The big news around City Hall these days is the dissolution of municipal redevelopment agencies (RDAs) all over California — including Santa Monica’s.
Early last year, Gov. Jerry Brown recommended dissolving all 497 of the state’s agencies as a way to ‘take back” $1.7 billion in property tax revenues — money that would help balance the debt-ridden state budget and allow it to send more than $1 billion back to local schools and public safety programs that were previously cut.
On Dec. 29, a California Supreme Court ruling approved legislation that will eliminate all redevelopment agencies on Feb. 1. The ruling has sent City Hall staff into overdrive dealing with the aftermath of possibly losing all or some of $283-million in funding earmarked for local projects.
Redevelopment agencies were established decades ago to end urban blight and promote urban renewal. A portion of property taxes collected by the state were kicked back to communities to fund the RDAs. Typical RDA expenditures went to highways and bridges, affordable housing, stadiums, parks, libraries and other infrastructure improvements.
Knowing that RDA funding was in jeopardy, in mid-December the City Council (which also acts as the Redevelopment Agency) transferred $267 million in funds out of the RDA and into various general fund accounts hoping to protect projects such as Expo Light Rail enhancements, low income apartment projects, a new fire station, a new branch library and Civic Auditorium and Santa Monica High School renovations among others.
It’s unclear at this time whether any or all of those monies are safe or will have to be surrendered.
City Manager Rod Gould reported to the council at Tuesday’s meeting that the state is entitled to all but current debt and obligations. What was left flows back to the state to be redistributed.
Gould also told the council that 82 Santa Monica seniors receive rental assistance from RDA funds. With these monies "disappearing” in a few weeks, City Hall will undoubtedly (and must) step in and maintain the program even though it will add $1.3 million to the general fund, this year and more in years to follow.
Why were redevelopment funds (designated to cure urban blight) being used to subsidize rents for low income seniors? Perhaps, by not including this program in general fund expenditures such as City Hall does with some homeless services for example, bureaucrats thought they could save money by writing these costs off to redevelopment?
City Hall has spent hundreds of millions of dollars on “affordable” rental housing just in the last 10 years, primarily through its affiliate Community Corporation of Santa Monica. Virtually all of CCSM’s projects have been built and occupied by low income families recruited from far-flung parts of Los Angeles County — not for seniors in need, let alone Santa Monica seniors.
In this light, it’s unfortunate that City Hall hadn’t included affordable senior projects in CCSM’s housing mix. Nevertheless, of the $267 million that City Hall has said has been protected, $111 million will go to more low income rental projects — again, mostly for out-of-town families who’ll vote for the Santa Monicans for Renters’ Rights ticket come election time.
Some RDA projects are/were overpriced vanity projects such as the $47.7-million Palisades Garden Walk, a $46.7 million renovation of the aging Civic Auditorium which will likely never operate in the black and may need annual operating subsidies as high as $2 or $3 million, an $11.1 million branch library in Virginia Park and $12.8 million for a Colorado Avenue Esplanade..
Yet, more appropriate RDA projects such as creating infrastructure to reduce beach and ocean water pollution fell directly on taxpayers’ backs when local politicians placed the Clean Beaches and Oceans Parcel Tax Act (Measure V) on the ballot because they wanted to fund more glamorous, “world class” projects with RDA money. Measure V established a permanent tax on property to pay for urban runoff mitigation and was voter-approved in 2006.
At Tuesday’s council, Mayor Richard Bloom recalled a recent chat with former Santa Monica-Malibu Unified School District Superintendent, now Los Angeles Unified School District (LAUSD) superintendent, John Deasy.
Bloom mentioned that Deasy was disappointed in the loss of RDA dollars and told him that every dollar that’s not being spent in the community creating jobs means another potential student that’s falling into poverty in his (school) district and potentially more crime ... and more drugs and all of the things we associate with poverty.
I called the LAUSD press office to confirm Deasy’s position. They refused to comment. However, eschewing millions of dollars in state support for LAUSD schools in favor of creating local jobs is an irresponsible position for the superintendent of the state’s largest (and financially challenged) school district to take.
Deasy and SMMUSD school supporters should have been ecstatic that some state funding was being restored to public schools. Unfortunately, dissolving our RDA could cost the SMMUSD millions of dollars to help pay for capital improvements, so our school folks have an excuse for remaining noncommittal.
Where do we go from here? Obviously, we’ll have to see what’s left when the dust settles, but already the “tax and spend” crowd is talking about floating bond issues to pay for projects whose funding will be lost when the RDAs shut down.
That’ll leave the public to decide the merits of projects by approving or rejecting bond measures at the ballot box to fund them.
Bill can be reached at mr.bilbau@gmail.com.
