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Politics & Government

Redevelopment Debt Complicates City Budget

The dissolution of the city's agency continues to cloud Coronado's finances.

The City Council has approved a $60.6 million spending plan, which includes a $49.6 million operating budget, $2.7 million for capital projects and $8.3 million for transfers and loans between funds.

The vote was 4-1. Councilwoman Barbara Denny opposed the budget and when pressed by her colleagues, refused to say why.

In many respects, the budget was unremarkable. The city’s basic budget goals remain the same, “to maintain service levels” and match expenditures with revenues.” As in past years, Coronado has a healthy reserve – this year's is $19.7 million.

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But all of this was overshadowed by the fiscal uncertainty wrought by the state legislature's decision to dissolve redevelopment agencies.

Coronado is not alone in having to scramble for money. “There is much confusion over the dissolution of redevelopment obligations across the state,” said Leslie Suelter, director of administrative services.

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“Legislative cleanup bills that were supposed to fix some of the problems have all gone by the wayside at this point,” City Manager Blair King said. 

The fallout from this colors almost every aspect of the budgetary process, officials say.

The biggest impact has been on capital improvement projects (CIP). The city no longer has the luxury of funding all of them. Priority is given to projects that “improve safety or mitigate hazards, those that result in cost savings,” a staff report said.

The budget also includes $1.3 million that the city planned to loan the redevelopment agency for the boathouse project. “The money is still in a reserve fund, so it can be used for other needs,” Suelter said.

Mayor Casey Tanaka said of the fund, it's “not that we don’t want to spend the money. We have that as a cushion.”

The city did rescind $5.86 million in unspent funds it had loaned the redevelopment agency.

Suelter stressed that while the city is working to find ways to meet all obligations from the old agency, ultimately they are not the city’s responsibility. “The taxpayers are not on the hook for this,” she said.

Tanaka has asked for a timetable. “When do you want us to pull the trigger?” he asked. 

“We are not going to make a decision today, [but] at some point we are going to have to make those decisions. At some point bills are going to have to be paid.” 

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