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City Cuts Redevelopment Agency, for Now

State law dissolves cities' RDAs, but a lawsuit in the California Supreme Court could revive them.

The future of Agoura Hills’ Redevelopment Agency (RDA) is currently in limbo.

On June 28, Governor Jerry Brown signed Assembly Bill No. 26 into law, effectively dissolving all of the cities’ Redevelopment Agencies.

More recently, the state legislature passed AB1X 26, which dissolves cities’ RDAs, and AB1X 27, which forces cities to pay money to the state in order to keep their RDA. The two laws have been challenged, but the Supreme Court probably won’t hear the case for another few months.

“It’s in legislative and legal limbo,” said Mayor Harry Schwarz. “Until [the Supreme Court’s decision], we’re kind of floating in midair.”

voted at its Aug. 10 meeting not to go ahead with AB1X 27, because the city would have had to pay about . $1.17 million to the state for the first year to keep its RDA, according to City Manager Greg Ramirez.

“It’s kind of sad to see the state trying to resolve the budget problems on the back of local governments,” said Nathan Hamburger, the assistant city manager. “In a time when I think…the economy needs the most help and the RDA creates the most jobs, to get rid of that arm and tools now, it seems like bad timing.”

Agoura Hills simply can’t afford to pay that fee; it’s about 20 percent of the city’s budget, said Schwarz. 

“It’s really extortion, in my opinion,” he said. “They say, in AB 27, that those fees are totally voluntary—they’re voluntary that we pay them [over $1 million]. However, if you don’t pay the voluntary fee, the RDA does not exist, he said. 

“It’s kind of like taking a loan from the mafia. If you don’t pay it…," said Schwarz

Moreover, there is no guarantee it would stop there. Schwarz said it’s not out of the question that the legislature would ask for more money from cities and more control over their RDA. Hence, the lawsuit.

The California Redevelopment Association and League of California Cities, of which Agoura Hills is a part, filed a petition for a writ of mandate with the California Supreme Court on July 18. Their goal is for the Supreme Court to declare the two bills to be in violation with Proposition 22—which prohibits the state taking funds used for redevelopment, transportation or local government projects and services—and therefore unconstitutional.

If the Supreme Court finds in favor with the state legislature, Agoura Hills will lose money that goes to not only infrastructure—the Reyes Adobe and Kanan Interchanges, for example—but also schools.

Upwards of $380,000 from the the city’s RDA goes to the , according to Schwarz, and the school district relies on those funds.

“They counted on that,” said Schwarz. “It was actually an item in their budget every year, a large part of their budget. Now it’s sort of a question mark as to how much they’ll get and where it’ll come from.”

Based on state law, the property tax money that is flowed through the RDA would go to the county, which would form a district committee to decide on how to disperse the funds.

Whereas the city can only own property for public purposes, like a park or library, the RDA can own land to make deals. But that property will now have to be sold.

“Unfortunately, we’re only able to keep a certain percent of the profits,” said Schwarz. “Most of it will go to the county; they’ll get the profits.”

Earl Richards August 20, 2011 at 10:36 PM
The money sent to Sacramento, will probably end-up, either directly or indirectly, into an offshore bank acccount in the Cayman Islands, owned by a bunch of Goldman Sachs/Wall Street dirtbags.

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