CITY HALL — The City Council will decide Tuesday whether or not to take on the work of winding down the Redevelopment Agency, an entity that has hundreds of millions of dollars in housing and capital improvement projects throughout the city.

Staff recommends that City Hall become the successor agency to the RDA, which will be dissolved Feb. 1, and be responsible for administering the payment for projects that the council approved in August 2011.

If the City Council chooses not to, a “designated local authority” would be formed and Gov. Jerry Brown would have the power to appoint three residents of the county to serve on its governing board.

The Housing Authority would then take over the Redevelopment Agency’s role in producing low- and moderate-income housing in the area, which would also be problematic, said Andy Agle, director of housing and economic development at City Hall.

“The RDA has an existing master cooperation agreement with the city to implement redevelopment, including affordable housing,” Agle wrote in an e-mail. “There is no such agreement with the Housing Authority.”

He confirmed it would be the same city staff who would oversee the obligations, irrespective of whether it is with City Hall or the Housing Authority.

The move comes as the result of a December decision by the California Supreme Court to uphold a bill by the Legislature to dissolve redevelopment agencies across the state and killed a bill that would allow agencies to stay open in return for payments.

“This result, unfortunately, was the worst possible outcome of the litigation for redevelopment and local agencies, as the bifurcated decision means that all redevelopment agencies will be dissolved under (one) and none will have the opportunity to continue existence under (another),” the staff report reads.

That list of city projects is under review by the state Department of Finance, which will determine if the projects are valid or if the state can take back the money obligated under the contracts.

If that list gets approved, City Hall will have to administer the Redevelopment Agency’s bonds, loans, payments for state or federal governments, employee pension costs, judgments or settlements, legally binding agreements or contracts and contracts needed for the administration or operation of the “successor agency.”

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