School Districts Claim Fontana Ripped Them Off For Millions In RDA Funding

(May 31)FONTANA — The city of Fontana has shortchanged three of San Bernardino County’s school districts by millions of dollars by finagling the formula being used to pay the districts their share of property tax revenue due them in the aftermath of the dissolution of the North Fontana Redevelopment Agency.
In 2011, after the failure of a municipal coalition’s final legal challenge of the state’s AB XI 26 and ABXI 27, which shuttered all of California’s redevelopment agencies, Fontana, like all other California cities, closed down its redevelopment agency, and created in its wake a successor agency to extinguish its debts.
In rerouting that portion of the property tax revenue formerly exclusively devoted to the redevelopment agency, known as tax increment, to other governmental entities with a claim to the property tax generated in the area, the city apportioned to the Fontana Unified School District, the Chaffey Joint Union High School District and the Rialto Unified School District a revenue stream utilizing a formula that used fiscal 1997-98 as the base year for making its calculations for what would be provided to those districts from the North Fontana Redevelopment Project Area, which covers roughly 8,900 acres.
Mindful that significant development occurred in North Fontana over the previous two decades with a commensurate substantial increase in property tax revenue, Chaffey Joint Unified’s financial division raised with the city of Fontana its use of the 1997-98 figures, maintaining the computation of what the district was owed should be based upon a later tax-year baseline. Chaffey Joint Unified notified Fontana Unified, which also raised the issue with Fontana officials.   The city, however, in consultation with its financial and legal advisors, utilized the 1997-98 tax year as its pass-through revenue model.
Fontana Unified did have representation on Fontana’s redevelopment successor agency in the form of former associate superintendent of business services Alex Alvarez, who last year sought to have the successor agency resolve the base year calculation discrepancy for the North Fontana Redevelopment Project Area funding relinquishment but was outmuscled politically by the city’s two representatives on the successor agency board, Mayor Aquanetta Warren and councilman John Roberts.
North Fontana lies within the jurisdiction of not only Fontana Unified, but Chaffey Joint Union High School District on the west side and Rialto Unified School District on the east side.
With Fontana Unified School District in the lead, a lawsuit against the city of Fontana, along with the county of San Bernardino and San Bernardino County Treasurer Larry Walker was filed, contending that the inappropriate 1997-98 tax year baseline had been used in calculating the pass-back revenue due the three districts.
According to the suit, the formula should have involved a baseline of the 2004-2005 tax year. Using their own accounting methodologies and the 2004-05 tax year baseline, lawyers for Fontana Unified contend that from fiscal year 2006-07 through fiscal year 2010-11, Fontana owed Fontana Unified $11,475,014 and made good on $7,407,447 of that amount, leaving $4,067,567 unpaid.  Chaffey Joint Unified, according to the suit, was due $4,339,558 and actually received $2,058,556, leaving an unpaid balance of  $2,281,002. Rialto Unified was supposed to have received by now $662,555, of which it was paid $453,863, entailing an arrearage of $208,692, according to the suit. Moreover, if the current formula is left in place, the city will continue to shortchange the districts in future years, according to the suit, with Fontana Unified losing $23,352,614 owed it between 2012 and 2034, Chaffey being shorted $15,216,399 and Rialto missing $1,362,309.
Because AB XI 26 mandates that legal questions relating to the dissolution of the state’s redevelopment agencies be litigated in Sacramento Superior Court, the lawsuit was lodged there. The county is named as a defendant because of its function in overseeing the disbursements of payments from the successors to the redevelopment agencies. Walker, who as treasurer oversees the maintenance of the accounts from which the funds are disbursed, is also named in his capacity as the county controller, auditor and treasurer.
The city of Fontana denies the allegations in the lawsuit, according to city attorney Jeffrey Ballinger.

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