http://almanacnews.com/print/story/print/2012/01/18/menlo-acts-to-dissolve-redevelopment-agency


Almanac

News - January 18, 2012

Menlo acts to dissolve redevelopment agency

by Barbara Wood

Still scrambling to deal with the unexpected dissolution of its redevelopment agency, the Menlo Park City Council took the first actions necessary to dissolve the agency at it's meeting on Jan. 10.

On Dec. 29, the California Supreme Court ruled that a law disbanding redevelopment agencies was valid, while another law that would have allowed them to remain by giving part of their money to the state was not. The effect of the ruling was to force nearly 400 redevelopment agencies around the state to dissolve by Feb. 1.

Redevelopment agencies, formed in the hope of transforming blighted neighborhoods, were able to keep most of the property taxes generated within their boundaries instead of passing them on to other local agencies, such as schools. Governor Jerry Brown argued that the redevelopment agencies were not effective and should be dissolved, giving the tax monies back to the other local agencies.

Menlo Park Finance Director Carol Augustine told the council that the topic is due to come before the council for further discussion in two weeks, when the city has had a little more time to study the ramifications of the dissolution of the agency.

In the meantime the council voted unanimously to become the "successor agency" to its redevelopment agency, an action that will allow the city to retain some control over the dissolution process. The city will receive funding of at least $250,000 a year as the successor agency.

The city will pay off the redevelopment agency's debts, dispose any properties it owns, and redistribute any remaining money to local agencies.

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