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PRESS RELEASE / ANNOUNCEMENTS Tuesday, June 18, 2013

Goleta Sues Department of Finance Over Funds for San Jose Creek Project

The City of Goleta filed a lawsuit late yesterday against the California Department of Finance (DOF) regarding the money earmarked to complete the public safety improvements to the San Jose Creek.


The City is challenging DOF’s determination that the $18 million bond transfer from the Goleta Redevelopment Agency (RDA) to the City was not proper. The action will also validate the bonds which were issued specifically for the construction project. Goleta joins over 100 other cities statewide which are being forced to pursue litigation to appropriately wrap up the ongoing affairs of local RDAs. The State eliminated all such agencies in an effort to reduce the State’s budget deficit.

“This is our David versus Goliath moment,” said Mayor Roger Aceves. “We are using every available tool in our toolbox to insure these local dollars protect the safety of our community. It is unfortunate that the State’s decision to eliminate redevelopment has unintended consequences which gravely affect the security of our residents.”

Redevelopment Agencies were created for the purpose of allowing a portion of locally generated taxes to revitalize local project areas where market forces would not otherwise be sufficient to overcome the challenges. Typically, RDA projects would stimulate investment in depressed regions which lead to economic recovery through the area as well as substantial increase in the tax base to the benefit of numerous public agencies and their constituencies.

By removing portions of Old Town Goleta from a flood plain, business owners would be able to secure loans to improve their property and attract more and better businesses to the area. The need for increased capacity for San Jose Creek to protect public safety in the Old Town area was long identified by the County of Santa Barbara as an important goal and one of the primary reasons for creation of the RDA in 1998. In 2007, the City and the RDA agreed the City would build the important public safety project. The bond proceeds were then transferred from the Goleta Redevelopment Agency (RDA) to the City pursuant to the agreement for construction of the San Jose Creek Project. The transfer began prior to the State’s 2012 elimination of RDAs

The City is represented in the lawsuit by the Jeffrey D. Dintzer of the law firm, Gibson, Dunn and Crutcher.

For more information or questions, please contact Goleta City Attorney Tim Giles at 961-7534.

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