Redevelopment Agencies are referred to as RDAs. The RDA is created by cities and counties to handle the process of changing some parts of their communities that they don't like. The job of the agency is to investigate these problem areas and create plans to improve them based on the needs of the city or county. In Riverside County, the Economic Development Agency (EDA) is in charge of the Redevelopment Division--a variation on the name. The RDA has total decision-making authority over the Redevelopment Project, with the blessing of the Riverside County Board of Supervisors. This process is automatic, and the local citizens are asked for input, but they don't have any voting authority or actual control over any aspect of the RDA project.
Bonded Indebtedness is a term for the debt that taxpayers owe when their local government sells bonds to investors who are willing to loan money to the RDA based on the promise of a guaranteed return, with interest, on their investments. Traditionally, bonds must be approved by a vote of the citizens who will be required to pay them off. BUT, RDAs have the authority to offer bonds without any approval process by the citizens within the RDA project area. At this time, the Board of Directors has not put a number on the maximum bonded indebtedness they will authorize for the RDA project in Meadowbrook, Goodhope, Warm Springs (The Grove), and South Mead Valley. It's interesting to note that the Board authorized $150 million of debt for the RDA project area of Sun City and Quail Valley. Redevelopment Area tax money is used to pay back the debt on these bonds--for the next 45 years.
Tax Increments is the term used when the RDA says they won't raise your taxes, but will get money from you through "tax increments" instead. So, how does THAT work? It's really simple. A tax increment is the difference between the amount of money you paid in taxes from one year to the next.
Based on your last property assessment you currently pay $500 a year in property taxes. This amount is used as the "base" tax amount when the RDA officially begins. It's called the base-year tax.
Under Prop. 13, our taxes can be raised by only 2% a year--to cover inflation so that your taxes don't stay too far below the normal value increases in your property.
So, next year your taxes will go up to $510. The $10 difference is your tax increment. Without an RDA, that $10 goes to the county. But, with an RDA, that $10 goes to the RDA instead of the county. This happens to every single tax increment dollar you pay for the next 45 years! The county still gets the $500 base-year tax you pay, but doesn't get any additional amount for the next 45 years. Imagine, how little you could do with your income if you never had a raise for 45 years in a row! With inflation, the county loses more and more buying power every year.
There is another way tax increments figure into the equation--through property reassessments. Under Prop 13, your property cannot be reassessed to increase your taxes, except under certain circumstances.
If there is a change, such as, you sell your house, put on an addition, or do something that gives the county the authority to reassess your property, the county assessor comes knocking on your door.
For example, you add a room to your home and your tax bill goes up from $500 to $600. That $100 difference is also a tax increment that goes to the RDA, not the county. The RDA gets the tax increments for all the properties within its project area for the next 45 years. The same happens if you sell your house. If you owned your home for several years, the buyer may have a much larger tax bill than you did, based on reassessment of the value of your property. The tax bill of $500 you paid may be $1500 for the new owner. This $1,000 difference is also a tax increment that goes to the RDA, not the county.
So, the RDA claims they don't raise your taxes, which is true because they have no authority to raise them, BUT they still get your tax dollar, just the same. The real loser in this process is the county which plods along for the next 45 years, with the $500 base-year taxes you were paying when the RDA was started. Almost every dollar beyond that goes to the RDA--for the life of the bonded indebtedness, which is 45 years. The county is still obligated to provide you with fire and police protection and schools and libraries, but gets no additional money to do so. The county's budget income now must rely on naturally occurring increases in sales taxes, gasoline taxes, etc., as commerce and businesses grow. BUT, in a declining economy, that's not likely to happen.
Blight is a term that can be applied to any property that the RDA wants to call "blighted." In other words, it can mean that the property is totally trashed, the house is falling down, there are all sorts of codes violations. OR, it can simply mean that an empty trash container isn't hidden behind a fence or barrier. In other words, "blight" is whatever the viewer decides it is. The state code doesn't put limits on how this label is applied to private property. County officials and Codes Enforcement personnel can label anything they don't like as BLIGHT!!! Even new buildings or landscaping.
Eminent Domain is used by the county to take over private property into public ownership. Originally, eminent domain was only used to put in roads or make dramatic changes needed for the well-being of the community. In recent years, the US Supreme Court has broadened the use of this tool so that counties and cities can confiscate private property and sell it to private developers who promise to improve the property to bring more revenue to the local government. The county will pay money for the land they take over, but the value of the property is determined by the county, not the land owner. This is the heart of complications on this issue--the value of the land. The county only must pay what they say the land is currently worth. The developer pays for the land based on what it will be worth, once the developer makes improvements. The county gets the difference. At this time, the Board of Supervisors is not allowing Eminent Domain in the area under this RDA proposal. However, this doesn't mean they won't change their minds and use this unpopular tool to accomplish their purpose in the future.
Family Relocation Funding is part of the RDA proposal. This is obvious--they have money set aside to help provide you with housing while they demolish your home and you are waiting for them to build "lower income housing" for you. State law requires that a certain percentage of new housing in an RDA area MUST be dedicated as "lower income housing" so it would be available for more people to purchase. If your property is located in an area that changes designation from rural residential to multi-residential--you gotta move! The county will pay you the price they decide is fair (no negotiation here), and help you to find another place to live when they take ownership of your property. By the way, their relocation of you and your family isn't required to be in Meadowbrook, or anywhere near here. Where will your children be going to school? Most likely, not at their current school.