Brown’s Plan to Ax Redevelopment Agencies Could Hit General Funds

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If Gov. Jerry Brown’s proposal to ax redevelopment agencies comes to bear it won’t — in some cities — just jeopardize redevelopment money, it will hit their general funds.

The city of Irvine is a case in point. The relatively new master-planned city doesn’t suffer from the

usual blight cities point to when they activate a redevelopment agency, per redevelopment law. Irvine’s redevelopment agency was activated to fund conversion of the former El Toro Marine Air Base into the Great Park.

And unlike in many other places, there is not a separate redevelopment bureaucracy — the city and the agency share resources. Consequently, there are 26 different staffers working at least part-time on redevelopment issues, according to a memo released by the city. Time spent on those issues is compensated with redevelopment funds.

When employees aren’t working on redevelopment issues, other funds are used to cover their salaries, according to an email from Assistant City Manager Sharon Landers. She wrote in the email that “Depending on the type of project an employee is working on, their salary may be fully or partly reimbursed by, for example, grant funds or development fees” and general fund monies.

In 2010, the city of Irvine paid out $771,854 from redevelopment funds to employees who worked on redevelopment issues, according to figures released by the city. In addition to those payouts, the city manager and assistant city manager were paid $27,557 and $22,525, respectively, also from redevelopment funds.

Brown’s plan, if it is implemented, would have a significant impact on how these employees are paid. Finance Commission Chairman Don Dressler said the scenario could lead to a massive reorganization of the city’s administrative offices and the community development agency.

“If the RDA goes they’re going to have to make other staff decisions, there’s no question about that,” Dressler said. “It’s like a role of dominoes. It’s a reorganization issue.”

The city has already shown signs of digging deep to keep rainy-day reserve levels from getting dangerously low.

Earlier this year, Dressler criticized what he said were unusual planned transfers to bolster the rainy day reserve fund — transfers from funds that are usually rededicated toward capital improvements — calling them akin to giving a “hot credit card to a teenager going to the mall”

For fiscal year 2010-11, the city cut $12.8 million and dipped into its rainy day reserves to the tune of $14 million.

When the city approved the budget, the city projected to have just under $8 million in rainy-day reserves left at the end of the fiscal year. Now, if the transfers Dressler was uncomfortable with go through, the city projects it will have $15 million.



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