politics

Hayward Struggles After $10 Million Loss in Redevelopment Funds

By Keely Wong
Assistant Politics Editor

Photographer: Joseph Geha

Burbank Elementary in Hayward was a partnership
practically funded by redevelopement agency
revenue.

Several Hayward community leaders expressed frustration at a meeting last Friday over the $10 million loss in redevelopment funding that was earmarked for revitalization and improvement projects across the city.

“We’re dependent on redevelopment money to move forward,” said Sean Brooks, economic development manager for the city of Hayward. He said any new projects including South Hayward Bart, facade improvements on Foothill Boulevard were to be funded by redevelopment agencies.

Redevelopment agencies were created under the California Community Redevelopment Law of 2008 and funneled funds generated by property taxes to community improvement projects such as the new Burbank Elementary School, Cannery Park, and other downtown improvements.

However, in late June 2011 – facing roughly $20 billion in deficits – California Gov. Jerry Brown signed a law which required cities to dissolve their redevelopment agencies to plug up the shortfall to the state general fund so that California could fulfill its other obligations: schools, health care, etc.

The funding for redevelopment agencies came from property taxes set aside for areas in need of restoration, explained Kelly McAdoo, Hayward City assistant manager.

The redevelopment agency “gave us a dedicated funding source of about $10 million a year that was basically used for revitalization purposes,” she added.

According to Sean Brooks, Hayward Economic
Development Manager, South Hayward BART was
funded by Redevelopment Agencies.

“Instead of making budget reductions at the state level,” McAdoo says, “tools of local government were eliminated and used to backfill their funding obligations.”

In order to streamline the elimination process, a mandatory board of community leaders met on Oct. 12 – the Hayward Successor Agency Oversight Board.

The board halted all new “redevelopment activities” and followed up with a trailing bill that spelled out the processes. The provisions include hiring an auditor to enforce and handle deadline payments.

The meeting on Friday confirmed Maze and Associates will be the auditor overlooking the funds, however it comes after the given Oct. 1 deadline.

“We’re not the only city that has missed the deadline,” said McAdoo, as she reassured the board committee. She explained cities all over California are being affected by the cuts to their redevelopment agencies. There was no penalty for missing the deadline.

The next process is reviewing, approving and transmitting excess funds from housing property taxes by Oct. 15, according to the oversight board’s agenda. During the meeting, McAdoo explained due to the delay in finding an affordable auditor, the board is already behind schedule.

Board member Jesus Armas inquired whether there would be penalties to the city if they didn’t make the deadline of finishing the audits of housing property taxes. McAdoo confirmed the delay would not result in a penalty this coming deadline.

The successor board is looking at other cities for solutions, along with investors to help recoup lost revenue from the dissolving agency, says Brooks, who confirmed the committee has not come to a decisive solution.

This entry was published in The Pioneer Online on Thursday, October 18th, 2012 at 12:36 pm.