Responses to the

Conclusions 6

• CL1 Page 42
  The current district structure
• CL2 Page 42
  At-large representation
• CL3 Page 42
  District boundary changes
• CL4 Page 42
  New districts to be added as required by the City Charter
• CL5 Page 42
  The 30-day residency requirement b. The Mayor be given authority in decisions regarding land use and disposition of lawsuits. c. The Mayor be given access to independent legal counsel supplied by the City. Response to Recommendation 1:
• CL6 Page 60
  A. The RDA is a powerful governmental tool for expediting change in a community. Response to Conclusion A: The Agency agrees with Conclusion A. B. The near term RDA benefits for the City of Fresno’s General Fund are increased sales tax revenue and infrastructure development and improvements. Response to Conclusion B: The Agency agrees with Conclusion B. C. Aggressive RDA activities have the potential of diverting increased property tax revenues from the state, city and school districts. Response to Conclusion C: The Agency disagrees with Conclusion C. Redevelopment Agency policy is that acquisitions of property are only acquired by Council/Agency Board action. Dispositions of property also only occur with action taken by the Council/Agency Board. Taxable property is added to the tax rolls once a Disposition and Development Agreement (D&DA) is approved by the Council/ Agency Board. Redevelopment law also permits the Council/Agency Board to acquire property and to sell or provide property to a public agency (i.e., city, county, state, federal, or school districts) for development of a public use consistent with the redevelopment plan. Such development of public facilities would not necessarily be on the tax roll, but the public agency would benefit from such a partnership between the public agency and the Redevelopment Agency. D. There is no evidence of independent oversight of decisions made by the RDA staff as a result of the City Council also sitting as the RDA Board of Directors. 58 Response to Conclusion D: The Agency disagrees with Conclusion D. Public input and open government are key objectives in the accomplishment of the Agency’s mission. Public hearings are required for virtually all of the RDA business, and the actions of the RDA require public action by the Agency Board and at times by the City Council. Generally, the latter are joint actions of both the City Council and the Council acting as the Agency Board. Council actions in this regard are subject to the Mayor’s veto. In the process for approval of the RDA annual budget, adoption of new redevelopment plans, amendments to existing redevelopment plans, the approval of new development projects, the acquisition/development of land, and installation of public improvements, input is received from Project Area Committees/Citizen Advisory Committees (including the Historic Preservation Commission and Planning Commission as may be required), and all are reviewed by the Housing and Community Development Commission prior to being reviewed and acted upon by the Council/Agency Board. The Agency Board also approves the Agency’s Annual Report, including its financial reports/audits, housing activity reports, and property inventory. All of the above noted meetings are public and noticed per state law requirements. E. The property currently held for resale ($25 millon) is valued at the RDA’s cost or current market value, whichever is less. There is concern that the value of this property is overstated. Response to Conclusion E: The Agency agrees with the first sentence of Conclusion E. With respect to the second sentence, the Agency disagrees and incorporates by reference the response to Finding E under this Section. F. The Grand Jury’s inquiry, particularly with respect to date of acquisition of property currently held by the RDA, appears to have prompted disposition of some parcels. Response to Conclusion F: The Agency disagrees with Conclusion F. Disposition of property is driven by various factors relating to redevelopment opportunities. The Agency acknowledges that as a result of the Grand Jury’s inquiry, Agency staff developed a concise, reader-friendly listing and description of properties. See also responses to Recommendations 25 and 26 under this Section. G. The City of Fresno’s debt can be increased without taxpayer approval, as the City is the ultimate guarantor of RDA debt. Response to Conclusion G: The Agency disagrees with conclusion G. A lengthy explanation is merited. City/Agency relationship and debt. A redevelopment agency is a separate and distinct legal entity from the city. It is responsible for paying its debt obligations according to the contract or debt creation documentation. Generally a redevelopment agency may establish debt up to the date that the plan expires, and may collect tax increment to repay debt for a period of up to 10 years after the date that the plan expires. Generally, a redevelopment agency must have debt to collect tax increment, its primary revenue source. Tax increment derives from an increase in property taxes within a project area because of increased property values. But an agency may not collect tax increment except to repay debt it incurs for redevelopment purposes. 59 City vis a vis Agency debt. Legally the City may have no obligation to pay the Redevelopment Agency’s debt. But the City may contribute funds toward payment of, or may expressly guarantee or assume agency debt, subject to the constitutional debt limitations. In addition, the Redevelopment Agency prepares a separate financial statement that is consolidated or included with the City financial report. If the Agency were unable to pay any debt to third parties, the City may step in to avoid any negative credit rating effects and may consider assisting the Agency with bond restructuring, repayment of City debt to Agency or other bond payments. Under Health & Safety Code Section 33141, the Council may deactivate an agency when the agency has no outstanding bond debt, unpaid loans, debt, advances or binding legal contractual obligations other than to the City, or when the City assumes an agency’s unpaid obligations. Voter Approval. Much of the debt that the City incurs is not subject to voter approval. The California Constitution prohibits a city from “incur[ring] indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the qualified electors . . . .” This prohibition prevents the pledge of general fund revenue beyond the year in which that revenue is received. There are exceptions to that constitutional provision, for example (a) where the debt is created under a lease where the lease does not create an immediate indebtedness for aggregate installments, but confines the liability to each installment as it falls due and each year's payment is for consideration furnished that year, or (b) where debt repayment will be solely from a special fund (i.e., not payable with general fund monies). The City cannot be liable to maintain the special fund out of its general fund or by tax levies if the special fund is insufficient. The Council, by ordinance, may establish an agency, dissolve a redevelopment agency, establish a redevelopment project area, or amend a redevelopment plan or project area. Each ordinance is subject to challenge by the voters through a referendum action. Through a petition that the requisite percentage of registered voters have signed supporting the referendum, it may be placed on the ballot for voter action. Thereafter, redevelopment agency actions in which the agency incurs debt are taken in public meetings and hearings at which any member of the public may speak for or against the proposed action to incur debt. Generally such matters are considered first by the Housing and Community Development Commission Meetings for a recommendation, and then by the Agency Board and/or Council. H. The Fresno City Council members are part time legislators and the complexities and the need for diligent oversight of RDA may be an unreasonable expectation of the members. Response to Conclusion H: The Agency disagrees with Conclusion H. The Council sitting as the Agency Board understands the complexities relating to redevelopment. The complications are not any more difficult than those relating to other major matters addressed by the Council such as adoption of an $800 million City budget, consideration of City bond debt financing matters, consideration of City economic development projects, acquisition and disposition of property, public works construction, and other similar matters. 60 I. The operations of the RDA are complicated and not always understandable to City officials and the public. Response to Conclusion I: The Agency disagrees with Conclusion I. The Agency incorporates its response to Conclusion H by reference.