2011020707 - Adoption of resolution in opposition to the State administration's proposal to abolish Redevelopment Agencies in CaliforniaIoW N 0 MEETING DATE: 02/07/11
ITEM NO:
cos cao5 COUNCIL /AGENCY AGENDA REPORT
DATE: FEBRUARY 2, 2011
TO: MAYOR AND TOWN COUNCIL/
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR =_
SUBJECT: ADOPTION OF RESOLUTION IN OPPOSITION TO THE STATE
ADMINISTRATION'S PROPOSAL TO ABOLISH REDEVELOPMENT
AGENCIES IN CALIFORNIA
RECOMMENDATION
Adopt resolution in opposition to the State Administration's Proposal to abolish Redevelopment
Agencies in California.
BACKGROUND
The Central Los Gatos Redevelopment Plan was adopted by the Los Gatos Town Council in
November 1991 to provide a financing tool to assist the community. Since its establishment, the
Redevelopment Agency has made significant contributions to improve the Town's physical and
economic conditions.
The Governor and State Legislature recently announced intentions to eliminate redevelopment
funding for local jurisdictions, except as required to retire existing debt and obligations, possibly
including the prohibition on any further use of redevelopment funds. The legality of the State's
proposed actions is questionable on a number of fronts, including pursuant to the recent passage
of Proposition 22, which specifically protected redevelopment agencies from State takes.
DISCUSSION:
A broad coalition of mayors and council members, local govermnents, business and labor,
environmental leaders and affordable housing advocates oppose the State's attempt to shut down
redevelopment agencies. Staff is recommending that the Town of Los Gatos join this coalition in
opposing this State action by adopting the attached resolution.. 1,
PREPARED BY : PAMELA JACOBS >� !lift,�� /�
ASSISTANT TOWN MANAGER
............................
Reviewed by: Assistant Town Manager /Deputy Director Town Attorney /General
Counsel Clerk Administrator /Secretary Finance
Community Development
PAGE 2
MAYOR AND TOWN COUNCIL /CHAIR AND MEMBERS OF THE REDEVELOPMENT
AGENCY
SUBJECT: ADOPTION OF RESOLUTION IN OPPOSITION TO THE STATE
ADMINISTRATION'S PROPOSAL TO ABOLISH REDEVELOPMENT
AGENCIES IN CALIFORNIA
FEBRUARY 2, 2011
Like many other cities with redevelopment agencies, the Town of Los Gatos has utilized the
redevelopment financing tool to make significant improvements in the Central Project Area.
These improvements have benefitted the community as a whole, in terms of jobs, affordable
housing, economic growth, infrastructure improvements, public safety, and the new library now
under construction. The economic growth has generated increased revenue that funds local
services. In addition, throughout the life of the Redevelopment Agency, Los Gatos schools have
received pass- throughs of increased property tax generated in the redevelopment project area.
The Los Gatos Town Council and Los Gatos Redevelopment Agency Board of Directors have
long planned and committed the use of current Redevelopment Agency funds and reserves, as
well as anticipated Redevelopment Agency revenues and resources, for a variety of public
improvements needed to fulfill the Agency Plan to eliminate blight and achieve other benefits for
the Central Los Gatos Redevelopment Project Area. The abolishment of redevelopment agencies
would eliminate the key - iinancing tool needed to accomplish these projects.
CONCLUSION
The Los Gatos Redevelopment Agency has contributed greatly to the economic health of the
community and represents an important funding source for planned projects benefitting the
project area and the broader community. The State proposal to abolish redevelopment agencies
threatens these future projects. Staff recommends that Council adopt the attached resolution
opposing the _State's proposal.
ENVIRONMENTAL ASSESSMENT
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT
The adoption of the resolution does not have a direct fiscal impact; however, if the State's
proposal to abolish redevelopment agencies succeeds, the Los Gatos'Redevelopment Agency
may lose significant funds for critical public improvements.
Attachments:
Resolution in Opposition to the State Administration's Proposal to Abolish Redevelopment
Agencies in California
RESOLUTION
RESOLUTION OF THE TOWN COUNCIL /REDEVELOPMENT AGENCY
OF THE TOWN OF LOS GATOS IN OPPOSITION TO THE ADMINISTRATION'S
PROPOSAL TOABOLISH REDEVELOPMENT AGENCIES IN CALIFORNIA
WHEREAS, as part of its 2011 -12 budget proposal, the Governor has proposed
permanently abolishing California's more than 400 local redevelopment agencies; and
WHEREAS, this proposal represents more of the same misguided and illegal State budget
raids of local government funds that voters have repeatedly sought to end, most recently in
November 2010 when an overwhelming 61% of voters elected to stop State raids of local
government funds, including redevelopment funds; and
WHEREAS, this proposal will bring very little financial benefit to the State.
According to the State Controller's Office, redevelopment agencies have more than $87 billion in
bond and other contractual obligations that legally must be repaid before revenues are available
to any other purpose. In fact, according to the State Department of Finance's own budget
documents, there will be zero State savings in out years from shutting down redevelopment; and
WHEREAS, this proposal will destroy local economic development, including hundreds
of thousands of jobs and billions of dollars in local economic activity throughout California;
and
WHEREAS, in Los Gatos, abolishing redevelopment will severely limit the Town's
ability to make critical street and other public infrastructure improvements and to assist local
businesses in the Downtown Project Area. The Downtown business district generates one -
fifth of the Town's sales tax revenue, which funds local services including public safety,
libraries and parks; and
WHEREAS, throughout California, redevelopment activities support 304,000 jobs
annually, including 170,600 construction jobs, contribute over $40 billion annually to
California's economy in the generation of goods and services, and generate more than $2 billion
in state and local taxes in a typical year; and
WHEREAS, eliminating redevelopment will take away one of the few tools local
governments have to comply with state requirements to plan for more compact urban
development supported by transit - oriented development, housing, jobs and infrastructure; and
WHEREAS, eliminating redevelopment will destroy the development of affordable
housing in California. Redevelopment agencies are the second largest funder of affordable housing,
behind only the federal government, responsible for over 98,000 units of affordable housing since
1993. In Los Gatos, redevelopment is the largest source of funds for building affordable
housing; and
WHEREAS, shutting down redevelopment agencies is a violation of multiple State and
Federal constitutional provisions.
THEREFORE, BE IT RESOLVED THAT the Town Council /Redevelopment Agency
hereby formally opposes the Administration's proposal to abolish redevelopment in California.
THEREFORE, BE IT FURTHER RESOLVED, that Los Gatos authorizes the Council
and Town staff to communicate its opposition to this proposal to the Governor, the
Legislature, business groups, and citizens.
PASSED AND ADOPTED at a regular meeting of the Town Council /Redevelopment
Agency of the Town of Los Gatos held on the day of 2011 by the following
vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED: MAYOR/CHAIR OF THE TOWN OF
LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:.
CLERK ADMINISTRATOR/SECRETARY OF THE REDEVELOPMENT AGENCY
OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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