Redevelopment Agency officials can breathe a temporary sigh of
relief. Gov. Gray Davis backed off from a host of statewide RDA
cuts that would have cost Hollister $1.5 million to $4 million,
according to RDA Director Bill Avera.
Redevelopment Agency officials can breathe a temporary sigh of relief.
Gov. Gray Davis backed off from a host of statewide RDA cuts that would have cost Hollister $1.5 million to $4 million, according to RDA Director Bill Avera.
Davis had proposed that RDAs transfer all unencumbered funds or uncommitted balances from low and moderate-income housing funds to the state’s general fund. Throughout California, Davis had proposed $500 million in such shifts.
Local projects such as the Vista Meadows 72-unit senior apartment complex, which has already experienced delays, would have been put off even further, Avera said.
“They (state government) are not going to do that,” Avera said. “It was up in the air.”
The local RDA was established in 1983 for the purpose of citywide beautification and assistance with low and moderate-income housing. RDA regulations were established as part of the state constitution in 1952. And the statewide budget crisis has thrust RDAs into a sense of insecurity about the future.
Avera presented an update to City Council this week on the averted disaster with unencumbered funds and also addressed several other impending issues regarding state budget cuts.
Avera said state officials will inevitably shift more funds from the RDA to the Educational Revenue Augmentation Fund. In 1992 the state began shifting property tax revenue into the ERAF, according to the California League of Cities. Since that time, those funds have shifted $39 billion away from local government agencies.
Last year, Avera said $200,000 was shifted to ERAF from the local RDA. And late last year the governor proposed a permanent shift – 25 percent for the 2003-04 fiscal year and 5 percent each year thereafter. Avera said that potential would “kill” all RDAs in California by 2018.
“That probably won’t happen now,” he said. “There’s too much at stake.”
Avera called Hollister’s RDA “small potatoes” compared to larger RDA jurisdictions such as those in San Jose, Los Angeles and San Diego.
“We’re talking hundreds of millions of dollars there… it didn’t make a whole lot of sense,” he said.
As of yet, the state has not taken any action on shifting additional funds to ERAF. But Avera said it’s only a matter of time. The Community Redevelopment Agencies – which is the alliance of statewide RDAs – is currently negotiating with state legislators on the issue.
However, Avera said he had a “sneaking hunch” that Hollister will lose about $2.1 million over the next two years.
The RDA is scheduled to contribute funding to several major projects in Hollister during the next few years, including the Long-term Wastewater Management Plan, Highway 25 safety improvements and the second fire station.
Funding for the sewer plan is secure because that money will come from existing reserves, Avera said. For the remainder of the projects, the RDA is in the process of issuing a bond. If they succeed, funds for the other projects will be locked up, too.
Avera will send a report by Friday to CRA, which plans to take information from RDAs throughout the state to Sacramento for lobbying.
But for now, Avera said he was relieved because the deadline for the current fiscal year budget has passed.
“We didn’t get hit at all in this fiscal year,” he said. “Any hit we take would be in the fiscal year 2003-2004.”
