Area Cities Put Projects on Hold

Already faced with budgetary shortfalls from decreased sales and property taxes, cities throughout Los Angeles County now must also contend with lawmakers picking their pockets to close the state’s deficit. The move will delay or cancel planned redevelopment projects and force the cities to make additional cuts in their general fund spending. Gov. Arnold Schwarzenegger signed into law July 28 an amended $85 billion budget but not before making additional cuts to funding for state parks and social programs for children, families and the elderly. City governments throughout California were most concerned with the more than $2 billion being diverted in the next two years from redevelopment agencies to education in order for the state to meet mandates of Prop. 98. Additional monies destined toward municipal general funds will also be taken by the state. While that money is required to be paid back the same cannot be said for the redevelopment dollars. “This taking by the state is unconscionable because of the impact it will have on the redevelopment agency and the city,” said Stephen H. Williams, the city manager for the City of Palmdale. The $11.5 million Palmdale loses is toward the upper end of the scale for cities in the San Fernando, Conejo, Santa Clarita and Antelope valleys. Glendale will also lose $11 million, with Burbank taking a $16.1 million hit and Lancaster a whopping $17.5 million. Santa Clarita and Agoura Hills fall on the other end of the spectrum, losing less than $2 million. Without the money, Palmdale will have to scrap the starting of its Transit Village project of single-family homes, apartments and condominiums near its transportation center. A future phase of senior housing that is part of the Courson Connection, between city hall and Courson Park, will not get built. Simi Valley will put a hold on street and sewer improvements, while in the east Valley the City of San Fernando expects a slowdown in revitalization efforts in six redevelopment project areas. What must bristle with city officials from all municipalities is that they have made tough decisions when it came to their own spending and now must face even further cuts to their general funds. “As we were doing our budget we also had an $8 million gap to fill,” said Brian Gabler, assistant city manager and economic development director for Simi Valley. “Once we filled our gap what is left to cut?” Simi Valley has been fortunate so far with limiting its layoffs so far to a single position and having other employees take new positions as top level ones were eliminated. Palmdale reduced its full time staff to 256 from 355 employees, and cut costs by modifying health benefits, eliminating tuition reimbursements and trimming the budget for the performing arts center among other actions. San Fernando tackled its $3.2 million general fund deficit through cuts, hiring freezes and eliminating 21 part-time staff. If there is hope that the redevelopment dollars will stay with the cities, it is with a planned lawsuit against the state by the California Redevelopment Association. The association was successful earlier this year in another lawsuit challenging the state taking $350 million from redevelopment agencies as part of the 2008-09 budget. A new legal action could come in the next 30 days. The City of Thousand Oaks is holding back on making contingency plans on what projects could lose money if the state takes $7.4 million from its redevelopment agency. “The point is it is too early what projects will be impacted without seeing what the potential of the case is and the interest by the council,” said city Finance Director John Adams. The City of San Fernando is also taking a wait and see approach on which projects to postpone or to take a loan from the city’s housing fund, said Administrator Jose Pulido. The redevelopment agency board will look at every aspect of its budget, from administrative costs, professional services and capital projects to determine where money can be saved, Pulido said. The importance of projects funded through redevelopment agencies cannot be understated. Better roads, sewer connections, landscaping and other amenities bolster the chances a city has of landing new business and industry. “Those are all part of the criteria a CEO looks at when they look at moving to a new community or state,” said Gabler, of Simi Valley. In Thousand Oaks, the city’s business improvement district project to revitalize the downtown area along Thousand Oaks Boulevard with street extensions, landscaping, curbs and gutters could be funded with redevelopment dollars and provide a better area for businesses to locate. In San Fernando, projects are aimed at commercial corridors and industrial areas. Without such projects businesses would be less prone to come and make investments in the city, Pulido said. “Anytime an agency can provide the funding that is a bonus for everybody,” Pulido said.