Monday Sept 24 I was the only audience in Council chambers for a meeting of the Albany Oversight Board for the Successor Agency to the Albany Community Reinvestment Agency. I needed points for the Albany Local Week competition.
Seeing an audience, Board Chair Robert Lieber said from the dais, “You’re not going to like this.”
For most of its half hour meeting the Board discussed a State determination which calls for Albany, as the Successor Agency to Albany’s Redevelopment Agency, to remit $1,050,000 to Alameda County to settle a dispute over assets of its former Reinvestment (also called Redevelopment) Agency.
Redevelopment Agencies (RDA) and their history are described at this link, http://cclawyer.cccba.org/2013/09/redevelopment-dissolution-the-end-of-an-era/. Albany’s RDA attracted the Target store on Eastshore Hwy, to an area which had been underutilized and shabby.
But a few years ago Governor Brown proposed dissolution of Redevelopment Agencies to direct more tax dollars out of specific jurisdictions, and into general purposes like education. Losing RDA’s was a huge blow to many local jurisdictions. The State Supreme Court said the Governor’s proposal was legal.
Closing out the assets of the dissolved RDA’s has been rocky for many jurisdictions. By mid-June 2013, according to the League of California Cities, 120 cities/entities had filed lawsuits over RDA disputes. In Albany’s case,
the disputed transfer of assets from RDA to the City occurred before Feb 1, 2012, when the State of California dissolved local Redevelopment agencies.
On January 17, 2011, Albany’s RDA and the City entered into a Public Improvement Grant and Cooperative Agreement pursuant to which the RDA agreed to provide to the City certain funds for redevelopment projects and the City agreed to undertake the projects. The agreement specifically listed the acquisition of a Pierce St parcel (then owned by CALTRANS) as one of the projects to be funded by the RDA. The RDA amount totaled $1,050,000.
On April 26, 2011 the City and CALTRANS executed a Purchase and Sale Agreement providing for the City to acquire the Pierce St Parcel for $1,900,000.
On April 9, 2013, the CA Department of Finance (DOF) notified the City of Albany, as Successor Agency to the RDA, that DOF had disallowed the cash transfer of $1,050,000 for the Pierce St property, and excluded $82,480 requested by the Successor Agency to be retained for enforceable obligations. Regarding the latter, DOF declared that funding for enforceable obligations would be paid through the Redevelopment Property Tax Trust Fund (RPTTF). DOF asked Albany to remit to the local taxing entity (County Auditor Controller) a total of $1,169,178. Within 5 days, and along with any interest earned.
The City met and conferred with DOF late April to try to resolve differences. Albany said the transfer of funds from RDA to City should not be disallowed because it occurred before RDA’s were dissolved, and pursuant to a valid
and enforceable obligation; the agreement between RDA and City was an enforceable obligation until Feb 2012; and that payments under the agreement between RDA and City were not transfers subject to reversal. In May DOF reduced its total determination by $4,721. The City then remitted $82,480 to the County of Alameda via a cover letter that noted about the remaining $1.05M, "Both the licensed accountant approved by your office that prepared the 'Other Funds Due Diligence Review' and Successor Agency's Oversight Board have concurred with (Albany's) position regarding the disputed amount."
An internet search shows that as of June 2013 three cities had received favorable court rulings in lawsuits about RDA disputes, including Emeryville, Pasadena, and Murrieta, though one of those decisions was being appealed. A more recent listing on the League of California Cities' site lists various cases and their status: http://www.cacities.org/redevelopment
The City's Sept 24 staff report concludes, "The funds ($1,050,000) were used to purchase a parcel in the Redevelopment Project area and therefore another source would need to be identified if the City does not prevail on the matter."