State audit says West Sacramento’s handling of redevelopment property was clean & legal
FROM THE NEWS-LEDGER — NOV 14, 2012 —
By Steve Marschke
West Sacramento has become the first California city to be certified by the state controller with a clean bill of health for the manner in which the city “wound down” its redevelopment agency assets.
When the state abolished redevelopment agencies in a revenue-raising maneuver, cities like this one were left with property assets – some of them major – that were owned by the redevelopment agency, but suddenly in danger of being divvied up and parceled out. West Sacramento handled its redevelopment assets in various ways, putting acreage near Stone Lock under purchase option to the locally-controlled Port of Sacramento, and moving small potential “right of way” properties along roadways to the city itself.
The office of State Controller John Chiang has just announced that transfers like these were in compliance with the law. The properties transferred to the city served an obvious governmental purpose, he said.
At the same time, his office found the City of Hercules inappropriately handled $51.1 million of its assets, which must now be turned over to the local “successor agency” to the redevelopment agency in Hercules.
“We’re the first city in the state to have a completely clear audit,” Mayor Christopher Cabaldon told the News-Ledger. “The controller’s office was auditing whether the transactions that occurred as the redevelopment agency was winding down were appropriate. Some cities had problems.”
How much property did West Sacramento move out of the agency?
“In the range of $70 million, with some as large as parts of the Stone Lock District and some more like 50 square feet,” he said. “Most are not really high-value properties, like those rights-of-way. Our concern was that if we gave them up and they went to auction, somebody could pick them up for next to nothing because they had no development value. Then they could essentially hold us hostage and try to extort the taxpayers for huge sums of money because we need them (for road expansions and such).”
The audit process isn’t over, said the mayor. The state still needs to sign off that West Sacramento transferred some of its pre-existing tax obligations in a legal manner. The redevelopment agency had committed some of the local property tax increment to projects like the Bridge District and Stone Lock District, and the state needs to give approval for those commitments to continue.
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