Local Cities Want To Keep Redevelopment Agencies, Endorse Lawsuit
Officials from Coachella Valley cities and Riverside County unanimously endorsed a legal challenge to provisions in the 2011-12 state budget requiring local governments to disburse money from redevelopment accounts or face losing the ability to engage in any redevelopment activities.
Riverside County Supervisor John Benoit, Cathedral City Mayor Kathleen DeRosa and Rancho Mirage Councilman Richard Kite are among the nearly dozen speakers who publicly voice their support for a lawsuit filed earlier this week by the League of California Cities and California Redevelopment Association.
The suit, filed directly with the California Supreme Court to expedite the process, seeks an invalidation of the Legislature and governor’s actions in approving AB 26×1 and 27×1 as part of the fiscal 2011-12 budget.
Under the measures, the state’s 398 redevelopment agencies would be obligated to fork over a total $1.7 billion by January and make aggregate annual payments of $400 million to fund schools, fire districts and transit districts or risk being put out of business.
The 2011-12 budget calls for phasing out all existing redevelopment agencies by Oct. 1. However, counties and cities have the option of joining the Alternative Voluntary Redevelopment Program, which effectively keeps redevelopment agencies going — but with revenue-sharing obligations that many public officials call untenable.
Redevelopment agencies serve as financing mechanisms for revitalization projects, with the goal of eliminating blight and supporting affordable housing developments. Local governments use a portion of property tax revenue and issue bonds to cover the cost of redevelopment projects, which elected officials credit for stimulating job creation.
Riverside County’s redevelopment agency, with about $100 million in annual revenue, is the state’s seventh-largest. A total of 625 redevelopment projects have been completed in the county. There are 37 projects in the pipeline, including road improvements, parks, libraries, affordable housing complexes and public safety facilities, county officials say.
In March, California Controller John Chiang’s office concluded a review of 18 redevelopment agencies, including Riverside County’s, which found record-keeping inconsistencies and instances of “a lack of accountability and transparency.” In some cases, funds strictly allocated for “low- and moderate-housing projects” were applied to other uses.
Desert Hot Springs allocated $162,000 in housing funds for code enforcement, according to the audit, which also questioned Palm Desert’s use of redevelopment funds to renovate a four-star golf course.
