Canan Tasci, Staff Writer
Created: 09/08/2011 08:31:58 AM PDT

MONTCLAIR – City Council members have agreed to pay the state a ransom of $3.6 million to continue operating its redevelopment agency.

In a 4-0 vote, after a second reading on Tuesday, council members approved to comply and participate in the “Voluntary Alternative Redevelopment Program” that will allow the city’s agency to exists. Councilwoman Carolyn Raft was absent.

Cities who wish to continue their redevelopment agency have to adopt a continuation ordinance by Oct. 1 with an effective date of Nov. 1.

Two bills in the state’s 2011-12 fiscal budget is causing a number of cities to evaluate what they’re going to do with their agency.

The first bill would allow a city to shut down its redevelopment agency, while the other requires them forks over a portion of its redevelopment money to the state.

Cities are prohibited to enter into any new agreements until they pass an ordinance saying if they want to keep their agency, which helps develop blighted areas.

City Manager Edward Starr told council members there is an economic benefit to the community if the city continues the agency.

“The redevelopment agency brings in through its tax increment program about $8.6 million that if we did not have the city would probably only realize a gain of $1.7 million in property tax,” Starr said.

According to the staff report, the agency pays the city annual about $1 million for wages, benefits, graffiti abatement and additional costs related to the agency using city facilities.

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