$8,020,000 Seritd Bonds Due Am01alt Coupon Due Am_mt C__."L_.m- DMATate URITY SCHEDULE, INTEREST RDaATESte AN[) PRICES IEBI X 1956........... $370,(_00 Lg.7_% 1997,............ $ 6_0._2_1 i 1.20% 1987........... 400,_)0 9.25 1993............ 725,0Cs.) H.40 X lg_g ........ 440.000 0,73 994 ....... 810,0x_ f | .('.O 19_9,.ii..,i,. eg0,_) K'_.'.5 tgq5........... _)0,0._ ll.75 •1990.......... 530.(_'s) 10.75 1996............ | ,C/3_1)¢_) 11.90 Xl 9_1 ........... 5S._.000 I I,_Y_ 19_,_............ t, IX.s.000 t2,00 41$$1ONS$1ON \ \ $48,980,000 12 50_?,_Temn Bonds due May 1. 2012 '_ _ Price of all Bonds 100% Lt, _ (Accrued ittteres| to be added) The Use of Redevelopment and Tax Increment Financing •- b Cities and Counties P | Jesse M.Unmh, Treasurer. Chairman _l$$g:2N MEMBERS Jesse M. Unruh, Chairman George Deukmejian, Governor Kenneth Cory, State Controller o Robert Beverly, State Senator (R-Manhattan Beach) John Foran, State Senator (D-San Francisco) Jim Costa, State Assemblyman (D.Fresno) Patrick Nolan, State Assemblyman (R-Glendale) Thomas C. Rupert, Treasurer of City of Torrance Richard B. Dixon, Treasurer oJ Los Angeles County Melinda Carter Luedtke,Ex ecutive Secretary 915 Capitol Mall. Room 400 P.O. Box 1919 Sacramento. California 95809 Telephone: 1916) 32_,-2585 The Use of Redevelopment and Tax Increment Financing by Cities and Counties Prepared for the % by Ralph Andersenand Associates October1984 (The views expressed in this report are those of the author and are not necessarily those of the California Debt Advisory Commission or the .State Treasurer's Office.) Ralph Andersen _s Ethan Way, Sure 101 Preston Center Sacramento, CA 95825 5950 Berkshire,Suite 8(30 & Associates m_6) 929-5575 Oalia._Texas 75225 (214) 89%3091 • February 4, 1985 Hon• Jesse Mo Unruh State Treasurer State of California 915 Capitol Mall Room 110 Sacramento, California 95814 Dear Mr• Unruh: This final report summarizes our findings and conclusions relative to the use of redevelopment and tax increment financing by cities and counties In California. The report was prepared as a result of the passage of SB936 at the 1983 legislative session. $8936 required the California Debt Advi- sory Commission to conduct a study of four items, and the results are summarized below: •As of June 30, 1984, redevelopment agencies in California had $1,750,233,800 in outstanding tax allocation bond indebted- ness, and $3,496,690,246 in total outstanding indebtedness• This indebtedness is to be repaid from tax increment revenue. • In the fiscal year ending June 30, 1984, $377,977,992 in tax increment revenue was received by redevelopment agencies in California. •Subject to a legal opinion to the contrary, we are not aware • of any liability the State of California would assume in the event of a default on bonds by a redevelopmentagency. i . As of June 30, 1984, a total of 46,931 housing units have been eliminated and 69,216 housing units have been provided as a result of redevelopment activity. The majority of housing eliminated and provided by agencies over the last 15 years was for very low and low income households• This does not include additional housing that has been providedoutside of redevelop- ment project areas. In addition to the four items referenced above, the California Debt Advisory Commission asked that additional data be gathered regarding the activities of redevelopmentagencies throughoutthe State. Data was received from all counties and all but three cities in the State, and is summarized and analyzed herein• We have not conducted a before and after evaluation of each redevelopmentproject, and there Hon• Jesse H, Unruh Stateof California PageTwo have undoubtedly been abuses associated with individual redevelopment projects. In the aggregate, however, the results of redevelopment are impressive. Our conclusions, based upon a careful analysis of the data submitted by indfvldual city and county redevelopment agen- cies are, as follows: • The use of redevelopment and tax increment financing by cities and counties continues to increase. • Redevelopmentis an important plannfng and financing tool for cities, and there ere indications that it may becomea signif- Icant toolfor counties. • Redevelopmenthas resultedin significantaccomplishmentisn a relativelyshortperiodof time. • Redevelopmentactivity_o date is economicallyfeaslbleand financiallysound• • The fiscalimpactof redevelopmentandtax incrementfinancing on countieshas increased.Thls area shouldbe monitoredon a continuingbasis and additionalsafeguardsshouldbe provided to assurethat the cumulativeimpactof redevelopmentand tax incrementfinancingresults in an effectivebalance between the need for countyoperatingrevenueand the long-termeco- nomicdevelopmentandrevitalizationgoalsof citiesand coun- ties generally. • Redevelopmentdoes not representa significantcost to the State,and the possibilityof State liabilityfor indebtedness is remote. • Additional changesin the redevelopment process and the provi- sion of additional financing authority may be appropriate. However,while continuedmonitoringIs important,regulation of the redevelopmentprocess is neither necessarynor war- ranted• •Additionaltraining and informationon a continuingbasis wouldbe helpful. Although we have not made on-site visits to each redevelopment agency,a major effortwas made to obtain a completeresponseand care was taken to assure the accuracy and comparabilityof the data• _e believethe data is thoroughand reliable,and would llke to acknowledgethe assistanceof the League of CaliforniaCities, Hon. Jesse M, Unruh State of California Page Three ' California County Supervisors Association, and California Municipal Statistics in this regard. We recetved excellent guidance and direction from Meltnda Luedtke, Executive Secretary, California Debt Advisory Commission, and we are appreciative of her leadership throughout the assignment. Additionally, we are indebted to Suzanne Bragdon, Tere Moltnari,Claudia Dunning, Becky Darcy, Teresa Heple, Pam Brackenbury, Katie Wroblewskt, Joy Vickory, Patsy Fong and Lisa Jurlsic, as well as the SBg36 Study Task Force, for their invaluable assistance in conducting this study. We have appreciated the opportunity to work with you and the Cali- fornia Debt Advisory Commission, and believe this study will _ provide a helpful tool for informed decision-making in thts important and increasingly-used area. Sincerely, Ralph Andersen & Associates ? TABLE OF CONTENTS ' PAGE CHAPTER I--INTRODUCTION I ReasonfortheStudy i _rpose of the Study 2 ApproachtoConductingtheStudy 5 CHAPTER If--THE LAW PERTAINING TO REDEVELOPMENT AND TAX INCREMENT FINANCING 9 GeneralSummaryoftheLaw 9 Exhibit A--Procedures For Adoption of a Redevelopment Plan 12 Major Changes in the Law Since the Mid-197O's 16 Reporting Requirements 20 Procedural Filings 20 Exhibit B--Reporting Requirements of Redevelopment Agencies 21 ReportsonActivities 23 Other Reporting Requirements 25 CHAPTER III--SUMMARY DATA CONCERNING THE USE OF REDEVELOPMENT AND TAX INCREMENT FINANCING BY CITIES AND COUNTIES 27 Redevelopment Agencies 27 Exhibit C--City Redevelopment Agencies By County LocationandPopulationGrouping 2g Redevelopment Projects 32 Redevelopment Projects Currently Underway 33 Exhibit D--City Redevelopment Projects by County LocationandDateof Establishment 35 Redevelopment Projects Planned 37 Redevelopment Projects Completed 3B PAGE Exhibit E--Planned Redevelopment Projects by County Location 3g Exhibit F--Completed Redevelopment Projects by CountyLocation 40 Amount of Tax Increment.Revenue 41 Exhibit G--Tax Increment Revenue Generated by " County: 1983-84 42 Amount of Indebtedness 47 Exhibit H--Indebtedness from Tax Allocation Bonds Incurred By County: 1983-84 48 Exhibit I--Total Debt Incurred by County: IgB3-B4 50 Direct Results of Redevelopment 52 Exhibit J--Housing Units Eliminated and to Be Eliminated by County 55 Exhibit K--Housing Units Provided and to Be Provided by County 57 Exhibit L--Commercial and Industrial Space Provided by County 59 CHAPTERIV--CONCLUSIONS 63 The Use of Redevelopment and Tax Increment Financing " by Citiesand CountiesContinuesto Increase 64 Redevelopment Is an Important Planning and Financing Tool for Cities, and There Are Indications That It May Become a Significant Tool for Counties 65 i Redevelopment Has Resulted in Significant Accomplishments in a Relatively Short Period of Time 68 Exhibit M--Other Financing Sources Used by Redevelopment Agencies 71 Redevelopment Activity to Date Is Economically Feasible and Financially Sound 74 PA E The Fiscal Impact of Redevelopment and Tax Increment Financing on Counties Has Increased. This Area Should Be Monitored on a Continuing Basis and Additional Safeguards Should Be Provided to Assure That the Cumulative Impact of Redevelopment and Tax Increment Financing Results in an Effective Balance Between the Need for County Operating Revenue and the Long-term Economic Development and Revitali- zation Goals of Cities and Counties Generally. 77 Exhibit N--Frozen Assessed Value as a Percent of Total Assessed Value by County 1983-84 79 Exhibit O--Percentage County's Share of Tax Increment Revenue Is of Total Property Tax Revenue 82 Redevelopment Does Not Represent a Significant Cost to the State, and the Possibility of State Liability for Indebtedness Is Remote 85 Additional Changes in the Redevelopment Process and the Provision of Additional Financing Authority May Be Appropriate. However, While Continued Monitoring Is Important, Regulation of the Redevelopment Process Is Neither Necessary nor Warranted.