Lake Elsinore And Riverside County Opt For Local Control

that upholds legislation abolishing about 400 redevelopment agencies statewide – including Lake Elsinore’s – the city has moved to retain some control.

During its regularly scheduled meeting, Lake Elsinore City Council voted 5-0 to make the city the “successor” of its redevelopment agency.

Effective Feb 1, the city’s redevelopment agency dissolves under the As the successor, the city will finish up the affairs of the agency, which includes paying off existing debt.

With its vote, Council also agreed to form a “successor housing agency” to perform affordable housing activities.

and its have been funded by redevelopment dollars, but according to staff these endeavors, which are scheduled for completion this year, are not in jeopardy because funds were already pledged.

Tuesday afternoon, Lake Elsinore City Councilwoman Melissa Melendez was onsite at and said upgrades there would not have been possible without redevelopment money.

“This project satisfies the RDA purpose, which is to eliminate blight in the city and give an economic boost to the core of the city,” she said.

California Law

Under the auspice of redevelopment agencies (RDAs), local government has been allowed to use increased property tax to obtain and repay bonds that cover the cost of redevelopment projects in designated blighted areas.

But in June, Gov. Jerry Brown signed Assembly Bills 1x26 and 1x27, which mandated phasing out redevelopment agencies statewide and provided for an alternate program under which revitalization projects would be allowed to continue. Supporters of the legislation argued that redevelopment dollars would be better used to fund schools and other municipal functions during the current tight budgetary times.

Opponents, including Lake Elsinore and Riverside County, countered that RDA projects provided localized economic stimulus, creating construction jobs, eradicating blight and raising commercial and residential property values.

The California Supreme Court heard arguments in the matter and handed down the Dec. 29 ruling upholding the legislation ending redevelopment, but it struck down a requirement that counties and cities fork over roughly $1.7 billion by mid-January and make aggregate annual payments of $400 million to fund grade schools, community colleges, fire districts and transit districts under the "Alternative Voluntary Redevelopment Program."

Despite the California Supreme Court’s decision, Lake Elsinore and other jurisdictions that want to continue their redevelopment programs using successor agencies will be required, under AB 1x26, to share revenues derived from projects. According to the statute, funds not used to cover redevelopment debt and overhead costs will be remitted to the County Audit-Controller.

The County’s Vote

Lake Elsinore’s decision Tuesday night parallels one made earlier in the day by the County Board of Supervisors.

During its regularly scheduled meeting, the board designated the county Housing Authority to manage publicly funded affordable housing projects initiated by the Redevelopment Agency.

In a 4-0 vote -- with board chairman John Tavaglione absent -- the supervisors named the Housing Authority as the successor agency to the county RDA in all housing-related matters. The county's Economic Development Agency was designated in March as the principal successor agency, overseeing all revitalization projects not connected to housing.

There are several dozen RDA projects on tap countywide.

"The critical issue for the county is creating more jobs," said Supervisor Bob Buster. "Infrastructure improvements and redevelopment contribute to that."

Buster expressed concerns about securing funding to complete remaining and future RDA projects as doubts linger about how to pay for them.

The board will hold a workshop on redevelopment during its Jan. 24 meeting.

"The legislation that abolished RDAs and funding that had been available will now go back to the black hole of Sacramento," Supervisor Jeff Stone said Tuesday. "The state is balancing its books on the backs of local governments. It's a shame."

Riverside County's redevelopment agency, with about $100 million in annual revenue, is the state's seventh-largest. A total of 625 redevelopment projects have been completed in the county.

There are 37 projects in the pipeline, including road improvements, parks, libraries, affordable housing complexes and public safety facilities, county officials said.

Stone said one of the points of discussion at the board's Jan. 24 meeting should be downsizing staff in the county's now-defunct Redevelopment Agency. –City News Service contributed to this report.