• Letter to Editor
  • Pin it

One good thing about the dissolution of redevelopment tax in San Diego: tens of millions of dollars seemingly appear out of thin air.

The most recent pot of redevelopment gold was discussed at an August 3 city-council meeting. During the meeting, chief accountant for Civic San Diego, Wanda Nations, informed councilmembers that there was approximately $28.2 million in unspent bond proceeds. With the council's permission, the money can pay for capital improvement projects, including infrastructure. That's good news, considering the city's infrastructure backlog is estimated at over $1 billion.

However, there is a downside to money being appropriated for purposes not originally intended: if the former redevelopment agency (known as the Successor Agency) and its administrator, Civic San Diego, doesn't identify a use for the money soon, then the money disappears and is diverted back to the County of San Diego to distribute to schools and other taxing entities.

Although word of the $28.2 million is somewhat recent, the cash has been accruing since the 1990s: it was rediscovered during audits by the Department of Finance.

In June 2014, a total of $60.7 million in excess bond revenues was found and transferred to the City of San Diego. Civic San Diego has since whittled that amount down to $28.2 million.

One problem remains: the $28.2 million is not enough to pay for a specific project on the city's current redevelopment spending plan. If the money is not allocated before the next review by the Department of Finance in December, then the money will disappear permanently.

According to the staff report from Wanda Nations, of the remaining $28.2 million, 87 percent is tax-exempt, which means the Successor Agency can spend it on general uses, including streets and sidewalks, as long as it stays in the area where the bonds were originally issued.

For example, nearly $12 million of the $28.2 million can be spent downtown, in what was formerly called the Centre City Project Area. But in order for that money to be used there needs to be a certain project, or projects, that the $11.8 million can pay for directly. If not, the money vanishes.

The threat of losing the money didn't sit well with councilmember David Alvarez.

"It is really disappointing that we have 28 million in bond proceeds available to various communities in the city and hundreds of millions in infrastructure projects and all this action [does is] essentially grant Civic San Diego and the Successor Agency the authority to give this money back,” Alvarez said during council comment on August 3.

The District Eight councilmember accused Civic San Diego of sitting on this for far too long.

"I requested back in May that we bring this forward to budget committee for further discussion. We have so many projects on this list that are in dire need of money and we haven't figured out what to do with this. We should have been planning ahead to use this money and now we are at risk that if we don't use it we are going to lose it. "

Alvarez also questioned Civic San Diego's interpretation that the money needs to go directly to the project area where the bond was originally issued. Alvarez conceded that the money must benefit the area but limits it at that.

At the meeting, councilmembers, with the exception of Alvarez, granted Civic San Diego the authority to try and use the money before the deadline. The clock is now ticking to find ways to spend it.

  • Letter to Editor
  • Pin it

Comments

Founder Aug. 14, 2015 @ 12:25 p.m.

This is nothing but a MONEY GRAB, because the money is not being spent for the reasons it was allocated in the first place!

The City of SD has been only too happy to manage the assets of the Redevelopment (ReDev) Agency but the real question is why have those that were owed money by the Redev. Agency not been paid? What happened to all the property sold by the City that used to be owned by the ReDev. Agency and who is now "getting paid" to oversee these deals and or make decisions about these funds?

The North Park Theater is a perfect example, since it was sold for a use that was not in the original contract when the NP Redevelopment Project Area (NP PAC) spent the millions fixing up the Theater to remain theater, not a Club venue.

0

dwbat Aug. 14, 2015 @ 2:47 p.m.

I'm thinking The Observatory North Park was allowed because, while mainly a concert venue, it still has occasional theatrical events. As a total-theater venue, it proved to be a huge financial failure. Now it's bringing in $$$ to North Park.

0

laplayaheritage Aug. 14, 2015 @ 7:10 p.m.

Thank you for informing Taxpayers of the $28.2 million Cash that needs to be spent before the Cash available for Neighborhood CIP Projects gets turned into RPTTF Residual Distribution mainly to the Schools and County of San Diego. With the City of San Diego Receiving 17.5 cents on the dollar to the City's General Fund.

Item 200 Successor Agency Excess Bond Proceed Expenditures.

http://granicus.sandiego.gov/MediaPlayer.php?view_id=3&clip_id=6482

See Video Start time 26 minutes to 58 minutes.

Council Members David Alvarez, Todd Gloria, and Chris Cate confirmed that neighborhoods should call their Council Members on how to immediately spend these Successor Agency CIP Infrastructure funds, instead of Defeasing the Bond Proceeds by default.

This is only a portion of the total Cash Hoarded by Civic San Diego staff through our Strong Mayor Faulconer.

Negative Arbritrage and Total Debt Service Costs for the 51 Bonds, Long Term Loan Debt, and Bank Lines of Credit of the Successor Agency (SA) and LMIHAF have never been calculated.

0

laplayaheritage Aug. 14, 2015 @ 7:22 p.m.

Dear San Diego Reader Editor:

Please change the name of this Investigative article that seems to imply the San Diego Unified School Districts, and public school children would be hurt by spending this money to pay back the $228 Million in HUD OIG Audit Debt to CDBG Program Income for poorer neighborhoods.

"Spend it before San Diego schools can!"

The headline is not accurate because the annual $200 million RPTTF Residual Distribution in annual School, City and County Budgets are zero. That means that this $200 million former Redevelopment Agency Property Tax Income is hidden. Until the local taxing agencies conspire to create RPTTF Residual Distributions, when the goal is always ZERO in the name of the poor and justice.

The Successor Agency (SA) former Redevelopment Agency (RDA Revenue is outside of the normal Budget Process which is shady.

Then mid-Year this money secretly slips into updated Budgets, after the fact without the knowledge of the San Diego Unified School Board or Department of Education. This new secret $200 million Cash is brought in through Budget Update Line Items called "Transfers In" and "Transfers Out" without acknowledging the new Cash came from purposely created RPTTF Residual Distribution.

Because the money is hidden, there is no way for Teachers or Students to advocate to use the new found money. The new hidden RPTTF Residual Distributions should not exist. Therefore the Schools, City, and County can claim their are broke, when they are Hoarding Cash and manipulating the complicated public government system. Through Civic San Diego staff, outside the normal Budget process.

0

shirleyberan Aug. 15, 2015 @ 12:29 p.m.

Plenty of manipulated $ into private accounts, allegedly, by the last Sweetwater Superintendent and Nobody understands, No recovery effort anywhere. !?

1

shirleyberan Aug. 16, 2015 @ 10:31 a.m.

Not talking about a little bit of money, but a lot of $$$$$$$$$$$$$ where it doesn't belong!

0

Sign in to comment