.

The Reality of RDAs

Fact: 97% of RDA money comes out of the city's general fund.

What do the Cities of San Bernadino, Mammoth Lakes, & Stockton have in common? All three cities follow RDA and the League of California Cities, all circumvented AB26, and all three went bankrupt within a year.

Tax revenue is collected for the basic needs and services of the community, not to fund the private sector. The League of California Cities and the RDA Association are not on the side of the people. They are lobbyist groups who's purpose is to divert money to themselves and their affiliates.

In 1945 California authorized Redevelopment Agencies (RDA's) to alleviate urban blight. Blight is defined by state law as a combination of physical and economic conditions – vacant buildings, declining property values, poverty, high crime rate – that would prevent private enterprise from developing the area.

In the beginning very few cities used RDA, now most California cities not only use but abuse RDA. Half of California cities claim between 11-30% blight and 20% of cities claim over 30% blight to acquire land for RDA. The entire city of Imperial Beach has been declared blight. Imperial Beach is 1 ½ miles of beach-front property in Southern California; Does that sound 'blight' to you?

Powers of RDA:

Eminent Domain – Once an area is declared blight the city has the right to exercise the powers of eminent domain. The League of California Cities considers the powers of eminent domain an 'important tool' and encourages city officials to declare areas of their city blight to obtain eminent domain powers.

Take Out Loans & Issue Bonds without Voter Approval – RDA's use a federal Community Development Block Grant to start a project, but the remainder of the funding comes from issuing debt. By declaring a city blight the city is able to side-step Prop 13 to take out loans and issue bonds without voter approval.

Funding of RDA:

RDA gives the impression that the money is from state or federal grants, but 97% of all RDA finances are funded by the city. RDAs receive the federal Community Development Block Grant (CDBG) to begin work, but all redevelopment activity is financed by taking out loans that the city backs with future property taxes.

Tax Increment Financing: When Prop 13 passed RDAs feared a limited money stream, so they lobbied for special property tax revenues. After an RDA area has been established all property tax increases – less 2% for inflation – goes entirely to RDA instead of being used for the basic needs of the city. In the case of Imperial Beach all of IB is declared blight so ALL property tax increases go to the RDA program. The payments to RDA last as long as there is debt outstanding, and RDAs no longer have plans to conclude their projects, so eminent domain remains on the properties.

Cost of RDAs:

We can see the results of RDAs in the bankruptcies of Stockton, San Bernadino, and Mammoth Lakes. RDA eats up $1.5 billion/year of our cities budgets in the State of California. The financial records of Imperial Beach shows the actual costs of RDA on a city.

97% of all RDA funding is from the city itself. Taxes are collected for the general needs of the community, not to fund the private sector. Originally an RDA project took about 2% of a city's budget, now RDAs are swallowing up to 30% of city budgets.

The bigger problem is that the cities are spending even more on RDA than they are acknowledging. Imperial Beach's RDA is 32% of the budget, but I also found $4 million spent on RDA that is being funneled through 'dump accounts'. The budgets of numerous city departments have 'ABC' accounts listed with their expenditures. The ABC accounts pad the departments' budget by as much as 25%. The ABC accounts on the IB Fire Department's $2.3 million budget is $450,000 – 19% of their budget is being padded with RDA costs and legal fees.

Legal Fees:

Google 'RDA' and you'll find dozens of lawsuits pending. The Imperial Beach Financial Report for the year ending 06/30/11 stated City Attorney Fees at $244,000 – but paid out over $500,000 defending RDA lawsuits. This year the City Attorney Fees are budgeted at $200,000, but have already spent $600,000. In 2011 the City of IB also cut two checks to the RDA Association to help pay for their legal fees.

Massive Payrolls:

Another similarity of every city that belongs to RDA and the League of California Cities is massive payrolls for the top elected and appointed officials. Mammoth Lakes has a population of 8,000 people yet the Comptrollers' 2010 report shows their City Manager's salary is $198,533; Assistant City Manager at $186,358; and Exec Assistant to the City Manager at $71,708; and Airport Director at $151,431.

What are the salaries of elected and appointed officials in the city of Imperial Beach? That is information the City refuses to disclose. The new budget shows the City Council and Appointed City Officials shifted half of their payrolls to RDA accounts to avoid the State Wage Limits. City elected and appointed officials are giving themselves multiple titles to double dip wages.

How To Tell If Your City Is RDA? Simply look at the City Council Agenda.

 

“..JOINT REGULAR MEETING OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY, MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE SUCCESSOR HOUSING AGENCY TO THE REDEVELOPMENT AGENCY, AND MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE HOUSING AUTHORITY ..”

 

The Mayor and Council are hired to oversee the affairs of the City Employees and finances. It is a conflict of interest for council to belong to lobbyist organizations and to use tax payer dollars to fund lobbyists. 'Successor' RDA agencies are RDA on steroids. Their purpose is to shift as much money as possible from the city general fund to RDA regardless of the harm done to the city.

Our government functions on a system of checks and balances, but when city elected and appointed officials conspire together we have lost balance.

The League of California Cities lobbies every branch of city government. Their website lists departments for council, city managers, city attorneys, finance, city clerks, fire, police, & public works. The League nurtures a mentality in city officials that circumventing laws and putting their cities in debt with unnecessary construction projects and massive salaries is acceptable.

Circumventing wage laws and burdening cities with massive debt from unnecessary construction projects can no longer be acceptable in our State. We must close down RDAs and remove any elected or appointed officials associated with lobbyist organizations. Government officials are paid to work for the people, not to conspire against us.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Roger Berg August 13, 2012 at 03:59 PM
Libi: You know nothing about how Beaumont formed their RDA, when and how it operated. Just for the record, our RDA did not have the power of eminent domain. When the RDA wanted to purchase property it did so by negotiating with the property owner. Let’s get another fact straight here. I don’t believe in raising taxes, I believe in creating jobs, a tax base so the revenue that a city need to operate can come from increased property value and increased sales tax. This is we have done in Beaumont with our RDA. In regards to shopping center, we already owned an old Bank of America which we purchased. We made a deal the developer that if they purchased the balance of the property, built the new shopping center with the proposed businesses that would generate considerable tax revenue, the city would give them title to the bank property with a note payable to the city. If at the end of 7 years the businesses were still viable the City would forgive the note. The bottom line is the city got more tax revenue out of the new businesses through increased sales tax and property tax then the amount forgiven on the note. We are not in a financial mess like most cities, but rather have a balanced budget with money in the bank despite the State robbing our funds each year. We never issued any bonds that were indebted on the RDA. The bottom line is our city has no debt or loans. So if you are having problems in Imperial Beach please deal with them and not run down other cities.
G Rodriguez August 13, 2012 at 06:06 PM
I am all for what Mr. White said in his post, would the Patch start posting all campaign contributions to all local candidates? I notice another story here about a councilman who was just found quilty and fined for taking money under the table from an entity the city does business with- balanced budget aside, it seems like more watching to see if too much back scratching is going on is necessary. If one official gets caught doing one thing I don't think its just one thing, its more like a DUI arrest, out of lots of driving around drunk, you finally got pulled over once.
Mariana Zuelsdorf August 21, 2012 at 04:10 AM
A personal slush fund? Can you prove that, Gary? Is this back to the Cultural Alliance thing while ignoring the improvements in the downtown? What are the hundreds of thousand things that produced no physical improvements? I think it might be a good idea to double check your facts on Banning's budget for next year. Victor didn't answer the post about Beaumont's indoor shooting range but since it was featured in the newspaper, I'm assuming it is open and doing business.
Mariana Zuelsdorf August 21, 2012 at 04:17 AM
Contribution records are carefully kept and available, Mr Rodriguez. You are assuming that because one is guilty, they all are? Hummmm.......
Ken September 01, 2012 at 03:34 AM
Roger thats not even laughable.. ANIMAL FARM All animals are equal, but some animals are more equal than others -- All comments are welcomed. More to follow regarding other issues in the Beaumont area such as... -- What did we get for the nearly $¼ BILLION (ok $224 MILLION) in Mel-Roos bond debt? http://www.treasurer.ca.gov/cdiac/reports/M-Roos/2009.pdf (scroll to pg A320) -- Where did the $20 MILLION the City loaned to our dissolved RDA come from and where did it go and what did we get? Will it ever be repaid? Especially in light of the State’s ruling that “...loans to a Redevelopment Agency by a City are NOT an enforceable obligation.” PressEnterprise 6-15-12 -- When is a CalPers member eligible to buy Service credits? -- What is definition of Independent Contractor in regards to qualifying for CalPers membership? --If the “Independent Contractor” passes CalPers “Common Law Control Test” , is the City in arrears for over 15 years of contributions? Stay tuned........

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