Controller Releases Redevelopment Agencies Review

A new review of 18 redevelopment agencies in California cities revealed challenges in holding these groups accountable for funding decisions, according to the State Controller’s office Monday.

State Controller John Chiang announced the review in January, saying his auditors would take a closer look at how cities used redevelopment agency (RDA) funds. The redevelopment agencies of two East Bay cities, Pittsburg and Hercules, were among the 18 agencies that raised "red flags" in Chiang's review.

Gov. Jerry Brown proposed using cities' RDA funds to cover other state services as part of his budget proposal.

In response to Brown's proposal, a number of cities up and down the state, including Walnut Creek and Concord, have moved to protect millions of dollars in RDA money. The Walnut Creek City Council, for example, to commit up to $5.4 million in current and future RDA money for public improvements and affordable-housing projects and programs.

Chiang's auditors found the RDAs in the 18 cities had different definitions of what may be considered a blighted area. The report points out that RDA funds in Los Angeles were used for areas with abandoned buildings.

In the report, the State Controller’s office also looked at how Palm Desert used RDA funds to renovate the 4.5 star

“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 taxpayers are receiving optimal return for each invested dollar,” said Chiang in a news release.

Auditors found only 10 RDAs tried to keep track of how many jobs were created by their projects. Of that number, four RDAs could not explain their figures or provide the method on how they gathered the data.

The report also shows five RDAs failed to deposit $33.6 million in required payments to school districts located inside their redevelopment areas. 

According to the State Controller’s office, the 18 RDAs represent 16 percent of redevelopment dollars for the 2009-2010 fiscal year.

You may review the complete report from the State Controller's office in the PDF file attached to this article.