Panel begins process of retiring RDA debt

One entity to handle both Los Banos and Merced

By Thaddeus Miller / tmiller@losbanosenterprise.comSeptember 14, 2012 

Michael Amabile

The redevelopment agency dissolution panel began meeting last month to deal with the financial obligations of the RDAs.

Michael Amabile, the former mayor of Los Banos, will serve as chairman as members begin the four-year process of paying off debts for the entities in Los Banos and Merced.

Amabile said the panel, also called a designated local authority, submitted recognized obligation payments, or ROPs, for the first six months to the state Department of Finance. The task includes transferring, selling or liquidating $191 million in Merced and Los Banos property and assets.

"We want to make sure that the city of Merced and the city of Los Banos keep as much as possible," Amabile said.

The payments range from multi-million dollar bond payments to $5,000 for weed abatement.

The panel is one of six authorities, out of seven total, to hire Los Angeles-based Kosmont Cos. as legal counsel through the process.

In February, Gov. Jerry Brown appointed three members to the panel, but two resigned in March. Two replacements, including Amabile, joined in June. Merced, Los Banos and Mendota were the only three to get a late start.

Mark Persico, senior consultant for Kosmont, said that though the process started late, it began smoothly.

"I feel that we're making very good progress," he said.

Merced's biggest challenge, Persico said, lies in the remediation of contaminated drinking water. The city of Merced agreed to pay $1.5 million to more than 2,200 plaintiffs as a settlement in the 5-year-old contamination and flooding case, in which residents alleged a plant near their neighborhood contaminated the air and water around them.

The money secured for redevelopment agencies by the tax increment on property owners has been collected in a redevelopment fund, which the state, when it eliminated RDAs, renamed redevelopment property tax trust fund. Any payments approved by the Department of Finance are paid, and the remainder trickles to the other taxing bodies in the area, like public education and special districts.

Buildings used for public purposes, like the Los Banos Community Center, will remain public, Persico said.

"I think Los Banos is in a fairly good position," he said.

Los Banos' redevelopment agency was one of 400 eliminated after legislators passed a law last year ending the agencies on Feb. 1. Brown wants to use redevelopment agency money to help pay for services such as education and public safety.

The dissolution panel's quorum is three, and must receive unanimous votes on all actions.

The panel will meet monthly and alternate locations between the two cities. The Department of Finance is scheduled to meet with the panel Sept. 21, but that meeting is subject to change. Members plan the next regular meeting Oct. 4. Both meetings will take place at City Hall.

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