City Council Continues to Deal with Dissolved Redevelopment Agency

During the City Council's final meeting in January, the council discussed items regarding the subsequent dissolution of the Cerritos Redevelopment Agency.

10A. Consideration and adoption of the Cerritos Redevelopment Agency’s amended Enforceable Obligation Payment Schedule (Amended EOPS)

Budget Administrator Geri DeMasi briefly explained . Assembly Bill 27 allows cities the opportunity to opt into an alternative voluntary redevelopment program – effective Feb. 1. According to DeMasi, redevelopment agencies or their successor agencies, starting on Feb. 1, may make payments on obligations as listed on Enforceable Obligation Payment Schedule (EOPS). These obligations include bonds, loans of money from the agency, pass-through payments, judgements, and settlements.

The EOPS is amended with adjusted for bond payments, loan payments and other allowable expenses.

10B. Request to authorize demand by the city to the Cerritos Redevelopment Agency for payment of the city loan to the Agency, and to authorize the acceptance as partial payment of the loan a credit representing the present fair market value of Agency ground lease payments for certain properties including in the Towne Center and Auto Mall. (COUNCIL) 

DeMasi explained how, throughout its existence, the city of Cerritos has loaned funds to its redevelopment agency on an as-needed basis. These loans have covered the cost of typical agency activities such as line acquisition and major projects. Staff recommends the immediate demand of the agency to pay the maximum amount of principal on the city loan. Currently, the agency has approximately $1 million to make on the city loan. The city staff recommended to accept $1 million from the agency and authorize the acceptance of the present fair market value of the agency's ground lease payments in the amount of $28.77 million  

10C. Consideration of a resolution of the city of Cerritos, as successor agency to the Cerritos Redevelopment Agency upon the dissolution of the Cerritos Redevelopment Agency, authorizing the investment of monies in the local agency investment fund

Demasi, again, delivered the specifics of the item, saying that, for many years, Cerritos has deposited idle funds into the State of California's Local Agency Investment Fund (LAIF). LAIF has provided Cerritos with a secure investment option consistent with the objectives of safety, liquidity and yield.

Community Safety Committee member, Nikki Noushkam, suggested the city hold townhall meetings to involve the citizens with current litigation against the state regarding the dissolution of the redevelopment agency.

“That would be something that would not be very expensive,” Noushkam said. “You can just post some fliers around at city hall, the library and so forth. Just bring the citizens' knowledge regarding what is going on with the litigation and redevelopment agency basically going away.”

The next city council meeting will be held on Feb. 9.

- - - 

Mayor Carol K. Chen Issues Formal Response to Judge's Jan. 27 Rejection of Request for Injunction Blocking Dissolution of Redevelopment Agencies 

The City of Cerritos led a consortium of cities in a lawsuit challenging the
constitutionality of the State of California’s dissolution of redevelopment agencies. 

On Jan. 27, 2012, Sacramento Superior Court Judge Lloyd G. Connelly issued a ruling denying the cities’ request for a stay order and preliminary injunction against the dissolution of redevelopment agencies. (Thus the dissolution went into effect on Feb. 1, 2012.) The Judge also indicated that the cities would face an uphill battle if they continue to pursue the lawsuit.

“The City of Cerritos has worked diligently since 1970 to develop its redevelopment agency for the benefit of the community. The Cerritos Redevelopment Agency has been highly successful in funding such outstanding projects as three gymnasiums at local high schools, Fire Station #30 on Pioneer Boulevard, the Cerritos Sheriff’s Station/Community Safety Center and countless other projects," Mayor Chen in response to the Judge's ruling.

“It is blatantly unfair for the State’s legislature to stop cities from using the tool of redevelopment to assist in developing their communities. It is ironic that the State is pushing for job development and what the legislators have done will kill jobs," she added.

“We only hope that cities will be able to continue their economic development and job creation efforts given this new hurdle and the lack of available resources. We love being Californians and we feel the pain when California hurts, but the State’s attempts to balance its budget on the backs of cities will hurt communities everywhere,” Chen said.