California Comprehensive Annual Financial Report - City of Temecula

City of Temecula
Notes to Financial Statements (Continued)
Note 16:
Fund Equity and Net Assets Restatements (Continued)
Beginning fund balance has been restated as follows:
Community Services
District Fund -
Special Revenue
Fund Balances as previously reported June 30, 2008 $ 2,439,140
Increase for revenues not recorded in prior year 5,980
Fund Balances, as restated, June 30, 2008 $ 2,445,120
Note 17: Subsequent Events
SERAF Tax Increment Revenue Shift for fiscal year 2009-2010 and 2010-2011
On July 23, 2009, the California Legislature passed SB 26, requiring a shift in tax
increment revenues during fiscal years 2009-2010 and 2010-2011 to be deposited into
the county “Supplemental” Educational Revenue Augmentation Fund (SERAF) to be
distributed to meet the State’s Prop 98 obligations to schools. It is estimated that the
Agency’s share of the SERAF shift for fiscal year 2009-2010 and 2010-2011 will amount
to approximately $4,350,471 and $895,685, respectively. In October 2009, the California
Redevelopment Association and its member agencies filed a legal action in an attempt to
stop these amounts from having to be paid. As of the date of this report, no legal
determination has been made by the courts on that action.
Local Government Revenues Withheld by the State of California
On July 24, 2009, the legislation approved the “borrowing” of up to 8 percent of the local
property tax under Proposition 1A (2004). The City is a participant in the Proposition 1A
Securitization Program offered by California Communities, a joint powers authority
sponsored by the League of California Cities and California State Association of
Counties. California Communities sold bonds on November 10, 2009 securitizing the
future payments by the State and remit the proceeds of the bonds to the local
governments who opt to participate in the program. The purchase price paid on the sale
of the City’s receivable is 100% or $1,399,412. Participants of the Securitization program
have no obligation on the bonds and no credit exposure to the State. Distribution of the
proceeds to the participants is expected 50% on January 15, 2010 and 50% on
May 3, 2010.
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