Alhambra may have to pay $4.4 million to keep its redevelopment agency, City Manager Julio Fuentes said at Monday’s City Council meeting. The prediction was based on two bills Governor Jerry Brown had prepared, requiring cities to either eliminate their redevelopment agencies, or preserve them by paying money to the state. The bills were signed into law on Wednesday.
“It’s a substantial amount of money, and after that it'll be a little over a million a year to sustain the agency," Fuentes told the Council. "We'll have to see what the returns would be, and if we want to do that, because that's a lot of money we'll have to recoup."
Alhambra would have to pay a portion of the $1.7 billion that the state expects to collect from all municipalities choosing to retain their agencies. After the 2011-2012 fiscal year, the city will continue to pay annually a portion of $400 million, which will go toward education, transit services, and other local projects.
The price tag is even steeper for larger cities – in the Inland Empire cities like Fontana and Rancho Cucamonga will have to pay more than $20 million to keep their agencies, The Press-Enterprise reports.
If Alhambra chooses to keep its agency, it will have to adopt by October 1 a resolution stating its intention to pay the state. As such, the proposed budget for the next fiscal year funds the agency’s administrative costs only up till October. After the City has decided on whether or not it will keep the agency, the budget will be amended to reflect those changes. If redevlopment comes to an end, two project managers and a secretary from the agency will be moved into positions covered by the water fund.
The role of redevelopment agencies has been hotly debated as the state attempts to fix its budget. Proponents say that the agencies are instrumental in turning blighted areas into vibrant business centers, while opponents say they have been a source of corruption and mishandled money.
State Controller John Chiang said in a recent review that a large number of redevelopment agencies have failed to file reports, and that money has been inappropriately used to cover costs such as lobbyist expenses. “The lack of accountability and transparency is a breeding ground for waste, abuse, and impropriety,” Chiang said on the State Controller’s website.
Fuentes expressed a more positive view, stating that Alhambra has been “at the forefront of development” with the aid of the redevelopment agency.
The League of California Cities—an association of city officials—plans to sue the state over the bills. The association claims that the bills violate Proposition 22, which prohibits the state from taking money away from redevelopment, transportation and other local services.