Last week Gov. Jerry Brown signed in to law two bills designed to drastically diminish, or at least change redevelopment in California. Assembly Bill x 126 eliminates redevelopment agencies (RDAs) altogether in municipalities across the state on October 1, 2011. It also prohibits RDAs like Fullerton’s from any new beginning any new activities or issuing any more bonds, loaning money, buying more property and number of other things they normally do. Once the RDA disappears, the City of Fullerton would take over all outstanding duties like debt service while the rest of the agency’s revenues are distributed to schools and other things usually underfunded by the diversion of tax monies to RDA districts.
That’s it. No more redevelopment except finish off outstanding projects and pay off the bond debts that make them possible. However, an alternative exists that would allow RDAs to continue. Gov. Brown also signed AB x 127, which would allow redevelopment agencies to continue as long as a significant portion of their property tax revenue is redirected to schools and other local agencies. On Tuesday night the Fullerton City Council is scheduled to decide which of these paths to take with Fullerton’s RDA. And yes, the redevelopment staff are recommending option #2, which would keep the agency they work for alive.
According the agenda item’s report written by the RDA staff Fullerton would have to pay an estimated “$ 6,259,348 million in FY 2011-12 and $ 1,472,788 million in FY 2012-13” to schools and everyone else, but it would still be worth it for the city to keep the RDA in existence. These figures are based on old numbers that don’t $ 29 of bonds issued by the RDA for housing last year, so the an appeal is planned. The recommendation is based on the idea that more money would be available for redevelopment oriented activities if the RDA is kept in existence.
FFFF readers, and anyone paying attention in town, will recall that last March, in anticipation of the Governor’s actions Fullerton’s RDA gave a laundry list of properties and other assets to the City of Fullerton to keep the state from grabbing it and selling it off to the highest bidder. But AB x 126 made this action retroactively illegal, meaning that the city has to give it all back to the RDA so the state can take it and sell it if the RDA is dissolved.
But wait, there’s more. In 2010 the RDA’s Low and Moderate Income Housing Fund still has about $ 35 million to spend, most of it form a 2010 bond offering. At the last council meeting developers lined up to explain why they should each get a piece of it (more on that in the days to come, I promise).