By Josh Dulaney Staff Writer
Posted: 03/03/2011 08:55:45 PM PST

SAN BERNARDINO – Seeking to shield hundreds of millions in redevelopment money from Sacramento, the City Council, in a move Thursday night with questionable legal ramifications, voted to hand control of redevelopment funds to a nonprofit corporation.

The council, acting as the city Economic Development Agency board, voted 4-1 to shift redevelopment oversight to the San Bernardino Economic Development Corp., an entity Mayor Pat Morris said has been used to fund past redevelopment projects.

City Attorney James F. Penman said the current redevelopment budget is about $113million.

Councilman Chas Kelley was the lone dissenter. Councilwoman Wendy McCammack abstained, citing a conflict of interest. The 2nd Ward seat is vacant.

“We’re not entirely convinced this works either …” said Emil Marzullo, interim economic development director. “It’s never been done. We’re looking for ways to make this happen to protect the dollars.”

Marzullo said the the city would need to validate the move in court.

He said he was working with a ticking time bomb because Gov. Jerry Brown seeks to eliminate redevelopment agencies throughout the state.

Strapped with a $26.6billion state budget shortfall, Brown wants to plug redevelopment money into education, public safety and other services.

Thursday night’s action calls for the corporation board to be comprised of six voting members, three of which would be from the council.

The remaining board members would come from the San Bernardino City Unified school board, the county Board of Supervisors and the San Bernardino Area Chamber of Commerce board.

“I believe that we have an opportunity here to create a partnership around this money and what we can do to revitalize our city,” Councilman Tobin Brinker said.

Kelley blasted the move, saying it weakens accountability to the taxpayers and runs the risk of financial abuse.

“Abdicating that responsibility is inappropriate and can easily lead to corruption and financial mismanagement,” he said.

Kelley said he would support a nonprofit agency overseen by the city’s seven council members.

“This is an important issue and we need to solve this in an ethical and responsible manner,” he said.

Councilman Fred Shorett disagreed with Kelley’s take.

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