Redevelopment revenue to play a diminished role in Yorba Linda's Town Center area renovation

One of the more complex issues facing Yorba Linda's elected leaders involves the financial affairs of the city's disbanded Redevelopment Agency and the diminished role the agency's once-plentiful property tax collections will play in renovation plans for the Town Center area.

Again--as mandated by state officials--this city has dispatched a six-month spending plan for redevelopment revenue to state and county agencies, a plan likely to result in most available dollars in the second half of 2013 going for payments on previously issued bonds.

And interestingly, for the most recent bond issued, the city will pay a bit more than $1.6 million in principal and interest this year, while the bond sale proceeds remain in a trustee account at U.S. Bank, unused for Town Center or other redevelopment endeavors.

The bond in question was authorized for about $19.7 million in 2011, with payments, totaling some $33.9 million, running through 2032. The proceeds can't be used at present, since the bond was sold after a cut-off date set by the state for redevelopment project financing.

In all, the city has five “tax allocation” bonds for redevelopment projects outstanding, with repayment schedules just shy of $120 million and final payment dates from 2023 to 2032.

Proceeds from two of the bonds, issued in 1993 and 1998, refunded bonds issued in 1989 and have already been spent. Two 2005 bonds were meant for Town Center infrastructure and further land acquisition. Cash from the 2011 bond, as noted, sits in the U.S. Bank.

Aside from the $120 million bond debt, the city lists $13.7 million in outstanding obligations to be paid from redevelopment property tax revenues. Largest amount is the nearly $6.5 million from the 2005 bonds the city seeks to spend on infrastructure and more acquisition projects.

One problem with the city's spending plan for the July 1-Dec. 31 period is the amount of cash available to the city from the redevelopment property tax collections. Finance Director Dave Christian told me the county estimates the city will receive about $4.4 million to spend, some $3.3 million less than the requested amount.

Under rules established by the state Department of Finance, the city must adopt a spending plan involving property tax revenues from former project areas still collected under formulas used by the former Redevelopment Agency twice each year.

A new $10,000 fine is to be imposed each day a plan is late, so a sense of urgency is added to a process involving approval by the City Council and a specially appointed seven-member Oversight Board.

Some of the city's past requested expenditures were denied by the state, including payments for a Savi Ranch sign improvement project and certain engineering expenses associated with Town Center.