Still maintaining its protest against Sacramento, the Santa Monica City Council unanimously approved a resolution included as part of its consent calendar on Sept. 27 that would allow the City’s Redevelopment Agency (RDA) to maintain its “Priority Projects and Five-Year Implementation Plan.”
The resolution specifically endorsed the “Preliminary Draft of the Initial Recognized Obligation Payment Schedule (ROPS),” which allows Santa Monica to maintain its protest with a pair of recent pieces of legislation threatening RDA funding while still ensuring the city will be able keep up with its “enforceable obligations” in executing its “Priority Projects” as planned.
Accordingly, the Santa Monica RDA is provided “additional protection in performing its enforceable obligations.”
Under state law, the council had to approve a preliminary draft outlining the Initial ROPS prior to Sept. 30.
The preliminary draft includes planned payments for items such as: property acquisitions, improvements, and development; affordable housing; promissory notes; loan payments; and, allocations for the city’s “Priority Projects,” including parking structures, the Palisades Garden Walk, and Expo Line-related developments.
The dollar amounts listed on the Initial ROPS ranged from a low of about $22,000 for earthquake bonds to more than $76 million for “development of various public improvements and affordable housing.”
As part of the resolution, council members – acting in their dual capacity as RDA members – set forth “the minimum payment amounts and due dates of payments required by enforceable obligations for the six-month fiscal period from January 1, 2012 through June 30, 2012.”
In June, Gov. Jerry Brown signed two bills in June relating to RDAs in California. One bill eliminated all redevelopment agencies in the state, while the second bill allows redevelopment agencies to continue to operate “if they agree to make huge ransom payments to the state.”
A few short weeks later, council members adopted an ordinance in protest that allowed the RDA in Santa Monica to operate.
Under ABX1 26, the state government suspended all activities of the Santa Monica RDA, except for enforceable obligations. However, the signing of ABX1 27 allows the city to continue operating the RDA if “it agrees to pay the remittance amount determined due by the State Department of Finance to the County Auditor-Controller.”
When they passed the ordinance to preserve the RDA in protest of the state legislation, Housing and Economic Director Andy Agle told council members the city would be making millions of dollars in “ransom payments.”
“The legislation prohibits any redevelopment actions until the city has adopted an ordinance signaling its intent to make the ransom payment. For Santa Monica, the first year ransom payment is nearly $27 million, with ongoing payments estimated at $6.4 million per year,” he said almost two months ago.
Several groups, including California League of Cities and California RDA, have filed a lawsuit challenging the constitutionality of both bills signed into law by Brown. The suit also requests a stay of implementation of legislation.
City Manager Rod Gould stated at the Aug. 9 council meeting that the city has enough money to make the $27 million and $6.4 million payments, as well as meet the contractual obligations it entered into for redevelopment projects.
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