Days after the California State Supreme Court ruled that the legislature has the right to abolish redevelopment agencies but cannot require cities to make a payment to keep the agencies open, Hollister city officials are looking into the next step they need to take for life without an RDA while remaining hopeful that the legislature may come up with a last-minute reprieve.
Doug Emerson, a Hollister city councilman, said he was not surprised by the outcome of the ruling as he had listened to the deliberations. But he said he is hopeful that the state may come up with an alternative.
“I really think the legislature will come up with something,” he said. “I don’t know what, but they are kind of saying that that was not their intent (to completely eliminate RDAs.) I think something will be coming forward that will maybe clean up the RDAs because there have been abuses.”
The California State Supreme Court on Dec. 29 released the much-anticipated ruling on two state assembly bills that affect the future of redevelopment agencies. The judges were asked by the California Redevelopment Association – a group of cities and counties that banded together for the lawsuit – whether the state legislature can abolish redevelopment agencies and if cities have a right not to make payments to the state as a condition of continued operation. Gov. Jerry Brown made a move to eliminate the agencies to recapture dollars for public education.
The panel of judges ruled that the legislature does have the power to abolish RDAs, but that it is illegal for the state to levy a payment as a condition of continued operation.
David Huboi, a local architect and a Hollister planning commissioner, wrote letters to local legislators and Brown after the initial legislation past, seeking to save the redevelopment agencies.
“This ruling is like getting kicked while you are down,” he said. “We need to find a way to bounce off the mat and get our local construction base back.”
The RDA will shut down Feb. 1, barring a move by the legislature to reestablish the agencies.
“The next step, really for us, it has been recommended that the city council adopt a resolution that essentially makes the city of Hollister what they call a successor agency,” said Bill Avera, the manager of development services and the redevelopment agency. “We will continue to finish up the projects we have ongoing, and continue to administer the things we are allowed to continue administering. We have loans out there – first-time homebuyers – and we have some oversight.”
Avera said the city would likely take over the administration of the downtown fire station and that the RDA had signed a contract with San Benito Engineering for the West Gateway project. He said the city is likely to complete that contract, but no construction on the gateway project is likely because there is no capital available to complete it.
“We can maybe go out and seek grant funds and there may be other ways to accomplish this, but it won’t be done anytime soon,” Avera said.
He acknowledged that it may take a few weeks for the city council to sort through the decisions they need to make about how to proceed without an RDA.
“What will happen by next week, we will have an item on the (city council) agenda and some very general kind of big picture ideas of how this will work and what it actually means,” Avera said. “From the 9th to Feb. 1, we will become more clear on individual things. There are a lot of decisions the council will have to make in the next few weeks.”
Avera said there has not been any discussion on what will happen to RDA staff members, but that is something that will be discussed with the city council in the coming weeks. He did note that while the city will be losing the RDA money, some portion of the property tax that would have gone to the RDA will be returned to the general fund.
“Losing the RDA is absolutely devastating from the perspective of being able to do projects, public facilities; the money will not be there for some time,” Avera said. “On the flip side, the general fund will be getting money that it had not been getting in the past.”
Avera said city officials are still figuring out how much money will be added to the general fund, but that the additional funds would not likely support the types of large projects with which the RDA has been involved. He noted some of the projects the RDA has invested in through the years such as the wastewater treatment plant, the animal control facility, fire stations 1 and 2, and the police department building.
“They were built using RDA monies,” he said. “Those facilities could only be constructed otherwise through the general fund … The redevelopment agency is a pretty big tool communities use to provide general facilities or things that most small cities can’t afford to do. That’s probably the biggest for us.”
Huboi has been contracted for RDA projects in the past, including a renovation of the Veterans Memorial Building in 2002 and the more-recently completed Gateway Palms, an affordable housing project on the west side of Hollister.
“It seems to be a short-sighted measure to abolish RDAs,” he said. “I know how important it is for funding to go to our schools, but before you can put your kid in school you need to put food on the table and get dinner on the table.”
Emerson said he was most concerned about the ability of Hollister to continue to build affordable housing units.
“It will hurt because there is such a need for housing here,” Emerson said. “Even with the economy the way it is, we’ve done the Hillside project, Gateway Palms, the senior housing project with South County Housing. All of those – they were full a long time before completion so that is going to hurt our communities.”
