Gov. Jerry Brown’s efforts to close the state’s $25 billion budget deficit could impact Davis’ future redevelopment projects.
His 2011-2012 budget proposal would phase out the state’s roughly 400 city redevelopment agencies in order to reorganize local government. Brown said the proposal would free up $1.7 billion in the next fiscal year to help close the budget gap and finance cities, counties and school districts in the future.
“If we don’t do redevelopment, then what do we do, what do we take?” Brown told city leaders last week. “Do we take more from universities? Do we cut deeper into public schools that have been cut year after year?”
Davis officials said this plan, which would effectively eliminate Davis’ Redevelopment Agency, will impair the city’s ability to fund capital developments and improvements.
“Our ability to do small and large projects could be significantly constrained,” said Davis Community Development administrator Katherine Hess.
Davis’ Redevelopment Agency (RDA), whose governing board is the Davis City Council, has funded city projects including the I-80 bicycle tunnel and Pole Line over-crossing, as well as public-private projects such as the conversion of City Hall into Bistro 33.
The agency currently helps to fund developments such as the Second Street Pedestrian Improvements Project and the Fifth Street redesign. It also aims to fund the Third Street Improvements Project, which plans to renovate Third Street between A and B Street if the city attains adequate construction funding.
While the proposed budget plan would not affect existing projects, Hess said funding for future development would be contingent on grants from state agencies such as Caltrans or Federal stimulus money if the redevelopment agencies are eliminated.
“If we couldn’t get grant funding, the projects wouldn’t happen,” Hess said.
Davis city attorney Harriet Steiner said an elimination of the RDA would also impact the city’s affordable housing programs, which the agency helps to finance.
“Twenty percent of the RDA fund goes to low income housing, and the city uses that to help pay for construction costs, primarily for low income housing projects,” Steiner said. “[This elimination] could potentially have an impact on the feasibility of future projects that the city has on the drawing board.”
California enacted the Community Redevelopment Act of 1945 to allow cities to draw redevelopment areas to combat urban blight – deterioration of city infrastructure resulting from lack of funding and neglect. Davis’ designated redevelopment area, originally drawn in 1987, includes downtown Davis and much of south Davis.
The city uses the 1987 property tax levels within the designated area to finance city services. Additional property taxes resulting from inflation or increased property value since 1987 finance the city’s redevelopment fund, which comprises most of the Davis RDA’s $8.2 million budget.
Over 100 city leaders from across the state met in Sacramento last week to protest the proposed elimination, expressing their intent to fight the proposal in the state legislature and challenge its legality in the courts. Several Davis officials met in Sacramento last week, including interim City Manager Paul Navazio and multiple city councilmembers.
City advocates, including the League of California Cities, argue that the elimination is illegal under a new constitutional amendment, which voters approved last November. The amendment, formerly known as Proposition 22, aims to block the state from taking or borrowing local government money.
Brown has said that he is confident in the legality of his proposal.
The Davis City Council has not yet taken an official stance on the proposal, but plans to address the issue at next week’s meeting.
JUSTIN HO can be reached at email@example.com