SUISUN CITY — The Suisun City Redevelopment Agency today was forced to turn over $5.7 million to the Solano County Auditor, a required payment resulting from the State’s decision to raid $2.05 billion in local redevelopment funds as part of the 2009-10 State Budget. Instead of going to fund local job creation, economic growth and urban revitalization projects, this money will now be siphoned off to help pay the State’s obligations.

The payment was made in accordance with a ruling by Sacramento Superior Court Judge Lloyd Connelly last week that instructed local redevelopment agencies to abide by the provisions of ABX4-26 passed last year as part of the State budget. The bill allows the State to take $2.05 billion in redevelopment funding to use for State obligations. The California Redevelopment Association (CRA) is appealing the Superior Court ruling to the Court of Appeal.

The Redevelopment Agency Board had directed Suisun City Economic Development staff to wait until the latest possible deadline to forward the money.

“Losing this money is going to devastate our ability to build and expand our City’s economy,” said City Manager Suzanne Bragdon. “By taking our local funds, the State is preventing us from investing in local projects that are vital to the residents and businesses of Suisun City.”

“Loss of these funds comes during one of the worst declines in local property values and related revenues that we've ever seen,” said City Manager Bragdon. “The worst part is Sacramento will be back next year for another $1.7 million from our Redevelopment Agency. Unless the courts reverse this protocol, we’re afraid that the State will eventually take all of our redevelopment resources, effectively bankrupting the most powerful tool we have to build our community.”

In the past 20 years, the Suisun City Redevelopment Agency has been the primary force in

• Rebuilding the Suisun City Marina
• Removing severely blighted and crime-ridden neighborhoods near the Waterfront
• Rebuilding the Waterfront District
• Providing key funding for the Suisun City Library
• Constructing the Nelson Community Center
• Constructing the Lambrecht Sports Complex
• Renovating the Harbor Theater
• Constructing the Delta Cove, Victorian Harbor and Harbor Park neighborhoods
• Renovated the Suisun City Train Station
• Funding the First-Time Homebuyer and Neighborhood Revitalization programs and
• Dozens of other projects

“Sending this money to the State means we won’t be able to do these types of projects any longer,” said Economic Development Director Jason Garben.

The Suisun City Redevelopment Agency has joined with the California Redevelopment Association to fight the Superior Court ruling.

“We strongly disagree with Judge Connelly’s ruling which effectively says the Legislature has unlimited discretion to redirect local redevelopment funds to any purpose it wishes,” said CRA Executive Director John Shirey. “Under that logic any state program could be called redevelopment. The Legislature needs to deal with its budget problems by making hard decisions using its own limited resources -- not by taking away local government funds.

“Despite this ruling we continue to believe taking local redevelopment funds and using them to fund State obligations is unconstitutional. We have a strong case and feel confident the lower court ruling will be overturned by the Court of Appeal,” said Shirey.

The written ruling by Judge Connelly includes a statement that local redevelopment funds were needed to fund local education due to a decrease in State revenues. By diverting local funds, the State can reduce the amount it spends on schools under Prop. 98. If the State’s raid of redevelopment money is ultimately overturned, the State will have to meet its obligations to fund schools as provided for by Prop. 98.

In November, voters will consider the Local Taxpayer, Public Safety and Transportation Protection Act. If passed, the Legislature will not be able to raid local transportation and redevelopment funds to pay for State obligations. Like every city and resident in California, the State will be forced to balance its own expenditures against its revenues.

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