Talks to Begin Soon on Redevelopment Funds : Finances: How much money, if any, should go to Santa Ana schools will be determined.

Sensitive negotiations between city and school district officials will formally begin in mid-March to determine how much redevelopment money, if any, should go to the schools.

The funds would come from three existing redevelopment areas that the school districts failed to tap into when the urban development projects were created a decade ago.

Had no redevelopment project areas been in existence last year, an estimated $5.6 million in property tax revenues would have gone to the Santa Ana Unified School District, according to a study commissioned by the district. A Rancho Santiago Community College District board member estimates that his district could have received $3 million.

Santa Ana redevelopment agency officials, meanwhile, are expected to argue March 19, when negotiations officially begin, that the school districts must first prove that the lack of funds has had a “detrimental” effect on their operations, to show that they are entitled to the money.

Bob Hoffman, the city’s redevelopment and real estate manager, maintains that the school districts actually do not experience a loss in funding. State funds make up the difference to ensure that schools meet minimum revenue limits, he said.

But beyond the technical negotiating points, the scramble over redevelopment money has raised the politically charged question: Will the early, almost unanimous support for an ambitious citywide redevelopment project to fund education and community facilities hold firm?

Under the proposed citywide plan, two-thirds of Santa Ana not currently covered by six ongoing project areas would be incorporated into a new redevelopment area. Capital improvements would be funded through bond sales, and the debt would be paid through additional tax revenues that are created when property within the zone changes hands and the total assessed valuation increases.

Robert W. Balen, president of the Santa Ana Unified School District Board of Trustees, supports the citywide redevelopment effort. He said that his district’s efforts to get money from the current project areas should not hinder the larger, citywide project.

“It does not really matter what happens there,” Balen said. “We are going to go into the negotiations with the attitude that we are going to get the school district in the best financial position possible.”

But John Raya, a Rancho Santiago Community College District board member who has previously raised questions about the citywide project, spearheaded a unanimous vote by his board calling for a “financial review” of money due to the school districts from the current redevelopment project sites.

The districts, he said, should finish their bargaining sessions over the current project sites before making any financial agreements in the larger citywide redevelopment project.

Pointing to current efforts in the state Department of Finance and in the Legislature to block citywide redevelopment projects because they threaten the state treasury by draining education funds, Raya said the grander hopes for a citywide project may never be realized.

“That ‘better deal’ has a 1-in-10 chance of happening,” Raya predicted. “I would characterize this as an indication that the level of awareness as to how these plans work has increased.”

Although previous redevelopment plans had encountered controversy, Santa Ana Unified and the Rancho Santiago Community College districts eagerly endorsed the concept of raising $1.5 billion citywide over the next 30 years for new schools, athletic fields, computer labs and other needed improvements.

When the first redevelopment areas were designated 10 years ago, school officials say they missed out on the revenues because previous district administrations did not get along with City Hall. In the most recent project area, along the Bristol Corridor, school officials bargained for their share of tax dollars.

The opportunity to negotiate for previously lost redevelopment dollars opened up when the city announced plans last fall to amend three of the six current project sites. Only those three sites--South Harbor, Inter-City and South Main--are eligible for negotiation.