Sustainability Issue

Note: I intended to write about sustainability in the context of our physical resources; land, water, energy and even food. However, I got sidetracked into the realm of RDA or Redevelopment Agency issues and the sustainability of debt in a down market...Indulge me once again.

When I first moved back to Fillmore and saw the growth that was occurring, the second thing that occurred to me was..."this is not sustainable." (The first thing that occurred to me was..."this is not the slow, controlled growth that I read about in Vision 2020!")

First, the cost of housing wasn't sustainable without the Federal Reserve pumping liquidity into the system at such a rate that the value of the dollar was declining daily.

Second, the cost of housing wasn't sustainable without wages rising so that working people could pay for those houses.

Third, the economic viability of the City budget wasn't sustainable when it was based on borrowing multi-millions of dollars against potential future revenues that may or may not occur. In particular when the housing market goes south. Well, now it is moving in that direction(actually since July of 2005). The City RDA is now carrying an astronomical debt burden and a percentage of our budget will not go to any benefit or service for the community but, like our sewer plant, to debt service interest costs.

Here is a report on RDA that you will find interesting. Redevelopment and the attendant financing schemes are confusing but this report is a great place to start.

Here are a few of the comments...

"Bondholders and their brokers are profiting handsomely from redevelopment debt, while pocketing property taxes that should go to public services."

"Redevelopment has become a massive wealth-transfer machine. Cash and land to powerful developers and corporate retailers, while small business owners and taxpayers must foot the bill. A quarter of the money pays for the interest of debt."

"Significantly, 12% was spent on administration, most of it for redevelopment staff salaries. This provides a lucrative bureaucratic base that redevelopment staffers seek to preserve and expand."

"[Close to a billion] dollars into the pockets of bondholders, at the expense of California taxpayers."

"20% of RDA money is supposed to be spent on housing but "of the money which is spent, one fifth of all funds are eaten up by administration overhead, mostly for agency staff salaries, while 18% actually goes toward new housing construction."

"Clearly, redevelopment is out of control. Under the thin guise of eliminating blight, it consumes a growing share of property taxes, incurs ever-burgeoning debt, spawns sales tax wars among cities and tramples on property rights."

I'm not able to provide any figures on our RDA finances(on the road again without the budget book) so if you have any data be sure to share it with us.