Riding the redevelopment waves
City, council struggle to respond to dissolution of its RDA
If Chico is typical of what communities are going through because of the dissolution of the 400-plus redevelopment agencies in California, confusion and uncertainty are rampant in the state.
It’s all happening very fast, the law is extremely confusing, and a lot of money is involved—more than $14 million in annual tax increments, in Chico’s case.
At its regular meeting Tuesday (Feb. 7), the City Council received yet another report from City Manager Dave Burkland, Finance Director Jennifer Hennessey and Senior Planner Shawn Tillman, the resident redevelopment expert.
The main problem is AB 26, the bill mandating dissolution of redevelopment agencies, or RDAs, Tillman said. The bill is vague and confusing in places, he said, but efforts to pass follow-up legislation that would make its implementation clearer or easier so far have stalled in the Legislature.
The main issue is unencumbered funds, money the agencies have collected but not allocated—in Chico’s case, some $1.8 million. Tillman was not optimistic that the city would be able to keep the funds.
Hennessey’s explanation of the dissolution budget had everyone scratching their heads. Even she acknowledged that her figures were fluid and subject to change, but if there were any clear messages in her presentation, it was that the city could be looking at a shortfall of $124,000 in 2012-13 and $74,000 in 2013-14 and that staffing adjustments might have to be made.
Redevelopment money pays for 25 to 30 full-time-equivalent positions. Obviously, with the loss of much of that money, something will have to give, but at this point nobody knows what form that will take, Burkland said.
In a follow-up phone interview, Housing and Neighborhood Services Director Sherry Morgado said her department was adequately funded to handle the three affordable-housing projects now in the works, “but beyond that is where we have uncertainty because there’s nothing to replace the RDA funding.”
She has other revenue sources—loan repayments, for example—but “it’s hard to predict when this money will be available.” All in all, it’s like riding waves, she said, with uncertainty a constant.
“It’s difficult. It’s challenging,” she said, but her staff has “sort of accepted it and is working on developing other sources for affordable-housing revenue,” such as a locally funded trust fund. “As a community we need to figure out what we want to do. Times are going to be leaner.”
Keeping PACE: The council voted unanimously to implement a program that will provide an attractive and affordable method for local businesses to increase the energy- and water-use efficiency of their buildings. Called the PACE (Property Assessed Clean Energy) program, it will create a special assessment district for the entire city in which business owners will have access to 20-year loans financed by the Pacific Housing & Financing Agency, a joint-powers group with more than 60 member jurisdictions. The loans will be paid back as an assessment on property taxes.
Ruben Martinez, the city’s general services director, said the program’s benefits are threefold: It will promote job growth, foster water- and energy-use reductions, and cost the city nothing.
Paul Sullivan, sales manager at Alternative Energy Systems, told the council several major potential solar projects are just waiting for PACE implementation.
Count Rucker in: City Clerk Debbie Presson announced that she was about to send out a request for proposal to nine headhunter agencies so the council can choose one of them to search for a replacement for Burkland, who is retiring at the end of August. She expects to have the RFPs back in time for the council’s March 6 meeting.
Interviewed following the meeting, Assistant City Manager John Rucker said that, “absolutely,” he was throwing his hat in the ring for the job.