City must give state $2.5M to keep Redevelopment Agency
Sandra Emerson, Staff Writer
Created: 07/06/2011 05:08:06 PM PDT
UPLAND – Like many cities in the Golden State, officials here are sorting through the impact that the state budget will have on its Redevelopment Agency.
Gov. Jerry Brown last week signed the state’s 2011-12 fiscal year budget, which included a trailer bill that will charge cities an annual fee to keep their redevelopment agencies.
Upland would have to pay $2.59million to the state this year if they want to keep its Redevelopment Agency. The fee would decrease to $611,000 in the 2012-13 fiscal year.
Upland’s Redevelopment Agency has been operating since the 1980s, said Jeff Zwack, the city’s development services director.
“For the state to give us a choice such as this is extremely difficult because, with the economy basically being flat, it affects our revenues that we take in – the tax increment taken in to fund redevelopment projects,” Zwack said.
The Redevelopment Agency oversees affordable housing, economic development programs, such as the Discover Upland Campaign and the weekly farmer’s market, as well as various infrastructure projects.
The city joined other Inland Valley cities in January in adopting a resolution opposing Brown’s proposal to eliminate redevelopment agencies.
For their agency to continue operating, Upland officials will need to adopt an ordinance by November.
But even if the city adopts the ordinance, funding for redevelopment projects will be limited, Zwack said.
“If we chose to continue, then we’re severely limited because the state essentially will take 25 percent of our tax increment. The majority of the remaining amount will go to pay off bonds and other indebtedness,” Zwack said. “We’ll have very little left for doing redevelopment projects, so the impact is basically gutting our redevelopment program.”
The fee the city will be required to pay the state will not be budgeted, which will also take funding away from projects, he said.
“What we’ll have to do is take money from existing projects or programs or low- to moderate-income funding sources to make that payment and continue on for as long as projects last,” Zwack said. “Some might be in existence until 2050, so every year we’ll have to pay this fee.”
If the city’s Redevelopment Agency is eliminated, the tax increment will go back to the city and school district.
Currently, a portion of the taxes go to the school district through the agency.
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