CJ Dablo
Staff Writer
With no hope that redevelopment can be saved, the members of the Signal Hill City Council voted on a resolution Tuesday night to create a new agency run by the City that will concentrate on winding down its soon-to-be defunct redevelopment agency’s (RDA) affairs. The Council members will now serve on the new successor agency’s board. They also voted to allow the Housing Authority agency to be responsible for the RDA’s housing sites and assume the RDA’s housing functions.
The Council had the option to decline the role of acting as a successor agency to manage the shutdown of redevelopment, which involves a major role in the RDA’s financial obligations and assets, but that was an option that each of the councilmembers opposed.
“You’re going to have to put trust in the Council,” Councilmember Michael Noll said, just before he voted to appoint the Council to act as the RDA’s successor agency. Councilmember Ed Wilson and the others on the Council agreed that keeping local control of the successor agency was vital to the interest of the City.
“When it comes to a successor agency, right now if we don’t do it, then we don’t know who will,” Wilson said, arguing that the City should be a part of the discussion to determine the future of the assets and financial obligations the RDA left behind.
It’s the first time that redevelopment has been shut down in California, and the future of redevelopment’s property and finances was burdened with controversy at both the state and city levels.
Background of redevelopment
California Governor Jerry Brown had throughout 2011 announced an intention to shut down the agencies that were created decades ago to eliminate blight and to provide affordable housing. The City Council has repeatedly lauded the successes of new retail centers that were created through the RDA. The Council noted the Signal Hill Auto Center and the Town Center developments where major retailers like Costco and Home Depot have generated sales-tax revenue and brought jobs to the city. Many of the development projects took place on land with abandoned oil wells and required major soil clean-up.
Redevelopment agencies relied on a portion of local property-tax dollars and, under a new law called ABx1 26, the property-tax increment that used to go to the redevelopment agencies will be distributed to police, fire, counties, local activities and schools. Brown said in a statement in December that a recent court ruling that allowed the elimination of redevelopment now guarantees more than $1 billion toward public safety and education. Last month, the Calif. Supreme Court upheld ABx1 26. The ruling effectively tells the more than 400 redevelopment agencies throughout California to shut down operations by Feb. 1. Signal Hill Councilmembers have continuously blasted the decision and the pending loss of its share of local property-tax money.
RDA’s successor agency
In addition to managing the administrative details surrounding the shutdown of the RDA, the City’s newly formed agency (referred to in City documents as “City Council as Successor Agency” ) will report to an oversight committee. According to the city manager’s report, the oversight committee is made up of appointees from the Board of Supervisors, the Signal Hill mayor’s office, the County Superintendent of Schools, the Chancellor of the Community Colleges and the Fire Protection District. The oversight committee will decide the future of the properties formerly owned by the RDA, Farfsing said Tuesday night.
There are also financial matters that the RDA left behind that the successor agency will have to now review and discuss with the oversight committee. The Councilmembers, acting as members of the successor agency, also unanimously passed a resolution that adopted a draft of the obligation payment schedule. The schedule outlines numerous financial obligations ranging from tax-allocation bond obligations to promissory notes. The total outstanding debt obligation is $309,019,908 as of June 11, 2011.
This figure includes all financial obligations of the RDA through 2027, the term that the City’s RDA would have to pay off all debt, Finance Director Maida Alcantara confirmed in a telephone interview Thursday.
Critics from a local community organization attempted to discourage the City Council from taking over as the RDA’s successor agency. Signal Hill resident Maria Harris read a letter to the Council signed by members of Signal Hill Community First. Harris and several others Tuesday night challenged items on the list of enforceable obligations, including $10 million that the City had loaned to the RDA at an interest rate of 10 percent. The City had loaned $10 million to the RDA to purchase property in the former oil field areas, according to the city manager’s report.
“Tonight, there is before you the decision to review and approve a list of the redevelopment agency’s debts that the City claims are legal obligations as defined by the State’s dissolution legislation, AB 1x 26. That list is called Recognized Enforceable Obligation Payment Schedule,” Harris said, reading from the letter.
“If any item listed on this schedule fails to be approved by county- and state-level authorities, the City will be required to accept the liability, including reimbursements to the State,” Harris continued.
She noted that the loan was made between two agencies that are governed by the same officials. All Councilmembers also serve on the RDA.
Alcantara confirmed Wednesday that the 10-percent interest rate cited by Harris was correct for the $10 million the City loaned to the agency in 2008. The finance director also indicated that the principal on the loan is approximately $7.8 million.
City Attorney David Aleshire argued in favor of allowing the Council to act as the RDA’s successor agency, indicating that there will be more discussion of the line items on the obligation payment schedule.
“There are some things that are listed on the schedule of obligations upon which there can be debate in the future. And there’s going to be an oversight committee that the City does not control,” Aleshire acknowledged during Tuesday night’s meeting, noting that the county controller will oversee the oversight committee.
Aleshire also reviewed why the RDA had purchased so many pieces of blighted property. Signal Hill was about to lose the ability to condemn property and had done so before anyone had proposed to eliminate redevelopment.
“What happens to that property will greatly impact the future of this community,” Aleshire said, explaining that the oversight committee will sell the property as soon as possible during a time when housing values are at their lowest in the last ten years.
Aleshire stressed that the City would be in a position to guide the oversight committee’s process to dispose of the property, also noting that if the City isn’t able to agree with the oversight committee with respect to financial obligations, Signal Hill could give up the successor agency role.
“The opportunity to work with the oversight committee and determine how this property develops is worth the risks that we would run in having this discussion about!how we would allocate these assets,” Aleshire added, noting that he believed that the county will appoint representatives to the committee that could work well with the City officials and that the City had good relations with the school entities.
Vice Mayor Tina Hansen did not agree with Signal Hill Community First’s conclusions, arguing that the City shouldn’t walk away from the responsibilities of the redevelopment properties.
“And I would be shocked, and I would be disappointed if we chose this moment to say, ‘We’re just going to walk away, and we’re not going to stand up and fight for the best resolution for the city in this,'” Hansen said.
The vice mayor challenged the idea that the money from the RDA property sale will go directly into the classroom or to the Long Beach Unified School District. Hansen described the criticism of the Council’s move as an issue of trust, that there are people in the community that can’t trust the Council. But Hansen said she trusts her judgment and that of her fellow Councilmembers.
“I trust us to go forward and be at the table and do the best possible job for the city as we go through this process,” Hansen said. “And the people that don’t trust us, they never will.”
Other City Council highlights
Signal Hill Employees Association The Council unanimously approved a resolution in a first-reading vote that approved a new memorandum of understanding between the City and the Signal Hill Employees Association. Highlights of the agreement include changes to the employee contribution toward CalPers and changes to the vision-benefit provider. The new agreement also outlines the employee vacation buy-back program.
Sustainability Award Mayor Larry Forester presented a Fourth Quarter Sustainability Award to Sustainable Now Technologies representatives Eric Woolery-Grimm, Nathan Morrison and Tim Bentley.
Sultans Classic Car Club Mayor Forester and Police Chief Michael Langston recognized the Sultans Classic Car Club at the City Council meeting on Jan. 17 for the club’s contributions to the community and particularly for its partnership with the Signal Hill Police Department to organize their annual car show.
Precinct ballots The City Council unanimously adopted an urgency ordinance to allow the City to reduce the number of precinct ballots it would need to purchase. The City may now order precinct ballots to accommodate 50 percent of the number of registered voters. City Clerk Kathee Pacheco noted an increased demand for mailed-in ballots and also noted that last year’s election in March posted an 11-percent voter turnout at the polls.
