With the state Department of Finance initially threatening to raid more than $4 million being used by the City of Goleta to fix up San Jose Creek — a project whose funding was caught up in the controversial and hasty dissolution of Redevelopment Agencies (RDA) statewide by the California Legislature in 2011 — the city filed a legal action last week to stop any such takings before the December 6 hearing on the disputed monies, which total more than $18 million. The state sent a letter on October 9 demanding that the $4 million be paid within 30 days; since the filing of the motion, the state Attorney General has indicated that it won’t require payment prior to the hearing.
There will be two main chunks of money being challenged by the state at the December hearing: the first is a $3.5 million loan that the RDA paid back to the city, which had ponied up that money to keep the San Jose Creek planning process moving after the economy crashed in 2007 and officials decided to wait for the bond market to rebound before seeking full funding. The second chunk is about $14.5 million, which is the money that the RDA paid the city to deal with the construction contracts after finally floating those bonds in March 2011. Goleta is just one of many citie statewide dealing with similar RDA dissolution issues; Santa Barbara, for instance, had a dispute over the ownership of city parking lots, which they successfully argued to retain.