CITY HALL ‚Äî The City Council earlier this week approved $14.6 million in payments to the state to cover various debts following the dismantling of Santa Monica‚Äôs redevelopment agency by the legislature.
Under AB 1484, or a community redevelopment law, the council, acting as the successor agency, has to prepare an obligation payment plan, which identifies the former redevelopment agency‚Äôs debts and sources of payment every six months. The payments are for January 2014 to June 2014.
Cities like Santa Monica and others have been doing this since redevelopment agencies were dissolved in February 2012.
Redevelopment agencies, which were funded by local property taxes, were killed in an effort by Gov. Jerry Brown and the state to close a significant budget deficit in Sacramento. Brown recommended the funding previously set aside for agencies be distributed to local governments to fund core services, such as schools and public safety. RDA funds were used to revitalize blighted areas and create affordable housing.
At the time, city officials said the elimination of the RDA, founded in 1957, would have “severe negative impacts on Santa Monica.”
In the payment plan approved recently by council, some of the projects and debt obligations that made up the $14.6 million included earthquake and Ocean Park RDA bonds.
“That payment schedule is actually how the state approves, and the county auditor-controller allocates former redevelopment funds to pay redevelopment debts,” said Andy Agle, director of housing and economic development for City Hall.
Approximately $10 million of the $14.6 million was received during the previous period, Agle said.
In February, the council approved $51.4 million, including the $10 million, to pay off various redevelopment debts for the months of July through December, according to a city staff report.
City Hall had to find alternative funding for the Pico Library and the Colorado Esplanade after redevelopment agencies were dissolved. Renovation and seismic retrofitting of the landmark Santa Monica Civic Auditorium was also intended to be funded by RDA money, but that‚Äôs been put on hold, Agle said.
After the council approves the money, the payment goes to an oversight board, which has the discretion to approve or deny any portion of the payment. Then, City Hall has an October deadline to the state Department of Finance, which has until November to finish its reviews, said H.D. Palmer, a spokesperson for the state.
Agle said if there are any questions from the successor agency on any determinations made by the Department of Finance, there‚Äôs an opportunity to discuss it.
Palmer said the money that has come back to Santa Monica since RDA has been dissolved is “new, general purpose revenue,” meaning there are “no strings attached to it.”
Santa Monica has received $9 million in residual property tax payments since redevelopment agencies were dissolved, Palmer said.
“It‚Äôs above and beyond what the city or county is getting in base property tax,” Palmer said. “They can use that new, additional money in whatever way they want.”
When it still existed, the Santa Monica RDA invested nearly $300 million in the community, with nearly half of the amount providing financing for over 950 homes for low-income households, city officials said.