As the state prepares to dissolve redevelopment agencies Feb. 1, the Glendora City Council named the city the “successor entity” in charge of making sure the dissolution of its redevelopment agency runs as smoothly as possible.
But city officials called the impending transition an administrative and legal nightmare as they say the state has not given them adequate direction on how to implement the agency’s dissolution.
Glendora, along with , fiercely opposed the state’s plan to abolish redevelopment agencies. But on Dec. 29, a Supreme Court agreed with the state and upheld the , while another law allowing redevelopment to exist if cities paid a portion of their taxes, was considered unconstitutional.
Glendora city officials called the Supreme Court decision “the most detrimental of all possible alternatives.”
However, a new bill -- SB 659 by Sen. Alex Padilla, D-Van Nuys – proposes to push back the deadline to April 15, which would allow cities more time to dismantle their community redevelopment agencies.
According to city officials, Auto Centre, Walmart, Marketplace and Diamond Ridge shopping areas were all created through redevelopment funds. About 70 percent of all the city's nearly $6.8 million sales tax will be generated by businesses located within this area. Redevelopment, the city claims, has also provided affordable housing opportunities for about 500 individuals in the city.
City officials say the Supreme Court ruling in California Redevelopment Association v. Matosantos leaves many unanswered questions, including what will become of legal debts to the city, liquidating assets and administrative costs.
“A lot of these questions have not been answered,” said City Manager Chris Jeffers. “It might take months, if not years, for us to get direction.”
“We are treading in water,” said City Attorney D. Wayne Leech. “There isn’t much of a guideline. There’s no real regulation that gives us a manual or a map that tells us how to get from point A to point B.”
City Council members also expressed frustration over the “bureaucracy” of a 7-member Oversight Board, which will be charged to manage successor entities. City officials hope to lobby for a representative from Glendora to join the board.
Among the other actions the council took was to activate the Housing Authority to oversee accumulated assets of the agency’s housing funds and assist with contractual requirements in place for about 200 housing units.
To help make up for a possible $2 million reduction to the general fund, Jeffers pointed to tapping into $197,000 of CDBG funds, usually allocated for housing rehab projects and grants to community organizations.
According to city documents, the demise of redevelopment agencies will void $6.5 million in legal loans to the agency from the General Fund over the years. The transition, the city believes, will also leave the city scrambling to absorb administrative costs charged to the agency for services, resulting in a cost of “hundreds of thousands” of dollars.
Councilmember Joe Santoro denounced the state’s plan to end redevelopment agencies as effort by the state to pass off its own budgetary problems onto local governments.
“They say let’s get rid of redevelopment agencies and they think all the stuff that goes with it disappears,” said Santoro. “They pay no attention to the planning process that it’s going to take to implement it. They pay no attention to the legal issues that is going to come up with the magnitude of that type of decision.”