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Boomerang Funds:
Residual property taxes distributions
under the Redevelopment Dissolution Laws
Karen Tiedemann
Goldfarb & Lipman
1300 Clay Street, 11th Floor
Oakland, CA 94612
510-836-6336
ktiedemann@goldfarblipman.com
goldfarb lipman attorneys
OVERVIEW
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What are “boomerang funds”?
How are boomerang funds distributed to taxing
entities?
Exploring opportunities and restraints on use of
boomerang funds
Open Dialogue
WHAT ARE “BOOMERANG FUNDS”
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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
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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
BIANNUAL RPTTF ROPS DISTRIBUTIONS
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• Passthrough Obligations
• Enforceable Obligations
• Successor Agency Administrative Costs
• 34183(a)(4) Residual Distribution
TIMING OF POTENTIAL DISTRIBUTIONS
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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 NonHousing 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
HYPOTHETICAL DISTRIBUTION OF
PROPERTY TAXES IN CITY “A”
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Distribution of $1,000,000:
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$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
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Local Efforts:
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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:
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No examples to date, but discussions on joint efforts
CONSIDERATIONS/RESTRAINTS
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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
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Residual distributions are property taxesIssues arise in spending property taxes outside of jurisdiction
 Residual distributions to school districts reduce State subvention
 State realignment goals offsets amounts available to Counties
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Bonding
Restrictions on multi-year pledge
 Subject to general obligation bond 2/3 voter approval
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DISCUSSION
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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