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Politics & Government

City Budget Passed Pending Fate of Redevelopment

State lawmakers have indicated redevelopment agencies could be eliminated, which would likely put city restorations on hold over the next two years.

Union City councilmembers approved the city's Tuesday night, even as the fate of redevelopment agencies across the state remains in limbo.

"If it sounds like it's complicated, if it sounds like it's up in the air, it is," City Manager Larry Cheeves said at the June 28 meeting.

Cheeves had urged City Council to hold off on a vote on the combined $150.5 million budget to give state lawmakers more time to pass a balanced spending plan and to allow staff additional time to prepare contingency procedures in the event that redevelopment agencies were eliminated. The budget relies on redevelopment remaining intact, allocating a redevelopment budget of nearly $31 million in the upcoming fiscal year and $37 million in fiscal year 2012-13.

According to Cheeves, if redevelopment is abolished, the amount of money the city will lose is comparable to the amount of money it plans to reinstate in the two-year budget.

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It may draw down on available tax increments that are now under the control of the city, hold off implementing some of the approved restorations — which include reinstated city services and several new city positions — or reevaluate redevelopment projects in such an event.

The Union City Community Redevelopment Agency has already to the city as a precautionary measure. In March, the city also authorized the agency to issue up to a $40 million bond to ensure that current redevelopment projects, including the , are completed.

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But even if Governor Jerry Brown does sign a budget that eliminates redevelopment, that doesn't necessarily spell the death of those agencies. The California Redevelopment Association has vowed to file a lawsuit challenging its constitutionality and request a stay until the legal challenges have been ruled upon. 

The city's budget passed unanimously, with only minor changes over the plan presented to councilmembers in previous sessions.

These revisions include: raising the city's self-insured retention for General Liability Insurance and Worker’s Compensation Insurance from $100,000 to $250,000 to reduce annual premium costs; increasing the proposed budget for retiree healthcare premiums by approximately $50,000 in both fiscal years 2011-12 and 2012-13; and allocating $200,000 per year out of RDA Special Revenue Housing Funds for rental assistance at the Tropics Mobile Home Park.

But while the budget passed without much discussion from Council, the five-year Capital Improvements Plan continued to generate disagreement.

Councilmembers voted 4-1 to approve the budget, which allocates Measure WW funding be put toward renovating park restrooms at a cost of $1.1 million:

  • $200,000 worth of improvements at Town Estates Park/Kitayama School
  •  $200,000 worth of improvements at Contempo Park
  • $200,000 worth of improvements at Veterans’s Memorial Park
  • $65,000 worth of improvements to Arroyo Park

The remaining monies, estimated at $1.5 million, will be allocated for a .

"Frankly, it's just an embarrassment," Mayor Green said, adding that councilmembers who voted to update the Measure WW plan at their June 14 meeting were "caving in front of a few people who got up here" and will look back on the motion as a big mistake.

"You need to take the big money when it's there," Green said, saying that East Bay Regional Park District, which must approve the city's uses for the Measure WW funds, might not even allow the current projects to go forward since normal repairs that are expected to last under 25 years are ineligible.

Other CIP projects that saw changes in the final plan include the seismic retrofit of the BART station overhead and bridges that span Alameda Creek, funding for which has been removed via the Bridge Benefit District as staff pursue state and federal grants. The budget for the pedestrian promenade and playground has also changed, with an increase to nearly $1.3 million and an additional $525,000 coming from the redevelopment agency.

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