Connect with CP&DR

facebook twitter

Follow us on Facebook and Twitter

Subscribe to our Free Weekly Enewsletter

Controller Issues Stern Criticism of Redevelopment Agencies

Throughout the now eight-week battle over the fate of redevelopment, both sides have issued claims about the efficacy -- or lack thereof -- of redevelopment but have relied on scant data to do so. Today the empirical analysis of redevelopment has, according to the office of State Controller John Chiang, become quite a bit clearer. 

Five weeks ago Chiang initiated a limited-scope review of redevelopment and today released findings that are highly critical of redevelopment. Among other criticisms, the findings directly contradict claims that redevelopment is responsible for the creation of hundreds of thousands of jobs -- because, according to the report, agencies have done little, or nothing, to track job creation. 

Based on a review of 18 agencies statewide, the controller found no reliable means to measure the impact of redevelopment activity on job growth because RDAs either do not track them or their methodologies lack uniformity and are often arbitrary such that "virtually any condition could be construed to be blight." The review also found that agencies interpret "blight" loosely enough that their standards lack uniformity and therefore cannot be compared to each other. The report noted that in some cities, golf courses and luxury homes are located in redevelopment project areas. 

The report suggests that these discrepancies make it difficult for the state to hold RDA's accountable for the funds they receive and spend. It found other troubling oversights, such as missed payments to school districts and sloppy bookkeeping, including auditing violations. 

The 40-page report (.pdf) has been submitted to Gov. Jerry Brown as well as leaders in the Senate and Assembly. 

"For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayer's are receiving optimal return for each invested dollar," said Chiang in a statement. "Locally-controlled economic development is vital to California's long-term prosperity. However, the existing approach born in the 1940's is not how anyone concerned with performance, efficiency, and accountability would draw it up today." 

The 18 selected agencies represent 16 percent of all redevelopment dollars in fiscal year 2009-10.  Auditors from the Controller's office conducted the review by interviewing redevelopment staff and analyzing financial statements, reports, plans, budget documents, ledgers, job creation data, and payroll records.

The report is a potentially damning rebuttal to the claim, circulated by the California Redevelopment Association and repeated by many supporters and local agencies, that redevelopment contributes to over 300,000 jobs in California. According to the report, only 10 of the 18 agencies studied even attempted to track job creation, and of those 10, some methodologies were inconsistent and opaque. 

"The lack of accountability and transparency is a breeding ground for waste, abuse, and impropriety," said Chiang in a statement.  "In whatever form local redevelopment takes in the future, the level of oversight and openness must be consistent with the amount of public dollars entrusted to their care." 

The report does note, however, that all 18 agencies contributed appropriate funds to their low- and moderate-income housing funds. Redevelopment agencies have come under fire recently for neglecting to make these payments, which are required by law. 

Editor's Note: CP&DR will convey the response of the CRA and others when available. 

--Josh Stephens
Job Announcements
Search this site

NEW E-EDITION JUST PUBLISHED: