My Word: Setting aside Fremont redevelopment money hurts city, schools
By Charlotte Allen - Guest Commentary
Fremont Argus, January 20, 2010
The Fremont Redevelopment Agency is
preparing for a final vote authorizing the amount of
money the agency can collect to be increased by $1.1
billion — yes, that's more than a billion dollars.
That's a pretty big sum compared to
Fremont's annual budget for basic city services, which
runs to about $135 million. The redevelopment agency,
which is run by members of the Fremont City Council,
will accomplish this feat by changing one of its own
rules that would have forced it to stop collecting
property tax money from the Industrial Redevelopment
Area once it had collected $400 million.
After that, the property taxes would have
flowed back to its normal channels, which include the
city of Fremont, Ohlone College and the Fremont Unified
Property taxes are the single largest
revenue source for the city, paying for about 35 percent
of all the money the city spends on police,
firefighters, street maintenance and every other city
service. So any action that affects the flow of property
taxes to the city has a big impact on the people who
live in Fremont.
Property taxes also support the schools
in Fremont. Without redevelopment agencies, half of the
property taxes collected in Alameda County go to support
our school systems.
Why does the redevelopment agency need
this? To pay the interest on bonds it needs to fund its
activities — the main upcoming one being the Irvington
Though the Irvington BART station may be
a worthwhile project, we are in an era of limited
budgets, and all expenditures must be carefully
scrutinized. Money, even redevelopment money, no longer
grows on trees. What will suffer if the redevelopment
agency is allowed to collect the sum it requires?
The city of Fremont, for one. According
to the analysis prepared for the redevelopment agency by
Seifel Consulting, the city of Fremont will receive
about $230 million in revenue from the redevelopment
areas from 2012 through 2044, if the cap is not raised.
If the cap is raised, the city of Fremont
will receive about $34 million.
Raising the cap will cost the city of
Fremont about $196 million over 32 years, or about $6
million a year. This $6 million would be enough to
eliminate the city's current general fund budget
deficit, and hire about 14 new police officers.
Another big loser is our school system.
Under current rules, the schools would collect about an
additional $560 million in taxes. Under the new rules,
the schools will get just $77 million. That means our
cash-strapped schools will lose about $483 million over
32 years, or about $15 million per year in this deal
with the redevelopment agency.
You'd think that taking this much money
from the city of Fremont and the Fremont schools to give
to the redevelopment agency would cause some lively
discussion in the City Council chambers. But, so far, it
hasn't even been discussed.
It seems to me that when our city and our
school district are cutting services and trying to pass
new taxes, the council should at least take a careful
look at a plan to move huge amounts of revenue away from
the city and the schools into the redevelopment agency.