Successor Agency To Dissolved Redevelopment Agency

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Background:
On December 29, 2011, the California Supreme Court issued its decision on the California Redevelopment Association's (CRA) and the League of California Cities' (LCC) lawsuit against the state challenging the elimination of redevelopment agencies. In June 2011, the Legislature and the Governor approved AB X1 26, which dissolved redevelopment agencies effective October 1, 2011, and AB X1 27, which allowed agenices to continue operations by making a payment to help mitigate the state's budget deficit. The CRA and the LCC sued the state challenging these actions as a violation of Proposition 22. Proposition 22 was overwhelmingly passed by the voters in November 2010 and sought to protect local revenues from being borrowed or taken by the state.

In a landmark decision, the California Supreme Court upheld the validity of AB X1 26 and invalidated AB X1 27. The AB X1 26 language is provided in the table below:

Assembly Bill X1 26 Legislative Language

 

 

This action meant that redevelopment agencies in California were dissolved effective February 1, 2012 and there is no option to "opt-in" to continue an agency. This decision was unfortunate as it eliminates a tool for Novato and other communities to foster economic development and revitalize community areas.

City Becomes Successor Agency - January 2012:

On January 10, the Council elected to serve as the successor agency for the RDA. The Council decided to take on this role to ensure that the City has the ability to interact with the Oversight Board which was appointed to oversee the successor agency and to manage the preparation of the Recognized Obligation Payment Schedule (ROPS). The ROPS  specifies the payments that are necessary to meet the prior obligations of the Novato redevelopment agency. In addition, AB X126 also provides at least $250,000 to cover the administrative expenses of serving as the successor agency. Therefore, these costs will not be the responsibility of City's General Fund.

Visit the Oversight Board's Agendas & Minutes page, to view agendas and actions, including all approved recognized obligation payment schedules.

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