Turlock Council Split Vote to Pay State “Ransom” Payment to Keep Redevelopment Agency

The October 25, 2011, Turlock City Council meeting was standard business for the most part that gained unanimous votes on all agenda items except for one, the action to participate in the Alternative Voluntary Redevelopment Program.

The council was first briefed on their three options at a workshop on September 13, 2011, meeting. Basically the Turlock Redevelopment Agency (RDA) has the following choices according to the new State legislation:
1) Dissolution
2) Creation of a successor agency to wind down the business of the agency, or
3) Continuation of the agency following a hefty "voluntary payment" to the State and annual payments thereafter.

The council, at their September 27th meeting, made an unbinding resolution to pursue option number three of making a "voluntary payment" to the State, a payment that has been referred to as a “ransom payment.”

The option of making a voluntary payment of $3,187,304 and $615,000 annual payments thereafter is the only option that allows the Redevelopment Agency to maintain its function. The City Council would remain in place as the Agency’s Board and would retain full budget discretion to initiate new projects following housing set-aside, pass throughs, debt service and required payment to the State of California Department of Finance (DOF). The greatest advantage in this scenario would be the continuation of the housing set aside that can be used for programs or matching funds for grants.

"This is the action that our legal counsel advises we take to put us in the best possible position to deal with the actions taken by the state in the unconstitutional act of taking the redevelopment agencies," said Turlock City Manager Roy Wasden.

City Attorney Phaedra Norton stated, "The Supreme Court has currently suspended the effectiveness of ABX1-27, which is the voluntary redevelopment program. Having said that, it’s unknown how the court will treat the deadlines upon lifting the stay. So because we are in an area where we are unsure about what’s going to happen, we believe it’s necessary to try and put ourselves in the best position possible."

By adopting the ordinance the city is not obligated to make the payment if the legislation is upheld in the courts. In the event that does occur, the city can make the payment or declare they are unable to make the payment and would automatically trigger the formation of a successor agency.

"We’re still pending litigation from the former governor and this litigation could go on and on while we voluntarily give them money at gunpoint," said Councilwoman Amy Bublak, who has opposed all actions relating to this legislation to this point.

Councilman Bill DeHart has also been adamantly against actions relating to this legislation as well.

"It’s kind of like loading a gun and putting it to your head,” said Councilman DeHart. “I’m uncomfortable putting ourselves in a position where we are prepared to pull the trigger."

Mary Jackson had optimism on the issue stating, "I am going to put my faith, and I know there is not a lot of it, in our State’s Supreme Court and they’re going to decide with the will of the people."

The vote was split 3-2, with DeHart and Bublak in opposition, to continue toward meeting deadlines in ABX1-26 and ABX1-27 legislation.

The first payment is due January 15, 2012, and the second payment will be due May 15, 2012.

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