(January 18, 2005) -- When city staff asks Councilmembers to approve nearly $200 million in bonds for a Redevelopment Agency whose non-elected board won't agree to a forensic audit of its previous spending -- whose record has led some Councilmembers to propose running things themselves -- someone needs to say "stop."
Reduced to its essence, the proposal brought to Councilmembers amounts to nearly a blank check with few guarantees (beyond Redevelopment legal requirements) on how the money will ultimately be spent.
Worse still, and regardless of who runs RDA, in our view the proposed $200 million bond risks the expansion of LB Redevelopment. We do not want Redevelopment expanded. We want it stopped and, if possible, rolled back.
If city staff's financial predictions turn out to be too rosy (as some have been in the past) or if the real estate bubble deflates (as it has in the past), RDA will be invited to expand and consume more of LB by declaring more areas "blighted" to divert more property tax money away from LB's General Fund to fund RDA's ballooning debt.
To borrow a phrase from an academic paper, this bond debt is -- literally -- banking on blight.
We recall previous memos that predicted LB's Aquarium would pay for itself. Others predicted a Queensway Bay parking garage would pay for itself. Others forecast that the Alameda Corridor would do wonders for truck congestion. Each time official predictions didn't pan out, LB's "remedy" was the same: build more Aquarium, more Pike, more Corridor.
We hope this latest debt proposal awakens some well-intended people to the folly of obsessing over a pending "independent" study of LB Redevelopment. We have previously called this a waste of time, a term paper at best, because it doesn't include a forensic or other independent audit.
The $200 million bond proposal says it all: if city officialdom really cared about the results of an "independent" study, or any study, they'd wait for the study before proposing the RDA IOU.
We urge taxpayers not to be distracted by the laundry list of projects included in staff's memo. Other staff memos claimed the North LB Police Station would be funded from General Fund revenue, then bond revenue, until City Hall raided NLB's RDA funds to get the money.
The lesson: promises in a memo can be changed with a word processor. In contrast, a bond obligation is a legally binding debt.
We do not support approving massive new RDA debt without an independent, forensic audit on how millions of LB RDA dollars have been spent to date.
And pardon us, but who is the "Long Beach Bond Finance Authority," this (quoting staff's memo) "joint powers authority and a separate legal entity formed by the City and the Redevelopment Agency" who'll issue the bonds? Who's on its governing board? Who chose them? When are its meetings? Where are its minutes? Why is it involved instead of RDA?
Some say these matters don't matter. We think they do.