The fight begins over Redevelopment funds in Calif Cities.

[Jeanfromfillmore]

Cities are now fighting over who did what and with what. It's time to pay the piper. Redevelopment money was like a slush fund and the rules were very lax. Now the fighting will begin over the few bones that are left since all the meat is gone.


State controller highly critical of redevelopment agencies
The battle over redevelopment in California intensified Monday.
State Controller John Chiang released a review of 18 redevelopment agencies that concluded they shortchanged schools by nearly $40 million and spent millions on questionable projects. The agencies also lacked a reliable way to calculate how many jobs were created by redevelopment, the controller found.
"The lack of accountability and transparency is a breeding ground for waste, abuse and impropriety," Chiang said in a statement.
"In whatever form local redevelopment takes in the future, the level of oversight and openness must be consistent with the amount of public dollars entrusted to their care."
Backers of redevelopment disputed the controller's findings, particularly as a vote on Gov. Jerry Brown's proposal to phase out the program could come as early as this week.
"This is a politically motivated study, of course, timed to come out right before a critical vote on abolishing redevelopment in California," said John Shirey, executive director of the California Redevelopment Association.
Meanwhile, two organizations -- a coalition of local governments and two labor groups -- launched competing radio ads Monday.
One ad, backed by the League of California Cities, contends the governor's proposal to phase out redevelopment agencies violates Prop. 22, which voters approved in November in an attempt to protect local funds from the state.
The second ad, co-sponsored by the California Professional Firefighters and the California School Employees Association, argues that redevelopment money could be better spent on core local services.
The controller's report and the new ad campaigns add fodder to the escalating debate on the governor's proposal. Riverside County and Inland cities have been rushing to start redevelopment projects before a vote can eliminate redevelopment agencies.
Redevelopment across California generates more than $5.5 billion in property tax revenue. Brown's plan would phase out the agencies and use $1.7 billion to help balance the state's fiscal 2011-12 budget. In future years, the money would go directly to cities, counties and schools to fund local services.
Statewide, 12 cents of every property tax dollar goes toward redevelopment. The Inland region has the highest rate in California: 31 percent in San Bernardino County and 26 percent in Riverside County.
Chiang's office launched the review of the 18 agencies, including Riverside County's and those in Palm Desert and Desert Hot Springs, in late January.
The report found:
Five of the 18 agencies reviewed failed to make deposits totaling $33.6 million into the Supplemental Educational Augmentation Fund in fiscal 2009-10. None of the five was from the Inland region. Money from the fund goes to schools partially or fully within a redevelopment zone.
A review of Department of Finance records by the controller's office found another three that failed to make $7.1 million in deposits to the fund. As a result, the state had to backfill schools by nearly $40 million, the controller reported.
Under current legal standards, the definition of blight is broad, giving redevelopment agencies wide latitude in the types of projects they pursue.
As one example, the controller's office points to Palm Desert's redevelopment agency. From fiscal 2009-10 through fiscal 2013-14, the agency's five-year implementation plan allocates $16.7 million for projects related to the Desert Willow Golf Resort.
The controller said the resort earned 4.5 stars from Golf Digest Magazine and that agency-funded projects included the renovation of all 18 greens.
The controller did not cite any questionable spending by Riverside County's redevelopment agency.
Redevelopment agencies are not required to have a consistent method for reporting data on their performance, including how they calculate the number of jobs created.
Riverside County's redevelopment agency used projections provided by each project's developer. The city of Fresno's agency used a Bureau of Labor Statistics calculator. Citrus Heights, near Sacramento, surveyed new businesses.
Shirey, with the California Redevelopment Association, said some of the controller's findings are simply wrong.
For instance, he said, the association sponsored legislation in the early 1990s to toughen the definition of blight. In addition, state law allows agencies to withhold payment to the educational fund if they cannot afford to do so, Shirey said.
In a telephone interview, he said he agrees there is room to improve how agencies report data.
Shirey also said there should be a uniform method to determine how many jobs have been created. He said the redevelopment association has offered a job-creation formula.
"It's a matter of reform and not abolishment," Shirey said. "Unfortunately, the governor is on the wrong track here."
http://www.pe.com/localnews/stories/...8.21068d1.html