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Budget fray on council agenda

 

The Sonoma City Council will meet Monday with an abbreviated agenda, no proclamations, presentations or public hearings and only one real item of major significance.

That will be a report by City Manager Linda Kelly on recent developments on the state budget front and the fate of redevelopment agencies. Two weeks ago, the council devoted some six hours over two days to 11th-hour decisions on actions to commit and protect the city's redevelopment funds so that they could not be appropriated by the state as part of its budget-balancing process.

At the time, Gov. Jerry Brown had set a March 10 deadline for agreement on the elements of a budget that would require voter approval for some $12.5 billion in new or continuing taxes. That deadline has come and gone without resolution of major disagreements on some of the proposed budget measures. The process is driven by extra urgency because time is running out to schedule a ballot measure for the June election.

Meanwhile, the California Redevelopment Association, a consortium of redevelopment agencies, has released an alternative proposal to provide what it describes as "significant funding to schools" while also helping to close the budget deficit and avoiding the litigation and constitutional controversy that has been promised if the state moves to terminate the redevelopment system.

The CRA proposal would give redevelopment agencies the voluntary option of suspending the 20 percent set-aside now required for affordable housing and instead contributing an equivalent amount to local school districts in redevelopment project areas.

In exchange for that contribution, agencies opting to take that action could extend their project area's life by two years, meaning that they would receive two additional years of tax increment revenue.

A second alternative would allow redevelopment agencies to voluntarily contribute up to 10 percent of their tax increment revenue stream to local school districts for up to 10 years. In return, agencies would be allowed to extend the life of their district by one year each percentage of tax increment funding provided to district schools. The district extension would be capped at 10 years.

The League of California Cities, which has threatened to sue the state if redevelopment agencies are terminated, has not yet taken a position of the CRA proposal. City Manager Kelly said Thursday she had just attended a webinar on the subject and learned that the league is surveying its city members to get their reactions and expects to announce a position by 2 p.m. today (Friday).

Kelly said she learned from that online interaction there is at least one member of the state Legislature willing to introduce the CRA proposal.

Kelly said that the housing set-aside from Sonoma's redevelopment pot will be $1.1 million for next year. The Springs Redevelopment Project Area has another $395,000 in housing set-aside revenue for 2011-12. Since the Sonoma Valley Unified School District encompasses both the Springs redevelopment district and the City of Sonoma's community development district, it is unclear whether or not both agencies would be able to direct revenue to the school district.

As of a week ago, the school district was bracing for a potential $1.8 million deficit in the 2011-12 school year.

In the current political climate, it is currently impossible to predict how the budget drama will unfold from day-to-day. At press time, the governor was still at least four votes shy of the two-thirds needed to put a tax measure on the June ballot.

Meanwhile, a recent Field Poll found that a majority of California voters support a special election on the question of extending higher taxes.