RDA shutdown crunches Menlo Park's budget

Should housing authority remain open?

A clearer picture is emerging of how the redevelopment agency (RDA) shutdown will impact Menlo Park's budget. But not everyone agrees on how to respond.

After the California Supreme Court ruled on Dec. 29 that the governor did have the power to shut down the nearly 400 RDAs in the state and also nixed a plan that would have let cities pay to keep the agencies open, Menlo Park staff started analyzing what that decision meant for the city.

The agency's non-housing assets will be turned over to a successor agency and fund controlled by San Mateo County; housing assets will be reassigned to a successor housing agency run by the city. Some aspects of the impact have already been discussed -- the city's code enforcement, narcotics enforcement, graffiti abatement, and housing programs relied heavily on RDA funding.

Now it looks like the effect of losing almost $3.1 million in agency money will ripple through other programs as well, including the city's midday shuttle bus line, which received $70,000 in RDA money annually, according to the staff report.

The agency also partially funded 37 staff positions. Capital improvement projects on the chopping block include Belle Haven pool upgrades ($128,269); Kelly Park improvements ($1.3 million); and other items for a total of $7.4 million in now unfunded projects.

The San Francisquito Creek Joint Powers Authority will also need $100,000 from the city's general fund -- the main source for making up the budget gaps created by the loss of RDA money -- to continue its flood control measures.

The debate over what to do with the RDA's housing assets has taken shape since the announcement of the court's decision. Former councilwoman Lee Duboc sent out an email asking the council to prevent the general fund from covering any housing costs, saying in part that the department was unproductive and that no one wants below-market-rate (BMR) housing in Menlo Park, leaving the department sitting on funds the county could put to better use.

However, architect Sam Sinott disagreed. In an email to the council on Jan. 21, he wrote, "There are immediate opportunities for BMR housing in Menlo Park. Doug Frederick, Menlo Park's housing manager, and I have been exploring the possibility of a 100% BMR housing project at 1258 El Camino Real, next to Jason's Cafe. Because this narrow, difficult site is not well suited for must uses, it works for Below Market Rate housing."

Menlo Park has come under fire during the past two years for accepting in-lieu fees instead of BMR units from developers of new housing projects. The city's current stock of 57 affordable housing units isn't sufficient to meet demand, according to the Housing Commission.

The City Council will examine the impacts during its meeting on Tuesday, Jan. 24, and try to decide which programs can be funded from other sources, and which need to be cut. The meeting starts at 7 p.m. in council chambers at the Civic Center at 701 Laurel Street.

Go here to read the staff report.


Like this comment
Posted by Joseph E. Davis
a resident of Woodside: Emerald Hills
on Jan 24, 2012 at 12:38 pm

Perhaps we could save some money by abolishing the Housing Commission and firing Menlo Park's 'housing manager'.

Like this comment
Posted by Nina Wouk
a resident of Menlo Park: Belle Haven
on Jan 24, 2012 at 1:33 pm

Waiting to see if City Council will do the logical thing and add Belle Haven Pool & Kelly Park to the Park & Rec budget where they belong.

Like this comment
Posted by Dave
a resident of Menlo Park: Downtown
on Jan 24, 2012 at 1:49 pm

Mr. Sinott has a prospective benefit from supporting the RDA. Be wary of those who have personal motive. Suggest the City request for proposals be generated for the RDA if funds remain dedicated.
It is astonishing the RDA funds contribute to 37 staff positions.
Seems a clear miss on proper allocation of those funds. No wonder we cannot understand the budgeting process.

Like this comment
Posted by new guy
a resident of Menlo Park: Downtown
on Jan 24, 2012 at 3:26 pm

Wow, 37 positions, that contributed to "redevelopment"? Sounds like a slush fund to me. Just look at Oakland's redevelopment.

"The city's current stock of 57 affordable housing units isn't sufficient to meet demand, according to the Housing Commission."

What is the demand? and how does one calculate it?

Like this comment
Posted by Harry
a resident of Menlo Park: Belle Haven
on Jan 25, 2012 at 5:24 pm

I agree with Joseph and Dave. Plus, Sam's project sounds like a good idea! It is at least worth a listen to find out more . . .

Like this comment
Posted by observing
a resident of Menlo Park: Central Menlo Park
on Jan 28, 2012 at 7:56 am

The RDA has been abused for years. Menlo Park is certainly one of the Cities that has led in diverting funds away from from uses for which they were supposed to be allocated, into balancing the City's budget.

Incompetence reins supreme. Still no police sub-station. How long has it been? Ten years?

They really should dispose of at least 6 full time employees. Council Person Fergusson is out to lunch on this issue, just as she was on the Pension reform.

Is our part time City Attorney, who recuses himself from involvement in the Specific Plan and High Speed rail because of personal investments, sitting this on out also?

Will the new City manager be like outgoing Rojas, who for 4 years did little except manage to reduce the City's reserve fund by almost 50%, while increasing employee wages and pension benefits, make the necessary changes?

Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jan 28, 2012 at 8:59 am

Peter Carpenter is a registered user.

This is what local governments were told over 3 years ago - too bad that they did not listen:

"With falling property values yielding less property-tax revenues, falling consumer and business spending yielding less sales taxes, increased retirement costs (because CalPERS has suffered significant loss of capital in the current financial downturn), continued demands for well-above-average salary increases by public employees, and the governor declaring a financial emergency, local governments in California are facing a Perfect Storm.
Unless local governments act promptly to respond to these dramatic changes we will see more of them joining Vacaville and Rio Vista in being forced into bankruptcy."

Like this comment
Posted by POGO
a resident of Woodside: other
on Jan 28, 2012 at 9:18 am

This is one of those quiet scandals of government. Our elected officials have silently moved money that was originally intended for "redevelopment" of their cities and towns into ordinary budget items. Washington does this with our Social Security money and Sacramento does this with our gasoline and cigarette taxes.

Now they will pay the piper...

Just be aware the next time those same officials tell you they need to raise taxes to do something specific, like pay teachers or build roads. The chances are excellent that that dedicated money will end up in their own bloated bureaucracies.

Like this comment
Posted by Morris Brown
a resident of Menlo Park: Park Forest
on Jan 28, 2012 at 5:40 pm

Pogo above wrote:

"Just be aware the next time those same officials tell you they need to raise taxes to do something specific, like pay teachers or build roads. The chances are excellent that that dedicated money will end up in their own bloated bureaucracies."

Our Governator, Jerry Brown, is precisely on this path right now. Promoting a proposition to raise taxes while using "blackmail" language, that the school budgets will be cut if these taxes are not approved.

Yet at the same time, he is promoting the High Speed Rail project, which has been condemned by the Legislative Analyst Office, the State Auditor and the Peer Review Group, committee of experts, all of who say the project is financially unsound along with a myriad of other insurmountable problems.

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