The Colusa City Council on Jan. 21, acting as the city’s Redevelopment Successor Agency, finally put the defunct economic development scheme out of its misery by assuming the remainder of the debt the agency incurred at its startup.
“The initial loan for the Redevelopment Agency was $334,000,” said Colusa Finance Director Toni Bensen, at the ending of an economic development plan labeled a decade ago by critics as a “bad idea” from the start.
The Colusa City Council formed the agency in May of 2011, despite numerous warnings from state leaders, including Gov. Jerry Brown, that the state planned to abolish the state’s 400 RDAs, following mountains of press that accused the agencies of abusing the power of eminent domain to fund pet projects like private golf courses (when projects were funded) or to pay for high-salaried administrative positions and consultants (when they were not).
California’s RDAs were first founded in 1945 as an effort to combat urban blight. They functioned through tax increment financing by giving cities the ability to capture a greater share of property taxes by diverting them from traditional services like schools, parks, and firefighting.
Colusa’s RDA was formed at the recommendation of then City Manager Jan McClintock, who was ousted a few years later after city leaders began questioning her longtime personal connection to an economic development consultant she recommended to lead the city toward prosperity.
Shortly after the Colusa City Council started the RDA, the California Supreme Court sided unanimously with state legislation in favor of abolishing the agencies, and voted 6-1 against a signature measure that would have allowed the agencies to continue if they promised to share revenue.
Bensen said that the state ordered in 2012 that all of California’s RDAs wind down, and because the Colusa agency never received a tax increment prior to the abolishment of the agencies, the city was required to officially dissolve the successor agency and oversight board as well.
“It’s just taken a few years,” she said.
While the initial loan from the City’s general fund to the Successor Agency was $334,000, the city did receive $218,000 in tax revenue to apply toward the debt. The city will still have to show the current loan balance of $106,000 as an expenditure of the city’s general fund at mid-year.
“The city is never going to receive the tax increment to repay the general fund that $106,000,” Bensen said.
Bensen said the city borrowed from the general fund originally to pay consultant costs.
“It was a bad deal that was voted on before any of us were on the City Council,” said Councilman Greg Ponciano, referring to just the four council members on the dais for the Jan. 21 meeting, including Dave Markss, Brent Nobles, and Mayor Josh Hill. “They paid a consultant an enormous amount of money to do nothing. I sat in Successor Agency meetings for two years. I would love to get rid of this.”
Although absent for the final vote to write the Colusa RDA into the history books, Councilman Tom Reische was on City Council when the RDA was approved, but later led the 3-2 majority to fire McClintock in August of 2012, after conflict between the embattled city manager and her critics came to a boiling point.
Reische, along with then City Councilman Kirk Kelleher, blamed McClintock for the poor relationship the city developed with the county and the City of Williams over economic development.
McClintock died in 2017 following a battle with cancer. ■