Monday, March 7, 2011

State Controller: Redevelopment Agencies Lack of Accountability and Transparency, Several Missed Payments to Schools, Questionable Loans

SACRAMENTO – State Controller John Chiang today released the results of a five-week, limited-scope review of 18 redevelopment agencies (RDAs) across the State of California. The Controller found no reliable means to measure the impact of redevelopment activity on job growth because RDAs either do not track them or their methodologies lack uniformity and are often arbitrary. The review exposes the difficulty of holding RDAs accountable for their funding decisions when existing legal standards are so loose that any area can be deemed “blighted.”
The report also identified several missed payments to school districts and widespread accounting and reporting deficiencies, questionable payroll practices, substandard audits, faulty loans, and inappropriate use of affordable housing funds.
“For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayer’s are receiving optimal return for each invested dollar,” said Controller Chiang. “Locally-controlled economic development is vital to California’s long-term prosperity. However, the existing approach – born in the 1940’s – is not how anyone concerned with performance, efficiency, and accountability would draw it up today.”
The 18 selected agencies represent 16 percent of all redevelopment dollars in fiscal year 2009-10. Auditors from the Controller’s office conducted the review by interviewing redevelopment staff and analyzing financial statements, reports, plans, budget documents, ledgers, job creation data, and payroll records.
The report notes that the 18 RDAs share no consensus in defining a blighted area. While run-down sections of Los Angeles with abandoned buildings show obvious need for redevelopment, other cities were far broader in their declaration of blight. Coronado’s redevelopment area covers every privately-owned parcel in the city, including multi-million dollar beachfront homes. In Palm Desert, redevelopment dollars are being used to renovate greens and bunkers at a 4.5 star golf resort. That RDA receives the 10th-highest tax revenue in the State, with a fund balance worth $4,666 for each of the city’s 52,000 residents.
Only 10 of the 18 RDAs attempted to track the number of jobs created by their projects. Of those ten agencies, four could provide no methodology or explanation for their figures. The remaining six all used different methods to find the number of jobs created. The County of Riverside used projections from developers, while the City of Desert Hot Springs looked at permit and employment records.
Employee compensation levels for RDAs were largely consistent with the salary and benefits offered to other local government employees. But the report found that redevelopment dollars often went to city or county payroll without evidence that those dollars actually supported redevelopment services. In the City of Pittsburg, the redevelopment agency signed a service agreement with the city and transferred $3 million to the city’s general fund. But no documentation exists to show that the $3 million actually went to redevelopment services.
Five of the 18 RDAs failed to make $33.6 million in required payments to schools within their redevelopment areas. When RDAs fail to make these payments, it increases the State General Fund’s financial obligations to local school districts. While RDAs are able to borrow funds in order to make these school payments, none of the five agencies attempted to do so.
While all the RDAs made the required deposits into their Low & Moderate Housing funds, the review found that many of them made inappropriate charges to this account that were not directly related to affordable housing, as required by the State’s Health and Safety Code.
·       The City of Los Angeles inappropriately charged 20 percent of its redevelopment administration costs to the fund (amounting to $833,000).
·       The City of Calexico also charged a percentage of its administrative costs, but also charged the fund for code enforcement and the cost of performing audits of the RDA.
·       The City of Desert Hot Springs inappropriately charged $162,000 for “code enforcement.”
·       The City of Parlier inappropriately charged the cost of purchasing a daycare center.
·       The City of Hercules inappropriately charged $9,600 of its lobbyist expenses.
None of the 18 reviewed agencies met all of their filing requirements. In some cases, annual financial reports were fed to the RDA governing bodies in pieces, while others simply did not file. Auditors from the Controller’s office found that many of the RDAs’ department staff were confused by filing requirements, and the report recommends strong training improvements for financial staff. The report also found that independent audits often failed to identify major audit violations and did not include all required information.
“The lack of accountability and transparency is a breeding ground for waste, abuse, and impropriety,” said Controller Chiang. “In whatever form local redevelopment takes in the future, the level of oversight and openness must be consistent with the amount of public dollars entrusted to their care.”
Two of the RDAs made questionable loans to their cities’ general fund. In Pittsburg, the agency loaned $16.6 million in fiscal year 2009-10 without interest to the city for specified projects. By the end of the fiscal year, $15.4 million was unspent, allowing the city to earn interest on those funds. The City of Calexico’s RDA loaned $1.75 million to the city in 1993 with six percent interest. The City Council, acting as the RDA board, lowered the interest rate to 1.42 percent in 2004. While the loan was supposed to be fully repaid by 2009, the city still owes $1.1 million to the redevelopment fund, based on information provided to the State Controller’s office.
The full report  can be found on the State Controller’s website at www.sco.ca.gov.
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2 comments:

  1. A government agency figured all of that out? I'm starting to like John Chiang. Suppose this leads to some standards that make sense for redevelopment money. We could both cite examples. Could even you support something that would allow for redevelopment funding if it were limited to say an abandoned factory or out of business big box store or something this obvious?

    ReplyDelete
  2. So far as I have observed, Chiang has done a good job as controller.

    There is no such thing as an "abandoned" factory. Someone owns everything.

    Redevelopment can exist without the redevelopment agencies skimming tax revenue.

    As they currently exist, BILLIONS are diverted from schools, public safety, and the infrastructure. The RDAs create a nice slush fund for politicians and well-connected developers. Its not just a sound bite but a fact.

    ReplyDelete

Greg Sebourn

Orange County Bail Bonds

The Beauty of a Storm

The Beauty of a Storm
Orange County, Ca.

My Grandma - A Eulogy

LET'S TALK ABOUT 1914 FOR A MOMENT.



FOR STARTERS, GRANDMA WAS BORN TUESDAY, DECEMBER 22, 1914 IN HER FAMILY'S ATWOOD RANCH HOUSE.



IT IS WORTH NOTING THOSE ALSO BORN IN 1914:

JACK LALANNE

JOE DIMAGGIO

DANNY THOMAS



AND WHO DIED IN 1914:

JOHN MUIR, THE FAMOUS NATURALIST FOR WHICH NUMEROUS ROADS, PARKS, HOTELS, AND NATURE RESERVES ARE NAMED.



IT IS ALSO WORTH NOTING THAT IN 1914 WOODROW WILSON SIGNS MOTHER'S DAY PROCLAMATION AND BABE RUTH MAKES HIS MAJOR LEAGUE DEBUT WITH THE RED SOX. MOTHER'S DAY AND BASEBALL- TWO OF MY FAVORITES!! (PERHAPS HER NICKNAME "BABE" CAME FROM BABE RUTH???)



GRANDMA WAS BORN INTO A PERIOD OF TIME FILLED WITH TURMOIL. IN JUNE OF 1914 ARCHDUKE FRANZS FERDINAND WAS ASSASSINATED. WITHIN ONE MONTH WORLD WAR I RAGED ACROSS EUROPE. TWO DAYS AFTER HER BIRTH HOWEVER, GERMAN AND BRITISH TROOPS INTERRUPTED WWI TO CELEBRATE CHRISTMAS. (PERHAPS THEY PAUSE KNOWING THAT A GREAT WOMAN WAS BORNE) WORLD WAR I CONTINUED UNTIL THE TREATY OF VERSAILLES IN 1919.



ALTHOUGH SHE WAS ONLY 5 YEARS OLD, SHE SAW THE LEAGUE OF NATIONS CREATED AND THE 19TH AMENDMENT WAS APPROVED BY THE U.S. CONGRESS GUARANTEEING THE RIGHTS OF WOMEN TO VOTE.



SHE LIVED THROUGH MANY NOTABLE EVENTS. LIKE THE 1933 LONG BEACH EARTHQUAKE OR WHEN ATWOOD FLOODED ALONG WITH MOST OF ORANGE COUNTY IN 1938 AND THE FLOOD-WATERS CLAIMED MORE THAN 50 PEOPLE, 43 OF WHICH WERE FROM ATWOOD! ALL OF THIS DURING A TIME THAT WE READ ABOUT IN SCHOOL AND KNOWN AS "THE GREAT DEPRESSION". SOMEWHERE IN ALL OF THAT SHE FOUND THE LOVE OF HER LIFE, GRANDPA LEO, GRADUATED HIGH SCHOOL, GOT MARRIED, AND HAD KIDS!



THEN THERE WAS WORLD WAR II. FROM PEARL HARBOR TO HIROSHIMA, GRANDMA WAS RAISING MY UNCLE BOB AND MOM ARLINE. WITH AIR-RAID SIRENS AND BLACKOUTS SHE WAS A WIFE AND MOTHER. WHAT A TIME TO RAISE CHILDREN! I BET GRANDMA'S PARENTS WERE ABEL TO TELL HER A THING OR TWO ABOUT RAISING KIDS IN WARTIME.



GRANDMA WAS THERE WHEN THE BOY SCOUTS OF AMERICA HELD THEIR 3RD ANNUAL NATIONAL JAMBOREE IN 1953. SHE SAW AIRBASES OPEN IN '42 AND CLOSE IN '99. SHE WATCHED WALTER KNOTT START UP HIS BERRY FARM AND WALT DISNEY TURN ORANGE GROVES AND STRAWBERRY PATCHES INTO DISNEYLAND!



SHE SAW THE HORSE AND CARRIAGE FADE AWAY INTO HISTORY AND SPACE TRAVEL EXPLODE BEFORE HER WITH THE FIRST LUNAR LANDING. JUST IMAGINE HOW MUCH TECHNOLOGY HAS CHANGED OVER THE LAST 100 YEARS. FROM TUBE RECTIFIERS TO SUPERCONDUCTORS; FROM TRANS-ATLANTIC TELEGRAPH CABLES TO SATELLITE TV.



SHE SAW MORE IN HER 93 YEARS THAN MOST OF US WILL EVER READ ABOUT, LET ALONE LIVE THROUGH!



OF THOSE 93 YEARS IT IS MY HONOR TO HAVE BEEN HER GRANDSON FOR 35 OF THEM. SHE WAS MY MOTHER WHEN MOM HAD TO WORK. SHE WIPED MY NOSE AND PUT FOOD IN MY MOUTH. SHE LET ME PLAY WITH GRANDPA EVEN THOUGH SHE NEEDED HIM TO TAKE HER TO THE STORE. SHE WAS MY GRANDMA AND I WILL MISS HER IMMENSELY.



JUST LOOK AROUND THIS ROOM; SHE DID THIS. SHE IS RESPONSIBLE FOR BRINGING SO MANY GOOD PEOPLE INTO THIS WORLD AND TOGETHER TODAY. THIS IS HER LEGACY.



A Dedication To My Loving Wife, Stacey. Thank you for all you do for me!

Brad Paisley - I Thought I Loved You Then


I remember trying not to stare the night that I first met you
You had me mesmerized
3 weeks later in the front porch light taking 45 min to kiss you goodnight
I hadn’t told you yet but I thought I loved you then

Chorus
Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Like a river meets the sea
Stronger than it’s ever been
We’ve come so far since that day
And I thought I loved you then.

I remember taking you back to right where I first met you
You were so surprised
There were people around
But I didn’t care I got down on one knee right there
And once again I thought I loved you then

Chorus
Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Like a river meets the sea
Stronger than it’s ever been
We’ve come so far since that day
And I thought I loved you then.

I can just see you with a baby on the way
I can just see you when your hair is turning gray
What I can’t see is how I’m ever gonna love you more
But I’ve said that before.

Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Well look back some day at this moment that we’re in
And I'll look at you and say I thought I loved you then
And I thought I loved you then...

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