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$698 thousand to stay in city coffers

POSTED September 29, 2009 10:34 p.m.
In 2008 the State of California revealed a plan to balance its budget by taking funds from local Redevelopment Agencies — just as they proposed in 2009 — but the state won’t see one cent of those proposed 2008 takings.
On Monday the state announced they had dropped their appeal of a Sacramento Superior Court decision that found the 2008 taking of $350 million statewide to be unconstitutional, ensuring that $698,000 will stay in the City of Turlock Redevelopment Association’s bank account. Unfortunately for Turlock, a larger taking still looms from the 2009 budget.
“One down, one to go,” said California Redevelopment Agency Executive Director John Shirey. “While we’re pleased that the state dropped the appeal of the 2008 state raid, we must head right back to court to block an even more drastic raid this year.”
The CRA plans to file a new lawsuit in Sacramento Superior Court “shortly” to protest the 2009 taking, which would “borrow” $3,334,746 from the Turlock Redevelopment Agency this fiscal year, and $686,565 in the next fiscal year.
The State believes that this year’s borrowing of funds — which would send Redevelopment Agency funds to county auditors, who would then redistribute the money to local school districts in lieu of state funds — may be legal where 2008’s direct taking was not.
The Sacramento Superior Court found the 2008 seizure to be in direct violation of Article XVI, Section 16 of the State Constitution, which requires redevelopment money to be used exclusively for the benefit of redevelopment project areas.
“It’s not where the money goes or how it’s taken, it’s that it’s taken period,” said Turlock Economic Development and Redevelopment Agency Manager Heidi McNally-Dial. “We believe those funds belong with the agencies who generated them.”
Should the courts uphold the 2009 taking, the City of Turlock Redevelopment Agency is not obligated to pay their share of $3.3 million until May 10.
If funds are borrowed, the drain on Turlock’s Redevelopment budget could lead to the elimination of some projects currently set for Turlock Redevelopment Agency funding, including a $2.8 million renovation of Turlock High School’s Joe Debely Stadium, a $2 million downtown parking lot, or even the $200,000 Columbia Park water play area.
Turlock could also elect to pay the state’s borrowing with an intra-agency loan from city enterprise funds, the General Fund Reserve, or some other unidentified funding source, rather than cutting planned projects.
“What we’re hoping is that sometime between now and May 10 there’s a court ruling,“ McNally-Dial said.
The CRA has stated they will seek a ruling from the Sacramento Superior Court before May 2010. The CRA has also said they anticipate the 2009 raids will be found unconstitutional as it is still, “an attempt to redirect redevelopment funds to pay off the State’s obligations.”
“Not only are these raids illegal, but they’re terrible public policy,” Shirey said. “Given our shaky economy, you’d expect lawmakers to be doing everything possible to support programs like redevelopment that put people to work and generate tax revenue.”
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.

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