At Tuesday night’s city council meeting the City Council Ad-Hoc Subcommittee on Redevelopment is recommending council support three redevelopment agency wind down bills that could prevent millions of dollars being lost by the city.
Three bills, SB 654, SB 986 and AB 1585, have been amended or introduced to the legislature in Sacramento to make technical fixes to AB1X 26 that eliminated redevelopment agencies.
Senate Bill 654, authored by Senate President Pro Tem Darrell Steinberg would allow the City of Santa Clarita, as the successor agency to the dissolved redevelopment agency, to keep nearly $9 million in housing funds to “increase, improve, and preserve supplies” of low and moderate income housing.
Specifically Santa Clarita would retain $8,896,406 to be used toward construction of affordable housing in Newhall.
“We actually have a development called the Newhall Avenue Development that would provide for affordable housing on Newhall Avenue and what we would be able to do is utilize that funding towards that project,” said Armine Chaparyan, Redevelopment Manager for the City of Santa Clarita.
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Although the city has a finalized agreement with the developer, it would die on the vine without passage of SB 654.
Senate Bill 654 has been approved by the Senate and is currently awaiting consideration in the State Assembly. The bill has not yet been assigned to a committee.
Senate Bill 986, introduced by Senator Bob Dutton, clarifies that all bond proceeds initiated by the former redevelopment agency are considered encumbered and prohibits a successor agency from sending the proceeds to the county auditor-controller.
“What that does is continue to guarantee payments on our bonds. That’s a direct benefit to us,” said Chaparyan.
Denise Covert, Administrative Analyst for the City of Santa Clarita says SB 986 is really the same as SB 654.
“654 was really designated just for housing, 986 expands it from housing and non-housing, so any bond proceeds we may have on hand,” said Covert.
SB 986 has been assigned to the Senate Committee on Government and Finance. A hearing date has not yet been set for the bill.
Assembly Bill 1585, introduced by Assembly Speaker John Perez, clarifies that low and moderate income housing funds are to be transferred to the successor agency to provide affordable housing. The housing funds are to be maintained in a separate account and at least 80 percent of the funds must be encumbered within three years.
“What it does is really clarifies the definition of enforceable obligations,” said Chaparyan.
According to Chaparyan in order to function as a redevelopment agency, they must first obtain loans from the city to start their operation until the project area gets formed, and the debt is issued.
“What we’ve done is we’ve listed those loans from the city as enforceable obligations,” said Chaparyan.
The bill would allow the successor agency to pay the city back.
AB 1585 also clarifies the administrative cost allowance for successor agencies. Right now they are capped at either 3% of their tax increments for 2012-2013 or $250,000, whichever is more.
Covert says many successor agencies “up and down the state” have argued they cannot do what they are compelled to do to wind down redevelopment activities with such a small amount.
“So what this part of the bill would allow is for successor agencies to petition to the oversight board for approval to use additional tax increment above that to pay administrative costs,” said Covert.
City council support for the legislative bills would result in position statements being transmitted to each bill’s author, members of the Santa Clarita legislative delegation, appropriate legislative committees, Governor Brown, the California Redevelopment Association and the League of California Cities.
The city council also plans to recognize the contributions of Newhall Redevelopment Committee members since its formation in 1996.