As the Hollister Redevelopment Agency prepares to shut its doors for good Feb. 1, officials are readying to find other funding sources to fill a gap that includes hundreds of thousands of dollars allocated annually from the RDA toward the general city workforce.
A recent California Supreme Court ruling is set to close Hollister’s RDA and more than 400 others throughout the state. Hollister’s RDA has existed for nearly three decades as a mechanism – funded through annual, state tax allocations – to ensure the city has spent money on affordable housing and economic development in a designated zone, largely the downtown.
Hollister officials have shifted a percentage of some general city employees’ salaries – such as those of the development services director, city manager or public works crews serving intermittent functions for the RDA – to be paid from the redevelopment agency fund. The general fund, meanwhile, is the primary source for city employee pay and accounts for more than 60 percent of total compensation.
Hollister finance official Robert Galvan in July estimated the city diverts nearly $1.1 million in employee compensation out of the RDA fund, or somewhere between 6.5 percent and 7 percent of the city’s total compensation figure. That also includes pay for the three full-time agency employees, while the council has not addressed potential RDA worker cuts.
City Manager Clint Quilter on Friday said officials saw a “discrepancy in the number” – regarding the $1.1 million figure – and were “working to resolve it.” Galvan on Friday said the finance office would have a figure available Monday.
Quilter said the city expects to make up some portion of the impending shortfall through an anticipated, related reallocation of tax revenue from the state. He said the city would counteract other portions of the RDA compensation shortfall by funding such compensation through other sources. That could include capital funds, from which money is funneled toward specific purposes, or the general fund, which can be used with discretion.
“If they were working on capital projects, they’ll be transferred to other projects,” Quilter said of employees.
The city manager noted that officials are not counting on legislation floating around to either extend the Feb. 1 cutoff or revive such structured redevelopment in some way. Even with support in the legislatures, Quilter said, it is doubtful Gov. Jerry Brown – who initiated nullifying RDAs – would sign anything.
“We’re really planning on it being over on Feb. 1,” he said.
RDA compensation breakdown
The breakdown of fund accounts used to pay department heads includes the following:
– For Development Services Director Bill Avera, the city allocated 40 percent of his pay from the RDA; 40 percent from the Housing Set Aside fund (which is a function of the RDA); and 20 percent from the general fund.
– For City Clerk Geri Johnson, 80 percent of her pay came from the general fund, with 20 percent from the RDA.
– For Galvan, 90 percent of his pay came from the general fund, with 10 percent from the RDA.
– For Quilter, 80 percent of his pay came from the general fund, with 20 percent from the RDA.
– For City Attorney Stephanie Atigh, 80 percent was from the general fund, with 20 percent from the RDA.
– For the director of the airport and code enforcement, Mike Chambless, 100 percent of his compensation came from the airport enterprise fund. Galvan said on an annual basis, about 90 percent of Chambless’ pay comes from the airport fund, meaning 10 percent of his time is devoted to code enforcement.
