Last week, California’s redevelopment agencies (RDAs) were dissolved and initial steps to redistribute approximately $5.7 billion in annual property tax increment previously diverted from schools, counties, cities, and special districts has already begun.

The impact of ABx1 26, the bill that dictates the dissolution of RDAs, could affect special districts presently within the boundaries of one or more RDAs.  Such districts may see the return of a portion of their previously diverted property tax revenues, and the largest special district within each RDA will need to appoint someone to a newly created oversight board.

As to the special district seats on the Oversight Boards, the Department of Finance (DOF) interprets the language in ABx1 26 as follows:

• We interpret the language to refer to the largest special district in the county that has territory in the RDA. If District X is the largest special district in the county in terms of countywide share of property tax, and District X has territory in the RDA, then District X gets to name the Oversight Board Member;
• If District X is the largest special district in the county in terms of countywide share of property tax, but it does not have territory in the RDA, then District X does not get to name the Oversight Board member. Instead, that honor falls to the largest special district by countywide share of the property tax that actually has territory in the RDA;
• Counties appear to be making the calculations based on an overall share before ERAF. Since each special district’s ERAF I and ERAF II share should be roughly proportionate; and,
• ABx1 26 contains no language stating that the largest special district must have a governing board independent of the county, city, or school entity governing boards.