Clearly the state did not believe that "its pockets were being picked" when it created redevelopment agencies to, over the years, provide value to otherwise blighted areas. Redevelopment was intended to be a long-term investment in the state of California, and it works.
A conclusion anchored by only current year data does not allow consideration of the long-term benefits that have been realized by redevelopment in Menlo Park's Las Pulgas Community Development Agency project area.
Redevelopment agencies were formed to issue debt to fund major capital improvement projects, which in turn create the value necessary to increase property tax revenues increment to pay off the debt.
The redevelopment that has occurred in Menlo Park — such as the visible improvements along Willow Road east of U.S. 101 since 1981 — has added value to the tax rolls, which has been used to pay debt service on the bonds and provide for other improvements and services that make the community a better place to live and work. One can only speculate about what the area's current property tax rolls would look like if redevelopment had not occurred.
After assuming that the property tax would be $11 million or more under any circumstances, the article's graphic analysis tries to compare how the annual property tax is currently allocated (bottom portion of the diagram) to how it would be allocated if the agency were eliminated (top portion).
The agency's budget is incorporated into the city's annual budgeting process. For 2010-11, tax increment revenue of $10.6 million is expected to be spent on total debt service ($4.9 million); legally required funding of housing activities ($1.2 million); approximately $3 million for pass-through payments to other agencies (including schools); $80,000 for county tax collection administration fees; $70,000 for shuttle bus programs; and yes, that leaves $1.35 million which the city can use to fund additional public safety services ($1 million) and administrative overhead.
That leaves very little to sock away for future redevelopment projects, which can be extraordinarily expensive and take years of planning. It should be noted that if the proposal to eliminate redevelopment agencies succeeds, the debt service will still need to be paid, so that the actual amounts of property tax available to agencies would be much less than the amounts shown in the top portion of the diagram.
With continuous raids on the RDA by the state to fund schools (the most recent cost the agency $3.4 million in 2009-10 and $710,000 in the current fiscal year), it is very difficult to plan for the long-term redevelopment needs. Proposition 22 reaffirmed that California redevelopment agencies are indeed on-going governmental concerns, with the ability to procure credit and debt financing, and continue to plan and invest in redevelopment project areas.
The city understands the financial crisis that exists at the state level, but to divert funds from RDAs to fix the problem only shifts the burden closer to the taxpayer — at the local level.
Elimination of RDAs cuts off long-term plans at the knees, creates enormous confusion in municipal credit markets, further shakes the credibility of the state as a partner in local government efforts, and ignores the specific needs of residents and businesses in these areas.
Redevelopment has created a lot of "wins" for the state. Let's not dismantle this working mechanism that makes many areas of California desirable places to work and do business.
Glen Rojas is city manager of Menlo Park.
What is a redevelopment agency?
An RDA must establish a plan that in many respects is similar to a constitution or charter. It sets forth the basic goals, powers and limitations of the agency, including its time span — typically several decades. The RDA is required to provide an updated redevelopment implementation plan every five years. The Menlo Park agency's most recent plan, based on extensive community involvement, covers last fiscal year through June 30, 2014, and can be found on the city's website, MenloPark.org. The plan details the agency's service goals and objectives for housing and non-housing activities, with an additional emphasis on business development.
This story contains 745 words.
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