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Background of Folsom Successor Agency Oversight Board

In 1945, the California Legislature authorized local governments to create redevelopment agencies.  As part of the redevelopment agency plan, tax increment revenue that had previously been directed to schools and other local agencies was re-directed to local governments to fund redevelopment of “urban blight”.   The City of Folsom formed its redevelopment agency in 1983 and has used the tax increment funds to pay for improvements within the redevelopment area and to help meet affordable housing mandates.  Most recently, redevelopment funds were used for the Sutter Street Revitalization project, construction of the Historic District parking garage, repair and replacement of antiquated water, sewer, and drainage facilities within the Historic District as well as for helping fund construction of low and very low income senior housing and rehabilitation of homes for extremely low income families. 

Responding to the State’s fiscal crisis, Governor Brown’s 2011/12 budget proposed the elimination of redevelopment agencies, with the purpose of redirecting increment property tax revenue from redevelopment agencies to schools in order to lessen the State’s financial burden toward school funding.  In response to the Governor’s proposal, the California Legislature enacted two measures, AB 1X 26 and AB 1X 27.  AB 1X 26 proposed the elimination of redevelopment agencies, and AB 1X 27 proposed some continuance of redevelopment agency activities in exchange for payments by the agency to the State for school and special district funding.    In December 2011, the California Supreme Court upheld AB 1X 26, but found AB 1X 27 to be unconstitutional. 

AB 1X 26 describes the procedure by which local redevelopment agencies shall be eliminated, including the establishment of a Successor Agency and a Successor Agency Oversight Board to oversee the agency’s dissolution.    Folsom’s Successor Agency Oversight Board has been assembled to carry out the duties prescribed by State law in dissolving the former redevelopment agency.   The Folsom Successor Agency Oversight Board will meet until July 2016, when all oversight boards within the county will be replaced by one consolidated oversight board. 

See also:
California Legislative Analysts Office publication “Unwinding Redevelopment”  02/17/2012
California Supreme Court decision – California RDA v. Matosantos, filed 12/29/2011


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