CITY OF SIGNAL HILL OVERSIGHT BOARD

Transcription

1 CITY OF SIGNAL HILL OVERSIGHT BOARD 2175 Cherry Avenue Signal Hill, California THE CITY OF SIGNAL HILL WELCOMES YOU TO A REGULAR MEETING OF THE OVERSIGHT BOARD October 11, :00 p.m. The City of Signal Hill appreciates your attendance. Citizen interest provides the Oversight Board with valuable information regarding issues of the community. In addition, meetings are streamed live on our website at and are televised at 7:00 a.m., 2:00 p.m., and 7:00 p.m. every day following the City Council meeting on Charter Communications Channel 3, and Verizon FiOS Channel 38. Meetings commence at 6:00 p.m. There is a public comment period at the beginning of the regular meeting, as well as the opportunity to comment on each agenda item as it arises. Any meeting may be adjourned to a time and place stated in the order of adjournment. The agenda is posted 72 hours prior to each meeting on the City s website and outside of City Hall and available at each meeting. The agenda and related reports are also available for review online and at the City Clerk's office and Library prior to the meeting. Agenda and staff reports are also available at our website at Pursuant to Government Code Section , each agenda for a regular meeting shall provide an item entitled Public Comment after Roll Call and the Pledge of Allegiance and before any business is transacted. The purpose of such item shall be to provide an opportunity for members of the public to directly address the Oversight Board on agenda matters as well as on items of general interest to the public that are within the subject matter jurisdiction of the Oversight Board. Speakers shall be limited to three (3) minutes. You are encouraged (but not required) to complete a speaker card prior to the item being considered, and give the card to a Successor Agency staff member. The purpose of this card is to ensure speakers are correctly identified in the minutes. However, completion of a speaker card is voluntary, and is not a requirement to address the Oversight Board. The cards are provided at the rear of the Council Chamber. Please direct your comments or questions to the Oversight Board.

2 (1) CALL TO ORDER 6:00 P.M. (2) ROLL CALL CHAIR HAUBERT VICE CHAIR NOLL MEMBER CHERNISS MEMBER GABEL MEMBER WAROT MEMBER WILLIAMSON MEMBER YU (3) PLEDGE OF ALLEGIANCE (4) PUBLIC COMMENT ON ITEMS ON OR OFF THE AGENDA (5) CHIEF ADMINISTRATIVE OFFICER REPORTS a. Housing Asset Due Diligence Review (DDR) Summary: Pursuant to provisions in AB 1484, approved by the Governor as part of the budget, the Successor Agency is required to provide a housing asset DDR to the Oversight Board (OB). By October 15, 2012, pursuant to Health and Safety Code Section (c), the OB is required to review, approve, and transmit to the Department of Finance and the County Auditor-Controller the determination of the amount available for disbursement to taxing entities as determined by Health and Safety Code Section Recommendation: Review, approve, and transmit to the Department of Finance and the County Auditor-Controller the determination of the amount available for disbursement to taxing entities as determined by Health and Safety Code Section (6) CONSENT CALENDAR a. Minutes of the Following Meeting(s) Special Meeting of the Oversight Board, August 23, Recommendation: Approve.

3 (7) OVERSIGHT AGENDA NEW BUSINESS MEMBER YU MEMBER WILLIAMSON MEMBER WAROT MEMBER GABEL MEMBER CHERNISS VICE CHAIR NOLL CHAIR HAUBERT (8) ADJOURNMENT The next regular meeting of the Signal Hill Oversight Board is Thursday, November 8, 2012 at 6:00 p.m., to be held in the Council Chamber of City Hall, 2175 Cherry Avenue, Signal Hill, CA, CITIZEN PARTICIPATION Routine matters are handled most quickly and efficiently if contact is made with the Successor Agency staff. However, if you would like to request that a matter be presented for Oversight Board consideration, you may do so by writing to the Successor Agency, Oversight Board or Chief Administrative Officer. The deadline for agenda items is 12 noon one week before the scheduled meeting. The complete agenda, including back up materials is available on the City website. If you need special assistance beyond what is normally provided to participate in Oversight Board meetings, the Successor Agency staff will attempt to accommodate you in every reasonable manner. Please call the City Clerk's office at (562) at least 48 hours prior to the meeting to inform us of your particular needs and to determine if accommodation is feasible.

4 October 11, 2012 CITY OF SIGNAL HILL OVERSIGHT BOARD 2175 Cherry Avenue Signal Hill, California AGENDA ITEM TO: FROM: HONORABLE CHAIR AND MEMBERS OF THE OVERSIGHT BOARD KENNETH C. FARFSING CHIEF ADMINISTRATIVE OFFICER SUBJECT: HOUSING ASSET DUE DILIGENCE REVIEW (DDR) Summary: Pursuant to provisions in AB 1484, approved by the Governor as part of the budget, the Successor Agency is required to provide a housing asset due diligence review (DDR) to the Oversight Board (OB). By October 15, 2012, pursuant to Health and Safety Code Section (c), the OB is required to review, approve, and transmit to the Department of Finance and the County Auditor-Controller the determination of the amount available for disbursement to taxing entities as determined by Health and Safety Code Section Recommendation: Review, approve, and transmit to the Department of Finance and the County Auditor- Controller the determination of the amount available for disbursement to taxing entities as determined by Health and Safety Code Section Fiscal Impact: The amount available for disbursement to taxing entities is $882,984. Background and Analysis: AB 1484 provided clean up language to the dissolution bill, ABx1 26 and added new requirements to unwind redevelopment agencies. A major requirement is that a housing fund DDR be completed as well as a non-housing DDR. By October 1, 2012, pursuant to Health and Safety Code Section a), each Successor Agency (SA) is required to

5 Housing Asset DDR October 11, 2012 Page 2 provide the DDR to the Oversight Board (OB), the County Auditor-Controller (CAC), the Controller, and the Department of Finance (DOF). Specific items to include are the amount of cash and cash equivalents determined to be available for allocation to the taxing entities. A Public Comments Session was held on October 4, 2012 pursuant to AB The DDR must be transmitted by October 15, In order to adopt the DDR, the By Laws state that every official act of the OB shall be adopted by a majority vote except in situations where the law calls for a vote of greater than a majority. A majority vote shall mean a majority of the full Board (i.e., four affirmative votes). If a majority vote is not received, the item will need to be continued until the next regular meeting of the Oversight Board, scheduled for November 8, Prior Housing Projects / RHNA Obligations The Housing Element of the General Plan was updated and adopted by the Signal Hill City Council on August 12, The Housing Element is required to identify the sites available to accommodate the Regional Housing Needs Assessment (RHNA). Through the RHNA, SCAG has allocated a new housing construction need to the City of 222 housing units. Of this amount, 91 are designated for extremely low-income, very low-income, or low-income households. The planning period for these units spans eight and one-half years, (1/1/06 through 6/30/14). In order to be in compliance with the RHNA requirements for affordable housing, the City researched and rezoned 1500 Hill Street for an affordable housing development. In the meantime, the Planning Commission at the City reviewed the site for affordable housing on June 17, 2008 and the City Council did so on July 22, This review consisted of a General Plan Amendment to change the designation of the site to very high density residential and two zoning ordinance amendments to change the designation of the site to Special Purpose Housing Specific Plan and the other amending the Specific Plan by adopting unique development standards for the site. The former Signal Hill Redevelopment Agency (SHRA) has a long history of creating affordable housing consistent with the Housing Element of the General Plan and the RHNA requirements. Approximately, 10% of all housing units in the City are designated for extremely low, very low, low, and moderate income residents. The SHRA has been part of creating 6 affordable housing projects. The following table lists these projects: Number of Project Name: Units Eucalyptus Gardens / Seabreeze Manor 2052 Gaviota Avenue (1997) 23 units East Village (1998) 15 units Signal Hill Village ( 1999) 40 units Las Brisas I 2399 California Avenue (2005) 92 units Las Brisas II 2340 California Avenue (2007) 60 units 967 Las Brisas Way (2010) 2 units Total 232 units

6 Housing Asset DDR October 11, 2012 Page Hill Street The estimated project costs below are for the development of an affordable housing project at 1500 E. Hill Street and 2170 Gundry Avenue. The affordable housing site at 1500 Hill Street was identified after researching many sites throughout the City of Signal Hill. The sites were evaluated based upon size, proximity to school, bus lines, parks and civic centers, and shopping. The site was identified in the Housing Element for affordable housing adopted on August 12, This project is the City s seventh affordable housing development. Beginning in 2007, the former Signal Hill Redevelopment Agency worked to acquire the property at 1500 Hill Street for the development of affordable housing. The property consists of three buildings and had four tenants at the time of purchase. The Agency completed appraisals of the site to determine the value that would have to be offered to acquire the property. The Agency s environmental consultant completed Phase I and Phase II Environmental Site Assessments, which involved studying the past uses at the site as well as completing soil borings to test the soil for hazardous materials. It is estimated that 8,334 cubic yards of contaminated soil will have to be removed. The cost of this removal is $945,000. In addition, the Agency hired a relocation consultant to determine the cost to relocate the existing tenants on the site. The property was acquired under the threat of eminent domain and a Judgment and Final Order in Condemnation was recorded on January 13, This site is 1.41 acres Gundry Avenue After the 1500 Hill Street site was acquired, Staff started to begin the process to acquire the adjacent Quonset hut property at 2170 Gundry Avenue to include as part of the affordable housing site. This site is.20 acres. An appraisal, environmental site assessment, and relocation estimate were completed. There is 1,290 cubic yards of impact soils. The cost of this removal is $122,200. There is one tenant at the site. Price and terms to acquire the site were agreed to and the site closed escrow on January 26, Since the close of escrow, Staff has been working to relocate the tenant from the site. There is currently a court case between the former redevelopment agency and the tenant on site regarding the goodwill and relocation settlement, Los Angeles Superior Court Case No. BC Due Diligence Review The DDR was completed by White Nelson Diehl Evans LLP, (the Accountant ). The Accountant reviewed the cash and property assets. The former redevelopment agency ( SHRDA ) transferred $3,469,773 in assets to the Successor Agency (See Schedule 1). As of June 30, 2012, this amount was $3,450,711 (See Schedule 3) due to contracts paid for existing obligations.

7 Housing Asset DDR October 11, 2012 Page 4 The former SHRDA transferred its property assets totaling $4,007,693 to the Signal Hill Housing Authority (SHHA) in addition to outstanding loans. Loans transferred to the SHHA include the SERAF loan of $1,063,162; the outstanding balance owed from the First Time Homebuyer Program of $71,083; and the transfer of a loan totaling $85,311 between the City and the SHRDA (See Schedule 2) for park development. The accountant reviewed the restricted balance which totaled $77,026 in unspent bond funds. The accountant was required to show that the bond amounts were restricted for housing activities. The accountant was required to review the identified enforceable obligations. The Successor Agency identified the need to retain $2,550,711 in existing asset balances to satisfy enforceable obligations related to the 1500 Hill Street & 2170 Gundry Avenue Affordable Housing Project. Of the total amount, $1,800,711 of the estimated projects costs are substantiated by cost estimates or other legal documents (see Schedule 5). The following list identifies enforceable obligations as identified by Staff for the development of affordable housing at 1500 Hill Street and 2170 Gundry Avenue. Hazardous Materials Consultant (Remediation efforts-1500 Hill Street) $869,545 Relocation of Tenants (1500 Hill Street) $120,000 Demolition of 1500 Hill Street $416,556 Relocation of Tenants (2170 Gundry Avenue) $750,000 Hazardous Materials Consultant (2170 Gundry Ave.) $192,000 Staff salaries and benefits $6,600 Legal Counsel $27,000 Maintenance of Acquired Property $25,000 Demolition of 2170 Gundry Ave. $144,000 Total: $2,550,701 Source: Exhibit 6, Successor Agency to the Signal Hill Redevelopment Agency Low and Moderate Income Housing Fund Existing Asset Balance Cash Flow Analysis Independent Accountants Report on Applying Agreed-Upon Procedures on the Signal Hill Redevelopment Agency s and The Successor Agency to the Signal Hill Redevelopment Agency s Low and Moderate Income Housing Fund, Pursuant to California Health and Safety Code Section It is doubtful that the Signal Hill Housing Authority can complete the 1500 Hill Street and 2170 Gundry Avenue project absent the funding of the remaining environmental remediation work, demolition, and tenant relocation as outlined above and listed in the DDR. Next Steps: The Successor Agency will submit the DDR to the Department of Finance and County Auditor Controller. The Department of Finance (DOF) is required to review the determinations made in the DDR no later than November 9, The DOF may adjust any amount associated with the determination of the resulting amount. The resulting amount is the net balance available after deducting the total enforceable obligations. For any items that are denied, the DOF will provide an explanation of its basis for overturning or modifying any findings, determinations, or authorizations of the oversight board. The Successor Agency and the City Council may request to meet and confer with the DOF to resolve any disputes regarding the amounts or sources of funds identified as determined

8 Housing Asset DDR October 11, 2012 Page 5 by the DOF. The request to meet and confer must be made within 5 business days of the transmission of the findings and no later than November 16, The DOF will either confirm or modify its determinations and decisions within 30 days of the request to meet and confer. The amounts to be paid to the taxing entities are due to the County Auditor-Controller within 5 working days of receipt of notification of the DOF s review which is required to be completed by November 9, 2012 or after the meet and confer process is completed. Reviewed by: Maida Alcantara Administrative Services Officer

9 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY Independent Accountants Report on Applying Agreed-Upon Procedures On the Signal Hill Redevelopment Agency s And The Successor Agency to the Signal Hill Redevelopment Agency s Low and Moderate Income Housing Fund Pursuant to California Health and Safety Code Section

10 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY AGREED-UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND Table of Contents Independent Accountants Report on Applying Agreed-Upon Procedures Related to the Low and Moderate Income Housing Fund 1 Attachment A - Agreed-Upon Procedures and Findings Related to the Low and Moderate Income Housing Fund 2 SUPPORTING SCHEDULES AND EXHIBITS: Schedule 1 - Listing of Assets Transferred to Successor Agency as of February 1, 2012 Schedule 2 - Transfers to Signal Hill Housing Authority Schedule 3 - Listing of Assets as of June 30, 2012 Schedule 4 - Schedule of Unspent Bond Proceeds Schedule 5 - Schedule of Cash Balances for Retention to Meet Obligations in Fiscal Year Schedule 6 - Summary of Balance Available for Allocation to Affected Taxing Agencies Exhibit 1 - Transfer Agreement dated April 5, 2011 Exhibit 2 - Resolution No adopted January 17, 2012 by the Housing Authority of the City of Signal Hill Accepting the Retained Housing Assets and Functions of the Dissolved Signal Hill Redevelopment Agency Exhibit 3 - Bond Documents 2003 Series D Taxable Tax Allocation Parity Bonds Exhibit 4 - Bond Documents 1994 Subordinate Tax Allocation Bonds Exhibit 5 - Bond Documents 1990 Tax Allocation Bonds, Series B Exhibit 6 - Existing Asset Balance Cash Flow Analysis Exhibit 7 - RPTTF Cash Flow Assumptions - Fiscal Year Exhibit 8 - History of Hill Street Affordable Housing Project Page

11 Independent Accountants Report on Applying Agreed-Upon Procedures Related to the Low and Moderate Income Housing Fund Oversight Board of the Successor Agency to the Signal Hill Redevelopment Agency Signal Hill, California We have performed the minimum required agreed-upon procedures (AUP) enumerated in Attachment A, which were agreed to by the California Department of Finance, the California State Controller s Office, the Los Angeles County Auditor-Controller, and the Successor Agency to the Signal Hill Redevelopment Agency (Successor Agency), (collectively, the Specified Parties), solely to assist you in meeting the statutory requirements of Health and Safety Code Section related to the Low and Moderate Income Housing Fund of the former Signal Hill Redevelopment Agency and Successor Agency. Management of the Successor Agency is responsible for meeting the statutory requirements of Health and Safety Code Section related to the Low and Moderate Income Housing Fund. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in the report. Consequently, we make no representation regarding the sufficiency of the procedures described below, either for the purpose for which this report has been requested or for any other purpose. The scope of this engagement was limited to performing the agreed-upon procedures as set forth in Attachment A. Attachment A also identifies the findings noted as a result of the procedures performed. We were not engaged to and did not conduct an audit, the objective of which would be the expression of an opinion on whether the Successor Agency has met the statutory requirements of Health and Safety Code Section related to the Low and Moderate Income Housing Fund. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the Oversight Board and management of the Successor Agency to the Signal Hill Redevelopment Agency, the California Department of Finance, the California State Controller s Office, and the Los Angeles County Auditor-Controller, and is not intended to be, and should not be, used by anyone other than these specified parties. Irvine, California October 2, Michelle Drive, Suite 300, Irvine, CA Tel: Fax: Offices located in Orange and San Diego Counties

12 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY ATTACHMENT A - AGREED-UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 1. Procedure: Obtain from the Successor Agency a listing of all assets that were transferred from the former redevelopment agency s Low and Moderate Income Housing Fund to the Successor Agency on February 1, Agree the amounts on this listing to account balances established in the accounting records of the Successor Agency. Identify in the Agreed-Upon Procedures (AUP) report the amount of the assets transferred to the Successor Agency as of that date. Finding: We agreed the amounts listed in Schedule 1 to the Successor Agency s accounting records without exception. The former redevelopment agency transferred $3,469,773 in assets to the Successor Agency as shown in Schedule 1. 2A. Procedure: Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Low and Moderate Income Housing Fund of the former redevelopment agency to the city that formed the redevelopment agency for the period from January 1, 2011 through January 31, For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency s enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. Finding: This procedure is not applicable as the former redevelopment agency did not make any transfers from the Low and Moderate Income Housing Fund other than payments for goods and services to the City of Signal Hill during the period from January 1, 2011 through January 31, B. Procedure: Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Low and Moderate Income Housing Fund of the Successor Agency to the city that formed the redevelopment agency for the period from February 1, 2012 through June 30, For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency s enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. Finding: This procedure is not applicable as the Successor Agency did not make any transfers from the Low and Moderate Income Housing Fund other than payments for goods and services to the City of Signal Hill during the period from February 1, 2012 through June 30,

13 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY ATTACHMENT A - AGREED-UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 2C. Procedure: For each transfer, obtain the legal document that formed the basis for the enforceable obligation that required the transfer. Note in the AUP report the absence of any such legal document or the absence of language in the document that required the transfer. Finding: This procedure is not applicable since no transfers were identified as a result of Procedures 2A and 2B. 3A. Procedure: Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Low and Moderate Income Housing Fund of the former redevelopment agency to any other public agency or to private parties for the period from January 1, 2011 through January 31, For each transfer, the Successor Agency should describe the purpose of the transfer and describe in what sense the transfer was required by one of the Agency s enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. Finding: The former redevelopment agency transferred assets as shown in Schedule 2 to the Housing Authority of the City of Signal Hill (Successor Housing Agency). See Exhibit 1 for the Transfer Agreement between the former redevelopment agency and the Successor Housing Agency dated April 5, 2011 for the transfer of real properties. See Exhibit 2 for the Successor Housing Agency s Resolution No adopted January 17, 2012 for the acceptance of the other retained housing assets of the former redevelopment agency. We noted that the first-time home buyer loans receivable were not recorded as an asset in the accounting records of the former redevelopment agency but were being tracked separately in a spreadsheet. See Note A, subnote (1), in Schedule 1 for further explanation. We also noted that the Successor Agency did not include a housing-related loan receivable from the City of Signal Hill on the Housing Assets List submitted to the California Department of Finance. See Note A, subnote (2), in Schedule 1 for further explanation. 3

14 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY ATTACHMENT A - AGREED-UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 3B. Procedure: Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and services) from the Low and Moderate Income Housing Fund of the Successor Agency to any other public agency or to private parties for the period from February 1, 2012 through June 30, For each transfer, the Successor Agency should describe the purpose of the transfer and described in what sense the transfer was required by one of the Agency s enforceable obligations or other legal requirements. Provide this listing as an attachment to the AUP report. Finding: This procedure is not applicable as the Successor Agency did not make any transfers from the Low and Moderate Income Housing Fund other than payments for goods and services to other public agencies or private parties during the period from February 1, 2012 through June 30, C. Procedure: For each transfer, obtain the legal document that formed the basis for the enforceable obligation that required the transfer. Note in the AUP report the absence of any such legal document or the absence of language in the document that required the transfer. Finding: Schedule 2 in the report shows the details for the enforceable obligation or other legal requirement supporting the transfers. 4. Procedure: Obtain from the Successor Agency a summary of the financial transactions of the Redevelopment Agency and the Successor Agency for the fiscal periods ended June 30, 2010, June 30, 2011, January 31, 2012 and June 30, Ascertain that for each period presented, the total of revenues, expenditures and transfers account fully for the changes in equity from the previous fiscal period. Compare amounts for the fiscal period ended June 30, 2010 to the state controller s report filed for the Redevelopment Agency for that period. Compare the amounts for the other fiscal periods presented to the account balances in the accounting records or other supporting schedules. Finding: This procedure is required by Section (c)(4) for the Successor Agency as a whole and therefore will be addressed in the AUP report associated with all other funds of the Successor Agency due December 15,

15 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY ATTACHMENT A - AGREED-UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 5. Procedure: Obtain from the Successor Agency a listing of all assets of the Low and Moderate Income Housing Fund (excluding assets held by the entity that assumed the housing function previously performed by the former redevelopment agency) as of June 30, Agree the assets on the listing to the accounting records of the Successor Agency. Finding: As of June 30, 2012, the Successor Agency s total assets related to the former redevelopment agency s Low and Moderate Income Housing Fund amounted to $3,450,711 as shown in Schedule Procedure: Obtain from the Successor Agency a listing of asset balances related to the former redevelopment agency s Low and Moderate Income Housing Fund on June 30, 2012 that were restricted for the following purposes: unspent bond proceeds, grant proceeds and program income restricted by third parties, and other assets with legal restrictions. 6A. Procedure - Unspent Bond Proceeds: Obtain the Successor Agency s computation of the restricted balances and trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation. Obtain the legal document that sets forth the restriction pertaining to these balances. Finding: As of June 30, 2012, the Successor Agency had $77,026 in unspent bond proceeds as detailed in Schedule 4. Exhibit 3 attached to this AUP report contains excerpts from the Official Statement of the 2003 Series D Taxable Tax Allocation Parity Bonds. Pages 2 and 10 from that document restrict the use of bond proceeds for housing projects. Exhibit 4 attached to this AUP report contains excerpts from the Official Statement of the 1994 Subordinate Tax Allocation Bonds. Pages 1 and 2 from that document restrict the use of bond proceeds for housing activities. Exhibit 5 attached to this AUP report contains excerpts from the Official Statement of the 1990 Tax Allocation Bonds, Series B. Pages 2 and 10 from that document restrict the use of bond proceeds for housing activities. 5

16 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY ATTACHMENT A - AGREED-UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 6B. Procedure - Grant Proceeds and Program Income Restricted by Third Parties: Obtain the Successor Agency s computation of the restricted balances and trace individual components of this computation to related account balances in the accounting records, or to other supporting documentation. Obtain a copy of the grant agreement that sets forth the restriction pertaining to these balances. Finding: This procedure is not applicable as the Successor Agency s assets related to the former redevelopment agency s Low and Moderate Income Housing Fund did not have grant proceeds and program income restricted by third parties as of June 30, C. Procedure - Other Assets Considered to be Legally Restricted: Obtain the Successor Agency s computation of the restricted balances and trace individual components of this computation to related account balances in the accounting records or other supporting documentation. We obtained the legal document that sets forth the restriction pertaining to these balances. Finding: This procedure is not applicable as the Successor Agency s assets related to the former redevelopment agency s Low and Moderate Income Housing Fund did not have other assets considered to be legally restricted as of June 30, Procedure: Obtain from the Successor Agency a listing of assets of the former redevelopment agency s Low and Moderate Income Housing Fund as of June 30, 2012 that are not liquid or otherwise available for distribution and ascertain if the values are listed at either purchase cost or market value as recently estimated by the Successor Agency. For assets listed at purchased cost, trace the amount to a previously audited financial statement or other accounting records of the Successor Agency and note any differences. For any differences noted, inspect evidence of asset disposal subsequent to January 31, 2012 and ascertain that the proceeds were deposited into the Successor Agency s trust fund. For assets listed at recently estimated market value, inspect evidence supporting the value and note the methodology used. Finding: This procedure is not applicable as the former redevelopment agency s Low and Moderate Income Housing Fund did not have any assets that were not liquid or otherwise available for distribution as of June 30,

17 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY ATTACHMENT A - AGREED-UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 8A. Procedure: If the Successor Agency identified that existing asset balances were needed to be retained to satisfy enforceable obligations, obtain an itemized schedule of asset balances (resources) as of June 30, 2012 that were dedicated or restricted for the funding of enforceable obligations. Compare the information on the schedule to the legal documents that formed the basis for the dedication or restriction of the resource balance in question. Compare all current balances which needed to be retained to satisfy enforceable obligations to the amounts reported in the accounting records of the Successor Agency or to an alternative computation. Compare the specified enforceable obligations to those that were included in the final Recognized Obligation Payment Schedule (ROPS) approved by the California Department of Finance. If applicable, identify any listed balances for which the Successor Agency was unable to provide appropriate restricting language in the legal document associated with the enforceable obligation. Finding: The Successor Agency has identified the need to retain $2,550,711 in existing asset balances to satisfy enforceable obligations related to an on-going affordable housing project as detailed in Schedule 5. These estimated project costs have been reported on the ROPS approved by the California Department of Finance; however, $1,800,711 of the estimated project costs is not substantiated by existing enforceable contracts. A history of this affordable housing project is attached to this AUP report as Exhibit 8. 8B. Procedure: If the Successor Agency identified that future revenues together with balances dedicated or restricted to an enforceable obligation are insufficient to fund future obligation payments and thus retention of current balances is required, obtain from the Successor Agency a schedule of approved enforceable obligations that include a projection of the annual spending requirements to satisfy each obligation and a projection of the annual revenues available to fund those requirements. Compare the enforceable obligations to those that were approved by the California Department of Finance for the six month period from January 1, 2012 through June 30, 2012 and for the six month period July 1, 2012 through December 31, Compare the forecasted annual spending requirements to the legal document supporting the enforceable obligation and obtain the Successor Agency s assumptions relating to the forecasted annual spending requirements. Obtain the Successor Agency s assumptions for the forecasted annual revenues. Disclose the major assumptions for the forecasted annual spending requirements and the forecasted annual revenues in this AUP report. 7

18 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY ATTACHMENT A - AGREED-UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 8B. Finding: The Successor Agency has identified the need to retain $2,550,711 in existing asset balances to satisfy enforceable obligations related to an on-going affordable housing project as detailed in Schedule 5. These estimated project costs have been reported on the ROPS approved by the California Department of Finance; however, $1,800,711 of the estimated project costs is not substantiated by existing enforceable contracts. The Successor Agency s cash flow analysis of existing asset balances is attached to this AUP report as Exhibit 6. The Successor Agency s cash flow assumptions for future RPTTF revenues for the fiscal year are attached to this AUP report as Exhibit 7. A history of this affordable housing project is attached to this AUP report as Exhibit 8. 8C. Procedure: If the Successor Agency identified that projected property tax revenues and other general purpose revenues to be received by the Successor Agency are insufficient to pay bond debt service payments (considering both the timing and amount of the related cash flows), obtain a schedule demonstrating this insufficiency. Compare the timing and amounts of bond debt service payments to the related bond debt service schedules in the bond agreement. Obtain the assumptions for the forecasted property tax revenues and other general purpose revenues and disclose them in this AUP report. Finding: This procedure is not applicable as the Successor Agency did not identify the need to retain any assets for the funding of bond debt service payments. 8D. Procedure: If Procedures 8A, 8B and 8C were performed, calculate the amount of unrestricted balances necessary for retention in order to meet enforceable obligations. Combine the amount identified as currently restricted balances and the forecasted annual revenues to arrive at the amount of total resources available to fund enforceable obligations. Reduce the total resources available by the amount of forecasted annual spending requirements. Include the calculation in this AUP report. Finding: The unrestricted balances necessary for retention to meet enforceable obligations is detailed in Schedule 5. The Successor Agency does not expect any revenues to pay for these enforceable obligations. 8

19 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY ATTACHMENT A - AGREED-UPON PROCEDURES AND FINDINGS RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND 9. Procedure: If the Successor Agency identified that cash balances as of June 30, 2012 need to be retained to satisfy obligations on the Recognized Obligation Payment Schedule (ROPS) for the period of July 1, 2012 through June 30, 2013, obtain a copy of the final ROPS for the period of July 1, 2012 through December 31, 2012 and a copy of the final ROPS for the period January 1, 2013 through June 30, For each obligation listed on the ROPS, the Successor Agency should identify (a) any dollar amount of existing cash that was needed to satisfy the obligation, and (b) the Successor Agency s explanation as to why the Successor Agency believes that such balances were needed to satisfy the obligation. Include this schedule as an attachment to this AUP report. Finding: This procedure is not applicable as the Successor Agency did not identify any assets to be retained under this procedure. 10. Procedure: Present a schedule detailing the computation of the Balance Available for Allocation to Affected Taxing Agencies. Amounts included in the calculation should agree to the results of the procedures performed above. Agree any deductions for amounts already paid to the County Auditor-Controller on July 12, 2012 as directed by the California Department of Finance to evidence of payment. Finding: The computation of the Balance Available for Allocation to Affected Taxing Agencies shows $822,984 to be remitted to the County for disbursement to affected taxing agencies as shown in Schedule Procedure: Obtain a representation letter from management of the Successor Agency acknowledging their responsibility for the data provided and the data presented in the report or in any schedules or exhibits to the report. Included in the representations is an acknowledgment that management is not aware of any transfers (as defined by Section ) from either the former redevelopment agency or the Successor Agency to other parties for the period from January 1, 2011 through June 30, 2012 that have not been properly identified in this AUP report and its related schedules or exhibits. Management s refusal to sign the representation letter should be noted in the AUP report as required by attestation standards. Finding: No exceptions were noted as a result of this Procedure. 9

20 SCHEDULE 1 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY AGREED-UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND LISTING OF ASSETS TRANSFERRED TO SUCCESSOR AGENCY As of February 1, 2012 Total as of February 1, 2012 ASSETS Cash and investments $ 3,392,747 Restricted cash and investments $ 77,026 3,469,773 NOTE: (A) For accounting purposes, the following assets recorded in the Low and Moderate Income Housing Fund at January 31, 2012 were transferred to the Signal Hill Housing Authority (Housing Successor) on February 1, 2012 pursuant to Health and Safety Code Section 34176(a)(2). Loan receivable - SERAF $ 1,063,162 Loans receivable - First-time home buyers (1) 71,083 Loan receivable - City Park Fund reimbursement (2) 85,311 $ 1,219,556 (1) The first-time home buyer loan program provides downpayment assistance to first-time low and moderate income home buyers. Financial assistance is provided in the form of deferred second mortgages, which are due the earlier of when the unit is sold, when the property no longer qualifies as buyer's principal residence or thirty years. These loans do not bear interest and the present values are significantly less than the original principal loan amounts due to the long-term nature of the repayment terms. For these reasons and since collection may be dependent on equity in the home if sold, the former redevelopment agency expensed the loans when made in the accounting records of the Low and Moderate Income Housing Fund. (2) In February 2003, the City agreed to reimburse the former redevelopment agency for 50% of certain land acquisition costs associated with a low and moderate income housing project since certain parcels of land would be used to develop a City park. The outstanding loan balance due from the City of Signal Hill is considered to be a housing asset but it was not reported on the Housing Assets List filed with the California Department of Finance.

21 SCHEDULE 2 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY AGREED-UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND TRANSFERS TO THE HOUSING AUTHORITY OF THE CITY OF SIGNAL HILL FOR THE PERIOD JANUARY 1, 2011 THROUGH JANUARY 31, 2012: Date of Enforceable Obligation/Other Transfer Description of Transfer Purpose of Transfer Amount Legal Requirement Supporting Transfer 4/5/2011 Transfer of Real Properties Transfer Housing Assets to the Housing $ 4,007,693 Assets transferred pursuant to Transfer Authority of the City of Signal Hil Agreement dated (Exhibit 1) and reported on Housing Asset Transfer Form filed with the Department of Finance 1/17/2012 Transfer of SERAF Loan Receivable Transfer Housing Assets to the Housing $ 1,063,162 Health and Safety Code Section (a)(2). Authority of the City of Signal Hil Assets transferred and reported on the Housing Asset Transfer Form filed with the California Department of Finance 1/17/2012 Transfer of first-time home buyer Transfer Housing Assets to the Housing (1) $ 71,083 Health and Safety Code Section (a)(2). loans receivable Authority of the City of Signal Hil Assets transferred and reported on the Housing Asset Transfer Form filed with the California Department of Finance 1/17/2012 Transfer of loan receivable from City Transfer Housing Assets to the Housing (2) $ 85,311 Health and Safety Code Section 34176(a)(2). of Signal Hill Authority of the City of Signal Hil Assets transferred but not reported on the Housing Asset Transfer Form filed with the California Department of Finance NOTES: (1) These loans receivable were not recorded as assets in the accounting records of the former redevelopment agency. See Note A, subnote (1), in Schedule 1 for further details (2) This loan was not was not included in the Housing Assets List submitted to the California Department of Finance. See Note A, subnote (2), in Schedule 1 for further details

22 SCHEDULE 3 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY AGREED-UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND LISTING OF ASSETS As of June 30, 2012 ASSETS Cash and investments $ 3,373,685 Restricted cash and investments 77,026 $ 3,450,711

23 SCHEDULE 4 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY AGREED-UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND UNSPENT BOND PROCEEDS 2003 Taxable Tax Allocation Parity Bonds, Series D $ 69, Subordinated Tax Allocation Bonds 4, Affordable Housing Bonds: 2,959 TOTAL UNSPENT BOND PROCEEDS $ 77,026 NOTE: These restricted cash balances are not held by fiscal agents. They are included as part of the City's investment pool. The City has been tracking the use of bond proceeds related to eligible housing projects in a separate fund in the general ledger for each debt issuance. The remaining balances represent unspent bond proceeds plus accrued interest earnings.

24 SCHEDULE 5 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY AGREED-UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND SUMMARY OF AVAILABLE RESOURCES AND ESTIMATED SPENDING REQUIREMENTS AVAILABLE RESOURCES: CURRENT RESOURCES: Unrestricted cash and investment balances at June 30, 2012 $ 3,373,685 PROJECTED REVENUES: No receipts from RPTTF - See Exhibits 6 and 7 - TOTAL RESOURCES AVAILABLE 3,373,685 ESTIMATED SPENDING REQUIREMENTS: 1500 Hill St./2170 Gundry Affordable Housing Project: Tenant Relocation - Hill St. Estimate $ 750,000 Hazardous Materials Removal - Hill St. Estimate 869,545 (1) Tenant Relocation - Hill St. & Walnut Estimate 120,000 (1) Demolition - Hill St. Estimate 416,556 (1) Hazardous Materials Removal - Gundry Estimate 192,000 (1) (2) Demolition - Gundry Estimate 144,000 (1) (2) City staff salaries and benefits Estimate 6,600 (1) Legal counsel Estimate 27,000 (1) (2) Maintenance of acquired property Estimate 25,000 (1) TOTAL SPENDING REQUIREMENTS 2,550,701 NET BALANCE (RESOURCES EXCEED SPENDING REQUIREMENTS) $ 822,984 NOTES: (1) This cost is reported on the ROPS; however, it is not supported by an existing contract or other legal document. (2) This cost is reported on the Housing Assets List; however, it has been subsequently disallowed as a low-mod encumbrance by the California Department of Finance.

25 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY AGREED-UPON PROCEDURES RELATED TO THE LOW AND MODERATE INCOME HOUSING FUND SCHEDULE 6 SUMMARY OF BALANCE AVAILABLE FOR ALLOCATION TO AFFECTED TAXING AGENCIES As of June 30, 2012 Total amount of assets held by the Successor Agency as of June 30, (Procedure 5) $ 3,450,711 Less assets legally restricted for uses specified by debt covenants, grant restrictions, or restrictions imposed by other governments - (Procedure 6) (77,026) Less assets that are not cash or cash equivalents (e.g., physical assets) - (Procedure 7) - Less balances that are legally restricted for the funding of an enforceable obligation (net of projected annual revenues available to fund those obligations) - (Procedure 8) (1) (2,550,701) Less balances needed to satisfy ROPS for the fiscal year - (Procedure 9) - Less the amount of payments made on July 12, 2012 to the County Auditor-Controller as directed by the California Department of Finance - Add the amount of any assets transferred to the City for which an enforceable obligation with a third party requiring such transfer and obligating the use of the transferred assets did not exist - (Procedures 2 and 3) - Amount to be remitted to County for disbursement to affected taxing agencies $ 822,984 Note: (1) The Successor Agency had $1,800,701 of outstanding obligations that were reported on the ROPS and on Exhibit C - Low-Mod Encumbrances of the Housing Assets List, but were not substantiated by enforceable contracts. See Schedule 5 for details.

26 EXHIBIT 1 TRANSFER AGREEMENT DATED APRIL 5, 2011

27 TRANSFER AGREEMENT FOR THE TRANSFER OF CERTAIN PROPERTIES OWNED BY THE SIGNAL HILL REDEVELOPMENT AGENCY TO THE SIGNAL HILL HOUSING AUTHORITY THIS TRANSFER AGREEMENT FOR THE TRANSFER OF CERTAIN PROPERTIES OWNED BY THE SIGNAL HILL REDEVELOPMENT AGENCY TO THE SIGNAL HILL HOUSING AUTHORITY ("Agreement") is made this 5 th day of April, 2011 by and between the Signal Hill Redevelopment Agency a public body, municipal and political ("Agency") and the Signal Hill Housing Authority, a public body, municipal and politic subdivision ("Housing Authority"). R E CIT A L S: A. The City Council of the City of Signal Hill (the "City") approved and adopted Redevelopn1ent Project No.1 (the "Project Area") on July 16, 1974, pursuant to Ordinance No , which resulted in the allocation of taxes from the Project Area to the Signal Hill Redevelopment Agency ("Agency") for purposes of redevelopment; and B. The intent of the Redeveloplnent Plan is, in part, to provide for the developn1ent and redevelopment of blighted areas in the community; to promote the general welfare of the people within the community by improving physical and economic conditions through employment of all appropriate means; to perform specific actions necessary to promote the redevelopment and the economic revitalization of the Project Area; to provide for the construction and installation of necessary public infrastructure and facilities and facilitate the repair, restoration, and/or replacement of existing public facilities; to increase, ilnprove and preserve the colnlnunity's supply of low and moderate incon1e housing, some of which may be located or in1plemented outside the Project Area; and to take all other necessary actions to implelnent the Redevelopment Plan for the Project Area and to expend tax increment to accomplish the goals and objectives of the Redeveloplnent Plan; and C. The Agency has adopted its Five Year Implelnentation Plan for the Project Area ("Implementation Plan") with established goals to support affordable housing, economic development, community revitalization, commercial revitalization, and institutional revitalization, and to implement the programs and activities associated with these goals, the Agency has acquired real property within the Project Area to be redeveloped; and D. The Project Area consists of 840 acres of active and formerly active oil fields, which present difficult environmental issues including soil contamination, improperly abandoned and leaking oil wells, abandoned pipelines, irregular lot patterns, and which are a major contributing factor to the blighted areas in the colnlnunity, the Agency has during the course of its redevelopment activities acquired properties to remediate and redevelop for future economic development projects and for the elimination of blight; and Specific to this Agreement, the Agency has acquired certain parcels or portions of parcels enumerated in Exhibit "A" ("Properties"), all of which were acquired with the Agency's housing set-aside funds and are necessary for redeveloping the Properties to implement the Redevelopment Plan, the Implementation Plan and the Housing Element and to carry out the 01002/00 12/ I

28 objectives of California Comlnunity Redevelopment Law, which is codified as Health and Safety Code Section et seq. (CRL), the Housing Authorities Law ("HA Law") and the Agency's housing requirements; and F. The Properties are currently committed to the various affordable housing projects ("Housing Projects") more particularly described in Exhibit "B"; and G. Pursuant to Section CRL, certain public bodies, including the City or a Housing Authority, may aid and cooperate in the planning, undertaking, construction, or operation of redevelopment projects; and H. Pursuant to the Housing Authorities Law (H&S Code et seq.), within any city, a Housing Authority, a corporate and politic body, may be formed if insanitary or unsafe inhabited dwellings exist in the city or if there is a shortage of safe or sanitary dwellings available to persons of low income and such Authority shall have the authority to undertake, mnong other things, the following: (i) (ii) prepare, carry out, acquire, lease and operate housing projects for persons of low income; provide for the construction, reconstruction, iinprovement, alteration or repair of any housing projects; (iii) provide financing for the acquisition, construction, rehabilitation, refinancing, or development of dwellings for persons of low income; (iv) (v) (vi) provide counseling referral and advisory services, relocation assistance and other housing related services, to persons and fmnilies of low incon1e; undertake all the variety of housing projects provided in the Housing Authority Law including leased housing, multiple fmnily housing, mobile hon1e housing, housing certificates, housing other state s and federal programs and all other such housing. cooperate with federal and state agencies to carry out the foregoing; 1. The Agency desires to transfer to the Housing Authority, the Properties, along with the responsibility of implementing the Redevelopment Plan and the Implementation Plan to bring about the redevelopment of those Properties, as the Housing Authority is familiar with the housing issues associated with the Properties and the goals of the City's General Plan, the Redevelopment Plan, the Implementation Plan and the Housing Elelnent; and the Housing Authority desires to cooperate with the Agency and to carry out the redevelopment of the Properties, in accordance with the objectives and purposes of the CRL, HA Law, the Redevelopment Plan, and the Implementation Plan; and J. The Agency and the Housing Authority have prepared a Transfer Agreement (the "Agreement") for the Agency to transfer to the Housing Authority the Properties for the following purposes: (i) the California Housing Authority shall have the authority to carry out the 01002/0012/ Transfer Agreement

29 redevelopment of the Properties in accordance with the California HA Law for the proposes of providing safe and affordable housing opportunities in the City; (ii) to continue providing for various Housing Projects to increase, improve and preserve the comn1unity's supply of low and moderate income housing; and (iii) the activities of the Agency hereunder shall be undertaken, in accordance with the CRL, as the CRL is written as of the execution date of the Agreement; and K. All other legal prerequisites to the adoption of this Agreement have occurred. NOW, THEREFORE, the parties hereto do mutually agree as follows: 1. INCORPORATION OF RECITALS. TERMS AND CONDITIONS The recitals above are an integral part of this Agreen1ent and set forth the intentions of the parties and the premises on which the parties have decided to enter into this Agreement and are hereby incorporated herein. 2. TRANSFER OF PROPERTIES. Subject to and on the terms and conditions herein set forth, the Agency agrees to convey and assign to Housing Authority, and Housing Authority hereby agrees to accept from Agency, the Properties described in Exhibit "A" together with (i) all privileges, rights, easen1ents, buildings and appurtenances belonging to the real properties, (ii) all developtnent rights, air rights, water rights and water stock relating to the real properties, and (iii) all right, title and interest of Agency in and to any streets, alleys, passages, other easen1ents, and rights-of-way or appurtenances included in, adjacent to or used in connection with the Properties. The Properties listed in Exhibit "A" are those which were purchased for and are necessary for the City's low and moderate income housing needs and satisfaction of the City's Regional Housing Needs Assessment. With the consent of the executive officers of each party, additional parcels may be added to Exhibit "A". 3. CONDITIONS TO CONVEYANCE. This Agreement shall be undertaken and carried out in accordance with the CRL and the Housing Authorities Law, and to implement the Redeveloptnent Plan, and the Implementation Plan, and the Housing Element to the General Plan. Transfer of the Properties shall be subject to the terms and conditions set forth below. (a) Subject to and on the terms and conditions herein set forth, the Agency hereby conveys to Housing Authority the Properties for the following purposes: (i) to redevelop the Properties to implement the Redevelopment Plan, the Implen1entation Plan and to carry out the objectives of CRL and HA Laws; /0012/94806, I 3 Transfer Agreement

30 (ii) (iii) to construct, reconstruct, improve, alter or repair and develop housing to carry out the purposes of the Housing Authority Law ( et seq.), pursuant to all statutory authorities contained therein; and (iii) to develop affordable housing which will comply with the City's Housing Element and its Regional Housing Needs Assessment. (b) Housing Authority shall retain each of the Properties listed in Exhibit "A" for fulfillment of the City's low and moderate income needs and satisfaction of the City's Regional Housing Needs Assessment. These Properties were acquired by the Agency with Housing Set-Aside funds for future development. Should any of the Properties listed in Exhibit "A" not be developed with housing projects, the Housing Authority shall receive proceeds from sale of the Properties to reinvest for housing purposes. The Housing Authority n1ay go through a process to find a suitable developer and convey the properties to such developer to be used for housing purposes, as the Agency has previously done with other projects it has developed. (c) The Housing Authority will have the right to exercise all the power that the Housing Authority currently does or will possess, pursuant to this Agreement and its Statutory Authorities, subject to all the obligations, duties and restrictions contained therein. (d) The Housing Authority will approve disposition of the parcels through a public process in accordance with Section et seq. of the CRL, including sections 33433, with noticed public hearings in accordance therewith, and if it approves them, making appropriate findings. The Housing Authority will determine how the project will alleviate blight and carry out the purposes of the Redevelopment Plan, Implementation Plan and the Housing Element. (e) The Housing Authority will accoll1plish the relnediation of the Properties or require the developer to do so to minilnize future liabilities. (f) The Housing Authority will negotiate appropriate tern1s and conditions to the transactions, including considering the restrictions in the redevelopment plan on the value, and any covenants and restrictions imposed on the Properties. The valuation shall consider not only cash paid, but other forms of consideration, including the obligation to remediate the Properties, and the restrictions on use. The Housing Authority will endeavor to record covenant agreements against the parcels upon disposition so that (i) the affordability restrictions on the use of the housing will run with the land, and (ii) so that the Housing Authority will continue to have the right to enforce such restrictions after the disposition of the parcels. 4. CONSIDERATION. In consideration of the transfer of the Properties from Agency to the Housing Authority, the Housing Authority is hereby obligated to carry out the redevelopment and disposition of the Properties in accordance with this Agreelnent /0012/ Transfer Agreement

31 5. ADDITIONAL DOCUMENTS REQUIRED FROM AGENCY. Immediately upon execution of this Agreement, each Property shall be transferred by the Agency to the Housing Authority by the execution of a grant deed, which shall be substantially in the form attached hereto and incorporated herein as Exhibits "C". Possession of each property shall be delivered to the Housing Authority concurrently with the conveyance of title. The Housing Authority will cause the Grant Deed to be recorded. 6. DUE DILIGENCE. 6.1 Disclaimer of Warranties. Housing Authority shall acquire the Properties in their "AS IS" and "WITH ALL FAULTS" condition and shall be responsible for any and all defects in the Properties, whether patent or latent, including, without limitation, the physical, environmental and geotechnical condition of the Properties, and the existence of any contamination, hazardous materials, vaults, debris, pipelines, wells, or other structures located on, under or about the Properties. Housing Authority makes no representation or warranty concerning the physical, environmental, geotechnical or other condition of the Properties. Housing Authority acknowledges that, once Housing Authority obtains title to the Properties, any liability of the Agency for the environmental condition of the Properties shall be extinguished, that Agency shall have no liability for remediating any environmental condition of the Properties and that Housing Authority shall indemnify the Agency against any claim or liability relating to the condition of the Properties. 6.2 Review of Documents. Agency shall make available to Housing Authority true, correct and complete copies of all contracts which relate to the Properties (together with any amendments or modifications thereto), and all reports or other documents in Agency's possession respecting the physical condition of or prior uses of the Properties, if any, and any other infonnation in Agency's possession or control reasonably requested by the Housing Authority regarding the Propeliies. 6.3 Entry for Investigation. (a) Subject to the conditions hereafter stated, Agency grants to the Housing Authority, its agents and employees a lilnited license to enter upon the Properties for the purpose of conducting engineering surveys, soil tests, investigations or other studies reasonably necessary to evaluate the condition of the Properties, which studies, surveys, investigations and tests shall be done at Housing Authority's sole cost and expense. (b) As a condition to Housing Authority'S entry, inspection or testing, Agency shall keep the Properties free and clear of all materialmen's liens, lis pendens and other liens arising out of the entry and work performed under this Agreement. 6.4 Title Policy. Unless waived by the Housing Authority, the Agency shall furnish the Housing Authority with a CL T A Owner's Policy of Title Insurance (Title Policy) for each Property, wherein the Title Company shall insure that title to the Property shall be vested in the 01002/0012/ Transfer Agreement

32 Housing Authority. The Title Policy shall include any available title Insurance, extended coverage or endorsements that Agency has reasonably requested. 7. CONDITIONS PRECEDENT TO CONVEYANCE OF THE PROPERTIES. 7.1 Conditions to Housing Authority's Obligations. The obligations of the Housing Authority under this Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by the Housing Authority of each of the following conditions precedent: (a) Agency has provided the executed and recordable Grant Deeds to the Housing Authority. (b) Timely performance by Housing Authority of all of the obligations required by the terms of this Agreement to be performed by Housing Authority. 7.2 Conditions to Agency's Obligations. The obligations of Agency under this Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by Agency of the following conditions precedent: (a) Timely perforn1ance by Agency of all of the obligations required by the terms of this Agreen1ent to be performed by Agency. 8. REPRESENTATIONS AND WARRANTIES. 8.1 Representations and Warranties. Agency hereby makes the following representations and warranties to the Housing Authority, each of which is true in all respects as of the date hereof and shall be true in all respects on the date of Closing on the Properties: (a) Agency has received no notice and/or has no knowledge that any governmental authority or any employee or agent thereof considers the present or proposed operation, use or ownership of the Properties to violate or have violated any ordinance, rule, law, regulation or order of any governinent or agency, body or subdivision thereof, or that any investigation has been commenced or is contemplated respecting such possible violations. (b) There are no pending or threatened allegations, lawsuits or clain1s which would affect the Properties. To the best of Agency's knowledge, Agency shall disclose to Housing Authority any documents, writings, or knowledge of any environmental conditions of the Properties. Housing Authority will take interest in the Properties as provided herein, in an "AS IS" and "WITH ALL FAULTS" condition /0012/ Transfer Agreement

33 (c) There are no contracts, claims or rights affecting the development or use of Properties and no agreements entered into by or under Agency that shall survive the Closing that would adversely affect Housing Authority's rights with respect to the Properties except as heretofore disclosed in writing by Agency to Housing Authority. (d) Housing Authority has received no written notice from any third parties, prior owners of the Properties, or any federal, state or local governmental agency, indicating that any hazardous waste remedial or clean-up work will be required on the Properties. (e) Agency is not a foreign person as defined in Internal Revenue Code Section 1445(f)(3). (f) Agency hereby represents, warrants and covenants to Housing Authority that Agency shall deliver exclusive possession of the Properties to Housing Authority. 9. ADDITIONAL INSTRUCTIONS. 9.1 No Escrow Instructions. Because this Agreement is being entered into by two related entities, an escrow is not being entered into and shall not be required. The officers of Agency shall carry out the recordation of the documents necessary to convey title, and shall assume the proper vesting of title. 9.2 General Provisions. Agency shall instruct the Los Angeles County Recorder to mail the Grant Deed to Housing Authority at the address set forth in Section 11.2 after recordation. This Agreement and any l11odifications, amendl11ents, or supplements thereto may be executed in counterparts and shall be valid and binding as if all of the parties' signatures were on one document. 10. BROKERAGE COMMISSIONS. Agency and Housing Authority each represent and warrant to the other that no third party is entitled to a broker's commission and/or finder's fee with respect to the transaction contemplated by this Agreement. Agency and Housing Authority each agree to indemnify and hold the other party harmless from and against all liabilities, costs, damages and expenses, including, without limitation, attorneys' fees, resulting from any claims or fees or col11missions, based upon agreements by it, if any, to pay a broker's commission and/or finder's fee. 11. MISCELLANEOUS No Conflict of Interest. No officer or employee of the Agency or Housing Authority shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects his financial interest or the financial interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in 01002/0012/ Transfer Agreement

34 violation of any State statute or regulation. Housing Authority and Agency each warrant that it has not paid or given and will not payor give any third party any money or other consideration for obtaining this Agreement Notices. Any notice which either party may desire to give to the other party must be in writing and may be given by personal delivery, facsimile or by mailing the same by U.S. mail to the party to whom the notice is directed at the address of such patiy hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate: To Housing Authority: Copy To: To Agency: Copy To: Signal Hill Housing Authority Attn: Executive Director 2175 Cherry Avenue Signal Hill, CA Aleshire & Wynder, LLP Von Karman, Suite 1700 Irvine, CA Attn: Dave Aleshire, Esq. Signal Hill Redevelopment Agency Attn: Executive Director 2175 Cherry Avenue Signal Hill, CA Aleshire & Wynder, LLP Von Karman, Suite 1700 Irvine, CA Attn: Dave Aleshire, Esq Interpretation; Governing Law. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. This Agreelnent shall be construed in accordance with the laws of the State of California in effect at the time of the execution of this Agreement. Titles and captions are for convenience only and shall not constitute a portion of this Agreelnent. As used in this Agreement, Inasculine, feminine or neuter gender and the singular or plural number shall each be deen1ed to include the others wherever and whenever the context so dictates No Waiver. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreelnents, restrictions or conditions hereof /0012/94806,1 8 Transfer Agreement

35 11.5 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provisions, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each tenn and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law Merger of Prior Agreements and Understandings. This Agreement and other documents incorporated herein by reference contain the entire understanding between the parties relating to the transaction contemplated hereby and all prior to contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect Execution in Counterparts. This Agreelnent may be executed in several counterparts, and all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpati. [SIGNATURES ON FOLLOWING PAGE] 01002/0012/ I 9 Transfer Agreement

36 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. "HOUSING AUTHORITY" "AGENCY" SIGNAL HILL REDEVELOPMENT AGENCY By: APPROVED AS TO FORM: Aleshire & Wynder, LLP Housing Authority Counsel 01002/0012/ Transfer Agreement

37 EXHIBIT "B" LIST OF HOUSING PROJECTS 967 Las Brisas Way The property at 967 Las Brisas Way is a duplex that the Redevelopment Agency has contracted with Abode Communities to manage. The Agency has been in negotiations with Abode Communities about selling the property to them so that it could be incorporated into the Las Brisas I project. The property was not incorporated into Las Brisas I initially, since the duplex was under construction at the time. The Agency purchased the property in 2010, when the property owner approached the Agency with an offer to sell the property. It is a suitable addition to the project, since the duplex is surrounded by Las Brisas 1. The rental income collected from the duplex will be placed in an account designated for the Housing Authority minus a property management fee and maintenance expenses Hill Street and 2170 Gundry Avenue The properties located at 1500 Hill Street were purchased in 2010 for an affordable housing development. The Agency recently purchased 2170 Gundry Avenue to include into the 1500 Hill Street Project. These two properties are proposed for the site of the City's sixth affordable housing development. The project will consist of up to 60 units. Both properties are currently leased to existing businesses. Rental income collected from these leases will also be placed in an account designated for the Housing Authority minus a property management fee and maintenance expenses /0012/ B-1

38 EXHIBIT "C" GRANT DEEDS FREE RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: SIGNAL HILL HOUSING AUTHORITY 2175 Cherry Avenue Signal Hill, CA Attn: Executive Director (Space Above Line for Recorder's Use Only) Exempt fron1 filing Fees per Govt. Code GRANT DEED FOR A VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, the SIGNAL HILL REDEVELOPMENT AGENCY, a public body corporate and politic, acting under the Community Redevelopment Law of the State of California, herein called "Grantor," hereby grants to the SIGNAL HILL HOUSING AUTHORITY, a public body corporate and politic, herein called "Grantee," the real property referred to as Assessor's Parcel No , as shown on the "Site Map" in the City of Signal Hill, County of Los Angeles, State of California, more particularly described in Attachment No. 1 attached hereto and incorporated herein by this reference. As conditions of this conveyance, the Grantee covenants by and for itself and any successors-in-interest for the benefit of Grantor as follows: 1. Non-Discrimination. Grantee covenants that there shall be no discrimination against, or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex, marital status, age, physical or mental disability, ancestry, or national origin in the rental, sale, lease, sublease, transfer, use, occupancy, or enjoylnent of the Site, or any poliion thereof, nor shall Grantee, or any person claiming under or through Grantee, establish or permit any such practice or practie:es of discrimination or segregation with reference to the selection, location, number, use, or occupancy of purchasers, tenants, lessees, subtenants, sublessees, or vendees of the Site or any portion thereof. The nondiscrimination and nonsegregation covenants contained herein shall remain in effect in perpetuity /0012/

39 2. Form of Nondiscrimination Clauses in Agreements. Grantee shall refrain from restricting the rental, sale, or lease of any portion of the Site on the basis of race, color, creed, religion, sex, marital status, age, physical or mental disability, ancestry, or national origin of any person. All such deeds, leases, or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) Deeds: In deeds the following language shall appear: "The grantee herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons clain1ing under or through thein, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, physical or mental disability, ancestry, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed." (b) Leases: In leases the following language shall appear: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, Inarital status, age, physical or Inental disability, ancestry, or national origin in the leasing, subleasing, renting, transferring, use, occupancy, tenure, or enjoylnent of the land herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased." (c) Contracts: In contracts the following language shall appear: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, physical or mental disability, ancestry, or national origin in the sale, lease, rental, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee himself or herself, or any person claiming under or through hiln or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the land." 3. Covenants to Run With the Land. The covenants contained in this Deed shall be construed as covenants running with the land and not as conditions which might result in forfeiture of title, and shall be binding upon Grantee, its heirs, successors and assigns to the Site, whether their interest shall be fee, easement, leasehold, beneficial or otherwise. The foregoing covenants shall remain in effect in perpetuity /0012/ C-2

40 IN WITNESS WHEREOF, Grantor has caused this instrument to be executed on its behalf by its officers or agents hereunto as of the date first above written. "GRANTOR" SIGNAL HILL REDEVELOPMENT AGENCY a public body, corporate and politic By: APPROVED AS TO FORM: ALESHIRE & WYNDER, LLP Chair By: Dave Aleshire, Esq. Agency Counsel APPROVED AS TO CONTENT: By: Executive Director COUNTERSIGNED By: Its: 01002/0012/ C-3

41 CERTIFICATE OF ACCEPTANCE This is to certify that the interest in real property conveyed by the grant deed dated on or about, 2011, from the Signal Hill Redevelopment Agency to the Signal Hill Housing Authority is hereby accepted by the undersigned officer on behalf of the Signal Hill Housing Authority pursuant to authority conferred by the City Council of the City of Signal Hill pursuant to the Transfer Agreement For The Transfer Of Certain Properties Owned By The Signal Hill Redevelopment Agency To The Signal Hill Housing Authority to Act as the Agent of the Agency in the Disposition and Redevelopment of Said Properties Pursuant to the California Redevelopment Law approved on March 8, 2011, and the Grantee consents to recordation thereof by its duly authorized officer. Dated:, 2011 GRANTEE: SIGNAL HILL HOUSING AUTHORITY ATTEST: By: --~ r--r~ Kenneth C. F arfsin Rebecca Burleson, Deputy City Clerk 01002/0012/ C-4

42 ATTACHMENT NO.1 SITE MAP 01002/0012/ C-5

43 7210 OFFICE OF THE ASSESSO COUNTY OF LOS ANGE.LE COPYRIGHT a:> 2002 z ~ ~ Cii.. ~) (j '1 1. ~...- (7.zJO- qod, q 01) j.r~ / ~v '~1500 J1111 "'''~';;~ I..,~ 7215 I 7 AVE'ii.. t. I. I 50,Ai. 201 I.J 1SO Rl)ZAN / i COLONY I TRACT!11 40 P CK t 50 RA MONU> TRACT, / ~ @ f,!~ o! (~ 0 BK $.67 DAUE TRACT \0 I U...l...l I ~ g GUNDRY \ \ \ \ EZJ \ 21"10 6"1..tYlctry AveY\-Ue. (1~IO 043- (28) o o 00.q- ~ o S2 N o o

44 I 7_~~~rQlP:t-l~-- ---_ ~-~-_-~-=--~-"-~J~;~~~~~~~.J~~~~:::::~~.. _L.. ~_.. ~._._.. ~..._~. ~ ~~_~:~~=_.... V : SIGNAL ',ILL REDEVELOPMENT AGENCY UNLESS OTHERWISE! <"':;, O. <j l' UNES. IN THoS.RACT P-LIHOUGH THE DIVISIONS OF I SOME : S~!AI.i'1i=80' I I f: I -z tilt. I All 900 SERIES PARCELS ON THIS PAGE ARE ASSESSEDTOI. STR'ffTLlNEsPER MR1~8s.-90 ARE CONSIDERED THE LOT r MAPPIN(. ~<O GIS I NOl ED I L' I ~~~~~: "EASLJRED FROM THE CENTERUNES OF THE SERVICES / --l ~ I "I PG ~t;j PG (j) l 1 r" "' ,.~ : I ~"."..~ I I NO [l'~","' 737 J' " ~ ''''6&?R?Rh -- TRACT " ~ ~,.. / 12 CALIFORNlA AVE / ill R::;12~ r-r.::=12 l 3 ~ 4 ~C) ~ 0 I....$ PG 4 I 1- Ii) N ~<J ill" ;;: ~T I It'-- I U o PG 3 1 I I \ \ Q7L1 Cjbl L.OS BnftAs WfAy (1~11-002>- ~:t-g) o 00.". ~ o N o o

45 EXHIBIT 2 RESOLUTION NO ADOPTED JANUARY 17, 2012 BY THE HOUSING AUTHORITY OF THE CITY OF SIGNAL HILL ACCEPTING THE RETAINED HOUSING ASSETS AND FUNCTIONS OF THE DISSOLVED SIGNAL HILL REDEVELOPMENT AGENCY

46

47

48

49 EXHIBIT 3 BOND DOCUMENTS 2003 SERIES D TAX ALLOCATION PARITY BONDS

50

51

52

53

54 EXHIBIT 4 BOND DOCUMENTS 1994 SUBORDINATE TAX ALLOCATION BONDS

55

56

57

58 EXHIBIT 5 BOND DOCUMENTS 1990 TAX ALLOCATION BONDS, SERIES B

59 NEWISSUE RATING: STANDARD&POOR'S: BBB In the opinion ofr utan & Tucker, Costa Mesa, California, Bond Counsel, subject, however, to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes, and such interest is not an item of tax preference for purposes of the federal alternative minimum taxes imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See "'CONCLUDING INFORMATION- TAX EXEMPTION" herein. COUNTY OF LOS ANGELES SIGNAL HILL REDEVELOPMENT AGENCY SIGNAL HILL, CALIFORNIA SIGNAL HILL REDEVELOPMENT PROJECT NO.1 $30,985, TAX ALLOCATION BONDS SERIES B (Subordinate Bonds) STATE OF CALIFORNIA Dated: December 1, 1990 Due: October 1, as shown below Interest on the Bonds is payable on April 1, 1991, and semiannually thereafter on October 1 and April 1 of each year until maturity. The Bonds wili be issued as fully registered bonds in the denomination of $5,000 each or any integral multiple thereof. Principal ofthe Bonds will be payable at the Trust Office of Security Pacific National Bank, Los Angeles, California, as Trustee. Interest on the Bonds will be paid by check of the Trustee mailed to the registered owner thereof (except as otherwise described herein for interest paid by wire transfer to certain owners of$1,000,000 or more in aggregate principal amount of Bonds). The Term Bonds maturing October 1, 2015, are subject to mandatory redemption, without premium, in part by lot on October 1 in each year commencing October 1, 2006 from sinking account payments under the Indenture. The Bonds maturing on or after October 1, 2001, are subject to optional redemption prior to maturity, in whole or in part, in inverse order of maturity and by lot within a maturity on October 1, 2000, and on any date thereafter at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption, without premium, as described herein. ' T?e. Bonds mat~r~ng, on or aftes, October~ 1,) 99~, ar~. su?ject ~o man.1~!~ry.!~<!~~eti~"'n in p~r_t_ on 9ctober_1, _1995 ~ro~ amounts remammg on depos1t m tne Escrow r una, as runner aescnbed herem (see "THE tsu N U:S - :Spec tal Mandatory RedemptiOn" herein). MATURITY SCHEDULE Serial Maturity Date Principal Amount 1991 $145, , , , , , , ,000 Interest Reoffering Maturity Date Principal Amount 7.00% 1999 $ 785, , ,015, ,100, ,185, ,260, ,360, $21,080, % Term Bonds due October 1, 2015 (Price %) Plus Accrued Interest from December 1, 1990 Interest Reoffering 7.00% 6.90% The Bonds are funding certain public facilities within and related to the Redevelopment Project No. 1 pursuant to the Law more fully described herein, establishing a reserve account and paying the expenses of the Agency in connection with the issuance of the Bonds. The Bonds are limited obligations of the The Bonds are offered, when, as and Bond Counsel. Arter Haynes Miller, Consultant certain legal that the Bonds will be available for delivery in Los Angeles, California on or about December 20,

60 The Agency has pledged for the repayment of the Bonds: (i) a second lien, on Tax Increment Revenues not required to be utilized for the provision of low and moderate income housing, subordinate only to the lien of the Agency's $21,910,000 Signal Hill Redevelopment Project No. 1, 1990 Tax Allocation Bonds, Series A (Refunding Bonds), being issued simultaneously with the Bonds, (ii) a first lien on certain Tax Increment Revenues of the Redevelopment Project, required to be utilized for the provision of low and moderate income housing (see "APPENDIX B - Report of Fiscal Consultant Low and Moderate Income Housing" herein) (collectively, as more fully defined in Appendix A hereof, the ((Tax Revenues"). and (iii) certain funds and accounts held under the Indenture. See uappendix B Report of Fiscal Consultant" and usecurity FOR THE BONDS AND BONDOWNERS' RISKS" herein. Based upon projected Tax Increment Revenues (see HSECURITY FOR THE BONDS AND BONDOWNERS' RISKS. Projected Tax Increment Revenue Assumptions and Bond Retirement" and "APPENDIX B - Report of Fiscal Consultant" herein regarding the Agency's assumptions pertaining to such projections), the Agency anticipates that sufficient funds should be available to the Agency to pay debt service on the Bonds. The projections of Tax Increment Revenues contained in this Official Statement are based on current assessed valuations within the Redevelopment Project, the current tax rates applicable to the taxable property in the R~development Project, certain increases in property value due to inflation and changes in property ownership allowed under Article XIIIA of the California Constitution and new development scheduled to occur within the Redevelopment Project. In addition, such projections are made without regard to any delinquencies in property taxes. Any future decrease in the assessed valuation of the Redevelopment Project 1 the applicable tax rates or general decline in the economic stability of the area or any increase in delinqu~ncies in payment of property taxes, will reduce the Tax Increment Revenues allocated to the Agency and correspondingly would have an adverse impact on the ability of the Agency to pay debt service on the Bonds. summaries contained herein to the the Agency, the Indenture, the Bonds, the Redevelopment Project, the California Health & Safety Code, and other statutes or documents do not to be comprehensive or definitive and are by reference to each such document or statute, and references to the Bonds are qualified in their entirety by reference to the form thereof "'"'"""'"""''-" in the Indenture. certain terms used herein are set in APPENDIX A. documents may be obtained after delivery Bonds at the Trust...,,...,..,~..,. National Los Angeles, California or from the Agency at 2175 Cherry Avenue, the Indenture are available the the initial offering of the Bonds at the offices of the Financing Consultant, Rod Gunn Associates, 3010 Old Ranch Suite 330,

61 ESTIMATED SOURCES AND USES OF FUNDS Proceeds from the sale of the Bonds will be used to provide funds for certain redevelopment activities of the Agency within the Redevelopment Project (including a deposit of moneys into the Low and Moderate Income Housing Account), to fund a Reserve Account, to pay the expenses of the Agency in connection with the issuance of the Bonds, and to pay the Original Purchaser's Discount in connection with the issuance of the Bonds. Under the provisions of the Indenture, the Trustee will receive the proceeds from the sale of the Bonds and will apply them as follows: 1. Accrued interest to date of deli very of the Bonds will be placed in the Interest Account of the Special Fund for the Bonds. 2. A sum equal to $1,916,400 from proceeds of the Bonds will initially be deposited in the Reserve Account of the Special Fund for the Bonds, which amount will equal the initial Reserve Requirement. 3. A sum sufficient to provide for the expected costs of issuing the Bonds will be placed in the Cost of Issuance Account of the Bond Proceeds Fund for the Bonds and used to pay Costs of Issuance. 4. A sum equal to $7,245, from the proceeds of the Bonds will be deposited in the Low and Moderate Income Housing Account of the Redevelopment Fund for the uses and purposed described herein. 5. sum Fund. to the Bonds will be 6. uj.a.n...u.lf;; the above deposits and payments, the balance of the proceeds from the sale will be in the of herein. vu.~..~....,."''....,..r.,cu, c Account Low and Moderate Income Escrow Fund Special Fund Reserve Account (2) Bond Proceeds Fund Cost of Issuance Account (3) Initial Purchaser's Discount Principal Amount of the Bonds Account 1,916, , , $30,985, ( 1> For of the use of moneys in the Redevelopment Fund, see "THE AGENCY -Use of Bond Proceeds" herein. (2) Amounts of the Bonds will the initial Reserve (3) initial Trustee of the Bonds

62 SECURITY FOR THE BONDS AND BONDOWNERS' RISKS Pledge of Tax Revenues The Bonds are secured by and payable from (i) a second lien on Tax Increment Revenues of the Redevelopment Project not required to be utilized for the provision of low and moderate income housing, subordinate only.to the lien of the Agency's Signal Hill Redevelopment Project No Tax Allocation Bonds, Series A (Refunding Bonds) being issued simultaneously with the Bonds, (ii) a first lien on Tax Increment Revenues of the Redevelopment Project required to be utilized for the provision of low and moderate income housing (see "APPENDIX B - Report of Fiscal Consultant- Low and Moderate Income Housing" herein) (collectively, as more fully defined in Appendix A hereof, the "Tax Revenues"), and (iii) certain funds and accounts held under the Indenture. Tax Revenues are pledged to the payment of principal of and interest on the Bonds pursuant to the Indenture until all of the Bonds have been paid, or until moneys have been set aside irrevocably for that purpose. The has no power to levy and collect property taxes, and any property tax limitation, measure, voter initiative or provision of additional sources of income to taxing agencies having the effect of reducing the property tax rate must necessarily reduce the amount of Tax Increment Revenues that would otherwise be available t9 pay the principal of and interest on the Bonds. Likewise, broadened property tax exemptions, changes in economic conditions within the Redevelopment Project or delinquencies in collection of Tax Increment Revenues could have a similar c.ff'r,..,-.+ \..t..l.j.~\.,..-t;. from Tax any of its,.,...,.,.t,,i>o the State of '-'""'... A of...,... ~... a..... of the of California or any of its or the interest on the The Bonds will be secured an irrevocable of, and will be payable as to principal of and interest from Tax Revenues received from the Project No. 1. As provided in the Redevelopment Plan and in the Indenture, and to Article 6 of Chapter 6 of the Law, and Section 16 of Article XVI of the Constitution of the State of California, taxes levied upon taxable property in the Redevelopment Project each year, by or for the benefit of the of any city, and county or other for fiscal years the first fiscal year the 1 the effective date of the ordinance adopting the amendment with respect are divided as follows: been valuation of such in the of the Redevelopment Project, those f'oc~r\ll t"'t-1uo 10

63 2. That portion of said levied taxes each year in excess of the amount referred to in paragraph 1 above will be allocated to, and when collected, will be paid to the Agency, to the extent necessary to pay the indebtedness of the Agency. Tax Increment Revenues allocated to the Agency are determined by the amount of incremental (increased) assessed valuations in the Redevelopment Project from the Base Year and the current rate at which property in the Redevelopment Project is taxed. The reduction of assessed valuations of taxable property in the Redevelopment Project caused by a relocation out of the Redevelopment Project by one or more of its major property owners, or the complete or partial destruction of such property would likely result in a reduction in the Tax Increment Revenues which secure the Bonds. In addition, any reduction in tax rates or the valuation of taxable property in the Redevelopment Project would cause a reduction in Tax Increment Revenues that secure the Bonds. Such reduction greater than that projected herein (see!(assessment of Oil and Gas Property" below), of Tax Increment Revenues could have an adverse effect on the Agency's ability to make timely payments of principal of and interest on the Bonds. Receipt of projected Tax Increment Revenues that secure the Bonds, in the amounts and at the times projected by the Agency (see ''Projected Tax Increment Revenue Assumptions and Bond Retirement" and "APPENDIX B- Report of Fiscal Consultant" herein), depends in part on certain increases in real property values for inflation "APPENDIX B Report of Fiscal Consultant Real Property Values" herein) and that new development scheduled to occur does in fact occur (see "APPENDIX B. Report of Fiscal Consultant" herein). The has reason to believe that the of Tax Increment Revenues and the upon which the projections are based are reasonable. However, to the extent that the in valuations due to inflation and new are not actually realized, the Agency's ability to timely pay principal of and interest on affected. the of Tax Increment Revenues herein do not include an allowance for any delinquencies in the payment of property taxes (see "THE AGENCY. Tax order to secure further the u '- tj'""l of and interest on the the of the LJVLHAhl in the Reserve Account for the Bonds an amount of... u'-" tj -4 amount of to the moneys on Reserve five Debt Requirement will be increased by 5% of the Initial Reserve Requirement. In addition, of any the Reserve will be further increased to include amount to 10% of the amount of Bonds having been released from the Escrow Fund on such date. The deposit from Tax Revenues and maintain an amount of money equal to the Reserve in the Reserve Account at all times while the Bonds are Outstanding. Amounts in the Reserve Account will be used to pay debt service on the Bonds to the extent other moneys are not available therefor. on amounts in the Reserve Account may be paid to the Agency to the extent not to the Investment Account be used to make to the United States. Amounts in the Reserve Account may be used to pay the final debt service on the Bonds uthe LEGAL DOCUMENTS THE INDENTt:RE" 1

64 EXHIBIT 6 EXISTING ASSET BALANCE CASH FLOW ANALYSIS

65 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Assumptions Made Total Sources Prior Year Balance Forward 3,373,685 3,373,685 List revenue sources RPTTF No Available RPTTF for Housing Projects Interest income Rental income Other TOTAL SOURCES 3,373,685 3,373,685 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant 869, Relocation of Tenants 120, Demolition 416, Relocation of Tenants - Hill St Housing Project 750, ,000 Hazardous Materials Consultant 192, Staff Salaries and Benefits 6, Legal Counsel 27, Maintenance of Acquired Property 25, Demolition , Other Expenditures TOTAL USES - 750,000 BALANCE 3,373,685 2,623,685

66 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Assumptions Made No Available RPTTF for Housing Projects ,623, , ,984 2,623, , ,984 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures 869, , , , , , , , TOTAL USES BALANCE 1,800, , , ,984

67 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Assumptions Made No Available RPTTF for Housing Projects , , , , , ,984 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures TOTAL USES BALANCE 822, , ,984

68 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Assumptions Made No Available RPTTF for Housing Projects , , , , , ,984 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures TOTAL USES BALANCE 822, , ,984

69 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Assumptions Made No Available RPTTF for Housing Projects , , , ,984 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures TOTAL USES BALANCE , ,984

70 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Assumptions Made No Available RPTTF for Housing Projects , , , , , ,984 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures TOTAL USES BALANCE 822, , ,984

71 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Assumptions Made No Available RPTTF for Housing Projects , , , , , ,984 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures TOTAL USES BALANCE 822, , ,984

72 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Assumptions Made No Available RPTTF for Housing Projects , , , , , ,984 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures TOTAL USES BALANCE 822, , ,984

73 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Assumptions Made No Available RPTTF for Housing Projects , , , , , ,984 Uses Administration Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures - TOTAL USES BALANCE 822, , ,984

74 SUCCESSOR AGENCY TO THE SIGNAL HILL REDEVELOPMENT AGENCY LOW AND MODERATE INCOME HOUSING FUND EXISTING ASSET BALANCE CASH FLOW ANALYSIS EXHIBIT 6 Fiscal Year Sources Prior Year Balance Forward List revenue sources RPTTF Interest income Rental income Other TOTAL SOURCES Uses Administration Assumptions Made No Available RPTTF for Housing Projects , , , ,984 Projects 1500 Hill Street/2170 Gundry Hazardous Materials Consultant Relocation of Tenants Demolition Relocation of Tenants - Hill St Housing Project Hazardous Materials Consultant Staff Salaries and Benefits Legal Counsel Maintenance of Acquired Property Demolition Other Expenditures TOTAL USES BALANCE , ,984

75 EXHIBIT 7 RPTTF CASH FLOW ASSUMPTIONS FISCAL YEAR

76 EXHIBIT 7 Signal Hill Successor Agency RPTTF Cash Flow Assumptions - FY FY Jan 2013 June 2013 Gross (Former) Tax Increment 13,500,000 County SB 2557 Fees (203,000) County AB 26 Admin Fee Estimate (101,500) SB 211 Withholding (1,211,000) Estimated Maximum Annual Available from RPTTF For Distributions 11,984,500 January 1 Estimated Maximum Distribution 7,190,700 June 1 Estimated Maximum Distribution 4,793,800 Contingency (250,000) (125,000) (125,000) Reserve For Annual Debt Service (8,720,363) (5,232,218) (3,488,145) Unfunded DS Carryover to Next 6 Months Available for Other Enforceable Obligations 3,014,137 1,833,482 1,180,655 Carryover Cash flow Shortfall to Next 6 Months (333,719) Price Note (535,880) (300,000) (235,880) Long Beach Signal Hill Owner Participation Agreement (1,500,000) (900,000) (600,000) Delius Walker (100,400) (50,200) (50,200) Other Expenses (Trustee Legal ROPS Consulting Etc) (244,000) (148,500) (95,500) Property Disposition Costs (552,984) (552,984) - Administrative Cost Allowance (349,609) (215,517) (134,092) SERAF Loan/Housing Deferral Max Repayment Beginning Other Expenses - Residual Property Tax to be Distributed (268,736) (333,719) (268,736) - City's Share Total Enforceable Obligations (Excluding ACA and Bond Proceeds) 11,653,627 7,183,902 4,469,725 3% Administrative Cost Allowance

77 EXHIBIT 8 HISTORY OF HILL STREET AFFORDABLE HOUSING PROJECT

78 Hill Street Affordable Housing Project The affordable housing site at 1500 Hill Street was identified after researching many sites throughout the City of Signal Hill, which is only 2.2 square miles. The sites were evaluated based upon size, proximity to school, bus lines, parks and civic centers, and shopping. The site was identified in the Housing Element for affordable housing adopted on August 12, Beginning in 2007, the former Signal Hill Redevelopment Agency worked to acquire the property for affordable housing. The property consists of three buildings and had four tenants at the time of a commercial and industrial nature. The Agency completed appraisals of the site to determine the value that would have to be offered to acquire the property. The Agency s environmental consultant completed Phase I and Phase II Environmental Site Assessments, which involved studying the past uses at the site as well as completing soil borings to test the soil for hazardous materials. In addition, the Agency hired a relocation consultant to determine the cost to relocate the existing tenants on the site. In the meantime, the Planning Commission at the City reviewed the site for affordable housing on June 17, 2008 and the City Council did so on July 22, This review consisted of a General Plan Amendment to change the designation of the site to very high density residential and two zoning ordinance amendments to change the designation of the site to Special Purpose Housing Specific Plan and the other amending the Specific Plan by adopting unique development standards for the site. The property was acquired under the threat of eminent domain and a Judgment and Final Order in Condemnation was recorded on January 13, This site is 1.41 acres. After this site was acquired, Staff started to begin the process to acquire the adjacent Quonset hut property at 2170 Gundry Avenue to include as part of the affordable housing site. An appraisal, environmental site assessment, and relocation estimate were completed. There is one tenant at the site. Price and terms to acquire the site were agreed to and the site closed escrow on January 26, Since the close of escrow, Staff has been working to relocate the tenant from the site.

79 MINUTES OF A REGULAR MEETING SIGNAL HILL OVERSIGHT BOARD August 23, 2012 A Regular Meeting of the Signal Hill Oversight Board was held in the Council Chamber of City Hall on August 23, CALL TO ORDER 6:05 p.m. ROLL CALL PRESENT: ABSENT: VICE CHAIR NOLL MEMBER GABEL MEMBER WAROT MEMBER YU CHAIR HAUBERT MEMBER CHERNISS MEMBER WILLIAMSON PLEDGE OF ALLEGIANCE Vice Chair Noll led the audience in the Pledge of Allegiance. PUBLIC BUSINESS FROM THE FLOOR ON ITEMS NOT LISTED ON THE AGENDA Maria Harris, Signal Hill resident addressed the Oversight Board regarding a line item on the ROPS schedule. Chief Administrative Officer informed Ms. Harris that would be covered during the ROPS staff report. CHIEF ADMINISTRATIVE OFFICER REPORTS a. Adopt Recognized Obligation Payment Schedule Chief Administrative Officer introduced the Redevelopment/Economic Development Manager and Suzanne Harrell, Managing Director of Harrell and Company who presented the staff report. Member Gabel and Member Warot asked for clarification on several ROPS line items. Redevelopment/Economic Development Manager, Chief Administrative Officer, and Deputy City Manager addressed the questions. August 23, 2012 Minutes of the Oversight Board Page 1 of 4