May 22, 2009

What is the Redevelopment Agency?

If you've heard me speak at any point during this campaign, you've likely heard me talk about the Riverside Redevelopment Agency. For those of you who don't know what all the fuss is about, let me explain. First, it's important to understand where the monies for necessary city services traditionally come from. Basic city services are typically culled from the General Fund which is supplied by taxes, property tax and sales tax for example. These basic services are:

• Police Dept.

• Fire Dept.

• Infrastructure and public works (roads, bridges, sewer, water, power, communications, etc.)

• Public access to city government records

• Public Libraries

• Parks and Recreation

In 1951 the State of California established the California Redevelopment Agency (California Community Redevelopment Law). The agency's stated purpose was to promote economic development and individual counties and municipalities could opt in or stay out if they chose. In 1967 the City of Riverside chose to opt in. Up to this time city government had little influence on the local economy, which is as it should be, but the RDA gave them very specific powers that blurred the line between government and the private sector forever.

First, the city could declare a "project area" if it determined that the area in question was "blighted." Blighted could mean anything from a neighborhood with a vacant lot to a undeveloped property to a strip mall with a two or three vacant storefronts. In other words, blighted is whatever the RDA wants it to be.

Once a project area is declared the property taxes there are capped and subsequent increases in property tax, called "tax increment" is diverted back into the RDA instead of going into the General Fund. Because of this, over 51% of property taxes in RDA project areas goes back to the RDA. The Arlanza/La Sierra Project Area is only a few years old, so its tax increment is still relatively small, but the Downtown Project Area diverts 90% of its property taxes to the RDA. So only ten percent of the property tax that downtown residents and businesses expect to flow into the General Fund for basic city services actually gets there.

Eminent domain is a prominent tool in the RDA tool box. (By the way, the City Council appoints the members of the RDA. So who did they appoint? Themselves.) The takings clause in the Fifth Amemdment to the Constitution states, ..."nor shall private property be taken for public use, without just compensation."  It is important to remember that this clause in the Fifth Amendment , like the rest of the Constitution, wasn't written to give government permission, it was written to apply the absolute limit on government power.  So when the RDA so much as threatens to use eminent domain in order to acquire property with the intent to sell it to a private developer it is shaking down private citizens with a threat that is forbidden by the Constitution of the United States. Unfortunately the RDA has done more that threaten, it has followed through.

According to the California Redevelopment Agency, for fiscal year 2007/2008 the RDA's total indebtedness had reached $1,571,915,472 and its tax increment revenue during that same period was $64,238,687. That's over 64 million that would have gone into the General Fund. You know, the fund that pays for Police protection, the Fire Dept. pothole filling, etc. It is important to note that the RDA can and does issue bonds without a public vote. These are the only municiple bonds that I am aware of that are not required to be placed on a ballot.

That's a lot of information to digest, so I'll leave it at that for now. Next time I'll show you just how successful cities with Redevelopment Agencies have been compared to cities who don't have them. (Hint: Not so hot.) So what's the motivation to have the RDA in the first place...?

Bill Scherer

Propositions to increase taxes voted down in CA: A sign of the times?

May 20, 2009

Props 1A through 1E collapsed under the stress of millions of California taxpayers putting their collective feet down. Although proponents outspent the anti-prop folks by 10-1, the initiatives never really had a chance as polling had consistently shown the propositions to be the antitheses of the citizen's will. The special election results are just the latest sign on the road toward greater fiscal responsibility.

Like the Tax Day Tea Parties before it, this special election reveals the nature of public sentiment and demonstrates how dangerously out of touch Mayor Loveridge and current City Council members are when it comes to the role of government and the purpose, and limits, of taxation. They seem incapable of reading the signs.

A sign points to something greater than itself. The Tea Parties pointed to the citizen's will to return to reasonable spending by elected officials and their intense, but peaceful, anger at politician's disregard for their constituents. The May 19 special election results were a sign that the anger of the people is real and rooted in common sense and the traditions of responsible government that America pioneered and no other country in the world has ever matched.

With excessive regulation on business, eminent domain abuse that ignores the spirit AND letter of the Fifth Amendment to the Constitution that elected officials swear to uphold, issuing Redevelopment Agency bonds without a vote of the people, or diverting property tax money away from basic city services, the current council members have a clear intent to ignore the signs and drive Riverside into ruin.

Councilwoman Hart has stated that she would use eminent domain as much as she feels necessary and that she thinks using the Redevelopment Agency for private development will "encourage businesses to come to Riverside when the economy improves." Such reasoning would be instantly rejected in a household or business that is trying to stay in the black, but is embraced by the councilwoman.  I suppose she figures that she can point to a new building, whether or not it is actually occupied, and say "look what I did, vote for me."

But the councilwoman fails to see the signs or understand their meaning. Their primary meaning? People are smarter than she thinks they are. It's time to do away with political posturing and elect individuals who represent the long-term best interest of their constituents.

Bill Scherer