City gets set to assume all RDA finances

Crescent City is set to become a successor to its nearly defunct redevelopment agency, assuming all assets, liabilities and debts by Feb. 1.

A state law passed last year axed some 400 redevelopment agencies as part of a plan to make up California’s budget shortfall by sending more property taxes to cities, counties, schools and special districts.

Previously, tax revenues from redevelopment areas were returned to the agencies for future projects.

According to a pair of resolutions passed by the City Council on Tuesday, a seven-member board will oversee the city’s new role in managing some $1.76 million in RDA debt obligations, $377,000 in outstanding loans and five parcels of property.

The oversight board will be comprised of Mayor Kathryn Murray, County Superintendent of Education Don Olson, a chancellor of California Community Colleges, a member from the largest special district taxing entity (which district this is has yet to be determined), a former RDA employee appointed by the mayor and two members from the county Board of Supervisors.

The actions of this board will be overseen by city Finance Director Ken McDonald and “may be subject to disapproval or modification.”

The state law mandating RDA dissolution is murky in regard to the agency’s housing funds that are not obligated, some $945,000.

For now the city will hold on to the housing assets.  

There is legislation in the state Senate now that would allow the city to inherit this money and assume affordable housing responsibilities.

City Manager Eugene Palazzo was hopeful this bill would pass, but doubtful that cities will be able to keep up with state’s affordable housing requirements without an RDA in place to keep collecting property tax revenue specifically for development and housing projects.

The El Patio motel site was purchased with RDA housing funds with the intent of creating affordable senior housing. The city may pick up that project again, depending on the input of the other oversight board members, Palazzo said.

 Last month the state Supreme Court struck down another law that would have allowed Crescent City’s redevelopment agency to carry on if it paid about $425,000 in fees to the state.

The City Council was on board for paying the fees, an option deemed preferable to losing the RDA altogether. Now the choices are narrowing.

Legislators are scrambling to introduce a compromise before the Feb. 1 dissolution date.

“This is a very fluid and moving process,” said Palazzo, “There’s a lot of legislation and bills out there right now.”

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