Wednesday Jan 04 2012
City's redevelopment agency fate awaits
By: Jon Brines, Placer Herald Correspondent
State Supreme Court ruling allows state to shut down agency
The city of Rocklin is trying to figure out what impact the California Supreme Court’s Dec 29 ruling will have on allowing the state to kill redevelopment agencies in an effort to close the state’s budget deficit. “We are all disappointed regarding the Supreme Court decision,” Mayor Brett Storey said. “We still have many issues that will need to be resolved.” At issue is the status of property purchased around town with RDA funds. The list includes the site of the Rocklin History Museum on Rocklin Road, reports Rocklin City Manager Rick Horst. Other properties owned by the agency that could potentially be impacted by the ruling, Horst said, include the library, the Big Gun Quarry site and two vacant lots. City Attorney Russell Hildebrand indicated that when Rocklin’s Redevelopment Agency is officially dissolved on Feb. 1, a successor agency will assume legal title to any property currently owned by the redevelopment agency. That successor will have an obligation to dispose of any assets and properties as directed by the Oversight Board. “The successor agency has yet to be determined,” Hildebrand said. “It is, by default, the city of Rocklin.” The key word “dispose” is what has some concerned as it implies that the properties would be sold. “That’s the general requirement, though there may be an exception for certain government-owned and used properties,” Hildebrand said. Nor would property or assets of the agency be shielded from control by the successor agency and the direction of the Oversight Board. City Officials are disappointed by the ruling since it did not give the city the option of keeping a redevelopment agency in some form. “The properties that the city purchased with redevelopment intentions are still critical to the city,” said Storey. “We hope that that would be taken into consideration and not just simply sold off to the highest bidder. As always, we would still have some control as to what would be proposed for that land.” The law abolishing redevelopment agencies throughout California was passed last summer. It also means the funds provided by local property taxes for those agencies will revert to the state’s general fund instead of the city. The law was promptly challenged in the State Supreme Court, but upheld in the Dec 29 ruling. The big challenge maybe the state quibbling over tax revenue associated with redevelopment agencies. How much the city will ultimately receive is still unclear. “We will lose control of the tax increment derived from the RDA,” Horst said. “There is no staff dedicated solely to the RDA,” Horst said. “Portions of staff time constitute the current RDA allocation.” Redevelopment agencies, widely used around the country, sell bonds to fund local development projects. Agencies pay off bonds with the increased property tax revenue, or tax increment, that results from the project. In Rocklin, RDA funds were used to rehabilitate the aging Community Center and make improvements to the Sunset Center, now called the Rocklin Event Center. Those properties will not be impacted by the ruling. Over a period of three decades, it is estimated the city would lose nearly $54 million in redevelopment agency funding. Horst said he’s analyzing the impact with staff and hopes, in the meantime, that the California legislature will make good on its promise to revisit legislation that will allow Rocklin to keep its redevelopment structure intact. “It is also anticipated that the legislature will likely rush to make changes to the existing legislation. Who knows what that will mean? Stay tuned,” Horst said. Horst plans on giving City Council members a full briefing on the financial impact at one of their upcoming meetings.