State controller finds agencies unaccountable
Jim Steinberg, Wendy Leung and James Rufus Koren, Staff Writers
Posted: 03/07/2011 10:00:15 PM PST

The State Controller’s Office on Monday issued a scathing audit of redevelopment agencies, giving ammunition to Gov. Jerry Brown and others who want to see the agencies eliminated.

But the audit also drew criticism from local officials and redevelopment backers who say it is flawed and one-sided.

State Controller John Chiang said the audit of 18 redevelopment agencies found no clear way to measure how or whether redevelopment agencies helped create jobs. The audit also found some agencies used redevelopment funds for ineligible or questionable purposes.

“For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayers are receiving optimal return for each invested dollar,” Chiang said.

None of the 18 agencies audited are in San Bernardino County, and local officials said Chiang’s report doesn’t paint an accurate picture of what their redevelopment agencies do.

“This report was set up to demonize redevelopment agencies,” said Fontana Mayor Acquanetta Warren. “They picked the cities they thought could get the most problems. … Funny they want to show the problems and not the successful ones like Fontana.”

Warren and other local leaders say most redevelopment agencies are run well and use public funds properly.

“This is not what all the redevelopment agencies are doing – this is what these 18 are doing,” Warren said.

Other officials questioned the timing of the report. Rancho Cucamonga Mayor Dennis Michael said agencies submit reports to the Controller’s Office every year but that Chiang never audited agencies en masse or presented findings similar to those released Monday.

“I find it very suspicious and somewhat deplorable that something that should have been done in the past is done now to further the governor’s plan,” Michael said.

Robb Steel, director of Rialto’s redevelopment agency, said Chiang’s office went out of its way to come up with a bad headline.

“If you want to find something, you can find it,” he said. “It may make for great sound bites, but I’m not sure it represents redevelopment agencies as a whole.”

In its response to Chiang’s report, the California Redevelopment Association, which lobbies on behalf of redevelopment agencies, said Chiang was off-base in criticizing how redevelopment agencies report their role in job creation.

“There is no question that redevelopment is directly responsible for hundreds of thousands of jobs,” said John Shirey, executive director of the association. “But neither the Legislature nor the controller have prescribed a single way of estimating private-sector jobs.”

Assemblyman Mike Morrell, R-Rancho Cucamonga, said it’s likely that some redevelopment agencies are misusing or not properly managing public funds, but he also said that’s not the case for most agencies.

“Just because a few people aren’t handling the taxpayers’ money well doesn’t mean they’re all doing that,” he said.

Morrell doesn’t like Brown’s plan to eliminate redevelopment agencies, but not necessarily because he thinks redevelopment is a good thing. More than that, he said taking redevelopment money to balance the state budget only prevents the state from cutting spending.

“He’s taking that money that has done good for a number of local municipalities and he’s putting it back into the state,” Morrell said. “He’s not really doing away with redevelopment money – he’s just bringing it to the state. … I’m looking for him to really cut things.”

But State Sen. Gloria Negrete McLeod, D-Montclair, said the controller’s audit bolsters Brown’s case for doing away with redevelopment agencies.

“It’s part of the argument that if you can’t take care of your business, then why do we keep funding you?” said Negrete McLeod, a member of the budget panel that voted last week to go ahead with Brown’s plan. “We can’t really afford to continue transferring revenues to unaccountable agencies.”

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