News

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 School District.

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 BART station.

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.