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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. What are “boomerang funds ”?

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  1. Boomerang Funds: Residual property taxes distributions under the Redevelopment Dissolution LawsKaren TiedemannGoldfarb & Lipman1300 Clay Street, 11th FloorOakland, CA 94612510-836-6336ktiedemann@goldfarblipman.com goldfarb lipman attorneys

  2. Overview • What are “boomerang funds”? • How are boomerang funds distributed to taxing entities? • Exploring opportunities and restraints on use of boomerang funds • Open Dialogue

  3. What Are “Boomerang Funds” • 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).

  4. LRPM Plan Land disposition • 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

  5. Biannual RPTTF ROPS Distributions

  6. Timing of potential Distributions

  7. Hypothetical distribution of property taxes in City “a” • Distribution of $1,000,000: • $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”

  8. Potential Opportunities • Local Efforts: • 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: • No examples to date, but discussions on joint efforts

  9. Considerations/Restraints • 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 • Residual distributions are property taxes- • Issues arise in spending property taxes outside of jurisdiction • Residual distributions to school districts reduce State subvention • State realignment goals offsets amounts available to Counties • Bonding • Restrictions on multi-year pledge • Subject to general obligation bond 2/3 voter approval

  10. Discussion • 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

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