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Sonoma joins redevelopment rush
Posted By Sun News On February 8, 2011 @ 1:13 pm In News | Comments Disabled
Spending its money before the state can seize it, the city of Sonoma authorized a $16 million bond issue to fund street improvements, bikeways, a library renovation and other priority projects.
“Time is of the essence,” said Assistant City Manager Carol Giovanatto. “There appears to be a short window of time to complete the process prior to final action on the state budget.”
To help close the state’s budget gap, Governor Jerry Brown has vowed to eliminate redevelopment agencies in California. Reacting to the threat that their dedicated funds might be seized by the Sacramento, redevelopment agencies throughout the state have rushed to commit available funds to eligible projects.
Sonoma County supervisors last month approved the use of more than $20 million in redevelopment dollars. The state’s 425 redevelopment agencies have reportedly approved more than $1 billion in new spending.
In Sonoma, the biggest line item on the local list is $7.55 million for street reconstruction, sidewalk and bikeway improvements, and traffic lights and signage. The Sonoma Valley Library improvement project would receive $2.5 million, and the Sonoma Community Center, for structural upgrades, would get $2 million. Another $1.45 million would support an affordable housing project.
City Manager Linda Kelly said the items had previously been identified as priorities in the city’s development plan. Further refining the list was the bond provision that all work must be completed within three years.
“These are all on our list of approved projects,” said Councilmember Steve Barbose. “They are all totally appropriate expenditures.”
Even after committing to the bond, the council retains considerable flexibility in deciding how to spend the money.
The $16 million figure was what the city determined it could comfortably afford to pay back over the 20-year term, Giovanatto said. The estimated debt service is $1.41 million.
Lonnie Odom of Stinson Securities, the city’s bond consultant, said that even with flat property tax revenue, the city will collect twice what it needs to make the annual payments.
If the city did not issue the bond, it would stand to lose $6 million from its redevelopment fund.
“Right now you have the greatest amount of money for your projects,” Odom said. Without the bond issue, “You’ll probably send some of it or all of it to Sacramento.”
Councilmember Tom Rouse admitted he began the meeting unsure of how he would vote on the issue, but joined the 4-0 decision. “Nothing here says we’re wasting money,” he said. “These are our dollars, and we are spending them on reasonable projects.”
On the advice of the city attorney, Councilmember Joanne Sanders did not participate in the vote because she resides within 500 feet of the community center. She did question the city incurring more bond debt, and likened the action to “running up a credit card to the max.”
Councilmember Ken Brown noted that by spending bond dollars to fund the library project, the city need not dip into its Special Projects Fund as it had planned. That frees up money for other use as directed by the council – the community pool, for example.
Investing in local projects to benefit the city is what redevelopment is supposed to do, Brown said. “I have more faith in our city council than I do in the state.”
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