The details of how redevelopment agencies are funded have always been confusing, but how they are being dissolved can only be described as byzantine. Redevelopment agencies were officially "dissolved" on February 1 by state mandate, but their work will go on, in some cases, for decades as bonds are paid off, bills paid, paperwork generated and audited, and funds redistributed.

The legislation (Assembly Bill X1 26) that ended redevelopment was appealed by a consortium of California cities and counties, which lost in court as 2011 ended. Redevelopment funds have often been seen as "cookie jar" funding for popular projects like street repairs, business assistance, affordable housing and economic development, all of which are facing uncertain futures with redevelopment funds being diverted elsewhere.

Locally, those projects and programs include funding for the downtown association, a river trail, road projects and partrnerships with developers of low-income housing.

The future of millions of dollars of local tax monies traditionally controlled by a local redevelopment agency will soon be dominated by an oversight board made up mostly of representatives of agencies that stand to benefit from the redistribution of those funds, a sort of government-sanctioned excuse for the foxes to guard the henhouse.

The oversight board that will be formed to oversee Petaluma's redevelopment agency will have seven members. AB X1 26 calls for one member each to be appointed to represent the Sonoma County Office of Education, the Santa Rosa Junior College district, the Sonoma County Water Agency and the Sonoma County Board of Supervisors. In addition, the mayor of Petaluma appoints two members, one from the City Council and another from city employee groups. The seventh member will be a member of the public appointed by the county Board of Supervisors.

The education, water agency and county appointees all represent groups that stand to gain from Petaluma's loss, but only on paper. For example, Petaluma City Schools will likely gain some of the millions that used to be available for redevelopment projects, but school budgets will not increase. Instead, the state will divert funds from the city to the school district, then reduce state payments to schools by an equal amount.

According to Ingrid Alverde, Economic Development Manager for the City of Petaluma, "This oversight board will be a new governing body that will control how this money is spent."

Imagining that redevelopment agencies will "just go away" is untrue. Alverde estimates that half of her time will now be spent helping to dissolve the agency that was paying her to implement the city's economic development strategies. "We have to keep doing business until we know how this will work," Alverde said. "We're just trying to get through the fiscal year, pay our bills and keep functioning."

The oversight board must be appointed by May 1 and will take over the functions of the former redevelopment agency (the Petaluma City Council) on July 1, the beginning of the next fiscal year. The bulk of its work at the beginning will be studying an Enforceable Obligation Payment Schedule, a document that will be presented to the Petaluma City Council on February 27. The EOPS lists the city's best guess of what redevelopment dollars must be held back for legal obligations and contracts and what can be redistributed to the other agencies.

"The City of Petaluma has done the best it can to secure the projects and programs that are best for the community," said Alverde, who admits that a list of popular programs are vanishing, including grants to low-cost housing agencies, the Petaluma Downtown Association, and more.

Two programs that will be hurt by the change are each designed to improve safety and preserve history in the downtown area. The redevelopment agency was helping downtown business owners add fire sprinkler systems to older buildings, and offered a matching grant program that helped the owners of historic buildings pay for seismic upgrades. Alverde is fighting to keep at least part of the latter program. The owners of the historic Burdell Building, at the corner of D Street and Lakeville Highway applied for $40,000 in reimbursement funds after a costly seismic retrofit. The application was approved but the check has not been cut, so Alverde worries that the funding promised to the building owner could go elsewhere.

Alverde summed up the atmosphere at City Hall, "It's not easy trying to wind down an agency that's been around for 30 years. All of us are trying to get to clarity. We know what we know today and I can guarantee it will change. Our motto now is: how do we move forward?"

(Contact Ray Holley at argus@arguscourier.com)