The Redevelopment Money in California

An interesting article in Orange County Register titled "OC cities play hide-the-redevelopment-money game", covered the issues surround a California State Budget debt, a new Governor (Jerry Brown) who ambitiously sought to take charge and begin cutting the "fat", and cities' reactions as their economic development departments scrambled to save assets.

Gov. Jerry Brown said he wanted to do away with400 redevelopment agencies and send their property tax income to school districts and other projects. When cities around the state got then news, their redevelopment agencies crafted plans to keep the money in a strategy that involved bonds. Between Jan. 1 and March 8, according to figures from the The California State Treasurer's Office, there was a spike of $700 million in bonds issued before a vote was set to take place in Sacramento.

Brown called redevelopment corporate welfare. If developers want to build something, they should finance it without public funding, according to his logic. However, legislation to remove funding for the redevelopment agencies fell one vote short in the state Assembly and many cities' recent job hires sighed a sigh of relief that they can keep their jobs for now.

When State Controller John Chiang examined 18 redevelopment agencies he found analysis and regulation of funds were very poorly designed. Problems he encountered included

definitions of what's considered blighted
no reliable means to measure the impact of redevelopment activity
redevelopment agencies that missed required payments to school districts widespread accounting and reporting deficiencies
questionable payroll practices
substandard audits
faulty loans
inappropriate use of affordable housing funds

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