Manteca may still use $43.6 million in development bond proceeds to help fund transportation projects along the 120 Bypass.
The projects and their price tags are $32.5 million for the Union Road interchange, $29.5 million for McKinley Avenue, $25 million for Airport Way interchange, and $3 million to extend Daniels Street to McKinley Avenue. City leaders believe two or three of the projects could be completed with the RDA funds when combined with other money collected from growth to pay for road improvements.
Legislation passed in the aftermath of the California Supreme Court ruling approving Gov. Jerry Brown’s decision to pull the plug on redevelopment agencies and divert money to help offset perennial overspending by the state allows unspent bond proceeds committed to specific type of projects to be retained and spent by local government.
The City Council, though, has no plans on spending the $43.6 million until the state has sorted through a series of challenges of which the latest is a lawsuit by bond insurance underwriters that contend what the governor did is illegal as bonds were sold and taxes were imposed for a specific purpose of which covering state spending wasn’t one of them.
The City Council on Tuesday is being asked to transfer $10.8 million of RDA tax reserves that had been moved to the general fund back to the successor agency.
Successor agencies were established to oversee the paying off of RDA debt and completing projects already in progress.
The money is being transferred to make sure that the Manteca successor agency has enough funds to pay bond debt and keep projects in progress moving forward.
The city originally had transferred $14 million in RDA tax collection reserves to the city accounts to cover transportation projects. Some $4 million was previously transferred to the successor agency to provide adequate fund to cover bond debt. The balance is now being transferred based on a recalculation of property taxes by San Joaquin County.
Tuesday’s expected action will mean the only RDA money left for transportation projects are unspent bond proceeds.
Manteca’s Redevelopment Agency’s $458 million in debt will be covered first by RDA taxes that are being passed on various properties within the city before the state can take the rest to cover its general fund shortfalls. 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 onto debt in order to exist. They money borrowed is paid back from future property tax revenue.
The Manteca RDA was among the most conservative managed in the state. The Manteca RDA collected $15.6 million a year in taxes. Some $3.1 million was set aside for state-mandated affordable housing while $8.5 million was dedicated to debt service. That left $4 million that goes into projects and operations.
RDA tax increment imposed to invest in everything from job creating projects, infrastructure and fighting blight to affordable housing is now going instead to Sacramento to cover assesed budget gaps.
The bottom line is that 49 cents on every $1 paid by Manteca property owners in RDA taxes over the next 30 years will now finance balancing the state budget with no local benefits derived from the property taxes collected.