Pleasanton Weekly

Opinion - November 15, 2013

Pleasanton spared Livermore's financial anguish

The new year may not be a happy one for our friends in Livermore following a ruling last week that funds that were part of the city's Redevelopment Agency cannot be used to build the proposed multi-million-dollar Livermore Valley Performing Arts Center. Also involved in a decision by Sacramento Superior Court Eugene Balonon are debt obligations used to construct and operate the Bankhead Theater in downtown Livermore. While theater aficionados are no doubt disappointed, the decision by Judge Balonon was a good one for taxpayers who would have otherwise been obligated to pay down the debt over the next 30-50 years.

California's 400 redevelopment agencies and their supporters lost out two years ago when Gov. Jerry Brown closed them down, grabbing the incremental tax monies they were collecting to reduce the state's debt. The State Supreme Court agreed with the decision, allowing Brown to move the $1.7 billion in revenue that they had collected to schools and other public programs where the money belongs. We said at the time that it was good news for taxpayers who for too long had seen their funds appropriated by appointed -- not elected -- local officials who often made decisions without adequate accountability on how to spend the money, whether for more parks, libraries, community centers, waterfront improvements or, in the case of neighboring Livermore, on a monstrous performing arts center of questionable need and with uncertain long-term funding.

Pleasanton years ago decided against establishing a redevelopment agency and Dublin never had one. In Pleasanton's case, voters rejected proposals to establish an RDA that would fund improvements, such as new sewers and housing, in the downtown district, with the area to be covered extending to what is now the Raley's shopping center and west to include homes and apartments on West Angela and other downtown side streets. After those measures were defeated, the City Council determined that to pay for capital improvements, it would methodically set up a Capital Improvement Projects (CIP) segment in the annual budget, identifying and prioritizing these projects each January. Funding would be limited to only as much money as tax revenues would allow. Only three debt-financed projects were approved: the Pleasanton Library 25 years ago, the Pleasanton Senior Center and the $40 million Callippe Preserve golf course. Last month, the city used money from its reserve funds to fully pay down all debt obligations for the golf course, leaving the city free of debt for construction projects.

Livermore and a number of other California cities that established redevelopment agencies and borrowed in advance for major projects now have to determine how to repay those obligations. In Livermore's case, since the multi-story, 2,000-seat performing arts center was never built, outstanding costs are for preliminary planning. The City Council there earlier approved tapping into the General Fund to pay upfront costs while the court was deciding its appeal.

At the time Pleasanton voters rejected establishing a redevelopment agency, some thought that would put the city at a competitive disadvantage. It may have. Surveys show shoppers and others travel to Livermore's redeveloped and robust First Street and the vibrant Bankhead Theater. There were also calls to build a 1,700-seat performing arts center as part of a Cultural Arts complex in the Bernal Community Park, but studies showed a major theater just wouldn't be self-sustaining. Livermore's proposed theater, even farther away from the large population centers of San Francisco, Oakland and San Jose was considered even less sustainable in a study by local analysts.

The Firehouse Arts Center and theater were built as part of the city's policy to have the funds available before signing off on capital improvement projects. It's a policy that has served our city well.

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