State Budget Could Cost Sonoma Almost 1.8 Million

The newly minted state budget may cost Sonoma $10 million in city redevelopment funds - which provide for affordable housing projects, and various programs to eliminate urban decay.

Under the newly passed ABx1 26 and ABx1 27, the city can "opt in" to retain the Community Development Agency (CDA), which administers the funds, by agreeing to fork over a hefty payment to the state - estimated at $1,793,445 for the 2011 - 2012 fiscal year.

Otherwise, the city can "opt out," which disolves the agency and eliminates the collection of any revenue, aside from existing bond obligations, as defined by the state.

Sonoma City Manager Linda Kelly calls the plan, which puts the city's redevelopment program on hiatus until a decision is made, a "lose-lose proposition." 

“Until the City opts in, or until the legality of this redevelopment legislation is decided by the courts, the Sonoma Community Development Agency is not open for new business. We cannot at this point in time provide any economic development loans, façade improvement grants to local businesses, or enter into any contracts or agreements for new programs,” stated Kelly.

To avoid dissolution, by November 1, 2011, the City must enact an ordinance agreeing to voluntarily make payments to the state. Once the ordinance is enacted, the CDA can start allocating money towards new projects.

The CDA allocates about $10 million of redevelopment funds annually, a figure that’s half as large as Sonoma’s roughly $20 million general fund.

The Governor's budget will also chip away at Sonoma's general fund.  Vehicle license fees, which formerly provided revenue for a city's general fund, will now fuel the Citizens Options for Public Safety/Supplemental Law Enforcement Services (COPS) grant. The loss to the City of Sonoma is estimated at $35,709.