Manteca’s Redevelopment Agency has $458 million in debt California taxpayers will be on the hook for if Gov. Jerry Brown achieves his ultimate goal of putting redevelopment agencies out of business.
It includes $255 million in pass through payments to various taxing entities in the area including the Manteca Unified School District and San Joaquin County that the Manteca RDA is under obligation to honor over the next 20 plus years.
The next biggest chunk is almost $138 million in bond payments for money the RDA borrowed. The single biggest project bond proceeds were used for was the $30 million Big League Dreams sports complex. State law required RDAs to go into debt in order to exist. They money borrowed is paid back from future property tax revenue.
Should the Manteca RDA go out of business at some point down the road in response to future commandeering of RDA funds, the $458 million debt would become a state obligation. The state is under obligation, if that happens to cover the debt payments first and foremost. After that the next priority is pass-through payments to other taxing entities and then agency operational costs.
Manteca RDA, though, will continue to operate for the time being.
The Manteca RDA is among the most conservative managed in the state. The Manteca RDA collects $15.6 million a year in taxes. Some $3.1 million is set aside for state-mandated affordable housing while $8.5 million is dedicated to debt service. That leaves $4 million that goes into projects and operations.
The Manteca RDA had a balance of $76.7 million in borrowed funds as of July 1, 2010. That money is committed to numerous projects ranging from interchanges to community improvements. That amount has since been whittled down due to payments the state has demanded and other projects. The balance for the fiscal year that ended June 30, 2011 will be reflected in a final city budget for the current fiscal year expected to be adopted next month. The balance is anticipated to be less than $60 million.
Manteca is preparing to comply with a directive from the California Legislature to pony up redevelopment agency money while at the same time they have joined a lawsuit to stop Sacramento from taking the money.
What is at stake is $5.8 million this year in RDA funds and $1.2 million annually in future years. That is Manteca’s share of the California budget deal that requires RDAs statewide to fork over $1.7 billion this year to balance the state budget. In future years, the agencies will have to send $400 million a year to Sacramento.
It is money the city has used in the past to help make it possible to turn the shuttered Spreckels Sugar plant into a teeming business park that attracted $250 million in private sector investment using an outright $1 million RDA investment and an $8 million RDA loan that has since been repaid. It is the same money that built the BLD sports complex, put in infrastructure to make the Stadium Retail Center possible and has provided hundreds upon hundreds Manteca residents with affordable housing opportunities whether it is subsidized low-income housing for seniors and families or grants to help low-income senior homeowners to make health and safety improvements to their houses.
The California Supreme Court has agreed to hear a lawsuit filed by the League of California Cities and California Redevelopment Association questioning the constitutionality of the state’s move against RDAs. Manteca is a member of both groups. The City Council has gone on record supporting the legal action.
A court ruling is expected by year’s end.