The Council punted the Redevelopment Agency (RDA) budget last week to February 2010. As has already been highlighted in the news, the state is taking $75 million away from San Jose’s RDA. We need to pay the State off in May and identify where the money is coming from in March (no negotiation or payment plans on this matter are allowed by the State). The legislature, recognizing that this payment would be difficult for all RDA agencies, allowed for borrowing from affordable housing money which is 100-percent funded from RDA. Twenty percent of all RDA money goes off the top to the Housing Department in San Jose.

Last week, KLIV Radio reported that NBC Sports has learned that the National Football League is encouraging both the 49ers and the Raiders to play in the proposed Santa Clara Stadium.  Will the Raiders and 49ers both call Santa Clara home?

The possibility of the Raiders (or another team) making partial or full use of the Santa Clara Stadium is not really “news.”  The E.I.R. and Stadium Term Sheet both allowed for the possibility.  The Stadium Term Sheet reads, “49ers Stadium Company will have the right to enter into a sublease with a second NFL team, on terms and conditions consistent with and subject to the stadium lease.  Conditions of repayment to the city, forgiveness of advances, and additional revenues to the City of Santa Clara are defined in the term sheet’s outline of conditions.

The City of San José is facing yet another year of budget deficits. The projected deficit for FY 2010-2011 is over $100 million. We have cut the fat out of our budget and have laid off City and Redevelopment Agency employees. Our situation has been further exacerbated by the terrible job the state legislature did of closing their deficit by taking funding from local municipalities. Unfortunately for the City, we cannot do the same. We must make difficult decisions and have the courage to change our approach to budgeting.

San Jose’s movers and shakers are wrestling with two important questions.  First, should the San Jose convention center expansion project move forward?  And second, where should the new federal courthouse be built?

As reported on San Jose Inside last week, the city and state budget crisis has forced the city and its redevelopment agency to scale back the project from $300 million to $140 million.  And, the state’s plan to pull $75 million from the San Jose RDA creates an additional hurdle.  Councilmember Sam Liccardo has indicated that he is, “...not willing to do anything that puts the RDA’s future viability in peril.”

The expansion of the McEnery Convention Center has long been the crown jewel of the San Jose Redevelopment Agency’s list of projects. Then came the budget crisis—city and state—which clobbered potential funding for the project, and caused the proposal to be scaled down by more than half, from $300 million to $140 million. Now Mayor Chuck Reed is asking the most fundamental question of all: Can we really afford to go ahead with the expansion?

A couple of weeks ago I put together my own web based Redevelopment Budget survey. I shared financial information in bullet point form in the introduction and then gave information throughout the survey. In some cases I would state the dollar amount given to a particular program and then ask a question. More than 600 people completed the survey, which required that each question be answered. The survey could not be taken twice.

As with most issues that involve money, the feedback to my survey was mixed

Last week, at the city council meeting, I removed an item from the consent calendar on the agenda for discussion. As you may remember from my blog about San Jose’s million-dollar golf nets, consent calendar items do not have individual discussion, but rather are voted on all at the same time. If one wants to discuss a consent item, you have to “remove” it for discussion.

The item I removed was asking $993,876 for the library to spend over the course of seven years on an online tutoring service for kids.

Last week, the council had public hearings regarding the upcoming 2009-2010 Redevelopment budget. Mayor Reed ensured that the public had both a day and night session to attend, allowing more people to participate. In addition, tonight (Nov. 16) at 6pm the mayor is hosting an additional public meeting at City Hall to garner feedback on the RDA budget. 

During last week’s public hearings, the usual lobbyists—those who are paid to speak at council meetings on behalf of special interests—attended and spoke. The lobbyists have also been known to orchestrate the other speakers, giving them colored stickers to wear and scripts to read from.

One of the first targets of state officials desperate for money to close the budget deficit were California’s redevelopment agencies. In 2008, the state took $350 million from them, and this year it plans to take more than $2 billion. But the agencies are fighting back…and winning. A State Superior Court judge ruled that the confiscation of funds in 2008 was unconstitutional because the money was earmarked specifically for development projects. Last week the state dropped its appeal, with repercussions for the 2009 court case that the agencies have initiated.

The ruling could have enormous repercussions for San Jose.

At the San Jose Redevelopment Agency, 24 staff members are about to get laid off—out of a total staff of 109. The decision, called “heart-wrenching” by Agency head Harry Mavrogenes, was the inevitable outcome of a state raid on the RDA’s funds in an effort to cover Sacramento’s own deficit. This year the state is grabbing $62 million; next year it plans to take another $13 million. All of this is in addition to the $13 million that the state took in 2008. The layoffs will save the RDA about $3.1 million.

The Caravan Lounge has poured strong drinks on South Almaden Avenue in downtown San Jose for at least 45 years, but ever since current property owners Jan Chargin and Lynn M. Bohnen asked the Redevelopment Agency in 2007 to buy the building, rumors have run rampant about what would finally happen to the classic dive bar. The San Jose City Council was scheduled to vote today on whether the RDA should fork over $1,120,000 for the property, plus an extra $187,000 in “relocation” costs to current Caravan operator, George Rich.

However, the meeting adjourned 15 minutes ago with no mention of the Caravan.