Monday, July 2, 2012

(Mendocino) GJ: Wind down of Ukiah's RDA 'very difficult, problematic'

Panel suggests more communication between Oversight Board, Successor Agency
Ukiah Daily Journal Staff
Updated: 07/01/2012 10:24:00 AM PDT

Calling the dissolution of the state's redevelopment agencies a "real nightmare," the 2011-2012 Mendocino County grand jury recently released a report on the Successor Agency to the Ukiah Redevelopment Agency (URA).

The Successor Agency is the Ukiah City Council, and an Oversight Board that includes representatives from the city, county and other agencies including the Ukiah Unified School District, was appointed to approve all expenditures.

The 2010-2011 grand jury also investigated the URA at the request of several complaints by citizens and recommended the correction of several deficiencies. However, the current grand jury reported there were new complaints filed by citizens who felt the URA's response was "inadequate."

While the grand jury was completing its second investigation, the "whole ballgame changed," meaning the state Legislature passed AB1X26, which ordered all the RDAs to dissolve as of Feb. 1, 2012.

The grand jury learned that:

The former URA was involved in significant projects, including the Redwood Business Park infrastructure on Airport Park Boulevard (the "Costco Project"); the county courthouse relocation project, the Alex Rorabaugh Gymnasium and Activity Center and the Orchard Avenue Bridge.

The URA issued bonds last year. Millions of dollars are still outstanding and are included in its Recognized Obligation Payment Schedule (ROPS).

The ROPS for the URA Successor Agency totals approximately $118 million for Jan. 1 through June 30, and approximately $59 million for the period of July 1 though Dec. 31.

At the first meetings of the Oversight Board, it was not represented by legal counsel, "despite the fact that (its members were) acting as sworn fiduciaries."

The dissolution of RDAs is a "complicated business involving billions of dollars, and hundred of agencies and tax entities, all across California," the report states. "The process is fraught with almost unlimited possibilities for error. In fact, it is often remarked, that there is no playbook' for the dissolution of RDAs. There is no body of law that can easily resolve disputes."

Two members of the Oversight Board noted that the city "appears to be minimizing the role of the county auditor during the first few weeks of the dissolution process.

Ukiah's Successor Agency is "experiencing dissent on its Oversight Board. Part of the problem is that some board members feel rushed' by city staff. They commented that city staff need to slow down' the process and to more fully explain all their actions. They also stated that city staff needs to document actions whenever possible.

The grand jury recommended that the Oversight Board retain legal counsel, and Betsy Strauss, who has been hired to represent it, did attend the last meeting June 13.

The grand jury also recommends that:

City staff should present the Oversight Board with a written timeline of milestones and deadlines.

City staff should immediately invite the county auditor to participate in all future meetings of the board.

City staff should explain their presentation to the board, so that all members can fully understand aspects of the dissolution process about which they are uncertain.

City staff should present the board with a work plan for economic development projects they intend to continue.

The grand jury concludes with stating that it is "acutely aware that the dissolution of the URA will hurt us -- the goal of the URA was much-needed job creation, environmentally sustainable growth, affordable housing and the elimination of blight and economic disparity.

"The dissolution of RDAs is a real nightmare -- it is a rush job," the grand jury continues. "There is no blueprint for dissolution. Billions of dollars are at stake during a recession. With dissolution, many good projects go down the drain.

"The end result of the conflicting instructions from the state, along with the problems of understanding the provisions of the Supreme Court case, are making the dissolution process for Ukiah very difficult and problematic," the report states. "We cannot end this report on a more somber note."

The Oversight Board addressed this report at its last meeting June 13, and directed staff to prepare a response. It has 90 days from the receipt of the report, which it declares is May 30, to respond.

Responses were also requested from the Ukiah City Council and the county auditor.

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