City will appeal payment to state
Ryan Hagen, Staff Writer
Posted: 07/27/2011 03:30:39 PM PDT

GRAND TERRACE – Calling the Redevelopment Agency a vital revenue source, City Council members have agreed to pay the state more than $2.8 million in what they consider “extortion payments” to keep access to the agency and also hired a consultant to appeal the payment amount.

Tuesday evening’s actions follow votes by the state Legislature that abolished redevelopment agencies but allowed them to be reinstated by cities that pay their share of revenue the state thinks it would bring in by abolishing them.

Based on state formulas, the California Redevelopment Association estimates Grand Terrace will have to pay $2.8 million in fiscal year 2011-12 and $670,745 every year afterward, but City Manager Betsy Adams thinks the city could knock that number down to about $2 million this year and $550,000 in the future.

To potentially save that money, the council agreed to pay as much as $14,560 to Santa Ana-based Rosenow Spevacek Group to prepare an appeal to the California Department of Finance.

The council vote to appeal the amount was 4-1. Councilman Gene Hays, an attorney, said he voted against it because he didn’t think it was worth the cost.

“It’s an appeal based on data, data that we probably already have,” he said. “I’ve seen some very difficult appeals done for less, so I don’t see this as a $14,000 appeal – especially when we’re talking about someone who’s probably going to deny it because it’s political.”

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