LAKEPORT, Calif. – With Gov. Jerry Brown proposing to eliminate redevelopment agencies as a way of fighting California's budget problems, the Lakeport City Council on Tuesday heard an update from staff on the issue, which is galvanizing local governments across the state.
Council members and staff criticized the governor's plan, which they said would really only offer the state one year of economic benefit while, at the same time, killing off a major economic engine for California's governments and communities.
Community Development and Redevelopment Director Richard Knoll updated the council on Brown's plan, which would statutorily eliminate redevelopment but protect existing projects as it diverted $1.7 billion from the state's general fund to Medi-Cal and trial courts in the 2011-12 fiscal year.
Another $211 million would be distributed to counties, with the remaining tax increment revenue generated by redevelopment going to cities, counties and schools, Knoll explained.
“If we eliminate redevelopment in this state, we become that much less competitive with other states that have redevelopment,” said Knoll, adding, “It's another reason why this proposal simply does not make any sense.”
The governor's proposal also would require that current balances in redevelopment housing set aside funds be transferred to housing authorities, Knoll said. Since Lakeport doesn't have a housing authority, it would have to quickly form one or else its funds would go to the county's housing authority.
Knoll recounted listening in with other local governments to a Webcast put on by the California Redevelopment Association. He said association Executive Director John Shirey was asked about negotiating with the governor over his proposal.
“When you have a gun held to your head that's not the time to negotiate. That's the position of the redevelopment association,” Knoll said, paraphrasing Shirey's response.
Councilman Bob Rumfelt called the proposal to eliminate redevelopment “totally ridiculous.”
“I want to say another word but ridiculous is the one I can use,” he added.
Knoll said staff members are preparing drafts of letters to send to the governor and state Legislators, and he asked the council to consider attending a Feb. 7 rally in Sacramento.
Rumfelt suggested asking Lake Transit to supply a bus so a number of local officials could ride over together. City Manager Margaret Silveira agreed, saying some county officials might also want to attend.
On the council's next agenda there will be a resolution in opposition to the plan to abolish redevelopment, Knoll said.
He said redevelopment supports 304,000 jobs statement – of which about 170,600 are construction jobs – injects $40 billion annually in the state economy through goods and services generation and generates more than $2 billion in local and state taxes each year.
If successful the governor's plan would take away one of the few tools local communities have for meeting state planning requirements – including infill and transit-oriented development, housing and infrastructure, Knoll said.
He said redevelopment also is the second largest provider of affordable housing next to the federal government, with 98,000 units of affordable housing built or rehabilitated since 1993.
Lakeport's redevelopment agency has functioned since 1999.
Knoll listed the following redevelopment projects with rough estimates of cost: the Soper-Reese Community Theatre's renovation, $200,000; the Main Street lamp posts project, $150,000; Third Street parking lot and Park Street improvements, $800,000; pedestrian improvements on Main Street near Performance Automotive, $500,000; more than $300,000 in affordable housing projects, including rehabilitation and financing; and the downtown facade improvement project, which he told Lake County News later has cost about $200,000.
“All of which are what redevelopment is all about,” he told the council.
Knoll criticized state Controller John Chiang's statements this week about his decision to audit 18 redevelopment agencies. Chiang said he was trying to verify claims about whether redevelopment was beneficial or a “scam.”
“I think it's really unfortunate when state officials make those kinds of statements,” Knoll said, adding, “Certainly in Lakeport it's been a significant benefit and has really been one of the few tools we have available to us to make incentives to improve our community.”
During the discussion Knoll noted that if the Legislature was to approve dismantling redevelopment, he believed litigation would result.
He said redevelopment has been around in California for 70 to 80 years. “It's amazing to me that we're proposing to do this, but particularly at a time when we need redevelopment the most.”
Knoll said city staff will return to the council at a future meeting with letters in opposition to the plan for the council to sign.
In other news, the council voted 5-0 to postpone until next month a hearing on Full Throttle Tavern's appeal of the Lakeport Planning Commission's Dec. 8 revocation of the business' zoning permit allowing live entertainment.
Knoll said staff was asking to bring the discussion back on Feb. 15.
He said staff had been meeting with Full Throttle Tavern's management regarding new operating conditions.
“We have been meeting and working on those revised conditions. We're very close but we do need some additional time to address some additional issues,” Knoll said.
Because of the appeal, the commission's revocation of the permit is stayed, meaning the tavern can continue to operate under its originally issued permit, Knoll explained.
Councilman Bob Rumfelt asked if the police had been receiving complaints since the commission's Dec. 8 decision.
“The calls for police service have been virtually nonexistent since the action was originally proposed against Full Throttle Tavern,” said acting Police Chief Brad Rasmussen.
Council members also voted unanimously to approve the city's 2010-11 final budget document, with Councilman Tom Engstrom thanking staff and the previous council for its hard work on the budget.
Before the regular meeting had started, the council held a nearly 40-minute workshop to go over some of the final details of the budget, which totaled just over $13.5 million for the city and all of its agencies – including redevelopment – with $10.5 million in anticipated revenues. The $3 million gap will be filled by an existing fund balance, according to Silveira's report to the council.
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