State Supreme Court Upholds Law Nullifying Redevelopment Agencies

RIVERSIDE - The California Supreme Court today affirmed the Legislature's power to abolish redevelopment agencies throughout the state, including Riverside County, but invalidated a law requiring counties and municipalities to pour revenue into state-mandated accounts as a condition of continuing revitalization projects.

The two laws, Assembly bills 1x26 and 1x27, were passed by the Legislature and signed by Gov. Jerry Brown earlier this year.

''Today's ruling by the California Supreme Court validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety,'' Brown said in a statement.

Supporters of AB 1x26 and 1x27 argued that the redevelopment dollars -- gleaned from higher property tax receipts that result from projects -- would be better used to fund schools and other municipal functions during the current tight budgetary times. They cited a state analyst's report indicating the cost of redevelopment growing without any tangible economic benefit to the state.

In July, the League of California Cities and the California Redevelopment Association filed a lawsuit challenging the changes to redevelopment. Riverside County supported the action, which led to a hearing before the state Supreme Court in November.

The plaintiffs argued against requirements that participants fork over roughly $1.7 billion by mid-January and make aggregate annual payments of $400 million to fund grade schools, community colleges, fire districts and transit districts under the ''Alternative Voluntary Redevelopment Program.''

According to the suit, many of the 398 RDAs in operation statewide would fold under the cost burdens imposed by lawmakers and the governor.

The suit cited protections established by Proposition 22, approved by voters in November 2010, which prohibits the state from raiding monies specifically reserved for local government projects and services.

The state Supreme Court justices ruled that Prop 22 ''contains no express language constitutionalizing redevelopment agencies.''

The justices noted that RDAs were created by statute through passage of the Community Redevelopment Act in 1951 and could be undone by statute six decades later.

However, the jurists sided with the plaintiffs in interpreting Prop 22 as protecting localities from a compulsory system of making payments into state- designated accounts in exchange for their being permitted to continue redevelopment programs.

According to the court, the new requirement left too much ambiguity regarding the source of the payments and was therefore invalid.

Despite the decision, counties and cities that wish to continue their redevelopment programs using ''successor agencies'' will be required, under AB 1x26, to share revenues derived from revitalization projects. According to the statute, funds not used to cover RDA debt and overhead costs will be ''remitted to (a county's) auditor-controller for (proportional) distribution to cities, the county, special districts and school districts.''

The court extended the deadline for compliance with the new law by four months to May 16.

Riverside County's redevelopment agency, with about $100 million in annual revenue, is the state's seventh-largest. A total of 625 redevelopment projects, which elected officials credit with stimulating job creation, have been completed in the county.

There are 37 projects in the pipeline, including road improvements, parks, libraries, affordable housing complexes and public safety facilities, county officials said.

In March, California Controller John Chiang's office concluded a review of 18 redevelopment agencies, including Riverside County's, and found record- keeping inconsistencies and instances of ''a lack of accountability and transparency.'' In some cases, funds strictly allocated for ''low- and moderate- housing projects'' were applied to other uses -- upgrading a golf course in one instance.

California Supreme Court ruling today could decide fate of redevelopment projects

Riverside - A ruling from the California Supreme Court today could decide whether redevelopment projects move ahead in Riverside County and throughout the state . The court is considering the validity of laws passed by the Legislature and signed by Gov. Jerry Brown earlier this yea abolishing existing redevelopment agencies and permitting new ones to take their place in exchange for hefty payments to the state. Supporters of the laws argue the money is better used to fund schools and other municipal functions during the current tight budgetary times. They cite a state analyst's report that suggests the cost of redevelopment growing without any tangible economic benefit to the state. In July, the League of California Cities and the California Redevelopment Association filed a lawsuit challenging the changes to redevelopment. Riverside County supported the action, which led to a hearing before the state Supreme Court in November. The plaintiffs argued against requirements that participants fork over roughly $1.7 billion by mid-January and make aggregate annual payments of $400 million to fund schools, fire districts and transit districts under the ''Alternative Voluntary Redevelopment Program.'' According to the suit, many of the 398 RDAs in operation statewide will fold under the cost burdens imposed by lawmakers and the governor. The suit cites protections established by Proposition 22, approved by voters in November 2010, which prohibits the state from raiding monies reserved for local government projects and services. Riverside County's redevelopment agency, with about $100 million in annual revenue, is the state's seventh-largest. A total of 625 redevelopment projects, which elected officials credit stimulating job creation, have been completed in the county. There are 37 projects in the pipeline, including road improvements, parks, libraries, affordable housing complexes and public safety facilities, county officials say. In March, California Controller John Chiang's office concluded a review of 18 redevelopment agencies, including Riverside County's, which found record- keeping inconsistencies and instances of ''a lack of accountability and transparency.'' In some cases, funds strictly allocated for ''low- and moderate-housing projects'' were applied to other uses -- upgrading a golf course in one instance.