Visalia Times-Delta: Tulare County fights to preserve redevelopment agency

Preservation of Tulare County redevelopment agency pushed

by DAVID CASTELLON
Visalia Times-Delta
12:32 AM, Oct. 10, 2011 

Tulare County supervisors on Tuesday are expected to take the next step before approving a plan to keep the county Redevelopment Agency operating.

But the county may have to pay the state more than $2 million to do it.

Whether that money actually has to be paid will depend on the state Supreme Court deciding whether state laws requiring the fee and eliminating redevelopment agencies in counties and cities not willing to pay the fees are legal.

"One or both could be ruled invalid," said Roger Hunt, the county Resource Management Agency's assistant director over community development. He said county officials are hoping that it's both.

Court to rule

The state Supreme Court has indicated that it should render its rulings by Jan. 15, which also is the deadline for cities and counties opting to continue their redevelopment agencies to pay the first half of their fees to the state.

All this stems from Gov. Jerry Brown's efforts this year to try to balance California's budget by eliminating city and county redevelopment agencies and having the fees that support them paid by property owners in redevelopment districts directed to the state.

Redevelopment agencies develop and fund projects to reduce and eliminate blight in their districts, which includes rehabilitating aging and dilapidated houses. They also install and repair community infrastructure, which includes building sewer treatment systems and installing street gutters, cleaning contaminated areas and funding community cleanup programs.

There are eight redevelopment districts in unincorporated Tulare County: in Earlimart, Ivanhoe, Goshen, Cutler-Orosi, Pixley, Traver, Richgrove and Poplar-Cotton Center.

They're funded by fees tacked onto property taxes in those districts, which would total about $3.5 million in those districts this year, Hunt said.

Government options

Despite the governor's efforts, state lawmakers passed two bills and he signed them. They give cities and counties two options:

ª Assembly Bill 26, the "Dissolution Act," shuts down redevelopment agencies, and any unspent assets are put into trust to pay off the agencies' outstanding debts and unfinished projects.

The money that would have gone to redevelopment this year instead goes to the state, primarily to help fund schools and special districts.

ª Assembly Bill 27, the "Voluntary Program Act," was approved by lawmakers to give cities and counties the opportunity to retain their redevelopment agencies.

But to keep them going, the counties and cities each have to pay the state an annual fee. Statewide, those fees would total to about $1.7 billion for the first year — with Tulare County's portion at $2.08 million — and a lesser amount the second year.

How much cities and counties would pay in subsequent years isn't known yet, Hunt said.

"Most entities are opting for 27," Tulare County among them, Hunt said, noting that on Sept. 27, the board approved a notice of intent to follow that plan.

During Tuesday's meeting, the board is expected to waive a formal reading of an ordinance for the county to follow AB27 and authorize RMA to publish a summary for the public to review.

A vote on approval of the ordinance is scheduled for Oct. 25.

If the board approves it, RMA officials then would work on a "remittance" agreement so the county could get the money to pay the more than $2 million state fee from the $9.1 million in the county Redevelopment Agency's account.

Termination

A few cities aren't paying, including San Jose, which has announced that it can't afford to pay its $50 million first-year fee, Hunt said. Communities opting to go with AB26 had to terminate their redevelopment districts by Oct. 1.

One advantage of following AB27 is that the county can wait to find out the state Supreme Court's decisions on both laws before actually paying any money, Hunt said.

And until that happens, the county can continue using its redevelopment funds to pay for already approved projects — although no new projects can be started — and use about $800,000 of that money as matching funds for grants, he added.

If the state's high court rules that the laws are illegal, then the county would continue operating its redevelopment agency as it has in the past, Hunt said.

But if the court rules that the laws are legal, RMA officials have recommended to the supervisors that they still follow AB27 at least for a year, after which it could be re-evaluated, Hunt said.

During Tuesday's meeting, the supervisors also are expected to waive a reading of an ordinance that would set new voter district boundaries for the county.

They already have approved a map of the new boundaries, but need to pass the ordinance to actually alter the district lines, which last were changed in 2001.

Another reading would be set for Oct. 18 and the board could vote to approve the ordinance then.