Fiscal Health

RSG Well Deserved Fun Day

RSG’s commitment to its clients, employees, and local communities is evident daily. The 2016/2017 period has been especially challenging for RSG, given the current difficulties facing California cities and recent changes in legislation, just to name a few. Yet, without skipping a beat, staff continued to hunker down and produce top notch work; meeting deadlines, finding creative solutions for our clients and forging new relationships and service avenues. This dedication did not go unnoticed by the firm’s Partners!   

Recognizing the huge effort by staff to overcome the challenges over the past year, the Partners decided to scrap the already scheduled June All-Company meeting. Instead they treated us to a day of fun on a Duffy Boat out of Newport Harbor, followed by a yummy lunch from The Cannery in Lido Village. Very tre-chic for this group, but that was the best part about it!

Call it a re-boot for the mind, body, and soul, these types of events are relished, cherished, and appreciated! For those of us who joined the work force before the invasion of the “creative work space demanding millennials,” events like this were held only on rare occasions to commemorate extraordinary achievements by companies. However, the owners at RSG are in the trenches every day with us, working alongside us, jumping every obstacle with us. So, it is not a surprise that they felt the need to say thank you in a BIG WAY!

And for this, I personally want to express my gratitude, and let them know that I am thankful every day that I work with such committed and passionate leaders. Leaders who always strive to celebrate and appreciate more than the bottom line. They choose to celebrate and appreciate staff and all their accomplishments-because it is each of these individual accomplishments melded together that make up the RSG Family!  

Written by Business Office Coordinator, Erin Woodmas7.19.17

Build It, and They Will Prosper?

Copyright 2016 Kelly Wilson, Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Copyright 2016 Kelly Wilson, Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Do sports stadiums generate net economic benefits for the community? 

The consensus is generally no. Economists say that sports teams spur little new spending in the community. 

While stadiums are limited in use, politicians and developers claim that a stadium is a win for local communities. Proponents say that sports facilities improve the local economy by creating construction jobs, generating new spending, attracting tourism and multiplying local income and job creation. Advocates argue that new stadiums spur so much economic growth that subsidies are offset by revenues from ticket taxes, sales taxes, and property tax increases.

These arguments may overstate the benefits of stadiums. Economic growth takes place when a community’s resources become more productive. Increased productivity can arise from economically beneficial specialization by the community or from local value added. Building a stadium is good for the local economy only if it is the most productive way to make capital investments and use its workers.

Still, there are non-economic benefits, such as community pride and cultural activity. Some projects, such as the NFL Rams’ return to Los Angeles, which occurred with limited financial obligations for Los Angeles taxpayers, provide a valuable lesson in how to attract sports teams and new stadiums based on a market’s strength rather than subsidies.

Calculating the economic and fiscal impacts of a development is crucial when deciding on whether or not a project should break ground. RSG has extensive experience in projecting tax revenue from projects and can help determine if a sports stadium or other large municipal investment would be a good idea in your community!

Written by Jeff Khau, a Senior Analyst at RSG

Has Your Successor Agency Received a Claim for Pass Through Payments Owed?

 

In this post-redevelopment dissolution world, it is now becoming commonplace for school districts and other taxing entities to submit claims to a successor agency for historical pass-through payments owed because of either (1) non-payment or (2) a dispute over the way payments were calculated in prior years.  In some cases, there was a long-running dispute between a taxing entity and a former redevelopment agency that began before redevelopment was eliminated.  Regardless of the circumstances, the successor agency staff should complete the following steps prior to placing any repayments on the Recognized Obligation Payment Schedule:

  1. Verify the claim – all documents and information should be independently reviewed and analyzed by staff or consultants:

    • Check the precise language of a negotiated pass-through agreement (taxing agencies may have a different interpretation of the legal language in the agreement that can result in claims with significantly over-inflated amounts owed).

    • For statutory pass through payments, make sure that the assessed valuation information matches your records and that the correct formulas pursuant to Health and Safety Code requirements are being used for the calculations.

    • Look at historical tax increment receipts and assessed valuations to ensure that the actuals match the amounts being used in the taxing agencies’ calculations.

    • Make sure that the tax increment excludes all legally obligated payments that were made (i.e., low moderate income housing set aside, SERAF) unless a negotiated agreement explicitly excludes these specific payments.

    • If pass-through payments owed resulted from an SB211 amendment (eliminating the time limit to incur debt), be sure to verify that the correct “adjusted base year” is being used by the taxing entity.  The incorrect adjusted base year can result in significantly higher payments allegedly owed.

  2. Meet with the taxing entity to review methodologies.
  3. Draft a Settlement Agreement for both parties to sign.
  4. Obtain the appropriate approvals.
  5. Submit the required documentation to DOF.

DOF won’t necessarily approve all repayments to taxing entities right away and a meet-and-confer may need to take place in order to walk DOF staff through the requirements and methodologies.

Following these steps can identify inaccuracies in methodologies that can result in significantly reduced residual revenues to all taxing entities (other than the taxing entity making the claim), including the City (i.e., General Fund).

In summary, these calculations should be reviewed very carefully order to preserve General Fund revenues.

Written by Hitta Mosesman, Principal at RSG.