While many local agencies, programs and services have been on the potential chopping block for months, the state budget signed by Gov. Jerry Brown on Wednesday put a tentative axe to redevelopment agencies.
"There were two bills regarding redevelopment, one would dissolve our redevelopment agency and everybody else's. The second said that as long as you make an annual payment to the state, the agency would continue," said Danville City Attorney Rob Ewing. "For the immediate time, our agency is in limbo."
Danville's redevelopment agency (RDA) has spent approximately $53 million over 25 years to extend Railroad Ave., construct the library and community center, renovate the Village Theater and maintain infrastructure. Most recently, the RDA purchased a multi-million dollar building near San Ramon Valley High School as part of the downtown beautification project.
Assembly bills X1 26 and X1 27 could effectively wipe out Danville's RDA, which saw revenues of $1.6 million in the 2010-11 fiscal year. Under X1 26, RDA will be prohibited from several actions, including incurring debt, making loans and adopting or amending redevelopment plans. Those agencies that do not comply with X1 26 will be dissolved on Oct. 1, according to the California chapter of the American Planning Association.
Assembly Bill X1 27 would allow RDA to exist if the city or town participates in the alternative voluntary redevelopment program, which "requires the city to make certain specified annual payments to the county auditor for distribution to schools, fire protection agencies, and transit agencies beginning in fiscal year 2011-2012." Danville would have to take part in the program before Nov. 1.
"The way the bill is set up, that payment and it can come from entirely the redevelopment agency or the city or town can contribute to that too," Ewing said. " We've seen a preliminary number that for the first year would be $850,000 and roughly 20-25 percent off that every year after."
Because the state has until Aug. 1 to give the official numbers associated with Assembly Bill X1 27, Ewing said town officials won't be able to do much before their August council meeting. Until then, Danville will join forces with Oakland and other Bay Area cities in filing a lawsuit to try to stop Gov. Brown and the state Legislature from cutting funding for RDA.
The California Redevelopment Association and the California League of Cities will file the lawsuit with the California Supreme Court next week, challenging the bill's constitutionality by alleging that it violates Proposition 22, a measure passed by California voters last November that bars the state from taking funds that are supposed to go to local agencies. A ruling on a possible intermediate stay is expected by the end of July.
Ewing said the redevelopment bills aren't Danville's only problem, or even its biggest, with the new budget. Vehicle license fees, which are expected to account for $162 million in state revenue for the 2011-12 fiscal year, will be reallocated for local governments.
"It's taking away some of the vehicle license fees that normally go to the city's general fund, in our case about $130,000 a year. As part of that bill we might have some increased expenses for booking fees," Ewing said.
Since 2009, the vehicle license fee rate has been 1.15 percent. Of this amount, 0.65 percent goes to local governments, 0.35 percent goes to the general fund and the remainder to local public safety programs. Under Gov. Brown's budget, the fee will remain the same but only 0.5 percent will be dedicated to local purposes.
"Over the next week or two all cities are going to have to sort through all this stuff, not just the redevelopment piece, to see what the impact is on our budget," Ewing said.