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Friday, January 13, 2012

Should the City Council Take Over Redevelopment? We Don't Have the Money and Now We Don't Have a Choice..

As you know the State Legislature has abolished redevelopment and the California Supreme Court upheld their actions. Unless additional legislation is passed, redevelopment agencies have to be dismantled by Feb.

More than 40% of Long Beach was placed into redevelopment -- which means the tax increment from properties in these areas went back to redevelopment projects and not for use for police, fire, recreation, libraries or any other general fund service of the city. These redevelopment projects have acquired a considerable amount of debt which needs to be paid off. Additionally, the City employs 34 staff for these redevelopment efforts.

So cities are being given the choice of either assuming the assets, debts, liabilities and employees of redevelopment or turn it over to another agency or entity.

In Los Angeles, Mayor Antonio Villaraigosa has urged the city council not to assume this risk because of the continuing shortfalls in the City of LA's general fund. The LA City Council was provided an in depth analysis of the financial costs of the City Council becoming the successor agency for redevelopment projects. Check the LA Times story about this.

Click here to read the analyses given to the Los Angeles City Council  about why the risk is too great for the city to become the successor agency for LA redevelopment:

In contrast, the City Council was given a brief memo with no financial analysis and the recommendation that the Council become the successor agency. I cannot support this action unless and until the Council receives a detailed analysis and an evaluation of the risk of the City taking over millions in debt. Click here to read what Long Beach City Council has been provided.

But the most disturbing fact I have learned researching this issue, is that the City Council was supposed to act by January 13th if it (like the City of Los Angeles) wanted to opt out of assuming the risks of becoming the successor agency for Long Beach redevelopment.

The memo from the Long Beach City Manager is dated January 17th -- 4 days after the deadline for the Council to decide if it wanted to opt out.  Who decided for the City Council that we would become the successor agency? I don't recall a memo telling us of this deadline, nor the City Council taking a vote that it didn't want to opt out.

So next Tuesday, the City Council will be told, I mean get to decide, that it must assume the debt, liabilities, employees and operations of redevelopment. Stay tuned because I want to find out how it is that our City Council didn't get a full analysis of this issue and the choice to say "NO" to taking on debt we can't afford to pay.

Save Station 18

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