By: Libi Uremovic | Original Article at patch.com
At the March 23, 2015 Audit Workshop Beaumont Finance Director William Aylward, in an attempt to slip and slid around why the City doesn’t pay the $2.8 Million owed to the State, stated that the City is able to claim $250,000/year in Administrative costs to off-set the $300,000/year payments. Aylward further stated: “..equating to how much we were getting through the property taxes, the tax increment.”
The Department of Finance disagrees.
On November 7, 2014 the State Department of Finance notified Aylward that only $44,796 of the $125,000 claimed for Administrative Fees for the period of January – June 2015 was authorized. The remaining $80,204 was reclassified and not allowed.
ROPS: Recognized Obligation Payment Schedule
RPTTF: Redevelopment Property Tax Trust Fund
Department Of Finance Letter Dated November 7, 2014:
“ Finance notes the oversight board has approved an amount that appears excessive, given the number and nature of the obligations listed on the ROPS. RPTTF may be used as a funding source, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation. The Agency provided financial records that display available Other Funds totaling $80,204.”
“Item No. 8 – Administrative Cost Allowance. The Agency requests $125,000 of RPTTF; however, Finance is reclassifying $80,204 to Other Funds. This item is an enforceable obligation for the ROPS 14-15B period. However, the obligation does not require payment from property tax revenues and the Agency has $80,204 in available Other Funds. Therefore, Finance is approving RPTTF in the amount of $44,796 and the use of Other Funds in the amount of $80,204, totaling $125,000.”
http://www.dof.ca.gov/redevelopment/ROPS/14-15B_Letters/documents/Beaumont_ROPS_14-15B.pdf
Beaumont Audit Workshop March 23, 2014:
107:20 Aylward: It’s basically a cash flow recommendation because it would be a $2.8 Million direct hit to our cash flow. The $300,000 was equating to how much we were getting through the property taxes, the tax increment. So it was basically washing what was coming in was going out then. In addition to that we’re also eligible for administrative costs to the tune of $250,000/year. And so right now the way it’s working out is we’re getting $300,000 in from the property tax, we’re getting $250,000 for our administrative costs per year, and were remitting $300,000 of that, so it’s a net plus position for us. Currently the numbers’ about $1.2 Million that’s available in the tax increment funds. 250 comes off the top, then another 25% goes through to pass-through payments to the other taxing agencies and that remaining amount is split among the remaining taxing agencies.
If we were to pay that $2.8 million off and the $21.5 was approved on the ROPS we would be limited to how much per year we would get to the tune of say $1 Million/year. Also those other agencies wouldn’t be getting their money either because it would all be used to pay off the City loan.
Beaumont Audit Workshop Podcast: http://www.ci.beaumont.ca.us/index.aspx?NID=212