Oakland’s redevelopment agency dollars: A breakdown of how the city used them

The future of many city workers’ salaries is unclear, following the impending dissolution of hundreds of redevelopment agencies in California.

For 60 years, cities have used redevelopment agencies to mitigate community blight, attract new businesses to economically depressed areas, called “redevelopment zones,” and provide affordable housing. In Oakland, the city redevelopment agency also pays the salaries of more than 170 employees in 11 city departments—these amount to about $29 million of its $128 million budget.

But the state Supreme Court upheld a controversial new law last week that terminates all redevelopment agencies and authorizes the seizure of $1.7 billion of their property tax revenue to pay for school and county services.

The bill, AB 26, was one of several emergency measures signed by Governor Jerry Brown last June in an effort to alleviate the state’s $25 billion budget deficit. Last December the law was challenged in court by the California Redevelopment Agency, a legal advocacy group that represents the interests of redevelopment agencies in the state. But following the court’s ruling, redevelopment agencies, including Oakland’s, are to disband by February 1.

Whether those jobs will be affected by the agency’s dissolution remains unclear. The reality that many of those jobs are not wholly related to redevelopment further complicates the matter. Last week, Mayor Jean Quan told the San Francisco Chronicle that that city might begin issuing layoff notices to city workers in January.

Quan herself is technically employed by the agency, receiving half of $137,000 salary from redevelopment funds, according to her office. City councilmember’s similarly receive half of their salaries from the agency. Both the City Attorney’s Office and the City Administrator’s Office rely on the redevelopment agency to cover about 20 percent of their payroll expenses—jobs ranging from cable TV production assistants to deputy city attorneys.

The agency also staffs one full time police sergeant and 16 full time police officers, following the City Council’s 2007 decision to transfer Port-funded police services from the Oakland Airport to high crime neighborhoods.

“It was immediately seen as very short-sighted because [the city] had no money in general funds to pay them,” said Barry Donelan, the vice president of the Oakland Police Officers’ Association, referring to the 2007 decision. “So they were paid for by redevelopment, and they said [the officers] would work in redevelopment areas.”

Oakland is not the only city to use redevelopment money for extra-agency personnel expenses. According to Jim Kennedy, the interim director of the California Redevelopment Association, it’s not uncommon for cities to use redevelopment funds to cover at least some portion of city workers’ pay, though the amounts can vary significantly. Mayors and city councilmembers who oversee redevelopment projects may receive a per diem for their participation in agency meetings or, as in Oakland, receive a portion of their salary from the agency, commensurate with their redevelopment role, he said.

Funding police services is also consistent with redevelopment law, Kennedy said, as long as those services are used to mitigate gang activity, graffiti abatement and other causes of community blight.

While Kennedy declined to comment on the Oakland Redevelopment Agency’s particular use of redevelopment funds to pay for police service, he said that, as a general rule of thumb, redevelopment agencies “should not be the only thing paying for those services, and it should not be on an ongoing basis.”

The Oakland Redevelopment Agency has funded full time officers for five years. What becomes of those officers come February remains to be seen.

“I have no idea what will happen to them,” Donelan said. “I don’t know. Just for perspective, we lost 25 percent of our force already… We expect to lose more just from attrition in coming years.”

Fred Blackwell, the assistant city administrator, is in the process of assessing the new law’s impact on the city and devising a plan of action, according to city staff. City council members, meanwhile, are meeting with their attorney and the city’s budget staff to determine whether any action is needed on their part.

“It’s premature to talk about how the Supreme Court decision might specifically affect the city budget,” said Jason Overman, communications director for Councilmember-at-large Rebecca Kaplan, adding that when it comes to funding councilmembers salaries: “The last thing on Councilmember Kaplan’s mind is how her pay could be affected…Her focus will be on making sure we continue to fund vital city services that her constituents depend on.”

Reporting by Catherine Traywick, infographic by John C. Osborn.