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Yucca Valley, Ca.- According to the Press Enterprise analysis of Redevelopment Agency data filed with the State Controller’s Office, the Town of Yucca Valley has racked up over One Hundred Million Dollars, $101,080.492.00! Is our town worth that much? I used to recall ex-Councilman Chad Mayes quoting a specific dollar amount of the worth of this little town but for the life of me, I do not remember the figure. He always brought it up when the Council was addressing the high costs of our lacking infrastructure stating it exceeded the value of the town.
While this may seem overwhelming for us wee little folks of Yucca Valley, population 20,700 with the average income of $32,000, it is just a smidgen of red ink compared to the City of Fontana with their RDA debt surpassing TWO BILLION DOLLARS! $2,664,951,323.00, according to the Press Enterprise analysis.
Fortunately for the Yucca Valley Town Manager, Mark Nuaimi, who was their past Mayor for several years, he has flown the Fontana coop and left the present Mayor of Fontana holding the RDA bag. While Nuaimi was Mayor of Fontana, he performed his “RDA Magic” to become one of the top agencies with the largest debt in the state and he was sure to maximize every dollar.
“Inland Southern California agencies have some of the largest debts in the state. For every $1 in revenue Fontana’s redevelopment agency collected in 2009-10, for example, it had about $25 of total indebtedness. That compared with a statewide average of about $1 for every $18 of total indebtedness.”-The Press Enterprise, Redevelopment: Court Decision only First Step.
“The recent ruling to shut down all RDA’s states auditors and oversight boards will decide how much of the agencies’ property-tax revenue should go to paying off debt and how much should be redirected to schools and local governments.”
The article further stated:
“Some agencies went on a borrowing binge last year to get projects on the books before Brown could carry out his plan to phase out redevelopment. The law dissolving the agencies, AB 1X26, gives the power to challenge those transactions.”
The Town of Yucca Valley will move to appoint themselves as the Successor Agency and more than likely hand over all the decisions to Nuaimi as the designated “Executive Director” or some other fancy title. The Yucca Valley Town Council will simply bob their heads in unison as the “Go Along-Get Along Sky Harbor Five.” Always receiving their weekly “update” on the town’s projects by Nuaimi, there is little transparency to discuss these matters openly in a study session to hear the opinions and input of the elected Council members. I guess their input isn’t needed as Nuaimi calls all the shots.
This is a lame Town Council that forget they are to supposed to represent the voters, elected or appointed, and should be engaged on these matters. There are TWO members that are skating along and NOT reading the agendas. What sorry Sad Sacks they have turned out to be having no clue as to what is going on.
Yucca Valley must have angels watching over us because we have been spared going into deeper debt because the “RDA Magic” was stopped in it’s tracks. I have constantly voiced my concerns and criticism about the CORE Senior Housing fiasco that not only used up all our RDA funds but will probably obligate our town to back-fill out of the General Fund. Promises by Nuaimi of future RDA revenues to full-fill this obligation has him looking like his face is splattered with egg.
Expect Nuaimi to work hard to pass an initiative to add 1% sales tax to bail out of these Yucca jams and to provide income to maintain a new proposed Youth Sports Park with projected maintenance costs of $200,000 up or more, per year.
Boy, that’s what we need right now with the high cost of water, mandated sewers and poor economic climate…..more grass soccer fields.
Where are our priorities?
Yucca Valley redevelopment_agency_EOPS
PE Court decision just the first step
Some interesting articles from the Hi-Desert Star:
While I appreciate the Press Enterprise author’s article, the way it is portrayed in this blogging is simply wrong. The newspaper is reporting from a document called the “Statement of Indebtedness” that accounts for ALL the tax increment generated in a Redevelopment Project Area over the LIFE of the project area. It is not the amount of DEBT for the project area.
In the case of Yucca Valley, this $100 million includes all the property taxes paid in the project area over the life of the area — of which over $50 million goes to other agencies (school district, HDWD, CMC, Mohave Water Agency, SB County, Fire District). This number includes all the FUTURE taxes that would have been collected by the RDA if it hadn’t been eliminated.
A better way to explain this is that when the RDA was formed, the agency negotiated “pass-thru” agreements with each of the taxing authorities. Each of those pass-thru agreements is considered an “indebtedness” or obligation of the agency. So while the $$ flow to schools, fire, HDWD, and other government agencies, they flow THROUGH the RDA and get accounted against it.
In addition to these $50 million, there is another $26 million that is low/mod set-aside (20% of all tax increment) projected to be generated during the lifetime of the project area. By the way, the lifetime of the project area was supposed to be for the next 20 years +/-.
As for our actual RDA debt, I don’t have the exact figures in front of me but the Agency has a little over $10 million in outstanding RDA bonds, of which $5 million in bond proceeds remain. Over the lifetime of the debt service payments for these bonds, they amount to slightly over $20 million of the $100 million of indebtedness.
Hope this helps explain a VERY CONFUSING subject matter … clearly something that can’t be reported accurately in a newspaper article or a blog.
well if not in the newspaper or a blog,where can it be accurately reported?
Well according to the YV EOPS now attached to this article.. the actual total “Outstanding Debt Obligations” on August 23, 2011 was $105,896,818.00.
It looks like $26,837,179.00 of that is for the RDA non housing side and expenses.
It looks like the Morongo School District gets all of $300 Grand a year.
I got to tell you Mark, I do not see the MUSD settling for only $300,000 a year out of that tax increment and in fact expect them to go for the lions share. The only thing in your favor is those Bonds were passed during the 2008 Fiscal year and not as 29 palms, floated after they were told not to, those bonds can and most probably will be challenged.
I think you all are pretty safe in having the increment pay off your Bonds. But 29 is in deep shit. As for future of the RDA… I think you have a better chance of kissing Margo’s pig.
Dan, that $300,000+ is the CURRENT pass-thru that MUSD already receives from our RDA. When the agency was formed, they negotiated a pass-thru agreement that began at 45% of their normal property tax share and has since increased to (I believe) 65% of their normal property tax.
When the Agency is dissolved, residual taxes will be passed down to ALL taxing entities on the typical (non-RDA) basis… there won’t be any single agency going after “the lions share”… also, anything that MUSD receives will simply reduce the amount that the state backfills to get them to their Prop 98 levels. So I don’t believe that local districts will see a windfall of new money.
As for the future of RDA, while I’m not a betting man, I do believe that some form of RDA will be re-established to promote “sustainable communities” development and affordable housing. Whether that comes out of future taxes or allows agencies to spend their current balances, I do believe there is adequate pressure at the state from legislators on both sides of the aisle to make some move.
I’m thinking you might give that AB1x 26 another read. The Oversight Boards will have far more power to divvy the spoils than you are giving them credit. The power is in the Oversight Boards. The Successor Agencies are nothing but holding agencies…. decisions will be made by the oversight boards and Successor agencies will do as they are directed by the oversight board.
I agree the back fill of money to the schools of Prop 98 will stop. It will be made up from the tax increment. That is Far More and I mean Far Far more than the $300,000 a year that your RDA has been pitching in. I would think it would be reasonable to think as much as half maybe more, of your tax increment will go to the schools, both MUSD and CMC.
Then you have to think of the other small taxing agencies that have been heretofore denied their share of those tax dollars, cemetery boards, special districts of all sorts and sizes, and even some water agencies who have the ability to fund from property tax. They are going to be wanting what they think is a fair share.
Lets not forget about the County they are going to want their piece of the pie.
I see most all of that increment, other than the covering of your 2008 Bond, going bye bye.
As for the pressure to reinstate the RDAs… there is a huge amount of pressure to keep them closed. With the way that the Cities and the league acted with such Hubris and contempt for the Legislature, Governor and the People themselves, you might find that its going to be harder to pass that bill than you think.
Lets face it… Cities were so much out of the loop with their own citizens, the Legislature and the Court they did not see the writing on the wall.
To be honest local politicians need to do a whole lot of fence mending before the Governor is going to sign any kind of bill to open that festered wound again.
Hi Mark,
I am so glad that you are here and providing information.
I am at a loss as to what will happen if the various parties that have a vested interest “challenge” encumbrances that were made clearly in an attempt to thwart the legislature.
Yucca Valley did not encumber new debts in 2011 in the RDA. But why did 29 Palms put itself into a debt Bond situation when it had never, ever, ever, done so before? I realize you can not answer that question.
But what happens now with my city in light of the Supreme Court decision. Do we go bankrupt? Do we default on the Bonds? Does MUSD and the others challenge the debt of the bonds? If they do challenge what does that mean for our city?
Sorry to ask you all these questions but there is no information coming out of the 29 Palms City Hall. Not that you can speak for them but you are a City Manager and have more information than most of us have – help!
You gotta give Mark N. credit (and I do) for his input. There is NO information coming out of 29, even though it’s one of the biggest story in town history.
Something is very wrong with City Hall. Something that goes beyond hubris and haughtiness, something that outstretches the practice of ignorance and incompetence, when residents and property owners treated as mere subjects — in a Kingdom of five very stubborn men and General Richard.
29 is not a democratic city. It’s under siege.
Dan, Steve, Ben, I don’t remember seeing you at the last city council meeting to express your concerns in a democratic forum.
Well thank you Larry for sharing.
We did not attend because it would have been like gloating. Your side has been so totally humiliated by your complete lack of planning for the worst case scenario. It would have been considered poor taste by most people, to set in the audience, forcing the Council to face those who told them not to do what they did and having the Court agree with them. That would be too, too cruel even for me.
And besides, when has a “democratic forum” been successful at stopping Munoz and a overbearing staff, from bamboozling any 29 Palms Council, ever?
Maybe if there would have been word that those promoting this fiasco would be crawling on shards of glass from Four Corners to City Hall in penance, I might have attended. But just to face to face rub it in… I already did at the Planning Commission with Staff.
PS they bet on the Come and threw:
Larry, generally when community people do express their concerns — if they aren’t insiders or patronizing the council — council members are unresponsive, unconcerned and sometime discourteous. The democratic forum is necessary but it’s also necessary to have a council that’s not elitist or paranoid.
They’re not talking, explaining or listening to much of anything. They haven’t listened one iota!
@Dan, the Oversight Boards role is to dispose of the assets of the RDA and retire the outstanding debt as soon as possible. They are not deciding what happens to the property taxes (former tax increment that is now “surplus”). Those funds go to the County Auditor/Controller to be distributed to the various taxing entities. They will be responsible for reviewing / approving the “Obligation Schedules” that take the current tax increment and allocate it to agency obligations (bond payments, agreements, judgments, etc.).
Regarding those Special Districts, in the case of the Town Agency, many of our special districts already receive their full tax increment. For example, HDWD receives 100% of their property tax… when the agency was formed, they did not give up any of their increment. Many of our special districts receive all of their taxes already. So the big “winners” here will likely be the state (reduced Prop 98 backfill to MUSD), County, fire district, and Town General Fund.
By the way, going back to the inaccuracies of the original blog here, I do wish you would edit it to be remotely accurate or post it as a Commentary. Frankly this has nothing to do with a potential sales tax measure or any of the other assertions included in the blog “article”.
Prop 98 is a constitutional provision and will still be in effect if the tax increment is unable to reach the total $5K per student Constitutional Mandate. So if the Schools get enough of the Tax increment they will indeed preclude prop 98 funding. But most of us know that and I’m wondering what is your point in bringing it up?
Regarding special districts… Your opinion while valued here, hinges upon how the State and County Controllers interpret AB1x 26, and how the individual members of the Oversight Board’s legal councils wish to proceed. Are you willing to bet the city coffer on special districts NOT getting additional funding from the tax increment? I think you might be hoping beyond hope.
A tax is a tax is a tax….. what was lost in losing the RDA tax increment might well be put up for vote as a sales tax or another bond issue. Those options are fair game for discussion.
@Dan… My point is that since many of the special districts already receive their tax increment there is actually less TI being used by the RDA in Yucca Valley than folks might assume. Therefore there is less benefit to the taxing authorities with the elimination of RDA than other agencies where a vast majority of TI was diverted for redevelopment purposes.
I’ll buy that…
Real quick you said, “Therefore there is less benefit to the taxing authorities with the elimination of RDA than other agencies where a vast majority of TI was diverted for redevelopment purposes.”
If you did not use the Tax increment for Redevelopment (ie Blight mitigation and low income housing) what did you guys use the money for???
I think this is one of those areas where people have a problem with the RDA scheme as it was. Too much of a chance of diverting funds that served no other purpose but to prop up unrelated burden of government.
If the vast majority as you say was not spent on redevelopment one could surmise that it was misspent or at least not spent on Blight Mitigation or low income housing.
Any money the agency kept was used for RDA purposes. What I’m saying here is that not all of the money that came to RDA remained in RDA because it was “passed-thru” to other taxing entities. So since we had a number of agreements that passed through much of the entitled property tax (increment), our local agencies may not realize much difference after implementation of AB 26.
Again I go back to my first comment… Not a simple issue to decipher in news reports or blogs.
Actually it is getting clearer as we go on for those that can keep up. I think you are doing a fine job at explaining the pro RDA side of the issue.
If I am not mistaken from reading the EOPS (and this is rough calculations) The Town of Yucca Valley says it brings in $8,475,863.00 in the tax increment. of that they passed thru on page 2 a total pass thru of $939,000 to the receiving agencies like schools and fire department. Less than a Million Dollars.
That leaves $7 million a year we are talking about. Less the $735,703.00 to repay the bond that leaves $6.3+/- million a year in residual revenue to divvy up.
$6 Million a year in this neighborhood is worth fighting for.
Now how are my numbers messed up?…. Either the EOPS is wrong and it was knowingly filed with the state in error or it is right and that is the numbers we are working with.
Is there a page three on that puppy?
The EOPS includes both annual tax increment AND bond proceeds/20% set aside money from prior years. The numbers for FY 11/12 are as follows:
Revenues:
Tax Increment: $2,175,000
Major “Uses”:
Debt Service: $736,000
Pass Thrus: $683,000
Low Mod: $435,000
ok…… Where are those numbers on the EOPS? I must have misread.
What Line Item is that?
In an article entitled “Town to lose redevelopment agency”, the local STAR provided this information (top left):
Established in 1993, the Yucca Valley Redevelopment Agency typically receives $2 million to $3 million each year from the tax increment funding and by selling bonds. The agency’s obligations and outstanding debt through today is $8 million. Total obligations and debt is $105 million.
Dan, Looks like the Town Manager knows something you don’t know. Any comments?
I imagine Mark knows a lot of things I am not aware of. Whats your point Larry?
You may be wrong.
Huh? Sure I may be wrong…. and you might be wrong and Mark Nuaimi might be wrong and Cora might be wrong and Warne might be wrong. So what is your point? What do you figure Larry… are we all to just roll over and accept say… your interpretation of fact as gospel? Is that it?
I think the interaction between us all is far more enlightening on the subject than accepting the Party line or what the Government tells you. That sir is what makes us different than the poor bastards in Burma or Venezuela. We can speak out. We can express differing viewpoints. Thank God we still have that right left!!
Dan one mans terrorist is another s freedom fighter, we now have some of the same ills as Venezuela with the passage and signing of the 2012 NDAA.
” When President Obama signed into law the National Defense Authorization Act on New Year’s Eve, he codified policies of arbitrary and indefinite detention for terror suspects including possibly U.S. citizens. Alexander Hamilton referred to such policies as the “favorite and most formidable instruments of tyranny.” Based on our experience in evaluating and caring for victims of torture and human rights abuses from all over the world, Hamilton was right.
Regardless of the law’s applicability to U.S. citizens, indefinite detention in a military facility without charge can be tantamount to torture, causing profound health consequences”
.http://www.oregonlive.com/opinion/index.ssf/2012/01/rights_now_indefinite_new_defe.html
Thanks for that info Cliff Clavin. And what, if any, does that have to do with the discussion about RDA??
Sure upton I can help u with that, when blogging often times the progression of a tread leaves a opening such as the post before mine that said
“That sir is what makes us different than the poor bastards in Burma or Venezuela. We can speak out. We can express differing viewpoints. Thank God we still have that right left!!”
Now that kind of statement makes many think therefore my post, some might not think as I and will digress into sitcoms for come backs, it is all about blogging. Hope that helps
You said,
“Now that kind of statement makes many think therefore my post, some might not think as I and will digress into sitcoms for come backs, it is all about blogging.”
Ah ok….what????
Are you talking about your Party line?
I was speaking in the metaphoric sense as in Orwell’s 1984 or Clock Work Orange. What do you mean by that Larry?