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Glendale scrambles to fill dollar gaps

Will apply $2.5M in leftover redevelopment money to patch budget cracks.

August 01, 2012|By Brittany Levine, brittany.levine@latimes.com
  • The Doran Gardens housing complex in Glendale is one redevelopment project on the list to be approved for state funding.
The Doran Gardens housing complex in Glendale is one redevelopment… (Tim Berger / Staff…)

Glendale officials are planning to use $2.3 million it has on hand to fill in gaps created by the state continually underfunding Glendale's attempts to pay off its lingering redevelopment debt obligations.

Since the state dissolved local redevelopment agencies, Glendale and other cities have been locked in a battle with state officials over how much of that property tax revenue, which now goes to California, should be sent back to help pay down previous debt commitments.

As Glendale winds down its redevelopment activity, it must get permission from Sacramento officials to spend money on related debt obligations every six months. The city has asked for 12-months-worth of money already, but it has received less than it asked for.

On Tuesday, the City Council — acting in its dual role that also controls post-redevelopment decisions — approved using $2.3 million of roughly $25 million in leftover redevelopment cash to fill in those gaps. For the next chunk — which would cover January to June — the city plans to ask state officials for about $44 million.

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The state approved about $25 million in expenditures for the prior period covering July through December.

Redevelopment projects on the list for the third funding request include about $9.7 million for Central Library improvements, $5.4 million for Doran Gardens — an affordable housing project that opened last month — and about $201,000 for several project contracts to improve the Grandview and Sonora railroad crossings.

In addition to giving Glendale less money than requested, state finance officials in May also forbade Glendale from recovering $70 million it loaned to its redevelopment agency. But if the city meets certain requirements, it may be able to start using property tax revenues to recoup the loan over time. The money would go to the city's General Fund, which pays for police, library and other public services.

One requirement is hiring a licensed accountant to perform a “due diligence review” of all financial activities between January 2011 and June 2012 to determine how much money Glendale must distribute to other agencies, such as the Glendale Unified School District.

But the debt payments may not start until 2013 and city officials don't expect to reach the level of income made in the past — $6 million annually — until 2025.

“It's an evolutionary process at the state level,” said Councilman Dave Weaver. “As the years and years go on, it'll soften the blow.”

The council's decision must still be approved by state officials, who have final say over redevelopment activities.

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