LOS BANOS, CA (November 4, 2025) — The City of Los Banos, acting through its Successor Agency to the former Redevelopment Agency, will pay $1,978,128 in FY 2025-26 to cover outstanding redevelopment bond obligations, according to the Recognized Obligation Payment Schedule (ROPS 2025-26) filed with the California Department of Finance (DOF).
Source: California Department of Finance – Los Banos ROPS 2025-26 (PDF)
Redevelopment was a state program that allowed cities to invest in certain areas using a method called tax-increment financing. When property values in a designated redevelopment area increased, the additional tax revenue, the “tax increment” was set aside to fund local improvements, public infrastructure, and economic development projects. Cities often issued bonds backed by those future tax revenues to finance major upgrades.
The schedule, which state law requires each successor agency to submit annually, lists all enforceable obligations remaining from the city’s former Redevelopment Agency, dissolved under state mandate in 2012. Of the total amount, $1,898,128 is allocated for debt service on the 2014 Tax Allocation Refunding Bonds (Series A and B), with trustee Wilmington Trust, N.A., and $80,000 is budgeted for administrative costs of the Los Banos Successor Agency.
According to the filing, the 2014 bonds mature September 1, 2035, and all payments will be drawn from the Redevelopment Property Tax Trust Fund (RPTTF) — a state-controlled account that collects property-tax increment revenues from the city’s former redevelopment area. The document shows no new obligations and no reserve or surplus balances for the reporting period.
Before dissolution, the Los Banos Redevelopment Agency used tax-increment financing to support local economic-development projects. Under this model, property-tax growth within designated redevelopment areas was diverted from general use to repay bonds and fund improvements aimed at combating blight.
In 2011, during a statewide budget crisis, the California Legislature enacted Assembly Bill X1 26, eliminating redevelopment agencies and reallocating property-tax revenues to schools and counties. The California Supreme Court upheld that law in California Redevelopment Association v. Matosantos (2011), which finalized the agencies’ dissolution effective February 1, 2012.
Under that ruling, each city or county that had operated a redevelopment agency became a Successor Agency, tasked with paying remaining debts and reporting to both the Department of Finance and a county oversight board. The Los Banos Successor Agency continues to make scheduled bond payments until those obligations are fully satisfied.
Once the bonds are retired, any residual property-tax increment collected within the former redevelopment project area will be redistributed among local taxing entities — including the City of Los Banos, Merced County, and local school districts — as required by state law.
Although California’s redevelopment programs ended more than a decade ago, Los Banos’s 2014 bond obligations will remain in place until 2035, when the final payments are due.
