State Money Grab Hits Home

Seaside to consider taking $4M from affordable housing fund to pay state's school obligation.

Thursday, May 6, 2010

The city of Seaside may have to take half the money from its affordable housing fund to help the cash-strapped state meet its obligations to local schools.

At a special meeting after the regular Seaside City Council meeting tonight, Thursday, May 6, the council will consider taking a "loan" of $3.97 million from its Low and Moderate Income Housing Fund to make a state-mandated payment of the same amount to the 2009-10 Supplemental Education Revenue Augmentation Fund (known as ERAF), a fund established by the state Legislature in the early '90s to distribute money for education through the counties.

"Normally the state gives the county the money," City Manager Ray Corpuz says. "We are, in effect, paying the state's obligation."

The city of Seaside is not in a good position to come up with almost $4 million. This fiscal year, but city budget is down 31 percent.

If approved, the loan will take about half the money out of the city's affordable housing program, Corpuz adds.

The city could be spared - at least for a while - if the California Redevelopment Association, which represents local redevelopment agencies including Seaside's, wins a court request for a stay on the state mandate. If the stay is not granted, the ERAF payment will be due May 10.

Meanwhile, a ballot measure to prohibit the state from borrowing local government money appears to be headed for the November ballot. Local mayors contributed to the signature-gathering effort.