Riverside County May Resort To Bonds To Help With Redevelopment
Riverside County may soon begin buying bonds from area cities to support their redevelopment projects under a plan approved today by the Board of Supervisors.
The board voted 4-0 to draft a new policy that would empower the treasurer, the director of Flood Control & Water Conservation, or the director of the Waste Resources Management District to purchase debt issued by redevelopment agencies from municipalities within the county.
The Economic Development Agency is slated to report back in two weeks on how to implement such a policy, requiring another board vote.
“It’s a win-win for the county and for the cities,” said Supervisor Marion Ashley, who proposed the policy. “First of all, we can negotiate favorable rates … There will be a better return for the agency that buys the bonds and a better rate for the issuer.”
The source of funds for the treasurer to purchase the interest-bearing IOUs was not immediately clear. The county’s $5.8 billion investment pool currently holds short- and long-term debt obligations issued by state and federal agencies, including Fannie Mae and Freddie Mac.
Supervisor John Tavaglione said the debt purchase plan would help offset losses that cities might sustain in the event Gov. Jerry Brown’s plan to phase out cities and counties’ redevelopment agencies’ succeeds.
“This helps us do what we need to do for our (local) projects,” Tavaglione said.
Brown wants the revenue normally transferred to the RDAs to be used, instead, to bolster the state’s general fund and pare down a $25.4 billion budget shortfall.
The governor is proposing that counties and cities seek voter approval before obligating funds for revitalization projects in the future.
Riverside County’s redevelopment agency, with about $100 million in annual revenue, is the state’s seventh largest.
Supervisor John Benoit, whose Fourth District covers most of the eastern county region, testified before a state legislative committee last month about the potentially dire consequences of ending redevelopment.
The former state legislator said around 625 redevelopment projects have been completed in the last few years, accounting for roughly $1.5 billion annually in economic activity locally.
Between 2007 and 2009, 8,707 jobs were created as a result of redevelopment. There are 37 projects in the pipeline, including road improvements, parks, libraries, affordable housing complexes and public safety facilities.
The California Community Redevelopment Law permits counties and cities to allocate a portion of property tax proceeds for projects that improve the public welfare, especially by eradicating blight.
California Controller John Chiang is auditing the county, along with the cities of Desert Hot Springs and Palm Desert, as well as 15 other municipalities statewide, to verify that they’re paying for low- and moderate- income housing as required by the law; accurately providing allotted payments to schools; and not overpaying board members and employees or misapplying the “blighted” designation.
