Spend it or lose it, Atascadero fears

A few days after Gov. Jerry Brown introduced a proposal to dissolve redevelopment agencies as part of a plan to plug the state’s budget gap, the Atascadero City Council moved quickly to fast-track some redevelopment plans.

During a special meeting on Jan. 14, the council approved spending more than $32 million on numerous projects, including completing its repairs to the historic City Administration Building, making downtown improvements such as parking, restrooms and a pedestrian bridge, and building 24 low-income housing units.

Similar action is being taken in at least a dozen cities across California, as city officials rush to assign money to projects with the idea that if the money is allocated to local projects, the state can’t touch it.

The flurry of meetings and approvals was kicked off by Brown’s budget proposal to dissolve redevelopment agencies and shift the money to public safety, education and other services.

It was also a reaction to a rumor that state lawmakers might push through legislation to prevent cities from approving any new redevelopment funds.

So far, that has not happened, and it’s unknown if such a bill may be introduced, said Krista Noonan, director of communications for the California Redevelopment Association.

Local city officials have criticized the governor’s plan, arguing that redevelopment agency money creates local job opportunities, provides low-income housing, expands business opportunities and stimulates increases in property values that benefit the overall community.

“Our Redevelopment Agency has been a game-changer for the community,” Atascadero Assistant City Manager Jim Lewis said. “It’s so frustrating that we would kill the golden goose when we have an unemployment rate of 12 percent (in California).”

The Atascadero council’s move was somewhat unusual: the city’s Redevelopment Agency board, technically a separate legal entity from the council, agreed to contract with the city for more than $32 million worth of projects and improvements. The two entities also agreed to loan $10 million to the city for the city hall project.

The council then approved the contracts — which, Lewis said, locks up the money. The projects will be completed over the next several years, Lewis said.

Brown’s plan would dissolve redevelopment agencies by July 1 and proposes that local jurisdictions be able to pass bond measures and tax increases to fund local infrastructure projects with 55 percent voter approval, instead of the current two-thirds requirement.

Cities and counties all over California have formed redevelopment agencies that use a portion of property taxes to pay for projects in areas deemed blighted. As with most cities in California, the council in Atascadero acts as the local redevelopment agency board, and appointed city leaders and employees also have roles in the redevelopment agency.

Five cities in San Luis Obispo County have redevelopment agencies: Arroyo Grande, Atascadero, Grover Beach, Paso Robles and Pismo Beach.

Those cities, excluding Atascadero, have not held emergency meetings on redevelopment funds. The Arroyo Grande and Grover Beach city councils have voted to send letters to the governor and state legislators opposing Brown’s proposal.

“Other cities are hustling to commit unrestricted money to bonded indebtedness so that the money can’t be taken away,” Paso Robles City Manager Jim App wrote in an e-mail. “Our money is committed already.”

Tribune staff writer Tonya Strickland contributed to this report. Reach Cynthia Lambert at 781-7929. Stay updated by following @SouthCountyBeat on Twitter.