Costa Mesa’s Redevelopment Agency to report its financial obligations to Sacramento next week

COSTA MESA — The Redevelopment Agency (RDA) approved reporting to the state next week more than $29 million of its unavoidable financial obligations in the wake of legislation that may force the agency to dissolve.

The report, called an Enforceable Obligation Payment Schedule (EOPS), shows state officials what Costa Mesa could be on the line for if the city chooses to fold the agency as opposed to paying Sacramento for the agency to remain intact — an option available under two laws passed this summer.

Lawmakers earlier this year also passed two laws that would dissolve the state’s redevelopment agencies and swallow up the money in those organizations.

The laws are being challenged in court; the state Supreme Court is expected to hear challenges early next year.

The EOPS was originally only required for California cities that were planning on dissolving their agencies and was meant to show lawmakers what bills the agencies still had to pay so the state wouldn’t take that money.

But a few early rulings by the state Supreme Court earlier this month are forcing every city with a redevelopment agency to list its obligations as the laws work their way through litigation.

Just because the city lists about $29 million in obligations — more than $19 million of which is going to repay the city of Costa Mesa for the original loan to create the RDA years ago — it doesn’t mean the city is necessarily on the hook for all of it, Finance Director Bobby Young told the board Friday.

It’s easier to include all of the agency’s bills and figure out which it doesn’t need to pay later, than to miss something now because there is no way to include it down the road, he said.

The City Council is expected to decide at its Sept. 6 meeting if it wants to keep the city’s RDA alive. If it does, the council would have to agree to pay upwards of $1.4 million to the county and state this year, then smaller annual amounts in the future.

RDAs were created to recycle a portion of a city’s tax revenue into a specific part of a city deemed in need of revitalization.