Resolution May Bring City Closer to Making 'Ransom' Payments

Loma Linda’s City Council on Tuesday approved a non-binding resolution of its intent to participate in a state-designed program that will allow cities to keep their redevelopment agencies.

The decision buys the city time, officials said

Cities all over the state will be considering such a move in light of the passing of AB 1x26, which eliminates the agencies in their current form, and AB 1x27, which allows a city to keep their RDA, but will be required to pay millions to fund the state’s educational system, officials said.

Officials in several cities and the organizations that represent them, such as The League of California Cities, call the payments ransom.

“And with that, the hostages gave up a lot of money to stay alive,” Mayor Pro Tem Ovidiu Popescu said after the vote.

According to Mark J. Huebsch, of Stradling, Yocca Carlson and Rauth, special counsel for the City of Loma Linda, the new law gives cities until Oct. 1 to enact an ordinance entering into the program. Those cities that pass a non-binding resolution get until Nov. 1.

“Time enables agency staff, probably with the assistance of an outside expert, to analyze numbers, to analyze the threshold decision as to whether it makes sense for the agency to dissolve in the face of the legislation or if it makes more sense, however painful the payments will be, to continue the agency even under this so called voluntary program,” Huebsch said.

It may also provide some additional time for the California Supreme Court to take some sort of action on a petition filed by The League of California Cities, the California Redevelopment Association and the cities of San Jose and Union City challenging the constitutionality of the bills.

Loma Linda city officials support the legal action.

City officials estimate it will cost $2.839 million a year to keep their redevelopment under AB 1x27.

Until an ordinance is passed, the RDA is officially is a state of limbo. The agencies cannot act or award contracts. They cannot meet, hence the missing redevelopment agency agenda, Mayor Rhodes Rigsby told the audience.

There is little the city staff can do on behalf of the agency beyond continuing to honor contracts or enforceable obligation, made prior to the passage of the bills, city officials said. There was not a detailed definition as to what might constituted an enforceable obligation, Huebsch said.

“I’m a little troubled by the uncertainty,” said councilman Ron Daily. “I recognize this is lousy legislation. Is there a specific answer to, if we approve the resolution for AB 1x27, when could we potentially begin to enter into new contracts?”

Thirty days after the second reading of the binding ordinance to enter into the new redevelopment program, Huebsch said.