My colleague Katherine Tam wrote a story about East Bay cities bracing for the possible elimination of their redevelopment agencies when Gov. Jerry Brown releases his budget next week.
I checked in with Lafayette City Manager Steven Falk and Administrative Services Director Tracy Robinson earlier this week, but their comments didn’t make the cut for the regional story. So I’ll highlight some of them here.
Let’s start with Falk, who’s always ready with a good quote:
“California’s biggest problem is unemployment, and redevelopment is California’s best tool to deliver new jobs, so this proposal makes no sense whatsoever. To me its akin to a fisherman who is so hungry that he eats his bait.”
And here’s Robinson:
“Obviously the easy answer is we wouldn’t be able to do any more redevelopment projects, for example, anything identified for the downtown plan. But most of our money at this point is already committed to debt service, and as you know, we already said that for the next couple of years all of the revenue that would be projected to be coming into the redevelopment agency would be needed to pay down debt. So in that sense, I’m not sure, I would assume that Jerry Brown is not going to tell all the bond holders, ‘Too bad for you, you’re not going to get your money back.’ I don’t know what he’s going to do, but I would assume that would be bad.”
Here are the numbers: The city expected to get about $67 million dollars, maybe a little less due to the economic downturn, over the life of the redevelopment agency, Robinson said.
For fiscal year 2010-11, the city projects it will receive about $2.9 million in revenue from the redevelopment agency, nearly $900,000 of that slated for affordable housing projects.
The agency has three outstanding bond series: $5,585,000 for the veterans hall in 2002, $11,680,000 for the library in 2005 and $9,600,000 for the library in 2008 (those numbers are the original amount of the bonds and do not factor in payments the city has made or interest accrued). The city will make about $1.7 million in bond payments in 2010-11.
The redevelopment agency also has a number of outstanding loans. As of June 30, 2011:
- $515,355 to the city’s parking fund
- $5,447,093 to the city’s general fund
- $13,591,135 to the library foundation
And lastly, here’s how redevelopment agencies work: Redevelopment agencies allow cities to invest a portion of property tax revenue from within the agency area back into that same area, theoretically raising property values, and tax revenues, as blight is eliminated.
How does the city get the money? When a city establishes a redevelopment agency, the amount of property tax from properties within the redevelopment area that is sent to other agencies is capped for the life of the agency. The difference between that amount and the actual property tax collected is sent back to the city and called the “tax increment.” The money can only be used on projects within the redevelopment area.
Lafayette has used redevelopment funds to help build the new library and veterans’ hall, and plans to use the funds for improvements that are penciled out in the still-being-drafted Downtown Specific Plan.
If you’re Jonesing for some more RDA info, you can check out the homepage of the California Redevelopment Association.