San Diego County Grand Jury
• 2012-2013
Redevelopment is Dead! Long Live Redevelopment! the Legacy of 54 Years of Redevelopment in the City of San Diego
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 15 findings
F01
Continued redevelopment in San Diego is desired and is important for the future growth and economic vitality of the City. Fact: The tax increment revenues used to fund redevelopment work in the past are no longer available. Fact: A stockpile of redevelopment projects exists, including many that are shovel- ready. Fact: There are potential sources of new revenue—some of which Civic San Diego is already pursuing—that Civic San Diego can try to tap into to implement these projects. Fact: There is strong competition for the funds available from these sources. Fact: Civic San Diego does not have sufficient staff with the specialized knowledge and experience necessary to compete successfully in applying for these new sources of funds. Fact: Civic San Diego does have former CCDC and SEDC personnel who have the skills and experience to establish the sophisticated public/private agreements necessary to utilize such new funds and complete redevelopment projects.
No recommendations for this finding
F02
A vigorous effort will be required to identify new funding sources and compete successfully for the money to fund the many projects that are ready for development.
No recommendations for this finding
F03
Because Civic San Diego lacks sufficient qualified staff, it does not have the capacity to compete successfully for funds from these new sources, but it is well positioned to utilize such funds effectively if they can be obtained. Fact: There are redevelopment agencies across the country. Many of these agencies do not use property tax revenues to fund their redevelopment work.
No recommendations for this finding
F04
By examining RDAs outside of California, a new revenue model could be identified for Civic San Diego to replace the tax increment funds the State diverted. Fact: The total debt left behind by San Diego’s dissolved RDA is almost $2.4 billion! This debt is the consequence of a RDA that was extremely active and successful. Fact: In 1952, Proposition 18 was passed as an amendment to the State Constitution. It established “tax increment” property tax revenue to be used to fund the work of the redevelopment agencies statewide. This constitutional amendment specifically authorized redevelopment agencies to use future tax increment revenues as security for the issuance of bonds and other financial obligations, and for the payment of such obligations. Fact: San Diego’s RDA did in fact use the promise of future tax increment revenues for this purpose. Those who purchased bonds and signed agreements relied on this security. Fact: AB 26, the “Dissolution Act,” stated a clear intent that legitimate redevelopment debt be paid out of tax increment funds. Fact: The Governor and the Legislature took the current funds the RDAs had accumulated and redirected future tax increment revenues. The money is gone!
No recommendations for this finding
F05
The Governor of California and the State Legislature have an ethical responsibility to assure that the items that legitimately comprise redevelopment debt are paid out of tax increment revenues. The provisions of Proposition 18 and AB 26 clearly establish this responsibility. 14
No recommendations for this finding
F06
The citizenry of San Diego need to remain informed and alert to the actions of the State regarding redevelopment debt. The impact of these actions on the City of San Diego is of particular concern to its citizenry. A means must be found for the citizenry to communicate their concerns to Sacramento effectively.
No recommendations for this finding
F07
The Mayor and City Council need a means of communicating to the Governor and the Legislature in an impactful manner the adverse consequences of the dissolution and the burden of redevelopment debt on the City of San Diego. Fact: On the authority of AB 26 and AB 1484, the State Department of Finance (DOF) has established a complex, multi-tiered approval process. Every six months Successor Agencies submit lists of individual debt obligations scheduled for payment—known as Recognized Obligation Payment Schedules (ROPS)—to the DOF for review and approval or rejection. Fact: Approval of the items on a ROPS is not guaranteed. They are subject to the approval of the Successor Agency’s Oversight Board and the DOF. Fact: Compiling a ROPS for submittal is a high volume, high dollar process. An individual ROPS can be more than 80 pages long and have a dollar value in excess of $200M! Firm deadlines and specific format requirements have been established by the DOF. A new ROPS is compiled and submitted every six months. The process is extremely time-consuming and potentially could continue for 40 years or more.
No recommendations for this finding
F08
Despite the stated intent of AB 26 to pay the obligations out of tax increment funds, approval to pay the obligations is not automatic. Rather, it is subject to a multi-tiered approval process that has become contentious. This process creates uncertainty and difficulty for cities in planning budgets, and requires reserves far beyond the ordinary.
No recommendations for this finding
F09
The ROPS process involves extensive lists of obligations that must be prepared and submitted in compliance with firm deadlines and formatting requirements established by the DOF. The complexity of the process creates the possibility of costly omissions and errors and the rejection of items for minor deficiencies.
No recommendations for this finding
F10
Civic San Diego has insufficient personnel to focus on both the ROPS process and other important responsibilities assigned to the corporation. Preparing and submitting ROPS is not the only task consuming the time of employees. Responding to items the DOF has disputed and to audit requests and findings is also detracting from the ability of Civic San Diego employees to focus on the full range of their duties.
No recommendations for this finding
F11
Because the ROPS approval process is likely to continue for 40 years or more, its time demands as well as the potential for costly errors and oversights cannot be ignored. These issues cannot be addressed effectively without additional qualified staff who can focus on ROPS preparation and submission. Fact: CCDC, with the help of consultants, prepared and published a Five-Year Work Plan Toward Goal of Ending Homelessness in Downtown San Diego. Fact: A critical element in that plan is the construction of sufficient supportive housing units to reduce homelessness. The plan utilizes an innovative formula that determines the net number of new units required by balancing the influx of new homeless persons with the number of persons no longer needing this assistance. Fact: The plan included collaborating and partnering with other groups who would provide services to those living in the supportive housing units. Fact: Funds to construct supportive housing as specified in the plan are no longer available to Civic San Diego or the City.
No recommendations for this finding
F12
The Five-Year Work Plan held out a realistic hope of making substantial progress in reducing homelessness downtown.
No recommendations for this finding
F13
The present state of homelessness in the City heavily detracts from the urban renewal progress San Diego has achieved.
No recommendations for this finding
F14
A means must be found to continue the construction of supportive housing and keep the Five-Year Work Plan active. Fact: Information regarding the status and outcome of redevelopment projects virtually stopped with the dissolution of the City’s RDA. Updates on projects are no longer posted or published.
Related Recommendations (3)
R1
the progress of redevelopment projects;
R2
the implementation status of the major plans developed by CCDC;
R3
the total current debt and assets of the Successor Agency and the Housing Successor Agency; and
F15
Information regarding the status of legacy redevelopment projects, the ROPS process, and the other activities of Civic San Diego is difficult for the public to obtain, resulting in a lack of transparency.
Related Recommendations (1)
R4
the ROPS submitted and any items rejected or being disputed by the DOF. The 2012-2013 Grand Jury recommends that by December 31, 2013 the San Diego Mayor and City Council: 13-7: Establish a formal program of soliciting and evaluating a wide range of ideas and suggestions to make the continued revitalization of San Diego possible. The strong encouragement and unequivocal support of redevelopment efforts that have characterized past City administrations should be continued. 13-8: Make funds available for Civic San Diego to hire additional personnel who have specialized knowledge and experience in identifying new funding sources, applying for the funds available, and a track record of success in getting such funds awarded. 13-9: Adopt a new revenue model that will provide ongoing support for Civic San Diego to continue redevelopment. 13-10: Make funds available for Civic San Diego to hire an Administrative Analyst who will be assigned to the ROPS Processing Unit. This Analyst should be assigned responsibility for creating procedures that support the systematic collection of data regarding the obligations due for payment and the compilation of this data in each ROPS. 13-11: Vigorously pursue Federal and State contacts to find the means and ways to keep the Five-Year Work Plan Toward Goal of Eliminating Homelessness in Downtown San Diego active and adequately funded. 17 13-12: Establish as a major priority the construction of sufficient supportive housing units to meet the goal of the Five-Year Work Plan. Realistic annual goals should be specified and progress measured to keep this humanitarian crisis and blight upon our City in the forefront of our thinking and assure a sustained effort is made to achieve the five-year goal. REQUIREMENTS AND INSTRUCTIONS The California Penal Code §933(c) requires any public agency which the Grand Jury has reviewed, and about which it has issued a final report, to comment to the Presiding Judge of the Superior Court on the findings and recommendations pertaining to matters under the control of the agency. Such comment shall be made no later than 90 days after the Grand Jury publishes its report (filed with the Clerk of the Court); except that in the case of a report containing findings and recommendations pertaining to a department or agency headed by an elected County official (e.g. District Attorney, Sheriff, etc.), such comment shall be made to the Presiding Judge with an information copy sent to the Board of Supervisors. Furthermore, California Penal Code §933.05(a), (b), (c), details, as follows, the manner in which such comment(s) are to be made: (a) As to each grand jury finding, the responding person or entity shall indicate one of the following: (1) The respondent agrees with the finding (2) The respondent disagrees wholly or partially with the finding, in which case the response shall specify the portion of the
No Responses Found 1
Government entities assigned to respond to this report. No response documents have been linked in our database.
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