Municipal leaders throughout the state have lamented the pending loss of property and potential revenue generating initiatives for their cities in the wake of the state Supreme Court’s ruling that will dissolve redevelopment agencies on Wednesday, Feb. 1.
But how employees from local redevelopment agencies will be absorbed, redistributed or laid off will give city leaders an additional challenge when budget discussions begin in the coming months.
Culver City’s City Council will take over some of the duties of the soon-to be-eliminated agencies, but the future status of some of those employees is still a mystery.
“While the City Council has determined that the city will be the ‘successor agency’ to the Culver City Redevelopment Agency as permitted under state law, the mission of the successor agency is to wind down the activities of the former Redevelopment Agency,” City Manager John Nachbar told the News.
Nachbar said the ramifications will extend into the city side, due to the way that some programs and how some employees were paid for is structured.
“While the loss of funding potentially impacts the city employees whose salary was supported 100% by the redevelopment agency, the loss of funding impacts the city organization as a whole,” the city manager explained before the joint agency and council meeting on Jan. 23. “Therefore, I am in the midst of preparing a proposal for the City Council that will begin the process of reducing expenditures and positions in multiple departments of the city.”
There are 24 positions in the city’s Community Development Department who fall under the category of having their salaries paid for exclusively by the agency.
Chamber of Commerce President Steven Rose thinks that there will inevitably be layoffs due to the elimination of the agencies. “If Sacramento is taking the vast majority of agency funding, the staff will likely be cut,” Rose, a former city councilman, predicted.
Neighboring cities are facing the same dilemma that Culver City officials will be forced to grapple with in less than a week.
Santa Monica Councilman Kevin McKeown said his city would do all that it can to limit the number of layoffs to city employees from its community development and planning divisions.
“Those employees do work essential to affordable housing, public projects, and a vibrant local economy, and we will find ways to fund them as long as
that work needs to be done,” McKeown said. “We won't let the state's seizure of local tax
revenue steal from our residents their promised libraries, parks, housing or transportation improvements.”
Rose also touched on the potential ripple effect that could spill over to the city as far as initiatives and staff positions due to the closing of the agencies.
“Certain positions are funded half by the agency and half by the city,” he said.
“One thing is for sure,” Rose added, “is here will be changes.”
Nachbar made a presentation to the council at its Jan. 9 meeting to inform them of how the court ruling will affect Culver City and the many pending redevelopment projects.
“The redevelopment agency provided significant resources to produce and maintain affordable housing. While the environment uncertain at best at this time, the city does expect to continue with projects that have received approval,” the city manager told the News. “These include the affordable housing components of the Tilden Terrace project and the 4043 Irving (Place) project.”
According to a report issued last year by a state oversight office, Culver City, as well as other municipalities throughout the state, has lagged behind in creating affordable housing.
In 2008, the Culver City Redevelopment Agency’s low to moderate income housing fund collected nearly $5 million in property tax money, the highest of any of the 12 agencies selected at random during an investigation by the state Senate Office of Oversight and Outcomes. The fund held $22.1 million that year.
During a 13-year period between 1995 and 2008, Culver City reported only four new units of affordable housing. It did report the substantial rehabilitation of 31 other units and the agency acquired the covenants of 12 housing units that are set aside for low to moderate-income tenants.
Santa Monica created nearly 750 units during that same time period.
Nachbar said the Legislature appears to be open to consideration of “some level” of funding for affordable housing.