Redevelopment: successor agencies: administrative cost allowance.
The proposal indicates a significant restructuring in the financial guidelines under which successor agencies operate, particularly in relation to funding for their administrative expenses. By establishing both a percentage-based calculation and a minimum threshold for funding, the bill intends to create stability for successor agencies in managing finances while winding down their obligations from former redevelopment activities. It effectively balances the need for sufficient operational funds with fiscal oversight by ensuring that local agencies cannot amass excessive administrative costs relative to the resources they manage.
Assembly Bill 3009, introduced by Assembly Member Mullin, aims to amend Section 34171 of the Health and Safety Code, specifically focusing on the administrative cost allowance for successor agencies responsible for managing the dissolved redevelopment agencies in California. The bill proposes a change in calculating the administrative cost allowance, which is a cap on the administrative expenses that can be funded through the Redevelopment Tax Trust Fund. The bill seeks to ensure that, starting from January 1, 2021, the administrative cost allowance is set at up to 3% of the actual property tax authorized for payment of approved enforceable obligations, providing a minimum of $250,000 per fiscal year unless reduced by agreement or oversight board action.
However, the bill may also invoke debate over its impact on local governance, particularly regarding how successor agencies will balance administrative needs with enforceable obligations they must meet. Critics may raise concerns about the adequacy of the minimum funding guarantee in times of budgetary constraints or fluctuating property tax revenues. Additionally, the bill's stipulation that administrative costs should not exceed 50% of the Redevelopment Property Tax Trust Fund may be seen as potentially restrictive, especially for agencies accustomed to different funding dynamics prior to this legislation.