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Pasadena/Glendale and 7 other cities lose legal battle for redevelopment funds
News Jun 01, 2012
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Pasadena/Glendale and 7 other cities lose legal battle for redevelopment funds
A Sacramento judge denied a request from nine California cities, including Pasadena and Glendale, for the release of money they say is theirs as part of the RDA.
Sacramento Superior Court Judge Timothy Frawley ruled for the Department of Finance finding that the cities were not at risk of defaulting on existing financial obligations and therefore denied their TRO (Temporary Restraining Order.)
The TRO filed last week – was an attempt to stop the Department of Finance from ordering counties to withhold payments the cities in the suit believed were owed.
Michael Beck, Pasadena City Manager sent out the following letter to employees yesterday.
“I want you to know that a California Superior Court judge in Sacramento on May 30 denied the request made by Pasadena and eight other cities to temporarily halt the distribution of money under the State’s new law that dissolved local Redevelopment Agencies.
As you may know, we were seeking the court’s help because we believe—and continue to believe—that cities are being denied funding for legitimate existing financial obligations. We wanted the judge to call a time out while we worked through differences with the state, but the initial request was denied.
The state and LA County Auditor-Controller have indicated that Pasadena will receive sufficient funds to pay some, but not all obligations. There will be no immediate impact on the General Fund Budget to those items that remain in dispute. We will continue to work with state and county officials to resolve our outstanding issues.
No final decision has been made yet about our next steps, but rest assured we will move forward under the leadership of our Mayor and City Council. “
Michael Beck – City Manager
William H. Boyer, Pasadena’s new Public Information Officer told Beacon Media
“We’re very disappointed with the decision…” Boyer continued that the city was hoping the TRO would be a ‘Time Out’ for cities to come to grips with the financial realities.
However, Boyer was optimistic that there would be no immediate impact on Pasadena as the
state and county has assured that the city will get monies to meet current financial obligations.
In the long term Boyer warns residents that some projects may be delayed but hes said “ We will move on and develop new strategies”
The Department of Finance decides what redevelopment money cities can keep and what money will go to schools, counties and other necessities.
Last year the state legislature passed a law that ended 400 redevelopment agencies.
The other cities that joined Pasadena in the TRO request were Palmdale, Culver City, Huntington Beach, National City, Imperial Beach, Palmdale, Inglewood and Hayward.
There is approximately $ 133 million in loans in jeopardy according to Boyer.
“Its our understanding that cities are seeking additional litigation, hoping for time out.” Boyer said.
The matter gets even more complicated when the state has refered to ROPS 1. And ROPS 2.
ROPS is state mandated ( Recognized Obligation Payment Schedule )
Similar to the enforceable obligation payment schedule (EOPS), the ROPS sets forth the redevelopment agency’s enforceable obligations and scheduled payments for such enforceable obligations on a monthly basis. However, the ROPS differs from the EOPS in that it requires the payments to be set forth for the upcoming six-month fiscal period. The ROPS to be prepared by redevelopment agencies should set forth the enforceable obligations for the period between January 1, 2012 and June 30, 2012.
ROPS 1. Covers Jan to June 2012 (Pasadena needs $ 24 Million………..state offered 9.6 Million
ROPS 2 Covers July – Dec 2012 the city needs $ 26 Million; the state said only 14.5 million will come to Pasadena.
Boyer said we will ” Look at the next steps available to us and city council will discuss the matter next Monday.”
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