It wasn’t the decision the city of Big Bear Lake hoped for. The California Supreme Court ruled at the end of December redevelopment agencies across the state must be dissolved as of Feb. 1, 2012.
“I’m devastated,” says Liz Harris, chair of the city’s Improvement Agency.
Gov. Jerry Brown pushed through legislation in June that dissolved redevelopment or improvement agencies in the state. The idea was that the funds flowing to those agencies would help fill the state’s $13 billion budget shortfall.
California Redevelopment Association took the matter to the state’s highest court arguing that the legislation to shift the redevelopment funds to the state was illegal under Prop. 22, which bans the state from raiding local government funds. The state Supreme Court upheld AB 26 legislation and invalidated AB 27 to keep the redevelopment agencies in place with the payments to the state. Those payments would be for schools and local services.
Assembly Bills 26 and 27 effectively dissolved the agencies but allowed for reinstatement with a price tag. If the sponsoring entities, such as the city of Big Bear Lake, agreed to fork over money to the state, the redevelopment agencies could remain in operation. The city of Big Bear Lake voted to make the payment, but like all agencies in the state were in a wait-and-see mode waiting for the court’s decision.
Unless the state legislators can enact new legislation in the next few weeks, Big Bear Lake’s improvement agency will be dissolved. Any capital improvement projects planned by the IA will not take place, says Lyle Haynes, the city’s redevelopment director. At least not at the level originally proposed, he says.
The next step is for the City Council, which also serves as the IA board, to determine if the city will serve as the successor agency for the IA, Haynes says. As the successor, the city will oversee the disillusion of the agency. If the City Council chooses not to be the successor, any local taxing entity can apply to serve, according to Haynes. Examples would include the school district or even the healthcare district.
Haynes says he expects the City Council to consider the successor agency item at its Monday, Jan. 9, meeting. Additionally, the city staff and leaders will need to look at alternative structures to fund economic development, Haynes says.
Harris says, speaking for herself, that in her mind the court ruling doesn’t change what the city does in terms of redevelopment, but how it’s done. Pay as you go will probably be the way the city funds future projects, Harris says.
Village projects such as an amphitheater, boardwalk or skating rink are among those affected by the court ruling. Any future plans will most likely be “scaled way, way, way back,” Haynes says. Projects where funds were already committed or under contract won’t be shelved, he says. Those include the streetscape projects for the Village L of Village Drive and Pine Knot Avenue, and the Knickerbocker Trail.
Business assistance loans funded through the Improvement Agency are also in jeopardy. Those already approved will not be impacted, but future projects will be at the discretion of the City Council, Haynes says. He feels that the facade improvement program is one of the first that should receive priority, as it has been very successful.
Also part of redevelopment is the requirement for low to moderate affordable housing. Haynes says the affordable housing component is the most unclear and confusing piece of the ruling and legislation. The obligation remains, but without funding, he says.
Harris, who is a former educator, says if the redirected improvement agency funds are used as Brown promised for education, there is a silver lining to the court ruling. “I’m not singing the hallelujah chorus yet,” Harris says. She is waiting to see if in fact education gets the funds as promised.
Harris says, however, the court ruling has ripped apart the jobs element of redevelopment. One of the components of redevelopment agencies is creating jobs, and in a down economy, that component is vital.
Without an improvement agency, is there a need for a redevelopment director? Haynes says his arena is economic development, so it’s a wait-and-see period for him. If the city doesn’t restructure in a way that can utilize his skills, he will be looking for other work.
Harris says Haynes has put his heart and soul into the Improvement Agency and worked hard to bring the entities together. But she adds that she is an eternal optimist and the court ruling isn’t the end of the world. It’s just a time to recraft how things are done.
The Jan. 9 City Council meeting is at 6:30 p.m. at Hofert Hall, 39707 Big Bear Blvd., Big Bear Lake.
Contact reporter Judi Bowers at 909-866-3456, ext. 137 or by e-mail at firstname.lastname@example.org.