Assembly Bill x1 26 - Dissolution Act
Thomas P. Clark, Jr., Special Counsel to the City of Santa Ana
Acting and Serving as Successor Agency to the Community
Redevelopment Agency of the City of Santa Ana
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Suspension & Dissolution
AB x1 26
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Assembly Bill x1 26 added Parts 1.8 and 1.85 to
Division 24 of the California Health & Safety Code
(“Dissolution Act”)

December 29, 2011 decision issued by California
Supreme Court in petition California Redevelopment
Association v. Matosantos, Case No. S194861; Supreme
Court upheld the Dissolution Act (invalidated AB x1 27)
All redevelopment agencies in California were dissolved
as of and on February 1, 2012
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Suspension of Agency Powers
From June 28, 2011 to January 31, 2012 all
Agency powers were suspended, with limited
exceptions as to Enforceable Obligations
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No New Debt
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No New or Amended Contracts
No New or Amended Plans
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Authorized Acts during Suspension
and before Dissolution
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Pay or Perform Enforceable Obligations
Preserve Assets
Decide whether to become Successor Agency
Prepare and Adopt Enforceable Obligations
Payment Schedule (EOPS) and Initial
Recognized Obligation Schedule (ROPS)
City election re housing functions and assets
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Agency – City Agreements

Not Enforceable – with Limited Exceptions
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Exceptions:
•
•
Agreements entered into prior to
12/31/10 providing security for debt
City loans made within 2 years of original
Creation/Activation of Agency
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ABx1 26 Timeline
January through March
By January 13
If City does not want to serve as the “successor agency” to its redevelopment agency, then it must submit a
resolution to that effect to the County-Auditor Controller by this date. If a city wishes to serve as the
“successor agency,” no action is required.
February 1
Redevelopment agencies are dissolved.
By February 1
Successor agency must create Redevelopment Obligation Retirement Fund.
By February 1
Successor agency must decide whether to retain affordable housing function of the redevelopment agency. If
successor agency does not elect to retain this function, it is transferred to the housing authority, or, if no
housing authority exists, to the State Housing and Community Development Agency.
By February 1
Successor agency must review the Enforceable Obligation Payment Schedule (EOPS) adopted by the
redevelopment agency last fall, modify it if necessary, and readopt. The successor agency may only make
payments for those obligations identified in the EOPS until a Recognized Obligation Payment Schedule (ROPS)
is approved.
By March 1
Successor agency must prepare a Recognized Obligation Payment Schedule (ROPS). This is a permanent
schedule of obligations that replaces the interim EOPS once the ROPS has been approved by the Oversight
Board. The County Auditor-Controller will allocate property tax increment to successor agencies to pay debts
listed on ROPS.
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ABx1 26 Timeline
April through July
By April 1
Successor agency reports to the County Auditor-Controller whether the total amount of property tax available
to the agency will be sufficient to fund its ROPS obligations over the next six-month fiscal period.
By April 15
Successor agency must send the adopted ROPS to the State Controller and the State Department of Finance
for approval. The ROPS is also subject to approval by the Oversight Board.
By May 1
Oversight Boards begin operations, files report of membership with State Department of Finance.
Starting May 1
Successor agency may only pay those obligations listed in the EOPS until the ROPS is approved. The approved
ROPS replaces the EOPS.
By May 11
DOF requests second ROPS (for July 1 - December 31, 2012) as approved by Oversight Board be submitted to
DOF and County Auditor-Controller (and presumably State Controller).
By May 16 and continuing
thereafter as specified
The County Auditor-Controller transfers property tax to the successor agency in an amount equal to the cost
of the obligations specified in the ROPS. This amount is transferred into the successor agency’s
Redevelopment Obligation Retirement Fund, and payments from this fund are used to satisfy the obligations
identified in the ROPS.
June 1
Dissolution Act calls for Auditor-Controller to make Trust Fund distributions to Successor Agencies for the
period of July 1 - December 31, 2012.
July 1
County Auditor-Controller to have audited all former Agency’s assets and liabilities.
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Dissolution – Successor Agencies ABx1 26
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All California Redevelopment Agencies Dissolved on
and as of February 1, 2012
Successor Agency is City of Santa Ana Acting and
Serving as Successor Agency
If City had not elected to become Successor Agency,
then role to 1st Taxing Agency that volunteered or
Governor appoints 3-Member Designated Local
Authority (e.g., Los Angeles)
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Role of Successor Agency

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Pay and perform Enforceable Obligations as
shown on approved ROPS
Dispose of Agency Assets and Wind Down
Affairs of former Agency
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Housing Functions
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City had right to elect to retain housing assets &
functions
City declined and selected the Housing Authority of
the City of Santa Ana to assume housing assets
and function of former Agency as of February 1,
2012
If no local housing authority then transfer would be to
HCD
Includes all rights, powers, duties and obligations
Excludes unencumbered Housing Fund balance
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Oversight Board
7 members
Appointed By
Board of Supervisors (2)
Mayor (1)
County Superintendent of Education (1)
Chancellor of CA Community Colleges (1)
Largest Special District (1)
Former Agency employee (appointed by Mayor) (1)
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Role of Oversight Board
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Approves most actions of Successor Agency
Approves Successor Agency Administrative Budget and
ROPS
Most actions subject to review by State Department of
Finance (DOF)
May negotiate with City for City to acquire assets
May terminate contracts with payment of compensation
Has a fiduciary responsibility to holders of enforceable
obligations and to the taxing entities that benefit from
distribution of property tax and other revenue
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Role of Auditor-Controller

Audit all former Agencies assets and liabilities by
July 1, 2012
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Audits to be reviewed by DOF and State Controller’s
Office (SCO)
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Determine
annually
amount
of
(former)
Tax Increment and Deposit in Redevelopment
Property Tax Trust Fund

Administer Trust Fund for benefit of bondholders and
taxing entities
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Redevelopment Property Tax Trust Fund

Pay Pass -Throughs
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Pay Successor Agency amount required to
pay Enforceable Obligations on approved
ROPS

Pay Successor Agency amount to pay
allowed administrative costs
5% TI allocated FY 2011-12
3% TI allocated FYs thereafter
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