League of CA Cities and Redevelopment Agencies lawsuit v. State

 Powered by Max Banner Ads 




As soon as the state Legislature passed, and governor Brown signed, ABx1 26 and ABx1 27 we anticipated the current request by the League of Cities and the CRA for the California Supreme Court to stay implementation of these redevelopment bills.

What they are attempting is to invalidate legislation on the fly. The CA Supreme Court may not take up the League/CRA lawsuit. Instead they may suggest going to a full trial and ruling, than, if they fail, consider taking it up with the Supreme Court on Appeal.

Let’s begin with their argument that these new laws violate Prop 22 protection as approved by the voters last November. for those unfamiliar with Prop 22 it placed a ban on state borrowing from cities and counties.

However, here is where they have a problem. Let’s begin by reporting that Initiatives cannot contain multiple topics. The primary issue with Prop 22 was to secure highway funds from raiding gas taxes. The second and hidden issue was to prevent the state’s raiding local government property taxes.

Prop 22 was not an Amendment. It was a revision taking power away from the legislature. It was not resulting from a Constitutional Convention. Therefore you cannot amend the Constitution with passage of Prop 22 as written.

Query! While arguing Prop 22, which repealed 2009/2010 ERAF, why haven’t local agencies sued to recapture money given to their local school districts? Just curious. RDA is poisoning the well. It never ends and most voters have no idea of this unknown government that operates in the shadows, approving projects without voter approvals while creating bond debt.

Another point relates to the “poison pill” of these bills that can be found in the legislation. If you file a lawsuit challenging ABx1 26 and ABx1 27, which apparently is currently happening, your agency should read Chapter 5, AUDITOR-CONTROLLER FEE, 34196. SEC. 3. in ABx1 27.

“If any legal challenge to invalidate a provision of section 2 of this act is successful, a redevelopment agency shall be prohibited from issuing new bonds notes, interim certificates, debentures, or other obligations, whether funded, refunded, assumed, or otherwise, pursuant to Article 5 (commencing with Section 33640) of Chapter 6 of Part 1 of Division 24 of the Health and Safety Code.”

As someone pointed out to me today we should look at our property tax bills where we get the impression that our property tax is used to fund services from the basic levy to water districts, mosq. fire and ant, vector control and school districts. There are some projects where most of that tax money, in the form of tax increment, is going to redevelopment projects rather than where you assume it ends up.

Activists get another benefit from these bills in that they extend the statue of limitations for challenges to two years after January 1,2011 to January 1, 2013.

To avoid termination of their agencies RDAs may participate in the “alternative voluntary redevelopment program” by enacting an ordinance confirming compliance to the mandates contained in the legislation pursuant to Section 34193.

While these bills do not abolish these agencies this is a major step forward to stop subsidizing billionaires such as providing $52 million dollars to billionaire Eli Broad for a parking structure for his LA art collection while the city lays off sworn officers, whose job is to reduce crime and protect their citizens, due to lack of general funds. The money for this 370 space garage is coming from the Bunker Hill redevelopment project.

Hmm. Will Mr. Broad provide tents in his garage for some of the people in LA who are displaced for redevelopment projects and need a place to stay?

Additional LG comment. Some highly leveraged agencies may need to declare bankruptcy and re-structrue their debts.

About Larry Gilbert