Poway council OKs $3.3M payment under protest
(Story updated at 7:12 p.m. Wednesday )
By Steve Dreyer
Threatened with the loss of state sales tax revenues, the City Council Wednesday night agreed to reutrn $3.3 million in funds that were collected prior to the court-ordered Feb. 1 death of the city’s redevelopment agency.
The demand for payment came as a “nasty surprise” to City Manager Penny Riley, who said that state legislation passed June 27 mandated the money be wire transferred to the county by tomorowThursday). Failure to do so would result in the state withholding next week’s payment to the city of its share of quarterly sales tax revenues.
“They have a gun to our heads,” is how Councilman John Mullin put it Tuesday afternoon.
The City Council voted 3-0 to approve the wire transfer during a special meeting early Wednesday night. The money will be redistributed to taxing agencies within the city, including school districts and the Palomar Health district. Poway will get 21 percent of the money back as its share of the distribution plan. That money should be in the city’s general fund somtime next week.
The $3.3 million was adjusted downward by the county earlier today after city officials questioned the original claim of $3.4 mllion, according to Assistant City Manager Tina White.
Last summer the legislature passed ABX1 26, a bill that was to end redevelopment in California as of Oct. 1. The state Supreme Court later extended the implementation date to Feb. 1 of this year in a December ruling upholding the constitutionality of the law.
However, the legislature on June 27 adopted AB 1484, which, among other things, reinstated the redevelopment program termination date to Oct. 1.
Between Oct. 1 and Feb. 1 the city received just under $3.4 million in tax increment money, which must now be returned. The money represents available revenue after approved post-redevelopment expenses were approved by a appointed Oversight Board.
“The problem is that the Legislature, pretty much on a party line vote, has been emboldened… to leave no stone unturned if they think there’s cash underneath,” Mullin said. “These are the same people who think high speed rail is a good idea and will throw billions of dollars at that.”
Added City Councilman Dave Grosch, “The city is being penalized for the very poor management by our elected representatives in Sacramento. It’s time for them to either do their jobs, or we should replace them all.”
Councilwoman Merrilee Boyack on Wednesday morning called the state’s disassembling of the local redevelopment program “disgusting.”
“Driving past Community Park, you realize what the state’s murder of redevelopment has done to our city,” she said. “We could have the park area to be so beautiful for our community but instead, we’re forced to turn over the money to the state because the politicians in our state government can’t control themselves.”
The unexpected $3.4 million payment is in addition to another $43 million the city must send to the county over the next several months. This includes an $18 million obligation the city plans to begin paying next week, plus a $20 million affordable housing fund payment due in November and another $5 million in accumulated tax increment funds. Sometime next year the city and its appointed redevelopment Oversight Committee will also begin dealing with the process of selling off an undetermined numbered of the 70-plus properties that were formerly owned by its now-defunct redevelopment agency.
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