Dixon’s Redevelopment Agency is in Survival Mode

Whether it’s called ransom, extortion or extraordinary – plans to make a payment to the state in order to continue operating.

The Dixon City Council – acting as Dixon’s Redevelopment Agency – passed a resolution Wednesday stating the intent to make the payment and introduced by title the actual ordinance.

But if the California Supreme Court rules in favor of a filed by the League of California Cities and the California Redevelopment Association – of which Dixon holds memberships in  – the payment may not have to be made.

The California Supreme Court agreed Thursday to hear the case against AB 26 and 27, the pair of bills that require RDAs throughout the state to dissolve or make a “voluntary” payment to the state in order to continue operating.

 As part of the lawsuit, the Supreme Court also agreed to issue a stay in the payments to the state – due in January 2012 – until the court can rule on the merits of the case. Dixon’s Redevelopment Agency however agreed to make the payment, unaware that just a day later, the Supreme Court would agree to take on the case.

The Redevelopment Agency took two separate actions last Wednesday. The RDA passed a resolution declaring the RDA’s intent to pass an ordinance that will follow AB 27 (the Continuation Bill) and use money in existing Low and Moderate Income Housing Funds to make the initial payment to the state. The council also introduced, waived the first reading and read by title the ordinance to be passed at a future meeting.

For Fiscal Year 2011-2012, Dixon’s payment will be $865,000, with $240,000 required for Fiscal Year 2012-2013. Subsequent payments will be the same as Fiscal Year 2012-2012 or some unspecified differential.  City Economic Development Director Mark Heckey urged the council to make the payment despite legal challenges to the two bills.

“Staff strongly recommends that you follow AB 27 and stay alive,” Heckey said. “We strongly feel that even in a reduced structure re-organization or AB 27, because the agency will not have so much money to work with, there’s is still possibility of finishing up some key projects. Trying to finish up the , trying to finish up ,  (and) trying to hold on to our housing money and utilize that and have influence of how our housing money is spent.”

Heckey also reminded the RDA about the pending litigation brought on by the LCC and the CRA and said that some of the money paid to the state might be returned to Dixon should the court rule in favor of the CRA and LCC.

The bills end RDAs throughout the state, City Attorney Michael Dean told the council. Dean said its up to the city’s RDA to decide by Oct. 1, on who will be the successor agency to liquidate the RDA's assets. If the RDA votes for the city to become the successor agency, it will operate in a limited capacity but will able to hold on to RDA assets. Not so if the state is the successor agency.

Vice Mayor Michael Ceremello asked if the newly created RDA would receive the same tax increments it normally gets from the state. Dean told him that the tax increment structure would be changed on an unspecified “going-forward basis.”

“Without knowing what the revenue stream is I can’t make the decision as to whether to keep this because I don’t know exactly what our benefit is going to be,” Ceremello said.

 “I think the more important issue at this point is how do we protect what we have to move forward I.E. the Core Area Drainage Project, which we know is essential in terms of future development and infield within that area,” Mayor Jack Batchelor said. “It’s kind of hard not to know what we are going to have but I am wiling to roll the dice and say ‘OK we’ll pay the 865 and then the 240 knowing that we can get what we got in the pipeline done.’”

Heckey told the council that under the re-structuring of the tax increment, the city would have about $240,000 or more available for projects.

The council passed the resolution unanimously.

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