Use of RDA funds is under scrutiny

(by Amelia Nielson-Stowell desnews.com 2-17-06)

School districts and counties need to have a larger voice in deciding what happens to their share of millions of dollars worth of local property taxes being used for redevelopment projects, according to a legislative audit of redevelopment agency (RDA) practices.

The audit was released Friday as Sen. Curt Bramble's bill changing RDA requirements awaits its third and final vote in the Senate. RDAs are a tool used by local governments to cure blighted areas by diverting property taxes into city rejuvenation projects.

Cities are abusing the ambiguous RDA law, the audit showed, and criteria for determining blight need refining as "almost any area of land could be considered blight." Seven of the 10 redevelopment projects surveyed included undeveloped land in their projects. The audit suggested RDAs need to apply the "but for" test to all projects, assessing whether or not the project would exist without an RDA.

In addition, there is a need for taxing entities to have an expert opinion on land-use planning, oversight throughout the project timeline and a bigger vote for approval or denial.

"All the audit did was caution in everyone's mind what we already know," said Randy Sant with the Utah RDA Association. "We came up with a solution to fix it, even before the audit."

Sant said most of the recommendations are already addressed in SB196, except for a requirement on a detailed expense report. Cities "ask for as much as they can get to use towards the project," audit supervisor Wayne Kidd said, but do not keep their expenses separate, so it's impossible to tell if they exceed the project cap.

However, one audit recommendation angered Bramble — bringing back eminent domain.

"I don't believe there's any appetite to handle that," the Provo Republican said.

Last year, SB184 ended cities' power to use eminent domain to seize private property for RDA projects. After lawmakers passed the bill, which also put a one-year moratorium on future RDAs for retail projects, they requested the audit.

Bramble said he has been working with concerned parties for two years on the bill and thinks new amendments are unlikely. SB196 takes a three-track approach for cities to still bring in developers with tax incentives, but with a tighter rein on tax dollars.

"I'm somewhat discouraged about the timing on this," said Robyn Bagley, founder of Citizens Coalition for RDA Reform. The last audit on RDAs was in 1993. "If you're going to write a new bill and the last audit was (12-13) years old, you need a new audit."

While SB196 is a step in the right direction, she said, citizens should be better informed of why and how their property taxes are being raised. Bagley argues a fourth track detailing the tax increase to residents would be ideal.

"There's still no transparency for the taxpayers," she said. "They don't know the buck is being passed to them. The cities get away with raising your taxes."