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League Sponsors Bill to Provide More Financial Certainty for Successor Agencies Receiving a “Finding of Completion”

March 8, 2013

This week, the League issued a support letter on AB 564 (Mullin), which provides certainty to successor agencies and all other public and private entities that benefits offered by a finding of completion from the Department of Finance (DOF) can be relied upon.

 

Existing law requires successor agencies to endure a series of complex reviews and audits overseen by the State Department of Finance. Agencies completing the process are to be provided a “finding of completion,” making them eligible to secure three specific benefits listed in statute:

  1. The ability to transfer former redevelopment agency-owned properties to the city or county for redevelopment upon completion of a long term property management plan approved by DOF.
  2. The ability to repay city loans made to the redevelopment agency.
  3. The ability to use unspent bond proceeds issued by redevelopment agencies before Dec. 31, 2010.

Existing statute provides, after approval by the oversight board, that the repayment of city-agency loans and the expenditure of unspent bond proceeds become “enforceable obligations.” Yet, the statute is silent on the role of DOF. This is an issue that should be clarified. Since all actions of oversight boards can be reviewed and rejected by DOF every six months as part of the ROPS process, there is no confidence that a community can rely on accessing even these benefits without future disruption or reversal. 

AB 564, which is sponsored by the League, clarifies the statute to reflect legislative intent so successor agencies can rely on access to these benefits over the long term. The bill requires that after the initial approval of oversight board action by DOF, the successor agency and all other public and private entities may rely with certainty upon that decision. This important clarification will avoid unnecessary future disputes, confusion and litigation, and assist the affected communities in moving on from redevelopment so they can focus on their future.

City officials are encouraged to support AB 564. The League’s support letter and a sample support letter have been posted on the League’s website.



 
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