Redevelopment change will give control to city

 The City of Sonora will take control of the low-income housing program formerly administered by the Sonora Redevelopment Agency in an effort to maintain its nearly $2 million in assets.

As a result, the city will have to operate the program using rental income and repayments from Homebuyers’ Assistance Loans because current legislation diverts the property tax revenues that otherwise would have covered administrative costs.

The Sonora City Council at a special meeting Monday night unanimously voted to name the city as the caretaker of the program. The program’s assets would be handed over to the state’s Department of Housing and Community Development had the council chosen to step aside.    

“Anything the state gets control of is going to be a wreck,” said Councilman Matt Hawkins.    

The purpose of Monday night’s meeting was to tie up any loose ends before all redevelopment agencies in the state are effectively dissolved Feb. 1 as mandated by legislation signed into law last year.    

The property tax payments will no longer go to costs for administering the housing program, but instead the county-auditor controller will redistribute that money to local taxing agencies, which include schools, the city and County of Tuolumne. The nearly $800,000 in the program’s reserves will also be redistributed.   

The housing program’s assets that can be maintained are made up of rental properties and loans made through the Homebuyers’ Assistance Program.    

“I’d hate to see these assets go away,” said Community Development Director Rachelle Kellogg. “At least it’s money on the books.”    

She also reminded the council that the only effect on the budget will be about $44,000 each year in administrative costs associated with running the program. Those costs can be offset through loan repayments, rental income or the possible return of a $462,000 payment made to the State’s Supplemental Educational Revenue Augmentation Fund, according to Kellogg.   

Mayor Bill Canning expressed his support for continuing the housing program.    

“As a city council we have a sworn duty to the people to see this through and salvage what we can,” he said.    

Other actions taken by the council at the special meeting included formally declaring the city as redevelopment’s “successor agency” and approving an amended payment schedule for all eligible debts.    

The city was all but forced to name itself as the successor, because the deadline to choose otherwise was Jan. 13. The city as the successor agency will be tasked with identifying debt obligations and managing a repayment schedule.    

The approved amended repayment schedule includes a $1.6 million debt to the city. A payment of about $26,000 is set to be to the city in June, according to the schedule.    

An oversight board comprised of representatives from schools, special districts and local governments will have to approve all debt obligations, and City Administrator Tim Miller said there’s a possibility it won’t find all of the debts eligible.    

"We need to start by identifying everything we think is eligible for repayment,” he said.    

After the meeting, Councilman Hank Russell said he thought the decision to dissolve redevelopment agencies was an example of the state “stealing” from cities in order to deal with its own budgetary woes.   

The number of projects the city’s redevelopment agency accomplished over the years, including sidewalk reconstruction on Stewart Street, were signs the program worked to the benefit of the community, Russell said.  

“It served a purpose and I think it still would,” he said.