Politics & Government

City Takes Steps to Salvage Redevelopment Agency

The city may pay $2.6 million in the first year to keep its redevelopment agency going.

The Glendora City Council will consider an ordinance adopting one of two state laws that would require the city to pay $2.6 million to save its redevelopment agency.

Two laws, ABXI 26 and ABXI 27, were passed as part of the state budget approved June 28 eliminating or severely restricting redevelopment agencies.

While ABXI 26 calls for the complete elimination of redevelopment agencies, the city council moved Tuesday to pursue an ordinance adopting ABXI 27 that would still allow redevelopment agencies to function if cities make alternative payments to state taxing agencies.

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For Glendora, $2.6 million in first-year payments would be required to allow redevelopment activities to continue, followed by $600,000 in annual payments thereafter.

“We would continue to make payments so we can continue normal RDA activities,” said Planning Director Jeff Kugel.  “We will just have fewer resources to do so.”

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The city is currently analyzing its cash flows to determine how the law would impact the city financially. The city will prepare the ordinance for City Council review Aug. 9.

While the council saw ABXI 27 as the better of the two laws, council members referred to the law as the state’s attempt to extort money from cities.

“It’s either pay the ransom in AB27, or AB26 and be a hostage,” said Councilmember Karen Davis. “While neither of them are desirable that’s what we’re left with.”

Although against the state’s actions on redevelopment agencies, the city will continue to plan for the sunset of the redevelopment agency in 2017 and 2019.

The CRA, which represents 361 redevelopment agencies across the state, including Glendora's, said in its suit that the new laws are unconstitutional and undermine the will of the electorate by circumventing the state constitution and Proposition 22, a 2010 voter-approved ballot measure that barred the state from taking redevelopment funds.

The state is legally forbidden from taking property tax funds from redevelopment agencies under the state constitution. But the two new state laws force cities themselves to make payments to the state with whatever funds they see fit, effectively bypassing the constitutional requirement that redevelopment funds not be taken, the CRA argues.

"The fact that the legislature left it up to local jurisdictions to determine which tax proceeds must be surrendered does not excuse these constitutional violations," the CRA's lawsuit reads.

Gov. Brown has said that money should not be used by redevelopment agencies for private projects when basic services, like education, are in dire need of funding.

While the city believes the CRA has a strong lawsuit against the state, City Manager Chris Jeffers said because of the unpredictability of the legal system, a definitive decision may not be reached for another 24 months.

City leaders have voiced their opposition to state laws on redevelopment agencies. What is your take? Tell us your opinion in our Facebook poll.


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