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Galt to lose millions if it does not keep redevelopment agency

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Posted: Thursday, July 21, 2011 12:00 am | Updated: 6:09 am, Thu Jul 21, 2011.

A petition filed by two groups against the state of California for unconstitutionally influencing the elimination of redevelopment agencies could possibly be a major player in whether Galt is able to move forward with its Old Town building projects.

Galt has had to halt its Old Town Relocation Project due to the fact that two trailer bills in the state budget prohibit cities from using their redevelopment agencies for building projects unless cities first pay the government a specified amount of money to keep the agency open.

The payments, the state government asserts, are meant to help fight the state’s $26.6 billion budget gap.

But the League of California Cities and the California Redevelopment Association claim that the state’s payment requirements are unconstitutional.

Specifically, the trailer bills AB1X 26 and AB1X 27 violate Proposition 22, the constitutional amendment passed by 61 percent of California voters in November 2010 to “conclusively and completely prohibit state politicians in Sacramento from seizing, shifting, borrowing, transferring, suspending or otherwise taking or interfering with” revenue that had been or is dedicated to local government.

The petitioners, who filed their litigation directly with the California Superior Court, will hopefully hear back within the week on whether or not something can be done to at least temporarily halt the impact of the bills on California cities, said Kathy Fairfield, spokesperson for the groups who filed the lawsuit.

“We are looking for a speedy resolution because it is the exact wrong time to cut off the strongest job creating engine in state,” she said. “The economic ripple effect that comes from using redevelopment agencies will cease to exist.”

Fairfield added that statewide every year, redevelopment projects support 300,000 new jobs and create $40 billion in economic activity.

For the city of Galt, the money that could come with continuing the Old Town building project is of vital importance.

City attorney Steve Rudolph said the city must consider the fact that though the payment Galt is required to make to the state is just over $1 million, that cost is a “trade off” for what the city would lose if it decided to refuse to fund its redevelopment agency.

“We’d be facing a loss of $9 million if we do not make the payment,” he said. “But the question is — where are we going to come up with the $1 million to keep the agency? That is something we are not necessarily sure of yet.”

The redevelopment agency in Galt is a key component in the city’s building project that is currently on hold. Should the city decide to close the agency, all activity on revitalizing the Old Town area would most likely be put on hold, Fairfield said.

“At this point, we are trying to get our calculations in place so we can bring back the ordinance that would allow us to move forward,” city manager Jason Behrmann said. “The city needs to figure out where the money can possibly be taken from and when we get to bring that money back.”

Contact reporter Katie Nelson at katien@lodinews.com.

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  • Doug Chaney posted at 8:22 pm on Thu, Jul 21, 2011.

    Doug Chaney Posts: 1232

    It will be a problem for little towns like Galt to come up with a million cash when they are already living off borrowwed money. Unless they're like livable, lovable Lodi who has a garbage company that "donated" a million bucks to them. But the payback was a seven year extension on the garbage contract with no worries about having someone coming in with a bid for probably half what they charge. The three amigos are shrewd businessmen, but lousy councilmen that represent themselves and not the taxpayers and voters of Lodi, IMO. Galt would be very hard pressed to come up with that amount of money on a moments notice.

  • Jackson Scott posted at 5:07 pm on Thu, Jul 21, 2011.

    Jackson Scott Posts: 382

    Davis is paying the State about $3M and keeping $8M. Otherwise they lose it all.

    Doug, think outside the box.

  • Josh Morgan posted at 1:34 pm on Thu, Jul 21, 2011.

    Josh Morgan Posts: 529

    Let me think about this for one millisecond........invest $1 million and a return of $9 million.

  • Doug Chaney posted at 12:05 pm on Thu, Jul 21, 2011.

    Doug Chaney Posts: 1232

    The thing that would concern me is the fact that if Galt decides to pay and the budget deficit doesn't improve soon, which many finance and economy experts predict may drag on for years, that the state politicians won't dump redevelopment altogether and keep Galt's money anyway?



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