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Raiding local coffers for state obligations

Roseville, Calif.- The City of Roseville Redevelopment Agencyย was forced to turn over $2.3 million to the Placer County Auditor, a required payment resulting from the State’s decision to raid $2.05 billion in local redevelopment funds as part of the 2009-10 State Budget. Instead of going to fund local job creation, economic growth and urban revitalization projects, this money will now be siphoned off to help pay the State’s obligations.

The payment was made in accordance with a ruling by Sacramento Superior Court Judge Lloyd Connelly last week which instructed local redevelopment agencies to abide by the provisions of ABX4-26 passed last year as part of the state budget. The bill allows the state to take $2.05 billion in redevelopment funding to use for state obligations. The California Redevelopment Association (CRA) is appealing the Superior Court ruling to the Court of Appeal.

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“Taking this funding will stall job creation efforts in Roseville at the worst possible time”

Mayor Gina Garbolino

“‘The money being turned over to fund State obligations was going to be used for local revitalization projects that would have improved our community, created jobs and stimulated our local economy.'”, said Mayor Gina Garbolino.

‘”It”s incredibly narrow-minded of the state legislature to reach into the pockets of local redevelopment agencies, one of the state’s strongest job creating engines, at a time when job creation and economic development are desperately needed.”,’ continued Garbolino.

Among the specific projects that will be harmed by this state raid include:

Business Retention

  • Faรงade and Sign Rebate Program on hold ($75,000 annual allocation)
  • Commercial Loan Program unfunded (Recently assisted start-up in construction of 3 new businesses with a total value of $3 million)
  • Delay or removal of construction of key infrastructure improvement projects that support existing and new business
  • Key partners (Chamber, merchants and arts groups) will lose funding and exposure due to reduced financial and promotional assistance

Business Attraction

  • Delay of construction of the Town Square Project ($3 million )
  • Delay of construction ofย  City Hall and Post Office opportunity site
  • Delay of construction of Vernon Street utility upgrades ($4 million)
  • Delay of future bond acquisitions ($50 million) for future CIP’s
  • Jeopardy of construction ofย  long-term amenities such as a creek walk, streetscape improvements, outdoor amphitheater
  • Hold on parcel assembly to enter into public/private partnerships

Economic Impacts

  • 180 jobs lost
  • Construction sector loss of over $15 million
  • Economic loss of over $32 million

Long-Term Impact

Agency cannot survive multi-year taking of funds.

California Redevelopment Association Executive Director John Shirey vowed to fight the Superior Court ruling: ‘We strongly disagree with Judge Connelly’s ruling which effectively says the Legislature has unlimited discretion to redirect local redevelopment funds to any purpose it wishes. Under that logic any state program could be called redevelopment. The Legislature needs to deal with its budget problems by making hard decisions using its own limited resources — not by taking away local government funds.

‘Despite this ruling we continue to believe taking local redevelopment funds and using them to fund State obligations is unconstitutional. We have a strong case and feel confident the lower court ruling will be overturned by the Court of Appeal,’ said Shirey.

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