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Spend it before San Diego schools can!
Civic San Diego has until December to find a use for $28M
One good thing about the dissolution of redevelopment tax in San Diego: tens of millions of dollars seemingly appear out of thin air.
The most recent pot of redevelopment gold was discussed at an August 3 city-council meeting. During the meeting, chief accountant for Civic San Diego, Wanda Nations, informed councilmembers that there was approximately $28.2 million in unspent bond proceeds. With the council's permission, the money can pay for capital improvement projects, including infrastructure. That's good news, considering the city's infrastructure backlog is estimated at over $1 billion.
However, there is a downside to money being appropriated for purposes not originally intended: if the former redevelopment agency (known as the Successor Agency) and its administrator, Civic San Diego, doesn't identify a use for the money soon, then the money disappears and is diverted back to the County of San Diego to distribute to schools and other taxing entities.
Although word of the $28.2 million is somewhat recent, the cash has been accruing since the 1990s: it was rediscovered during audits by the Department of Finance.
In June 2014, a total of $60.7 million in excess bond revenues was found and transferred to the City of San Diego. Civic San Diego has since whittled that amount down to $28.2 million.
One problem remains: the $28.2 million is not enough to pay for a specific project on the city's current redevelopment spending plan. If the money is not allocated before the next review by the Department of Finance in December, then the money will disappear permanently.
According to the staff report from Wanda Nations, of the remaining $28.2 million, 87 percent is tax-exempt, which means the Successor Agency can spend it on general uses, including streets and sidewalks, as long as it stays in the area where the bonds were originally issued.
For example, nearly $12 million of the $28.2 million can be spent downtown, in what was formerly called the Centre City Project Area. But in order for that money to be used there needs to be a certain project, or projects, that the $11.8 million can pay for directly. If not, the money vanishes.
The threat of losing the money didn't sit well with councilmember David Alvarez.
"It is really disappointing that we have 28 million in bond proceeds available to various communities in the city and hundreds of millions in infrastructure projects and all this action [does is] essentially grant Civic San Diego and the Successor Agency the authority to give this money back,” Alvarez said during council comment on August 3.
The District Eight councilmember accused Civic San Diego of sitting on this for far too long.
"I requested back in May that we bring this forward to budget committee for further discussion. We have so many projects on this list that are in dire need of money and we haven't figured out what to do with this. We should have been planning ahead to use this money and now we are at risk that if we don't use it we are going to lose it. "
Alvarez also questioned Civic San Diego's interpretation that the money needs to go directly to the project area where the bond was originally issued. Alvarez conceded that the money must benefit the area but limits it at that.
At the meeting, councilmembers, with the exception of Alvarez, granted Civic San Diego the authority to try and use the money before the deadline. The clock is now ticking to find ways to spend it.
Here's something you might be interested in.
Spend it before San Diego schools can!
Civic San Diego has until December to find a use for $28M
Spend it before San Diego schools can!
Civic San Diego has until December to find a use for $28M
One good thing about the dissolution of redevelopment tax in San Diego: tens of millions of dollars seemingly appear out of thin air.
The most recent pot of redevelopment gold was discussed at an August 3 city-council meeting. During the meeting, chief accountant for Civic San Diego, Wanda Nations, informed councilmembers that there was approximately $28.2 million in unspent bond proceeds. With the council's permission, the money can pay for capital improvement projects, including infrastructure. That's good news, considering the city's infrastructure backlog is estimated at over $1 billion.
However, there is a downside to money being appropriated for purposes not originally intended: if the former redevelopment agency (known as the Successor Agency) and its administrator, Civic San Diego, doesn't identify a use for the money soon, then the money disappears and is diverted back to the County of San Diego to distribute to schools and other taxing entities.
Although word of the $28.2 million is somewhat recent, the cash has been accruing since the 1990s: it was rediscovered during audits by the Department of Finance.
In June 2014, a total of $60.7 million in excess bond revenues was found and transferred to the City of San Diego. Civic San Diego has since whittled that amount down to $28.2 million.
One problem remains: the $28.2 million is not enough to pay for a specific project on the city's current redevelopment spending plan. If the money is not allocated before the next review by the Department of Finance in December, then the money will disappear permanently.
According to the staff report from Wanda Nations, of the remaining $28.2 million, 87 percent is tax-exempt, which means the Successor Agency can spend it on general uses, including streets and sidewalks, as long as it stays in the area where the bonds were originally issued.
For example, nearly $12 million of the $28.2 million can be spent downtown, in what was formerly called the Centre City Project Area. But in order for that money to be used there needs to be a certain project, or projects, that the $11.8 million can pay for directly. If not, the money vanishes.
The threat of losing the money didn't sit well with councilmember David Alvarez.
"It is really disappointing that we have 28 million in bond proceeds available to various communities in the city and hundreds of millions in infrastructure projects and all this action [does is] essentially grant Civic San Diego and the Successor Agency the authority to give this money back,” Alvarez said during council comment on August 3.
The District Eight councilmember accused Civic San Diego of sitting on this for far too long.
"I requested back in May that we bring this forward to budget committee for further discussion. We have so many projects on this list that are in dire need of money and we haven't figured out what to do with this. We should have been planning ahead to use this money and now we are at risk that if we don't use it we are going to lose it. "
Alvarez also questioned Civic San Diego's interpretation that the money needs to go directly to the project area where the bond was originally issued. Alvarez conceded that the money must benefit the area but limits it at that.
At the meeting, councilmembers, with the exception of Alvarez, granted Civic San Diego the authority to try and use the money before the deadline. The clock is now ticking to find ways to spend it.
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