Politics & Government

Live Updates: City Grapples With Loss of Redevelopment Funds

Click through for a play-by-play from Thursday night's special City Council meeting.

6:46 p.m. Meeting starts. Hall is about 3/4 full. Mayor Pro Tem Ken Brown says he is interested in raising TOT taxes to offset revenue.

6:51 City Manager Linda Kelly is joined by Dan Slater, special counsel to the redevelopment agency, to negotiate the city's next steps. The city now has to decide whether to take on the role of 'successor agency' to the redevelopment agency. The successor agency would earn a $200,000 one-time fee for the task of 'winding down' the redevelopment agency's holdings and obligations, says Kelly.

6:57 Currently, Sonoma's redevelopment agency has about $50 million, but only $11 million of those funds is currently in holding.

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6:58 An oversight board of seven members will be appointed to ensure the successor agency meets all financial obligations as quickly as possible. The board will consist of seven members:

  • Two appointed by County Board of Supervisors
  • Two by the mayor (one of these must be a city employee)
  • One by the Sonoma County Water Agency
  • One by the County Superintendent of Education
  • One by the Chancellor of Community Colleges. 

These members do not have to live in city limits. On July 1, 2016 the oversight board would be replaced with one oversight committee.

Find out what's happening in Sonoma Valleywith free, real-time updates from Patch.

The financial impacts of this legislation are vast, according to Kelly:

  • Over $1 million is used for jobs and affordable housing funds. Since this isn't considered an 'enforceable obligation' by the state, this money will be stripped from city use.
  • The preliminary budget shortfall, without the city's CDA, is $493,096. This will change based on what projects, that already have bonded money, are considered 'enforceable obligations.'
  • The new legislation to be used for their designated purpose – so funds bonded for the , and other projects appear safe. But, these funds will be overseen by the oversight board.
  • The Economic Development Program lapses in 2012, so it will only be seen as an 'enforceable obligation' until then. 
  • In addition to funding ongoing projects, there are "quality of life" and "risk management" concerns, according to Kelly, for funding capital projects. Without redevelopment funds, she says, "it's going to be harder to get projects done."

7:16 p.m. Councilman Tom Rouse asks what happens if there's still business after 2016. "Those oversight boards collapse into one oversight board per county, until all of the redevelopment agency obligations for all of the redevelopment agencies in the county are satisfied," Slater said.

7:28 Public Comments - First speaker says that the city must become the successor agency, though there are "a lot of potential lawsuits," involved. "Best of luck folks."

The sale of the 'old firehouse,' which is owned by the redevelopment agency, would be expedited to 'maximizing value,' of the entity. If the city, or another entity, chooses to purchase the units, says Kelly, they would have to match the fair use value of the property.

7:38 By tomorrow all cities have to decide who will become the successor agency. So far, only two haven't accepted: Bishop and Los Angeles. Los Angeles' CDA is separate from the city, and technically the state is responsible for the payroll of the CDA. In Sonoma, the CDA does not have any employees, so the city stands to benefit from becoming the successor agency, says Mayor Joanne Sanders.

But others disagree. "The task of the successor agency is impossible, and the amount – $250,000 – is nothing compared to the amount of staff time this will take," said John Kelly, a Sonoma resident.

7:44 Councilwoman Laurie Sanders issues a resolution for the city to become the successor agency. Tom Rouse seconds.

Even if the city passes on being the successor agency, they would be forced to use their resources to train the new group, says Councilman Steve Barbose. 

"Whoever would pick this up, if they weren't the city, they wouldn't have a clue, and staff would have to pick them up anyway," said Barbose.

Motion to make city the successor agency passes unanimously.

7:55 Brown: "We've had a very positive relationship with the county and I'm not paranoid about that."

Sanders: "The more government services are consolidated into a one-stop shop for shopping the more we're able to economize for the end user."

8:16 p.m. The city is required by the new legislation to make a declaration that they've not forgiven repayment on any redevelopment agency loans in the last two years, according to Slater.  Staff has already affirmed that this is true. Motion passes unanimously.

8:18 p.m. Another possible bill, SB 659, would temporarily postpone dissolution of redevelopment agencies. The city is considering sending a letter supporting the bill.

But, Sanders wonders if this bill would be costly in attorney's fees. "I know there's been a lot of time billed, against the redevelopment agency," Sanders said. 

"I think we've delayed enough," said Sanders. "Delays mean uncertainty, which is the worst thing for economies and businesses and I think we just need to accept this is where we're headed."

Sanders says the city is in arguably good shape to weather the new legislation.

"We're only going to see a roughly $500,000 hit, other cities are in much worse shape," she said.

Gallian says the additional time would give the county auditor time to go through the city's enforceable obligations. "It would be additional time to make sure the facts are thorough and that there's time to have a dialogue," she said.

Motion to send a letter passes. Meeting ends.


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