Grover Beach fights to keep agency

The Grover Beach City Council wants to keep its redevelopment agency, even if it has to pay $380,000 to do so.

The council directed staff this week to draft new rules so the Grover Beach Improvement Agency could comply with changes in two budget bills approved in June by the state Legislature to eliminate the state’s 400 redevelopment agencies by Oct. 1.

One of the bills allows local governments to continue their agencies if they pay a share of property taxes that will be passed on to schools and special districts, according to Grover Beach City Manager Bob Perrault.

Gov. Jerry Brown has been pushing since January to eliminate the agencies as part of his budget proposal, saying their funds should be spent on core government services.

Some critics have accused the agencies of acting as development slush funds; advocates say they help create jobs and economic growth in their areas.

The redevelopment bills would require each agency to pay a share of an estimated $1.7 billion and a proportional slice of $400 million a year thereafter, according to The Associated Press.

For Grover Beach, that amounts to about $380,000 this fiscal year, and an ongoing annual payment of about $88,000, Perrault said.

The larger North County cities are facing an even larger payment, should they decide to retain their agencies. Paso Robles’ one-time payment amounts to $1.7 million, said City Manager Jim App. The council could consider the issue in August or September.

The Atascadero City Council will discuss it Aug. 9. The city’s “ransom” would be about $1.5 million this fiscal year and $400,000 per year after that, said Assistant City Manager Jim Lewis.

City officials are also tracking a lawsuit filed Monday against the state by the League of California Cities, the California Redevelopment Association and two Bay Area cities.

They are asking the California Supreme Court to rule by Aug. 15 on whether to halt enforcement of the redevelopment changes, The Associated Press reported Monday.

In addition, the state’s plan temporarily halted Grover Beach’s attempt to issue about $3.4 million worth of bonds, Perrault said.

The money would be used to pay about $1.7 million in outstanding loans the improvement agency owes city water, sewer and general funds; the rest would go toward additional projects.