The sudden jolt that is the demise of the Hollister Redevelopment Agency and more than 400 others throughout California has prompted a state senate bill that legislators should approve to prevent mishaps and allow for a smoother transition.
The California Supreme Court in late December ruled against the California Redevelopment Agency – which filed suit to halt the governor’s planned dissolution of RDAs – and also decided it is unconstitutional for the state to continue the programs so long as cities pay lump sums and annual payments to help fill the budget gap.
It comes as no surprise that the supreme court sided with Gov. Jerry Brown’s decision to dissolve the agencies, which are funded through tax allocations requiring specific types of uses such as affordable housing and economic development projects, in a move to save between $1 billion and $2 billion. It was more of a stunning development in that the justices declared the so-called “blackmail” payments – Hollister had agreed to give back close to $1 million annually along with a nearly $4 million lump sum – as unconstitutional.
Hollister City Council members have taken the appropriate steps by getting their administrative house in order before the agencies must stop functioning Feb. 1.
Van Nuys State Sen. Alex Padilla astutely saw common sense in extending that cut-off date and authored the legislation to give municipalities until April 15 to close.
The state should allow for a longer turnaround, considering the financial and political complexities involved in organizations such as Hollister’s RDA, which has been active for nearly 30 years. One month is not a reasonable enough time frame for local jurisdictions and the state to get their affairs settled and administrative futures established.
Hollister council members earlier this month handed over the remaining administrative duties for outstanding projects and debt – of which the city carries a significant amount, about $44 million in principle from bond issues that are still on the books – from the current RDA to the city itself. There are still many outstanding matters, however, such as likely assimilating some of the RDA staff into the general workforce and, presumably, moving ahead with a reduction in force of some level. Other organizations affected by the RDA’s demise could use the time, too – such as the Hollister Downtown Association, which is losing $65,000 each year, about one-third of its annual budget, and the Economic Development Corp. of San Benito County, which is losing $50,000, or around one-quarter of its annual expenditures.
City leaders are on the right path, but, as other statewide jurisdictions are realizing as well, they could use a little bit more time to ensure there are no bumps along the road toward this monumental reform.
Pinnacle Editorial Board members Brenda Weatherly and Gordon Machado did not contribute to the discussion or writing of this editorial. Machado is president of the HDA. Weatherly is the HDA’s executive director.
