While the fallout from the state’s decision to disband community redevelopment agencies continues to rage and animosity between state and local governments persists, the city of Guadalupe found a ray of hope in the middle of this chaotic storm.
On Jan. 24, the Guadalupe City Council approved two resolutions that will make the city the successor agency in closing out its own redevelopment agency.
By accepting the role, Guadalupe will be allocated no less than $250,000 per year in administrative allowance funds. According to City Attorney Dave Fleishman, this allowance comes from the state through ABX1 26, which provides that successor agencies receive a minimum allowance of $250,000 per year to administer projects.
According to City Administrator for Guadalupe Regan Candelario, the city will continue to receive the allowance until all redevelopment agency obligations have been fulfilled.
Fleishman said that although money will be coming into the general fund, the redevelopment agencies business must be closed out. The money will go to city staffers who will be responsible for winding down redevelopment activities in the city. Closing out the redevelopment agency will entail making outstanding bond payments, as well as contract and lease payments.
The redevelopment agency in Guadalupe has just one outstanding loan in the amount of $550,000, owed to Santa Maria Habitat for Humanity for affordable housing that hasn’t yet begun construction. Candelario said that some obligations, such as the outstanding loan, will take many years for the city to pay back.
Even though the city could have chosen to take over the role as housing authority and finish out the redevelopment agency’s business, Fleishman said there was little to gain in taking control of the efforts. He also said that only six cities in the state had declined the option to wind down redevelopment activities themselves.
Initially, the Community Redevelopment Agency for Guadalupe was required to set aside a portion of taxes for housing efforts, but by choosing not to take over its housing function, that money will likely be passed on to the Santa Barbara County auditor controller. At that point, the money will be given to the agencies that receive property-tax income.
The Guadalupe Redevelopment Agency is just one of about 470 agencies axed by ABX1 26, signed in June 2011 by Governor Jerry Brown in an attempt to cut the budget.
Fleishman said it could potentially take years for Guadalupe to make the necessary payments and close out its agency. While the city stands to benefit somewhat from this legislation through the administrative allowance, it would seem that the negatives outweigh the positives.
The goal of the California Redevelopment Agency is to beautify cities and help draw tourism. However, with the agency scheduled to disband at midnight on Feb. 1, there will be no more funds put toward redevelopment.
“Redevelopment agencies are very important for a city such as Guadalupe,” Fleishman said, admitting that there are more questions than answers at this point.
This article appears in Feb 2-9, 2012.
