City Desk
By Carolyn Schuk

Charter Review Committee Gets To Work

At its Aug.16 meeting, the Santa Clara City Council appointed a Charter review committee to review the way Santa Clara City Council members are elected. Presently, candidates run for at-large seats. The committee will consider alternative methods, including district seats and cumulative voting.

The 15-member committee had its first meeting on Aug. 18, and appointed Dave DeLozier as chair and Teresa O'Niell as vice chair.

The committee includes:

• Six members appointed by individual City Council Members: Yuki Ikezi (Kolstad) Vilma Kennedy Pallette (Mahan), Mohammed Nadeem (Matthews), Keith Stattenfield (Kennedy), Eric C. Stroker (Gillmor), Sameena Usman (McLeod), Peter Yoon (Moore)
• Two members appointed by the Citizens Advisory Commission and the Chamber of Commerce: Dave DeLozier (CoC), Teresa O'Niell (CAC)
• Seven at-large members chosen by majority City Council vote, out of 12 applicants: Gary Alver, Karen Hardy, Michael O'Halloran, James Rowen, Steven Silva, Raj Chahal, Ralph Sivilla

In June, Lawyers Committee for Civil Rights (LCCR) legal director Robert Rubin threatened the city with a California Voting Rights Act lawsuit. The law - written by Rubin and his associate Seattle law professor Joaquin Avila, who have garnered millions in fees bringing voting rights lawsuits - prohibits at-large elections if they "result in the dilution or abridgment of the right of registered voters who are members of a protected class... by impairing their ability to elect candidates of their choice or to influence the outcome of an election."

Meetings are open to the public and held in the City Council Chambers (unless otherwise noted) from 5:30- 7:00 p.m., and are scheduled for Sept. 1 (Central Park Library Redwood Room, 2635 Homestead Rd), Sept. 22, and Sept. 29. City Council will review the committee's recommendation on Oct 11, 2011.

Where There's a Will There's an RDA

City staff is recommending that Santa Clara continue to operate its RDA under new terms offered by the state: an $11.7 million up-front payment this year and about $2 million in subsequent years. These payments are intended to recover RDA-diverted property tax "increments" that the state would otherwise funnel to schools and other local agencies. The Council voted unanimously in favor of moving forward with the plan to continue RDA operation.

Since California Governor Jerry Brown first announced his intention to abolish California's redevelopment agencies (RDAs) and return RDA-diverted property taxes back to local schools and agencies, Santa Clara's city government has been in a sweat to stay one step ahead of Sacramento. To this end, over the last six months the City Council transferred Santa Clara's RDA projects, assets and debts to other city authorities.

However, these steps may not be effective because the law abolishing the RDAs (ABX1 26) gives the state controller authority to review - and revoke - RDA asset transfers and debt issues back two years.

What it took away with ABX126, Sacramento has offered to give back with another budget follow-on bill: ABX1 27. But this choice comes with a hefty price tag. RDAs can continue operating if they pay the state a one-time, prorated pass-through payment this year, and ongoing payments annually.

On August 12, the California Supreme Court issued a stay on the plan to dismantle RDAs, promising a decision early next year. The decision allows RDAs to continue operations, but bars them from starting new projects, issuing bonds, and buying or transferring property in the interim.

In light of this, continuing Santa Clara's RDA under the ABX1 27 is "insurance" for the city if the lawsuit isn't successful, said City Manager Jennifer Sparacino at the Aug. 16 Council Meeting. "If the court was to rule in favor of the state we're better to have done as we're doing. If the lawsuit succeeds, then this is all moot."

Find $11.7 Million or Else

With Santa Clara's budget pressed, and its reserves drained, finding nearly $12 million this year and an additional $2 million in subsequent years isn't an easy task. City Manager Sparacino outlined the hard choices facing the city.

Two million would come from RDA tax increment revenue, $6 million from 2011-12 affordable housing funds, and the balance from unspent discretionary funds. Future levies could take money from affordable housing and capital improvement projects, as well as the City's ability to repay its $40 million advance from the 49ers football team, Sparacino acknowledged.

Indisputably, this puts Santa Clara between the proverbial rock and a hard place. Shuttering its RDA has potentially dire consequences for the city, according to Sparacino, including:

• $15 million general fund loss in RDA lease payments,
• $6 million loss to affordable housing programs,
• Jeopardizing current projects and RDA agreements,
• A halt to the north of Bayshore and downtown development projects, and
• Forced sales of RDA property, including some anticipated for stadium use.

Of these, it was clear from Council discussion that the threat of losing control of RDA-owned property looms largest in the city officials' fears. Over the course of Santa Clara's history, the city has had actively retained ownership of its land.

Careful reading of ABX126 doesn't allay this fear, although it does dispel the bugaboo that in the post-RDA era public parks and fire stations will be auctioned off to the highest bidder.

Successor Agencies, Oversight, and Assets
The new law specifies that cities and counties that established the original RDAs create so-called "Successor Agencies" to manage RDA assets and obligations. Public assets - roads, schools, police and fire stations - transfer to the appropriate public jurisdiction.

Other RDA assets would be disposed of by successor agencies "as directed by the Oversight Board with the proceeds transferred to the county auditor-controller for distribution to taxing agencies within the county." Successor agencies would have to pay taxing agencies for any assets they retain, "at market value as determined by the county assessor...unless some other agreement is reached."

Each successor agency will be overseen by a seven-member board representing regional and municipal interests: the county board of supervisors, the city that formed the original RDA, the largest special district in the RDA, the county board of education, the Chancellor of California Community Colleges, the largest representative employee organization of the former RDA, and the public (chosen by the county board of supervisors).

What's the job of the oversight board? To "direct the Successor Agencies to dispose of all assets and properties expeditiously and in a manner aimed at maximizing value," approve retention of RDA properties by cities and counties, and audit the operations of former redevelopment agencies.

Other City Council News

• The Council revised the zoning requirements to ease some restrictions on "non-conforming" buildings and facilitate their return to residential use.
• The Council will hold an Aug. 30, 2011 hearing on the proposed $15.5 million Presidio El Camino affordable housing project at 1410-1456 El Camino Real.
• MTC's 2011 report on Bay Area roads gave Santa Clara a pavement condition index (PCI) of 80 out a possible 100 points. That still puts the city in the "very good" category, but is a drop of 2 points from last year's PCI.
• The world's largest MINI dealership just opened in Santa Clara.
• The Council asked staff to develop a policy for short sales involving Santa Clara's First Time Homebuyer (FTHB) program.
• The Aug. 16 meeting was adjourned in Memory of Dan MacNaughton, Ron Swegles, Randy Sheleman and Sclavo DiVita.

Redevelopment's Dark Side

The downside of redevelopment is illustrated by towns such as Fontana - 70 percent of the city is RDA land, effectively revenue-starving local schools - and Bell - whose RDA is under state investigation for financial mismanagement, illegal taxation, questionable contracts and land purchases, and generally misusing RDA funds.

But even without criminally inclined public officials, RDA's downside can be seen right here on north Santa Clara's border with San Jose.

All of north San Jose's RDA-funded planned residential development is in Santa Clara Unified School District. Because it's RDA-funded development, not one dime of the additional property tax revenue generated will go SCUSD to support what may be a doubling of its student population - not until the development bonds are paid off, decades in the future. So far San Jose refuses to make any accommodation. Shuttering San Jose's RDA offers one path to a just resolution.