Redevelopment Agency of the City of Rialto
The End of Redevelopment
The Rialto Redevelopment Agency has been dissolved as a public entity effective February 1, 2012 along with all other redevelopment agencies in the State of California. The elimination of Rialto Redevelopment Agency will mean the end to the City’s most powerful economic development tool, as well as the end several planned major infrastructure and affordable housing projects that would have ultimately created thousands to new jobs for the community. The termination of the Agency will also result in the demise of many existing loan and grant programs that helped revitalize and improve older commercial and residential properties in the City.
When Governor Brown took office in January, 2011 he proposed to abolish redevelopment to help resolve California’s $25 billion budget deficit. After months of legislative wrangling, a compromise was reached with the enactment of two bills: ABX1 26 and ABX1 27. The first bill, (ABX1 26), eliminated redevelopment agencies statewide, while the second bill (ABX1 27) authorized reinstatement by each agency upon the agreement to make certain “voluntary” payments for the benefit of the State. Following the passage of ABX1 26 and ABX1 27, the California Redevelopment Association (CRA), League of California Cites (League), and several independent cities filed a lawsuit challenging the constitutionality of the two laws. CRA and the League argued that the two budget bills violated Proposition 1A (2004), Proposition 22 (2010), and the California Constitution. On December 29, 2011, the California State Supreme Court handed down its decision that ABX1 26, which eliminated redevelopment agencies statewide, was a constitutional exercise of the Legislature’s authority. The Court opined that if the Legislature had the right to create redevelopment, then it also had the right to eliminate redevelopment agencies. The Court opined that ABX1 27 – which would have allowed agencies to reactivate if they made “voluntary” payments to the State – was unconstitutional. The Court indicated that the payment was not voluntary and therefore violated Proposition 22. The Court also rejected the argument that the two bills were inseparably linked.
Although many legislators have indicated support for new legislation to continue some of the basic goals of redevelopment, such as affordable housing, infrastructure and job creation, it is unlikely that the Legislature will approve any such legislation. In accordance with the Court’s ruling, the Rialto Redevelopment Agency will be dissolved on February 1, 2012.
The City of Rialto has assumed the roles as the Successor Agency and will provide basic administrative support in the dissolution process and the disposition of all Agency assets. A seven member Oversight Board, which will be controlled by County of San Bernardino and various School District appointees, will oversee the payment of all existing obligations, the liquidation of all current assets of the Agency, and disposition of all proceeds and unencumbered funds to various state taxing entities. For additional information on the dissolution of the Agency and the creation of the Successor Agency, please contact John Dutrey at (909) 820-8014 or firstname.lastname@example.org.