@LkPwy FY97Costs(UpperLake)Proj 5629 (8313) 88,445 03/11/11 12 'AlumDocks/4'AlumGangway @LkPwy Proj5638A (8325) 46,261 03/11/11 RestRooms @LkPwyPark- PdFY98forFY97(8313) 256 03/11/11 Restrooms@ ArbolitosSportsField (InitialPay)(8311) 18,600 03/11/11 PCPA Courtyard Upgrade:FY98 6,574 03/11/11 Arbolitos Park Restrooms 12,555 03/11/11 Arbolitos Park Restrooms 50,220 03/11/11 Arbolitos Park Restrooms 4,185 03/11111 Restrooms @ LkPoway (Final Pay) 22,067 03/11/11 Shelter,Picnic,4- Post, I 2X I 2,SteelRoof@SilversetPark 8,500 03/11/11 RR Turntable @ Old Poway Park ProgPay#2 8,095 03/11/11 RR Turntable @ OPP- Construction Etc 240,506 03/11/11 Old Poway Park Improvements- Phase IV 26,968 -12- Poway Redevelopment Agency Asset Transfer Review Schedule 1 (continued) Unallowable Date Description Transfers Buildine and improvement transfers (continued) 74,516 03/11/11 Old Poway Park Train Depot 1,326,097 03/11/11 Fire Station I Apparatus Door Replacement (4 Doors) — 03/1 1/11 Blue Sky Parking Lot and Grading 1,159,309 03/11/11 Community Park Parking Lot 641,657 03/11/11 Auto Dealership Off -Site 2,201,941 03/11/11 Auto Dealership Off -Site 21,685 03/11/11 Poway Royal Pool — 03/11/1l Veteran Memorial Park Imp 481,646 03/11/11 Subtotal Building and Improvement transfers 17,581,602 Infrastructure transfers 03/11/11 Poway Community Road 74,516 03/11/11 Poway Mino de Oro 273,149 03/11111 Midland Road widening 1,876,863 03/11111 Midland Road widening 1,354,900 03/11/11 Titan & Espola Left Lane 349,073 03/11/11 Tarascan Drive Extension 363,156 03/11/11 Poway Road Street Improvement 369,500 03/11/11 Civic Center Drive Extension 775,530 03/11/11 Civic Center Drive Extension 843,116 03/11/11 Orchid Ave Extension 883,133 03/11111 Midland Village Improvement 3,250,700 03/11/11 Brandalise Homeownership Street Improvement 603,167 Subtotal Infrastructure transfers 11,016,803 CIP transfers 03/11/11 Tarascan Drive Extension 75,254 03/11/11 Oak Knoll Widening 6,607 03/11/11 Oak Knoll Widening 216,777 03/11/11 Oak Knoll Widening 363,175 03/11/11 Oak Knoll Widening 2,806,523 03111/11 Oak Knoll Widening 2,253,530 03/11/11 Poway Rd Mixed Use Fund -Town Center 2,462,635 03/11/11 Poway Rd Mixed Use Fund -Town Center 7,164 03/11/11 Poway Rd Mixed Use Fund -Town Center 24,986 03/11/11 Poway Rd Mixed Use Fund -Town Center 22,319 03/11/11 Big Slone Lodge Rehab 2,215 03/11/11 Big Slone Lodge Rehab 17,903 03111/11 Veterans Memorial Park 12,764 03/11/11 Veterans Memorial Park 465,861 03/11/11 Business Park /Restaurant Site 673,423 03/11/11 Business Park /Restaurant Site 311,666 03/11/11 Business Park /Restaurant Site 68,464 03/11/11 Business Park /Restaurant Site 105,859 Subtotal CIP transfers 9,897,125 Total Unallowable Transfers 96,502,200 Assets turned over to the Successor Agency on June 30, 2012 (96,502,200) Assets subject to Health & Safety Code section 34167.5 $ 0 -13- Poway Redevelopment Agency Asset Traufer Review Schedule 2— Unallowable Asset Transfers to the Housing Authority January 1, 2011, through January 31, 2012 Date Descriotion Amounts Cash transfers various Fund 416 - City RDA Housing $ 19,168,950 Land transfers 03/11/11 Housing Acquisition West of Library 283,928 03/11/11 Community Road Multi - Family Housing Site 5,000 03/11/11 Community Road Multi - Family Housing Site 106,086 03/11/11 Twin Pks at Espola, 321. 190 -28 846,270 03/11/11 14048 Sycamore, 314-214-18 436,220 03/11/11 13031 Poway Road APN# 317472 -06 347,000 03/11/11 12341 -12355 Oak Knoll Road APN 317- 152 -14 2,089,711 Civic Center Site -Parma Prcl APN #314- 220- 42x/Parcel # Changed 03/11/11 To 314- 220 -69 298,513 03/11/11 Land, Brookview Village Property, Escrow #29548 (Deposit) 50,000 03/11/11 Land, Huber Property, Ecrow #32148 -A, APN 317473 -18 (Deposit) 50,000 03/11/11 Land, Huber Property, APN 317473 -18 (Deposit) 1,598,105 Land, Brookwiew Village Property, 6.7 Acres, APN 317 -521- 03/11/11 02/03/04 1,082,074 03/11/11 Land, Brookview Vill Proj, 6.7 Ac, APN 31752102/03/04 Acq Cost 11,064 03/11/11 12674 Monte Vista Rd #275. 460 -61 1,291,346 03/11 /11 14025/41/56 Brighton at Edgemoor #314- 220 - 07/12/66 1,122,119 03/11/11 Brighton Ave Properties: FY01 Charges to Land Acct 1,596,864 03/11/11 13406 Community Rd Property 1,316,847 03/11/11 Brighton Ave Properties 25,101 03/11/11 13406 Community Road 88,511 13021 Poway Rd Schneider Property Acq Costs for Housing West of 03/11/11 Library 1,944,212 03/11/11 Port Lots 4 &5 Poway Tr 84-03 Gateway Park Rd 1,502,000 03/11/11 13956 Poway Road (Brandalise) 323- 203 -19 795,000 03/11/11 13917 Courier Way (Brandalise) 323 - 203 -18 405,000 03/11/11 13424 Scots Way Acquisition 5,000 03/11/11 13655 (13649) Poway Road APN 317- 190 -21 2,864,759 Total Land transfers 20,160,730 Total unallowable transfers 39,329,680 Less Adjustments: 2/1/2012 Cash transfers to the Successor Agency (19,022,695) 06/30/12 Land transfer to Successor Agency - 13655 (13649) Poway Road APN 317 - 190 -21 (2,864,759) various Third party invoices (16,953) various FY 12 lease revenues received after the election to assume housing assets and function (129,302) January 17, 2012 — Housing Authority election to retain housing assets per City Council meeting held (17,295,971) Total transfers subject to H &S Code section 34167.5 $ -14- Poway Redevelopment Agency Asset Transfer Review Attachment City of Poway's Response to Draft Review Report In addition to the attached letter, the City provided additional documents. Due to their size, we are not including them as an attachment to this report. Please contact the City for copies of the additional documents: -15- SrLVE VAUS, Mcyoc CITY OF POWAY w DAVE GROSCH, Depwy Mnym JIM CUNNINGHAM, CouncilmeN,ec JOHN MU[LIN, Coundlmembm January 23, 2015 Mr. Jeffrey V. Brownfield, CPA Chief, Division of Audits California State Controller's Office P.O. Box 942850 Sacramento, CA 94250 -5874 Dear Mr. Brownfield: In response to the State Controller's Office Asset Transfer Review letter, dated December 17, 2015, the City believes the findings can be broken down into two issues, Capital Assets and the Smith Judgment, with each issue being addressed below. Capital Assets: The California State Controller's Office ( "SCO') is ordering the return of approximately $21,845,296 in Capital Assets to the Successor Agency. (See, Draft Asset Transfer Review, pg. 7, Fund 429 — City Special Programs). The change in the capital asset transfer amount can be attributed to several factors as documented in the attached schedule (Attachment "A'7. The City respectfully disagrees with the SCO's determination for the following reasons: (1) balances were written off because expenditures for design had been capitalized, but no tangible asset had been produced, (2) assets had been sold or transferred to other entities pre- dissolution, but had not been removed from the Redevelopment Agency's (the Agency) records, and (3) assets had been transferred to the City pre - dissolution, but had not been removed from the Agency's records. Additional support in the form of grant deeds is included with Attachment A. Smith ,Judgment: I. Fund 429 — City Special Programs (The Smith Fund) The California State Controller's Office ( "SCO ") is ordering the return of approximately $2,762,808 to the Successor Agency. (See, Draft Asset Transfer Review, pg. 7, Fund 429 — City Special Programs). The Successor Agency respectfully disagrees with the SCO's determination for the following reasons: (1) the funds represent housing assets that are mandated by law to be turned over to the Poway Housing Authority ("Housing Authority') and not to the Successor Agency; (2) a portion of the funds are committed to third parties and therefore, to the extent committed, those funds cannot be turned over to the Successor Agency; and (3) the Successor Agency has received its finding of completion ( "FOC'l from the California Department of Finance ( "DOF'7 and therefore a City Hall Located at 13325 Civic Center Drive Mailing Address: P.O. Box 789, Poway, California 920740789 www.poway.org W. Jeffrey V. Brownfield, CPA January 23,2015 Page 12 determination has been made that the tracing entities have received all the funds to which they are entitled. Accordingly, for the foregoing reasons, which are discussed in further detail below, the SCO should reverse its finding that the funds at issue be turned over to the Successor Agency. II. Background Of The Smith Fund The funds at issue are part of the Housing Special Program Food that was created as part of a settlement agreement (the "Settlement Agreement ") in Smith et al. v. All Persons Interested, SDSC Case No. 667691 (the "Smith Action'), a reverse validation action that challenged an Amendment to the 1993 Redevelopment Plan for the Paguay Redevelopment Project Area. [A copy of the Reporter's Transcript detailing the Settlement in open court is attached hereto as Exhibit 1 to Attachment B.] The Settlement Agreement required and produced a Stipulation re Settlement (the "Stipulation'), attached as Exhibit 2 to Attachment B. Pursuant to the Stipulation, a stipulated judgment (the "Judgment'), attached as Exhibit 3 to Attachment B, was entered in the Smith Action on January 26, 1995. The Stipulation and the Judgment required the following: (a) Two Percent for Non - Profit Housing Corporations. Commencing in the fiscal year 2000 -2001 Poway shall allocate 2% of its gross tax increment funds for the life of the redevelopment project to be distributed to qualified, non -profit 501(c)(3) or comparable organizations in the following order of priority: A. First, to capacity building; B. Second for pre - development costs; and C. Third for community outreach and education concerning housing issues. To comply with the Settlement Agreement, the Stipulation and the Judgment, former Poway Redevelopment Agency ("Redevelopment Agency') established the Housing Special Program (the "Program') in 2001 for the purpose of disbursing two percent of its property tax increment to nonprofit housing developers. This was in addition to the 20% act aside required by the .e Program's mission was to increase, improve, and preserve that is well- managed and valued in the community. Program funds (the "Fund(sy are disbursed annually in the form of grants and loans for: (1) capacity building, (2) predevelopment costs, and (3) community outreach and education concerning housing issues, in this order of priority. The Funds have provided significant support to local nonprofit organizations allowing them to continue their mission of developing and maintaining quality affordable housing in Poway. In March, 2011, the Fund balance was transferred from the Redevelopment Agency to the City pursuant to a Cooperation Agreement. The City has administered the Fund and the Program ever since. Pursuant to their obligations under the Settlement Agreement, the Stipulation and the Judgment, the former Redevelopment Agency, and later the City pursuant to the Cooperation Agreement, have Mr. Jeffrey V. Brownfield, CPA January 23,2015 Page 13 entered into various loao/fimding agreements with various nonprofit organizations, including, but not limited to, Community Housing Works, Wakelend Housing and Development Corp., and San Diego Interfaith Housing Foundation (the "Funding Agreements "), [Copies of the loan/funding agreements are attached hereto as Exhibits 4.6 to Attachment B, respectively.] HI. The Dissolution Act' Mandates that the Funds Be Transferred To The Housipa Authoriri Health and Safety Code § 34176(b)(2), states, in part: "If a city, county, or city and county does not elect to retain the responsibility for performing housing functions previously performed by a redevelopment agency, all rights, powers, assets, duties, and obligations associated with the housing activities of the agency, excluding enforceable obligations retained by the successor agency and any amounts in the Low and Moderate Income Housing Fund, shall be transferiod as follows: ... (2) If there is one local housing authority in the territorial jurisdiction of the former redevelopment agency, to that local housing authority." In accordance with Health and Safety Code § 34176(b)(2), the City elected, upon dissolution of the Redevelopment Agency on February 1, 2012, to transfer the housing assets and functions previously performed by the Redevelopment Agency to the Poway Housing Authority. As such, to the extent permitted by the California Constitution and by §§ 34173 and 34176 of the Health and Safety Code, many of the Redevelopment Agency's rights, powers, duties, and obligations associated with those housing fimctions became rights, powers, duties, and obligations of the Poway Housing Authority ("Housing Authorlty'7. Health and Safety Code § 34176.5 states in pertinent part, "...the Controller shall review the activities of redevelopment agencies in the state to determine whether an asset transfer has occurred after January 1, 2011, between the city or county, or city and county that created a redevelopment agency or any other public agency, and the redevelopment agency. If such an asset transfer did occur during that period and the government agency that received the assets is not contractually committed to a third parry for the expenditure or encumbrance of those assets, to the extent not prohibited by state and federal law, the Controller shall order the available assets to be returned to the redevelopment agency..." (emphasis added). Here, the Settlement Agtcement, the Stipulation and the Judgment require that the funds be used for affordable housing purposes. Health and Safety Code section 34176(e)(2) states that a housing asset is "[a]ny funds that are encumbered by an enforceable obligation to build or acquire low - and moderate - income housing..." Therefore, because the City elected pursuant to Health and Safety Code section 34176, to transfer the housing assets and functions previously performed by the Redevelopment Agency to the Poway LThe Dissolution Act is hereby defined as AB 26, a emended by AB 1494 and further amended by various assembly and senate bills passed by the Legislature and signed by the Governor. 'fho Dissolution Act is codified as Hoahh and Safety Coda § 33500, at seq. Mr. Jeffrey V. Brownfield, CPA January 23,2015 Pa.ge 14 Housing Authority, the Smith Funds are required by California state law to be in the possession of the Poway Housing Authority. Accordingly, because California state law prohibits the Smith Funds from being transferred to any other entity other than the Housing Authority, the SCO should reverse its finding that the Funds be transferred to the Successor Agency. IV. Portions Of The Smith Funds Are Contractually Committed To Third Parties And Therefore Cannot Be Ordered Transferred To The Successor A¢enov Health and Safety Code section 34167.5, states in pertinent part "Commencing on the effective date of the act adding this part, the Controller shall review the activities of redevelopment agencies in the state to determine whether an asset transfer has occurred after January 1, 2011, between the city or county, or city and county that created a redevelopment agency or any other public agency, and the redevelopment agency. If such an asset transfer did occur during that period and the government agency that received the assets is not contractually committed to a third oarty for the expenditure or encumbrance of those assets, to the extent not prohibited by state and federal law, the Controller shall order the available assets to be returned to the redevelopment agency or, on or after October 1, 2011, to the successor agency..." (emphasis added). Further, with respect to any transfers that occurred post - dissolution (i.e., after February 1, 2012), AB 1963 (which took effect in July as emergency legislation) prevents the SCO from reviewing any _ transfers that occurred after February 1, 2012. Here, approximately $135,967.01 of the Funds were contractually committed to third parties pursuant to the Funding Agreements attached as Exhibits 5 and 6 to Attachment B hereto, and therefore must be excluded from the amounts ordered returned to the Successor Agency. Specifically, on August 17, 2010, the former Redevelopment Agency and San Diego Interfaith Housing Foundation (" Interfaith") entered into a Funding Agreement whereby the former Redevelopment Agency pledged a portion of the Funds to Interfaith to be used for affordable housing purposes. Further, on July 1, 2011, the former Redevelopment Agency and Community Housing Works ("CHW') entered into a Funding Agreement whereby the former Redevelopment Agency pledged a portion of the Funds to CHW to be used for affordable housing purposes. At the time of dissolution, CHW had approximately $123,150.71 and Interfaith had approximately $12,816.30 in Funds pledged to them for affordable housing purposes. Those amounts that had been pledged were returned to the Fund balance in June, 2012, but still remain encumbered pursuant to the Funding Agreements. Mr. Jeffiey V. Brownfield, CPA January 23,2015 Page 15 Accordingly, to the extent the SCO continues to order that the Funds be tamed over to the Successor Agency, at least $135,967.01 must be deducted from the Fund balance. V. AB 1484 requires two "due diligence reviews" (each, a "DDR' of business transacted between January 1, 2011, and June 30, 2012, by the Redevelopment Agency and the Successor Agency. (Health and Safety Code § 34179.5.) The reviews must identify "the dollar value of any cash or cash equivalents transferred after January 1, 2011, through June 30, 2012, by the redevelopment agency or the successor agency to any other public agency or private party and the purpose of each transfer." (Id § 34179.5(c)(3).) One DDR is for transactions involving the Redevelopment Agency's Low and Moderate Income Housing Fund, and the other is for transactions involving the Redevelopment Agency's Other Funds and Accounts ( "OFA DDR'). The purpose of the DDRs is to identify "net balances ... available for allocation to" other public agencies that receive ad valorem property taxes collected within the jurisdictional limits of the former Redevelopment Agency. (Id § 34179.5(cx6).) The statute specifies that this "available" balance must include "any amounts that were transferred as identified in [section 34179.5(ex3)] if an enforceable obligation to make that transfer did not exist" (Id) AB 1484 gives DOF final authority to approve the DDRs, and to direct payment by the Successor Agency to the Auditor - Controller of any "available" balances. (Id § 34179.6(d).) if a successor agency disagrees with DOF's determination concerning the DDR, the successor agency may request a "meet and wafer" with DOF to discuss the reasons for the determination. If a meet and confer is requested on the DDR, than DOF is to issue its final determination within thirty (30) days of the request for the meet and confer. (Health and Safety Code, § 34179.6(d) and (e).) As required by Health and Safety Code § 34179.6(c), on January 15, 2013 the Successor Agency submitted to DOF the OFA DDR approved by its Oversight Board. The OFA DDR reflected the transfer of the Funds to the City and subsequent deposits into the Fund resulting in a Fund balance of $2,846,518.2 The OFA DDR was not required to include the Fund amount in the funds available for distribution to the taxing agencies. On March 27, 2013, DOF issued a determination letter, attached as Exhibit 7 to Attachment B, as to the OFA DDR that determined that the transfer of the Funds to the City was "disallowed" as not being supported by an enforceable obligation with the City. However, DOF also determined that the taxing entities. 2. Because the Judgment and Stipulation required the Redevelopment Agency to set aside tax incmment in addition to the 20% required to be deposited In the J.MIHF, and because the Funds were never deposited into the IN111F, they were included in the OFA DDR Mr. Jeffrey V. Brownfield, CPA January 23,2015 Page 16 In a letter dated May 2, 2013, attached as Exhibit 8 to Attachment B, COP directed that the Funds be returned to the Successor Agency and used for its intended Purposes under the Settlement Agreement. Stipulation and the Judement through the Recognized Obligation Payment Schedule ( "ROPS'� process. On May 24, 2013, following the OFA DDR and pursuant to Health and Safety Code § 34179, DOF issued a Finding of Completion ("FOC "), attached as Exhibit 9 to Attachment B, to the Successor Agency, stating that the Successor Agency had paid the full amount as determined during both due diligence reviews and that the San Diego Auditor - Controller ( "Auditor-Controller") had reported those payments to DOE. successor. On August 21, 2013, the Oversight Board approved and ratified Resolution No. OSB 13 -003 (the "Resolution'l, attached as Exhibit 10 to Attachment B, approving the City's transfer of the Funds to the Housing Authority, and subsequently sent the Resolution to DOF as required by Health and Safety Code § 34181(c) & (f). On December 5, 2013, DOF issued a letter, attached as Exhibit I1 to Attachment B, disapproving the Resolution by telling the position for the very first time, and in direct contravention of both the FOC and its May 2, 2013 letter, that the Funds were unrestricted and therefore considered "available" to be used to pay enforceable obligations prior to requesting RP7TF. DOF's position that the funds are unrestricted has the unlawful effect of diverting housing assets that an mandated by law to be transferred to the Housing Authority. DOF's new position further completely undermines the purpose and findings of the FOC, which provides that the taxing entities have received all the funds to which they are entitled Because of the foregoing dispute, the City, Successor Agency and Housing Authority have filed a lawsuit (City of Poway, or al. Y. Cohen, et d., Sacramento Superior Court Case No. 34 -2014- 80001923) against DOF and the Auditor - Controller seeking an order that the Funds are housing assets that are required by law to be transferred to the Housing Authority, and that the Funds must he used to fulfill the obligations of the former Redevelopment Agency under the Settlement Agreement, the Stipulation and the Judgment. If the Funds are transferred to the Successor Agency, it would: (1) have the effect of increasing the distribution of RPTIT to the taxing agencies, in direct conflict with the FOC; and (2) would unlawfully divert a housing asset from the Housing Authority. Mr. Jeffrey V. Brownfield, CPA January 23,2015 Page 17 Given that DOF has previously issued a FOC to the Successor Agency, as well as California state law requiring that the Funds be deposited with the Housing Authority to be used to satisfy the Settlement Agreement, die Stipulation and the Judgment, the SCO should reverse its finding that the Funds be transferred to the Successor Agency. If you have any questions please contact me by telephone at (858) 668 -4413 or by e-mail at sedw oway.ora or Andrew White by telephone at (858) 668 -4426 or by e-mail at awhiteftoway.ora. Sincerely, Sco Director of Administrative Services Attachments: A. Capital Asset Reconciliation (with Exhibits) B. Smith Judgment (with Exhibits) cc via e-mail: Richard J. Chivaro, Chief Legal Counsel State Controller's Office Elizabeth Gonzalez, Bureau Chief Division of Audits, State Controller's Office Scott Freesmeier, Audit Manager Division of Audits, State Controller's Office Trisha L. Quiambao, Auditor -in- Charge Division of Audits, State Controller's Office Tina White, Assistant City Manager Successor Agency /City of Poway Andrew White, Finance Manager Successor Agency /City of Poway State Controller's Office Division of Audits Post Office Box 942850 Sacramento, CA 94250 -5874 http: /Avww.sco.ca.gov S15-RDA-9015