Turlock City Council Discusses Important State Legislation Issues

At last week’s City Council Meeting, Interim Assistant City Manager Maryn Pitt discussed and analyzed pending State Legislation including Senate Bill 1156, and the Department of Finance Budget Trailer Bill.

Senate Bill 1156, which is currently on the League of Cities’ “watch-list,” authorizes a city and county that included the territory of a redevelopment agency to form a Sustainable Community Investment Authority to carry out Community Redevelopment Law, using the assets of a former redevelopment agency as well as new revenues that the bill authorizes.

The bill was amended on the Senate Floor to delete the authority for a City Council to form a Sustainable Communities Investment Authority that receives only the city’s share of tax increment revenue.

Up until the recent statewide elimination of Redevelopment Agencies (RDAs), the Community Redevelopment Law allowed local officials to set up RDAs, prepare and adopt redevelopment plans, and finance redevelopment activities. The redevelopment agencies kept the property tax increment revenues generated from increases in property values within a redevelopment project area. In Governor Brown’s 2011-12 Budget Proposal, however, the elimination of RDAs was called for in order to return billions of dollars in property tax revenues to schools, cities, and counties to provide core services.

SB 1156 authorizes a city and county that includes territory of a former RDA to form a Sustainable Communities Investment Authority to carry out the Community Redevelopment Law.

Pitt advised the Council to take the stance of the League of Cities, which is currently neither against nor for the legislation, and therefore keeping it on a watch-list, should anything change.

The Proposed Post-RDA Budget Trailer Bill, on the other hand, is looked negatively upon by the League of Cities.

“If the department of finance bill is not amended, it creates huge concerns in their ability to find that something was not what they thought it should be, and then go see sales tax money to balance that money out that they thought in their judge, jury, execution or mindset should not have been appropriated within the expenditures of the redevelopment,” stated City Manager Roy Wasden.

As part of the process to have the Department of Finance approve submitted Required Obligation Payments Schedule (ROPS) prior to June 1 tax distribution, the Department of Finance has distributed a proposed budget trailer bill that further erodes local control by successor agencies and oversight boards, requires payment of unencumbered cash and appears to reduce the June 1 payment to successor agencies for approved purposes to compensate for “underpayments” to local taxing agencies last December.

The proposed DOF budget trailer bill was developed without input from the League of Cities and other stakeholders. The bill diverts unencumbered cash from the successor agencies (including housing funds), limits the authority of oversight boards to approve contracts, and gives the final approval of all matters to the Department of Finance.

“There needs to be some legislation to clean up how confusing and difficult the poorly written law is that is ending the redevelopment,” stated Wasden. “It’s just filled with problems and questions that are very difficult to go through.”

To learn more about the League of Cities, and to read more about the League’s position on various bills and legislation, visit www.cacities.org.

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