Beaver friend and former city council contender Tim Platt had this letter in the Martinez News Gazette last week. I thought it was worth reprinting here with his permission:
February 11, 2009
Dear Editor,
The Gazette’s recent State of the City article highlighted fiscal achievements that have contributed to the relative soundness of our current financial situation. However, one of our most significant achievements was not mentioned—avoiding the potentially dire financial consequences that could have come from establishing a Martinez Redevelopment Agency.
The ability of a Redevelopment Agency to repay its bonds and loans is based directly on increasing property values. The increase in property tax income in the Redevelopment Agency area is the primary source of income to the Redevelopment Agency. Yet prices for housing, commercial buildings and land plummeted over the last two years and are predicted to continue to do so into the foreseeable future. That significantly reduces the amount of property tax income going to Redevelopment Agencies. Their ability to pay off the bonds they have issued becomes more difficult. The same is true of the loans many Redevelopment Agencies have taken from their host city governments.
In addition, the State has belatedly realized that the property tax moneys diverted by Redevelopment Agencies would be better spent on the local agencies and districts they were diverted from (schools and community colleges, East Bay Regional Parks, BART, fire departments, cities with Redevelopment Agencies in them, county government, public hospitals, etc.). Our State government recently enacted legislation taking $350 million of those diverted dollars back from the Redevelopment Agencies to support local schools (and more may be taken back in the future).
Added together, the financial pressure on Redevelopment Agencies to be able to repay their bonds and loans is increasing. We are lucky to have dodged that bullet in Martinez .
I applaud the sound thinking of our Council, the City and numerous local citizens who kept us out of this potential morass.
Working together I believe we can continue to make wise decisions to solve our City’s problems without jeopardizing our future.
Sincerely,
Tim Platt
Thanks Tim. If our beaver fans would like to know more about why this particular bullet is worth dodging, here are some places to start looking…
Redevelopment: the unknown government
California Alliance to Protect Property Rights
