State controller takes aim at redevelopment agencies

Redevelopment boosters keep claiming that their projects help create jobs that wouldn't have been possible otherwise, but a five-week review found no reliable means to measure the impact of redevelopment activity on employment growth. The report also found that agencies were shortchanging schools and engaged in widespread accounting and reporting deficiencies, questionable payroll practices, substandard audits, faulty loans, and inappropriate use of affordable housing funds. Aside from that, everything is peachy. From the press release:

"For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayer's are receiving optimal return for each invested dollar," said Controller John Chiang. "Locally-controlled economic development is vital to California's long-term prosperity. However, the existing approach - born in the 1940's - is not how anyone concerned with performance, efficiency, and accountability would draw it up today."

All told, only 18 agencies were selected (L.A. included), so it wasn't a definitive study. But the findings certainly don't support those who say that Gov. Jerry Brown is wrong in trying to eliminate the agencies. (Note the report's timing: the Legislature is scheduled to vote this week on Brown's budget package.)

Only 10 of the 18 RDAs attempted to track the number of jobs created by their projects. Of those ten agencies, four could provide no methodology or explanation for their figures. The remaining six all used different methods to find the number of jobs created. The County of Riverside used projections from developers, while the City of Desert Hot Springs looked at permit and employment records. Employee compensation levels for RDAs were largely consistent with the salary and benefits offered to other local government employees. But the report found that redevelopment dollars often went to city or county payroll without evidence that those dollars actually supported redevelopment services.

Here's the report.