CITY HALL — Santa Monica’s Redevelopment Agency currently spends approximately $3.8 million on personnel, a cost which may have to be partially borne by City Hall after the agency goes defunct on Feb. 1.

The agency supports 31 positions to varying degrees. The majority of those staff members manage or work on the redevelopment projects in Santa Monica like the field replacement at Santa Monica High School or the Pico Neighborhood Library, wrote Kate Vernez, deputy city manager for special projects, in an e-mail.

The remainder are involved in housing activities, which the agency also supports.

The California Supreme Court signed the death notice of over 400 redevelopment agencies across the state in late December when it upheld the state legislature’s ability to dissolve the entities as part of Gov. Jerry Brown’s 2011-12 budget.

Redevelopment agencies, which use a portion of property tax money to partner with developers to encourage development in blighted areas, control about $5 billion a year in tax revenue.

If the state Legislature does not pass a bill on the table to extend the life of the agencies by slightly over two months, those employees will transfer to a “successor agency.”

The City of Santa Monica took on that role by vote of the City Council Jan. 10, and in so doing, took on the responsibility to complete all “enforceable obligations,” which includes contracts for projects and the 31 employees.

The employees retain civil service status, and are paid out of 5 percent of the money the agency would have received through taxes for the first year of the successor agency’s tenure, said H.D. Palmer, deputy secretary for communications for the state’s Finance Department.

The next year, the agency only gets 3 percent for overhead. That has to support all of the employees, other administrative expenses and the costs of the Oversight Committee, a group of civilians and appointees that keep track of the successor entity.

“To the extent that there’s not sufficient funds for everyone, there would be seniority-based layoffs,” Palmer said.

City Hall does not have plans to lay off any employees right now, said City Manager Rod Gould in a prepared statement.

City Hall has a number of highly-visible capital improvement projects in the works that are funded through redevelopment money, Gould said, and those need professional staff to keep running.

“The city will be taking steps to ensure that these key positions remain funded in the wake of the Supreme Court ruling and will not make any precipitous decisions,” Gould said.

As the situation surrounding redevelopment agencies begins to resolve and stabilize, City Hall will take a closer look at its ability to “make longer term commitments to its redevelopment-funded employees,” Gould said.

Redevelopment agencies are still in a state of flux.

The California Supreme Court decided in December that the Legislature had the power to dissolve the entities, but that it did not have the ability to keep them open in return for payments.

California legislators introduced a bill Jan. 6 that would extend the life of redevelopment agencies to April 15 in order to give agencies time to figure out how to deal with existing development projects and get their houses in order.

In the meantime, the Department of Finance will review all obligations that the entities entered before June 29 to ensure they are legitimate.

The department will finish its review by May 1.

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