May Revise Brings Redevelopment Dissolution Tweaks

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Last week Governor Brown released a revised 2015-2016 budget that accounted for greater-than-expected growth in the state’s tax rolls. The panoply of talking heads, advocates, and policy wonks have already dissected the potential effects the new budget may have on higher education, the state’s rainy day fund, and the state’s social safety net. So instead of rehashing those stories, we’re focusing our attention on updates to the redevelopment dissolution process.

The January budget noted that the ongoing dissolution of the state’s redevelopment agencies has returned over $4.2 billion in tax revenues to cities, counties, and special districts. Now, the state is looking to routinize the dissolution process and shift some of the decision-making and review authority that the state’s Department of Finance is saddled with. To accomplish this goal, the January budget proposed some changes to current dissolution law. This includes moving from semi-annual to yearly budgets for each redevelopment agency, outlining a process for moving to countywide (versus city-based) oversight boards in 2016, and outlining criteria for a submission of a last and final budget (or “Recognized Obligation Payment Schedule” in dissolution speak). The May revision provides some tweaks to the process, including the following:

Loans to Fund Litigation

The updated language allows cities to loan their former redevelopment agencies funds to contest decisions made by the state.


No Single Countywide Oversight Board for Los Angeles County

The updated trailer bill would permit Los Angeles County to have five oversight boards, divided by supervisorial district, instead of one consolidated countywide oversight board in 2016.


Use of 2011 Bond Proceeds

For cities that have unspent bond proceeds from 2011, there is now a process for agencies to expend a portion of these funds. Current law does not permit agencies to spend proceeds from bonds issued in 2011.


Highway Infrastructure Improvements

The revised language allows former redevelopment agencies to fulfill agreements related to funding state highway infrastructure improvements.

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