Roseville Council Agrees to Pay $1.86M to Keep Redevelopment Agency

During a special meeting Monday night, Roseville City Councilmembers voted in favor of paying the state $1.85 million to continue its redevelopment agency.

The payment is what Kevin Payne, Assistant Planning and Redevelopment Director with the City of Roseville, calls a “ransom payment.”

Two trailer bills, ABX1 26 and 27, passed with the state budget give cities options to provide a hefty payment to the state to continue its redevelopment agency or opt out, which dissolves the city’s redevelopment agency.

During the , councilmembers received a briefing on the impact the payment could make on Roseville’s redevelopment, which could put several city projects at risk including Town Square and adding additional parking in Historic Roseville.

Monday’s special council meeting was called for the first reading of the ordinance, to determine if the city will pay to keep its agency.

Payne said the $1.86 million could be funded by suspending the Redevelopment Agency Low and Moderate Housing, totaling $1 million, and using the city’s redevelopment agency taxable bond funds and dipping into the agency’s fund balance and/or capital improvement project savings.

The payment will be split in half – the first payment due Jan. 15, 2012 and the second in May 2012. Saving the city’s redevelopment agency would also cost the city approximately $450,000 for 2012-13.

Payne said by paying the state, it’s “business as usual” and key projects will continue.

By not paying the state, the city’s redevelopment agency would dissolve, having a large impact on the city, Payne said. The city would have a loss of $4.6 million in annual tax increment and a loss of control on projects such as the acquisition of the Post Office and the future Fire Station No. 1 site, Payne said.

“The properties would be subject to an outside oversight board …essentially, we would lose local control,” Payne said.

According to city documents, the agency would retain over 10 times the amount of money that the city would retain if the agency is dissolved.

Roseville City Council voted in favor 4-0 to pass the first reading of the ordinance to determine that the city will pay $1.86 million to continue the city’s redevelopment agency. Vice Mayor Susan Rohan was not present for the vote.

Payne said the city has paid approximately $3,000 to get on board with the California League of Cities in filing a lawsuit against the state, challenging the two trailer bills.

David Piches, principal of Piches Architecture in Roseville, said he supports the ordinance.

“If we don’t do this, I think we really could lose momentum …If we don’t keep moving forward, I think it’s going to be more expensive,” Piches told councilmembers. “It would be a shame to lose what we have.”