Council says school funding should wait
Downtown projects first in line for special district's tax dollars
Despite concerns that it could hurt local schools, the City Council said Tuesday that it wants to extend the city's downtown revitalization authority for another two years.
"This is the last major chunk of money we will have to do anything significant in the downtown area," said council member Mike Kasperzak, referring to the downtown authority's current $5.5 million balance.
Without an extension, the money would need to be spent by the authority's April 9, 2011 sunset date.
The proposal was not met with stiff opposition from school officials and parents at the meeting, who were reassured by city officials that they would probably begin receiving their share of tax revenues by 2016-17, only one year later than if the authority were to expire in April with its current balance unspent. The council did not take a vote at the meeting, but is scheduled to do so on Feb. 22.
City Manager Kevin Duggan said the intent of the extension is not to add to the city's economic development funds, but to buy time so that the authority could "wind down in an orderly fashion." The city needs time to spend its current $5.5 million balance, he said, which has been budgeted for several studies on how to fund the downtown's parking improvements, maintenance and business recruitment in the future. Spending $1.5 million to $2 million to attract a long-sought downtown grocery store has had support on the City Council as well.
While the tax district won't expire for two years, the city says it will begin paying off the district's $27 million debt right away so that the extension would "hold harmless" local schools. That way the city's schools can begin to receive their share of downtown property taxes in five years.
"What's good for the school districts is good for the city" and vice versa, said council member Ronit Bryant, who supported the two-year extension along with the rest of the council.
Jim Pollart was one of seven parents who have been very involved in school district fundraising efforts and who made their presence known at the meeting. The group has been primarily interested in the city's $26 million-a-year Shoreline Community Fund property tax revenue, which is dedicated to maintenance and improvement in the Shoreline area indefinitely under special state legislation.
Pollart noted that he felt "a kick in the stomach" when he heard months ago of potentially several million dollars in state budget cuts to the Mountain View Whisman School District's $24 million budget, much more than parents' fundraising efforts could absorb. He made it clear that the group is interested in working with the city so schools can receive as much of the economic development funds as possible.
The group didn't take a clear position at the meeting on what Pollart called key issues: whether to extend the district and whether to spend its $5.5 million balance on debt payments in order to release tax revenue to schools sooner. Mountain View Whisman alone would receive $825,000 a year while the Mountain View-Los Altos High School District would receive $670,000. The city's general fund would receive $840,000.
School district superintendents Barry Groves and Craig Goldman also attended the meeting but did not speak.
Echoing a comment from Pollart about the state of downtown, real estate agent Mike Cobb said that real estate in downtown Mountain View is doing "extremely well" compared to other cities, as evident in low office vacancy rates and substantial rent growth.
Ever since Proposition 13 passed in 1979, restricting schools' efforts to raise property tax revenue, schools have eyed the property taxes locked in such special tax districts. Since 1969, Mountain View has collected all of the property taxes within a 16-block area along Castro Street and funneled the taxes toward property acquisition, economic development and streetscape and facade improvements downtown. It was a factor in causing downtown property values to increase from $22 million in 1969 to over $418 million today, officials said.
The authority's revenues totaled $5.4 million last year. To fund below market rate housing, 20 percent is set aside ($1 million a year), which will continue while debt is paid off and as long as the district exists.
To help plug the state's $25 billion deficit, Gov. Jerry Brown has proposed the complete elimination of Mountain View's Revitalization Authority and over 300 others like it around the state this June.
But economic development director Ellis Berns said the city should go forward with its extension because there is no guarantee that it will happen and council member Laura Macias and others said Brown's proposal was unlikely to pass the state Legislature.
Vice Mayor Mike Kasperzak, who is also the vice president of the League of California Cities, said that Brown's proposal threatens 300,000 jobs across the state. But state budget cuts that might otherwise be necessary could mean significant job loss as well.
Brown would use $1.7 billion of the redevelopment money to balance the state's budget next year, and allow cities to pay off their redevelopment agency debts in following years.
E-mail Daniel DeBolt at firstname.lastname@example.org