Budget depends on state payback

Glendale is counting on state officials to give it about $1.4 million for a redevelopment-related loan over the course of next year as it prepares the city's next budget.

But there's still uncertainty over how much the California Department of Finance will give Glendale by July — the start of the new fiscal year — and what the city will get in the future when it comes to the nearly $66 million the city used to kick-start redevelopment projects.

The city is depending on the money to pay for programs and personnel, said City Manager Scott Ochoa.

If the city does not increase payments to its liability and workers compensation funds, and the state hands over the loan reimbursement, Glendale could have a balanced budget for the first time after five years of major budget shortfalls.

“We hopefully will be flat next year,” Ochoa said.

Last year, the city had to cut about 120 positions and reduce services in order to close a $15.4-million budget gap. In 2011, the city bridged an $18-million gap.

The 2012 shortfall was mostly caused by the loss of redevelopment. In 2012, state lawmakers shut down the program that previously allowed local governments to use property tax revenues in redevelopment areas on business development and affordable housing projects.

Glendale was dependent on the hundreds of millions of dollars in tax increments it received. Dozens of salaries and proposed projects, such as Alex Theatre improvements and the Museum of Neon Art, were tied to the money.

While Glendale has received tens of millions of dollars every six months from the state Department of Finance to cover leftover obligations, such as construction and consulting contracts, city officials have complained that it's still not enough. State officials say dissolution is functioning and forecast a budget surplus for next year. Redevelopment money from 400 agencies across the state went to Sacramento to close a multibillion-dollar budget gap in 2012.

Ochoa has said he doesn't expect to get all the $66 million that Glendale's redevelopment agency was slated to pay back the city at a rate of about $6 million a year, but he wants the city to get as much of it as it can. The $1.4-million payback proposed for this year would come in two six-month intervals.

The City Council is slated to review a midyear budget report Tuesday.

Although a committee made up of Los Angeles County, Glendale school and city officials approved the request for loan reimbursements on Wednesday, the final decision to release the funds is up to the state Department of Finance.

“The DOF pretty much sits as judge and jury,” said Jhaioa Brown, the committee's attorney.


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