By Jason Islas
Lookout Staff

March 7, 2012 -- The State of California has ceased payments to the Santa Monica-Malibu Unified School District (SMMUSD) in anticipation of Redevelopment money returning to the schools.

State officials are assuming that $17 million of the former Redevelopment Agency's money will return to the school district, relieving the State of the $13 million annual obligation to SMMUSD. But the $17 million is quite a contrast from what Santa Monica's RDA successor agency expects will be left over after all the former RDA's obligations are met.

According to the enforceable obligation payment schedule, Santa Monica's RDA successor agency is claiming approximately $70 million of the $73 million generated annually by Santa Monica's former redevelopment districts as enforceable.

State officials are confident that there will be enough left over for the school district, after the State Auditor reviews the obligations.

“If it truly turned out that there was nothing left” of the RDA money, said State officials, then the State would step in to make up its obligation.

But State officials said that outcome may not be likely.

“Based on what we've seen in the field so far,” State officials said they are expecting RDA successor agencies' list of enforceable obligation payments to not hold up under scrutiny.

“We think our numbers our reasonable,” State officials said.

When asked specifically about Santa Monica's RDA successor agency, State officials said they couldn't comment specifically since they hadn't yet looked at the list.

If they hadn't looked at the enforceable obligation payment schedule, where did they get the $17 million as an estimate for the school district's take of RDA money?

Officials said they looked at numbers throughout the state. But it's clear that their estimates didn't anticipate that much of the former RDAs' dollars – throughout the state – would go to enforceable obligations.

Jan Maez, the school district's chief financial officer, said, “They made their assumptions; they didn't account for enforceable obligations.”

She added that she has never been told exactly how State officials arrived at the $17 million number.

In the end, the current situation will require the district to borrow money in order to keep paying its bills until either they get the former RDA money from the County or the State makes up the funding gap left over after all the recognized obligations are met.

This is nothing new for the district, said Maez.

In the past, the State has had to postpone payments to the district. As a result, the district has taken out tax revenue anticipation notes. The main problem will be strategizing how to keep the interest rates as low as possible, Maez said.