Sunday, January 1, 2012

2012-01-01 "Vallejo to lose redevelopment agency, weighs options" by Jessica A. York from "Vallejo Times-Herald"
Vallejo may not have the luxury of keeping its Redevelopment Agency running in the coming months, after last week's state Supreme Court ruling eliminated a buy-in option for local governments.
Instead of having the chance to keep the agency's doors open by reducing property tax flowing into the city's two redevelopment district coffers, Vallejo could now take about a $550,000 annual hit, the city's finance director said.
In eliminating redevelopment agencies, the state approved companion legislation to allow them to be reformed -- at a price. Specifically, the agencies would need to provide the state a large down payment and a continuing chunk of the agency's property taxes, to be redirected to schools.
On Thursday, the state's high court invalidated this legislation, ruling that it failed to align with state legislation protecting local money from state raids.
"We won't get the same revenue stream that we got as a redevelopment agency," city Finance Director Deborah Lauchner said. "(But) the way that they wrote the decision leaves it open for the Legislature to make the opt-in legal. I don't know what they're going to do."
Lauchner said a big chunk of that lost revenue comes from the elimination of the agency's debts. The Vallejo Redevelopment Agency has been repaying the city's general fund about $350,000 a year to pay down a debt of several million dollars, Lauchner said.
As the legislation stands, city coffers will lose about an $800,000 benefit, with about $250,000 reimbursed to continue paying the agency's staff, Lauchner said.
The city's next step will be to establish itself as the successor to the Redevelopment Agency and form an eight-member oversight board, Lauchner said. After that, the city will need to begin repaying agency debt, using cash from the city's two redevelopment district coffers and by selling off assets -- primarily waterfront property, Lauchner said.
"Once there's no more debt, the Redevelopment Agency automatically goes away, and it becomes regular tax base," Lauchner said.
Mayor Osby Davis said Friday that the court's decision was not expected, and will leave city leaders with many issues to resolve and ramifications to consider.
"It is a big blow," Davis said. "I expect staff will be briefing us on that some time in the near future."
Redevelopment in Vallejo has been broken up into two major areas: The 167-acre Merged Downtown Waterfront Redevelopment Area and the 490-acre Flosden Acres Redevelopment Area. The latter includes Six Flags Discovery Kingdom, the Solano County Fairgrounds and the Country Club Crest neighborhood.
The city's five-year Redevelopment Agency plan calls for general waterfront development, completion of the downtown parking garage, county fairgrounds development, community center renovations and other street and sidewalk repairs in blighted neighborhoods.
The state authorized redevelopment agencies more than 60 years ago as special property tax districts aimed at rebuilding neighborhoods and eliminating blight. The agencies grew to more than 400 statewide by July, when legislation eliminating them was enacted.
By eliminating the agencies, funds dedicated to redevelopment activities will be redirected to local municipal services, alleviating the state's obligation to cover those costs.
A court-issued freeze on the legislation was set in August, due to a lawsuit by the California Redevelopment Association, League of California Cities and others.

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