Galt will continue with its redevelopment agency until the current funding runs out. That means the city would receive just enough agency funds to pay the debts, complete the unfinished projects and oversee the assets.
The Galt City Council unanimously voted Tuesday to become the successor agency in order to comply with a court order that shuts down redevelopment agencies on Feb. 1. It is the first formal step in the dissolution process.
"On February 1, the Galt Redevelopment Agency will cease to exist," City Attorney Steve Rudolph said before the vote was taken. "In the event that the city chooses not to take on this on successor ... it will be very unlikely the city will ever be able to step back into that role."
The City Council's decision comes following the state Supreme Court ruling last month even as some legislators are floating proposals to breathe new life into redevelopment projects or extend the deadline.
The court determined the Legislature was within its rights to dissolve redevelopment agencies to divert taxpayer funds to schools and other agencies. The court also struck down a provision that would have allowed California's more than 400 redevelopment agencies to pay $1.7 billion to continue to exist for another year.
Now, cities and counties must decide quickly whether to declare themselves "successors" to redevelopment agencies in their jurisdictions.
Galt City Manager Jason Behrmann has said he expects the city will be allowed to finish redevelopment projects already in the pipe since the money has already been collected, but it's unclear what will happen after that.
By using a combination of private and public money, Galt has improved its downtown core with new buildings and landscape. Both Brewsters Bar and Grill and Galt Place are the results of successful redevelopment agency efforts.
"It's prudent we continue to be in charge of our own destiny," Vice Mayor Marylou Powers said Tuesday.
Councilman Randy Shelton agreed. "I do not want the state to tell us what we can and cannot do," he said.
Starting May 1, Galt's successor agency will be governed by a seven-member oversight board of yet-to-be-identified city and county representatives. The state Department of Finance, in turn, will have the final word over the each board's actions.
Redevelopment agencies were in line to get $5.4 billion statewide this fiscal year until the court decision was handed down. However, the push for alternative approaches already is under way.
State Senate President Pro Tem Darrell Steinberg said the Legislature could appropriate funds to local governments on the condition that projects promote job growth, affordable housing and transient-oriented development.
Separately, Steinberg has introduced a bill which would preserve successor agencies' ability to use their existing housing funds for affordable housing.
Another prospect, cities say, is legislation by state Sen. Alex Padilla, D-Los Angeles, which he amended on Friday. The bill seeks to push the Feb. 1 dissolution deadline to April 15.
Other Sacramento County cities including Roseville, Folsom, Woodland and Rancho Cordova have already named themselves successor agencies. Lodi does not have a redevelopment agency.
The Sacramento Bee contributed to this report.
Contact reporter Jennifer Bonnett at email@example.com.