Friday, Jan. 06, 2012

Redevelopment falls to court case

City will lose local revenue as it begins dismantling a 'bright spot'

City staff has begun the dissolution of the Los Banos Redevelopment Agency after the California Supreme Court last week decided the state can squash redevelopment agencies, the city manager said.

"It's frustrating, because the state continues to raid the local coffers," Steve Rath said, adding that the redevelopment agency was a bright spot for the city.

The court unanimously ruled in favor of a state law that abolishes the more than 400 redevelopment agencies and voted 6-1 to not allow the agencies to continue by sharing resources.

Rath said there are no projects immediately affected by the ruling.

"We anticipated something was going to happen," Rath said.

The city refrained from beginning redevelopment projects after the Los Banos Community Center was completed, Rath said.

The redevelopment agency, which uses property tax dollars to encourage the development of blighted areas, has been operating without a director since November when Elaine Post left for the director position in Merced.

Gov. Jerry Brown said the court's ruling "validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety."

City Attorney William Vaughn said the city must next decide if it will serve as the successor agency, which operates under a seven-member oversight board made up of city, county, school district and other representatives.

Vaughn said it will be a multi-year process to wind down the agency by paying outstanding debts and unloading assets to the city, county and school district.

"The community center and Henry Miller Plaza come to mind; those will probably be transferred to the appropriate governmental agency," Vaughn said.

In July, the California Redevelopment Association, the League of California Cities, San Jose and Union City filed a lawsuit challenging the constitutionality of the two portions of the state budget that eliminate redevelopment agencies.

The Los Banos Redevelopment Agency was established in 1996 and has been solely or partially responsible for the Los Banos Community Center, Rail Trail, Martin Luther King Jr. Early Childhood Development Center, installation of infrastructure on Technology Drive and upgrades of downtown sidewalks.

Enterprise reporter Thaddeus Miller can be reached at (209) 388-6562 or by email at tmiller@losbanos

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