At last night’s city council meeting, Culver City’s councilmen unanimously voted to “opt in” to the state’s “voluntary” payment plan to save the city’s Redevelopment Agency from dissolution.

On June 29, 2011, Governor Jerry Brown signed ABX1 26 and ABX1 27—two pieces of legislation with a profound impact on Culver City’s Redevelopment Agency. ABX1 26 immediately suspended the operations of and effectively dissolved all redevelopment agencies in the state. ABX1 27 allowed agencies whose legislative bodies (in Culver City’s case, the City Council) are willing to comply with "voluntary" payments to the State of California to be exempted from the elimination provisions in ABX1 26.

Councilman Andrew Weissman said at the council meeting that he believed the bills will be found to be unconstitutional. Indeed, the California Redevelopment Association and League of California Cities have indicated their intent to file lawsuits in either the State Appellate Court or the State Supreme Court to challenge them. However, pending action by a court declaring the contrary, the bills are now law.

To protect the options of the City and Redevelopment Agency, the City Council agreed to follow the advice of the General Counsel to the City Council and “opt-in” to the voluntary payments to the state and participate in the “alternative voluntary redevelopment program.” 

Councilman Jeffrey Cooper summed up the spirit of the council when he said, "The State will have you believe that the elimination of the Redevelopment Agency is a way to balance the budget. The question is: at what cost. The State will point out that Redevelopment Agencies in cities throughout the state have squandered this tax increment. Well, Culver City is not one of those cities. We view that money as a way to enhance, enrich, and provide positive growth for our residents. Therefore, I support the General Counsel's recommendation."

As part of the opt-in option, Culver City will make a payment to the State of California of about $12.1 million in fiscal year 2011-2012 and $3 million in payments in subsequent years. To make the $12.1 million payment, Culver City is permitted by  ABX1 27 to use the 20 percent of its tax increment income it is normally required to set aside for low- and middle-income housing -- which amounts to $7.6 million this fiscal year.  The agency will use additional unencumbered tax increment proceeds to fund the remaining portion of the initial payment and subsequent payments.

Even with this $7.6 allocation, the agency will still be able to carry out its current programming and its affordable housing projects, including those on Globe Ave., Irving Pl., and Tilden Terrace. (Although it may have to defer future affordable housing projects). 

The Opt-In Payment will be made under protest with a full reservation of rights of the city.