Cities Owe State Redevelopment Funds

Senate Republican Leader Bob Huff, R-Diamond Bar, said he is "deeply troubled" by a bill Gov. Jerry Brown recently signed that orders cities to turnover money from their now defunct redevelopment agencies immediately or face penalties.

With the agencies dissolving this year, the Brown administration anticipates collecting $3.1 billion in cash and property tax revenue to help bridge a budget gap, reported the Los Angeles Times.  The redevelopment funds are to be given to local schools and community colleges, easing the burden on the state budget. 

One of the trailer bills in the recently approved state budget deals with the redevelopment fund issue.  Huff criticized the bill in a statement, adding that several cities in his 29th Senate District got a three-day notice without warning to pay millions of dollars in newly calculated fees. Failure to pay in a timely manner will result in additional late fees, according to Huff.

“Brea city officials informed my office that they received a bill for more than $15.5 million,” Huff said.

Walnut reports that the city received a bill for $3.9 million, while the city of La Verne confirms it has received a payment demand of near $1.9 million, Huff said.

“They had three days to pay the bill or incur penalties that can amount to 10 percent or more," he said. "In Brea’s case that’s $1.5 million. This is unacceptable.”

With some agencies owing up to several million dollars, Glendora owed just $7,920.88.

Here is a list Huff provided of what some local cities owe:

• Costa Mesa = $1.4M
• Lancaster = $5.7M
• Scotts Valley = $748,601
• Walnut = $3.9M
• La Verne = $1.9M
• Whitter = $700,000.00 (but they got it reduced to $307,000)
• Brea = $15,525,713
• Glendora = $7,920.88
• Claremont = $949,498.33
• San Dimas =  $988,339.91
• Westminster = nearly $9M

Huff blames his Democratic colleagues for dismantling the state's 400 redevelopment agencies as a way to fix the budget shortfall.

"Their action left agencies and local governments scrambling to pay their outstanding obligations," he said.

Rhys Williams, a spokesman for Senate President Pro Tem Darrel Steinberg, told the Times that schools statewide need the funding and alleged that cities don't want to give up "slush funds tied to developers."

Huff said he feels it's unfair that cities are no longer able to challenge what the state says they owe.

On July 12th, even while some local agencies were attempting to question the amounts or negotiate lower payments, the governor, via the Department of Finance, issued a letter stating that the previous demands for payment will not be reduced, Huff said.   

“I question the wisdom of this move,” he said. “Local services have been cut. Firefighters and police officers have been let go due to local budget shortfalls. Three California cities have already been forced into bankruptcy and more may be headed in that direction. The last thing our communities need is a state government literally balancing its budget on the backs of local government.”