By Jason Islas
Staff Writer

August 10, 2012 -- The City Council will consider a contingency plan Tuesday related to the dissolution of Santa Monica’s Redevelopment Agency (RDA) that includes, among other options, suspending construction on the Pico Branch Library.

With the groundbreaking ceremony for the library set for Wednesday, staff will recommend that the City continue construction on the library -- which has been in the works since 1983.

However, the report mentions that, if funding should come up short, suspending construction on the library in order to divert funds to projects that are further along in construction, such as the Town Square and Palisades Garden Walk, will remain an option.

“The intent is to finish the Pico Library,” said Nia Tang, the City's acting administrative services officer. Suspending construction “is a contingency for all projects,” she said.

Other projects that staff recommends continue include the Colorado Esplanade, EXPO Light Rail enhancements and the City’s traffic signal upgrade project.

One project staff recommends suspending is the $56 million Civic Center Joint Use project, which would have revamped sections of Santa Monica High School’s campus for use by the public after school hours.

The City included the project on the original Recognized Obligation Payment Schedule (ROPS) -- a list of RDA projects the City contended they had a legal obligation to finish -- but it was rejected by the DOF.

The Civic Auditorium is also considered in the contingency plan.

“Staff recommends that the Civic Auditorium close as planned in June 2013 because, in the current financial climate, the City does not have the means to continue to subsidize the operations of the facility, estimated at approximately $2 million per year and growing over time,” staff wrote.

In addition, staff recommends that renovation of the Civic Auditorium, slated to cost about $47 million, be suspended, “other than necessary repair/abatement.”

The Senior Housing Voucher program could also be in trouble.

“There is a considerable risk that the DOF will attempt to seize any funds that were not promised to voucher recipients prior to June 28, 2011,” staff wrote.

But, since the program supports 81 low-income seniors, staff recommends that it be continued and that the City challenge the DOF should it contest the program.

Staff drafted a contingency plans after Sacramento passed AB 1484 on June 27, 2012 as part of the 2012-2013 State budget.

The problem is that the passage of AB 1484 proved “even more unfavorable for local government,” according to staff.

AB 1484 was “meant to clarify and fix” aspects of the original law -- ABX1 26 -- that dissolved hundreds of RDAs throughout the state when it went into effect on February 1, 2012, said Tang.

But still, Tang said, it is unclear how much the City can keep of what was earmarked for priority projects because AB 1484 gives discretion to the DOF over any contracts entered into after June 26, 2011.

“They tried to clear (ABX1 26) up, but what happened when they rushed this law through, they really didn’t think through the potential impact on local cities,” Tang said.

“While certain provisions of AB 1484 could be struck down as unconstitutional, and the City may be able to make legal and practical arguments that successfully protect priority projects, the adopted legislation, as well as the DOF’s approach to implementing the legislation, could have serious implications for the City,” staff said.

And not much else can be known until at least October 1, when the “due diligence” reviews are complete, said Tang.

All contracts entered into after June 26, 2011 will be subject to a “due diligence” review, in which the contracts are reviewed by an independent auditor.

Staff recommends that the City continue with building 10 new households at the Mountain View Trailer Park but will suspend the program “until there is certainty that any additional expenditure of funds would not become a liability of the City’s General Fund.”