Council Votes to Issue $13.6 Million in Bonds, to Retain Redevelopment Money

Following the lead of municipalities across California, Sonoma City Council voted 4-0, with Councilwoman Joanne Sanders in abstention, Monday night to issue $13.6 million of redevelopment funds into bonds, in an effort to preserve the money from state takeover.

The bonds form a temporary loophole around , which eliminates redevelopment agencies and commandeers an unknown percentage of these local funds to the state level, to help fund the state deficit.

But Brown’s office has promised not to re-allocate funds that are already “obligated” by being placed in bonds. At the Jan. 19 city council meeting, the council directed city staff to prepare a proposal for creating bonds, quickly, in an effort to reserve some redevelopment money for local projects.

“Right here, right now, before the new budget is passed, you have the greatest amount of money you’re going to have to spend on your new projects before you have to send all of it, or some of it, to Sacramento,” Stinson Securities Bond Underwriter Lonnie Odom said while addressing the council.

If the city chose not to create bonds, it would lose about $3 million of project money per year, said Odom.

Funded with a general property tax, Sonoma’s Redevelopment Agency (CDA) provides a fund set at just under half the city’s annual budget, to provide for structural and economic improvement projects that combat urban blight–a resource that local agencies say will be difficult, if not impossible, to replace.

"The idea that this may be the last opportunity where we really can come to the city redevelopment agency and ask them to help in a substantial way...it stops my breath in my chest, I am speechless--we need this so badly,” said Executive Director Kathy Swett while addressing the council.

The funds are reserved for five projects that city staff believe can be completed within three years, a state imposed time limit, said City Manager Linda Kelly.  

The money is divided into $2 million for the ’s renovation, $2 million to provide half the funds structural and seismic upgrades to the , $7.5 million reserved for ongoing grants providing for improved sinage, ADA upgrades and street reconstruction, a $142,000 grant for ADA upgrades for the and a $1.45 million grant earmarked for a low-income housing project slated to be built on Sonoma Highway.

Though supportive of local need for redevelopment funds, several councilmembers were wary of the spirit of the endeavor.

“It just kind of feels like a run on the bank,” said Councilman Tom Rouse.

Councilwoman Sanders, who recused herself from the vote because she lives within 500 feet of the Community Center, nonetheless warned that the council is overlooking state activities, such as the state historic parks, which would be funded by the reallocated money.

“Hurrying up and spending money is not how I run my business and not how I run my state…I ask all of us to do some soul searching, where in our community do we expect to feel the pain [of the state's financial crisis] or do we think that we are above the pain," said Sanders. 

But Mayor Laurie Gallian applauded the action, as a powerful move in support of local government.

“Elimination of something we have at a local level of government has me very upset, because it is something that we protect as our own. Yes, there are going to be cuts, but this is a possibility in which we can act as a local government to send a message straight back that we are here for the people who live in the city of Sonoma,” said Gallian.

The bond sale is scheduled to close on March 2, with public hearing notices published on Feb. 18 and 25.