Chiang Challenges Oakland RDA Transfers

The California Controller's office found in a review that approximately $170 million in properties and cash were inappropriately transferred from Oakland, Calif.'s now dissolved redevelopment agency.

Controller John Chiang's office has been conducting reviews of asset transfers of each of the state's dissolved redevelopment agencies as they go through the wind-down process following the shutdown of redevelopment in early 2012.

In the review of the transfers made by the City of Oakland Redevelopment Agency, the controller found that more than $341 million in unallowable transfers out of the RDA to the city government.

Oakland had contacted the successor agency and received retroactive approval for $171.8 million of the transfers. The remaining $170 million must be remitted to the successor agency, the controller's office said.

"With the concurrence of the courts, state lawmakers have redirected these funds to be spent on schools, public safety and other local public services," Chiang said in a statement. "With Oakland's cooperation, we will make sure that the assets of its now-closed redevelopment agency are used to retire appropriate local debt and begin funding critical services throughout Alameda County."

Oakland officials said they are planning to make all the required transfers and have already made most of them.

They also said the controller's order will have little practical impact on the city.

"The bottom line is there are no new developments or surprised today," City Administrator Deanna Santana said in a statement. "We have planned and prepared through a transparent process, and there will be no impact to the city's budget or to the services we provide."

About $41.5 million that the city will return to the successor agency is bond proceeds that the agency will keep and use on existing or new projects.

The controller's review is mandated by legislation that dissolved all redevelopment agencies in California by February 2012 and created "successor agencies" to pay off any RDA-related debts.

The successor agencies, which are governed by a locally appointed oversight board, are in charge of servicing the former agencies' debt.

So far, the controller has completed 68 RDA asset reviews.

The state expects that the RDA dissolution will result in an additional $1.4 billion to counties, $1.1 billion to cities, and more than $500 million to special districts over the next two years.

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