Redevelopment Agency Bails Out Brea : Public works: After formal finding that city can’t afford capital improvement projects, council members acting as agency approve spending another $12.4 million.

BREA — While describing this as the “crisis year for municipal budgets,” the Brea Redevelopment Agency this week approved another $12.4 million for capital improvement projects.

Together with previously approved spending plans of $4.8 million, the total allocated for capital improvement projects is $17.2 million, officials say.

Acting as the Redevelopment Agency, the City Council unanimously approved the spending package, even as the agency anticipates cuts in state funding of as much as $2 million.

Redevelopment Agency Director Susan Georgino said the state may shift $205 million away from redevelopment agencies statewide to plug its own $11-billion deficit. Brea could lose $2 million.

Capital improvements include street improvements, community facilities, public buildings, storm drains, public parking facilities and new development site improvements.

Such projects are usually funded by the city, Georgino said, but if there’s a finding that the city has no reasonable financing resource, as required by state law, the Redevelopment Agency may fund them.

In a report to the agency, City Manager Frank Benest said the city, indeed, can’t afford to finance those projects.

“(The current fiscal year) is a crisis year for municipal budgets with anticipated city revenues less than projected expenditures, due in large part to the continuing recession and the fiscal problems in Sacramento,” Benest said.

“It has become necessary to finance those projects by agency funds,” he said.

The 50-acre downtown project gets the bulk of agency funding, with $5.4 million set aside for construction of parking facilities alone. Infrastructures such as roads, sidewalks and storm drains will cost $3.5 million.

In a report to the agency, Benest said the downtown redevelopment project “represents the largest city-sponsored economic development project in recent years.”

Once completed, the project will generate jobs, sales tax and property tax revenue while providing for affordable housing, Benest said.

The project is being developed by Watt Co., but a court order has put the project on hold until the city completes a relocation plan for residents and businesses to be displaced by the project.

A relocation plan has been completed and approved by the council. However, a settlement of the court case brought against the agency by the Brea Small Business Coalition bogged down when the coalition failed to ratify the agreement.

Approval of the settlement was on the agenda in the council’s Sept. 1 meeting but City Atty. James L. Markman recommended that the council not act on it.