A California Supreme Court ruling last week upheld Assembly Bill 1X26, legislation signed by Gov. Jerry Brown that effectively kills redevelopment agencies.

Brown proposed dissolving the agencies and then transferring their property tax revenue, of about $5 billion a year, to cities and counties that controlled the agencies. They would then use the money to repay redevelopment debt and distribute money to cities, counties, special districts and schools, saving the state about $1.7 billion this year.

Controlled by cities and counties, redevelopment agencies initially existed to restore blighted neighborhoods. Through the years, the money has been used to finance big box retailers, sports complexes and other projects that critics say run counter to the agencies' original mission.

Locally, funds from the agency helped renew Vacaville's downtown, including Town Square, CreekWalk and Andrews Park, and the Nut Tree. The police station and newer freeway overpasses were also made possible by redevelopment agencies. The city of Dixon, according to Economic Development Director Mark Heckey, will have $1 million taken away from housing, have to cancel a major drainage project downtown and money for emergency home repairs for seniors will be gone.

For a while, the agencies were given an option in the form of Assembly Bill 1X27 to opt into diverting a specific amount of property tax revenue to schools and other services. However, redevelopment agencies were hit with another significant blow when the ruling also eliminated that option.

It also put a kink in the plans at the office of Solano County Auditor-Controller Simona Padilla-Scholtens, who had been planning for months that redevelopment agencies were going to still exist.

Padilla-Scholtens explained that the court's ruling "threw a curve" at the plans.

"We began to put together guidelines, outlining rules and regulations because the agencies opted to continue existing, but now they don't have that option," she said.

She explained that the California State Association of County Auditors is looking at the legislation to come up with a better plan to adhere to the court's decision.

"We'll have to regroup statewide," Padilla-Scholtens said. "The auditor-controller's office will play a key role in the dissolution of the agencies."

She explained that they've always played a role handling redevelopment agencies by calculating property taxes and ensuring proper pass through agreements, but now that role is different.

"It adds to the complexity of what we do," Padilla-Scholtens said.

There is a lot of work on the horizon, including an audit. The office will also have to validate the numbers by determining the agencies' indebtedness and committed allocations. Additionally, a timeline will be created so that needed information can be given to the county in a timely manner.

She added that there will be a fiscal impact to both the county and cities, but true numbers are unknown at this point.

Follow Staff Writer Melissa Murphy at Twitter.com/ ReporterMMurphy.

The Associated Press contributed to this report.