City, state duke it out for RDA funds

The city of Tehachapi's 2013-2014 mid-year budget adjustment, showing an anticipated fund balance change of negative $1.7 million, graphically illustrates the down-and-dirty battle between the city and the state of California over Redevelopment Agency (RDA) funds.

The RDA program – which enabled Tehachapi to carry out acclaimed projects like the Centennial Plaza (and enabled less conscientious cities to rip off the program, which contributed to its demise) – no longer exists, but the city and state are scrapping over money that the state required the city to transfer from its General Fund to the Tehachapi Redevelopment Successor Agency.

The money has not been lost to the city, City Manager Greg Garrett said at the April 7, 2014 City Council meeting, held in Wells Education Center, during Finance Director Hannah Chung's mid-year report.

"We saved this money with our blood, sweat and tears," Garrett said.

State auditors were due to show up the next day, however, to skirmish for the funds.

"The state auditors continue to create rules and regulations as they go," Garrett said. "They will be three days in the conference room. We will fight to keep the money."

Mayor Phil Smith called the state's eradication of the RDA program "a typical state raid to balance their budget."

"When this issue was passed, they didn't know what they were doing," City Councilman Ed Grimes said.

Garrett said the overall health of the city budget is "A-plus, excellent."

The six-month budget tune-up shows that the city has been hit with variables, "but none of these numbers are scary. They are firm numbers. We don't want more going out than coming in. The General Fund is the bank for Tehachapi. At the end of the day, we have $2.8 million in hard cash in the bank and the mandated $800,000 for emergency funds.

"Your team keeps a keen eye on things," Garrett said. "We don't like spikes. We like growing in a nice arc."

In response to a question from public speaker Charles White about millions that the city had set aside for low-income housing and other projects, Chung said, "After the state took the RDA, RDA no longer belongs to the city. The city is a managing organization.

"We have to report to the state what we'll be spending in six months. The city is just a middle man. We jump through hoops to use our money. We're dealing with it as best we can."

The state's rules for housing, Garrett said, have not been made yet.

"I wouldn't do it over again," Garrett said. "The Successor Agency is a pain."

Tehachapi is in good shape compared to some other cities.

The state of California is demanding $70 million from one medium-size city, Garrett said.

"We need to be conservative in everything we do."