California Supreme Court To Decide Redevelopment Case

The state’s highest court announced today it will take up the issue of whether legislation that shutters local redevelopment agencies -- if they don’t pay to play -- is legal.

The case involves the validity of Assembly Bill 26 X1 and Assembly Bill 27 X1 (California Redevelopment Assn. v. Matosantos), which were both signed into law by Governor Jerry Brown in June as part of the state budget package.

ABx1 26 eliminates redevelopment agencies and ABx1 27 offers an Alternative Voluntary Redevelopment Program in which municipalities pay the state to keep their local redevelopment agencies afloat.

Under the voluntary program, Lake Elsinore would need to pay $7,739,443 during the current fiscal year.

Today the court allowed ABx1 26 to remain in effect insofar as it precludes existing redevelopment agencies from incurring new indebtedness, transferring assets, acquiring real property, entering into new contracts or modifying existing contracts, entering into new partnerships, adopting or amending redevelopment plans, etc., but it stayed enforcement of both statutes in all other respects.

The court said today it will expedite a speedy briefing schedule to facilitate oral argument as early as possible in 2011, and it will have a decision before Jan. 15, 2012.

The date is very timely. As part of the alternative voluntary program, the city of Lake Elsinore would need to pay half of the $7,739,443 by Jan. 15, 2012. The other half would be payable by May 15, 2012, according to city documents.

unanimously to move forward on a non-binding resolution to adopt an ordinance opting into the program. Council will get a chance to review the ordinance before taking a final vote on whether to approve. With today’s news, however, City Manager Bob Brady said he is consulting with the city’s legal team.