Culver City Sues State
May 23, 2012
Eight other Cities Join To protect Local Funds
The City of Culver City has joined eight other cities in Los Angeles, Orange, Alameda, and San Diego Counties in filing a lawsuit to ensure local property tax funds are disbursed to fund local obligations rather than to the State and other taxing entities.
The case stems from the dissolution of the state’s 400+ redevelopment agencies on February 1 as a result of the implementation of Assembly Bill 1X 26 (AB 26). This state legislation, signed by Governor Brown in June, 2011, provides for the winding down of the redevelopment agencies through the establishment of successor agencies.
AB 26 provides specifically that “enforceable obligations” of the former redevelopment agencies (such things as bond payments and contracts) would be paid by the successor agencies using funds from the newly established “Redevelopment Property Tax Trust Fund” held by the various County Auditor-Controllers’ offices in the state’s 58 counties. AB 26 provides for the first major payment to be released to the successor agencies and other taxing entities by the Auditor-Controllers on June 1.
The State Department of Finance has issued conflicting guidance over the past several days which significantly increases the uncertainty as to whether the successor agencies will receive sufficient funds necessary to pay the “enforceable obligations” as required under AB 26. For Culver City’s Successor Agency, the amount of funds expected is estimated to be $14.46 million.
The nine cities are asking a judge to issue a writ of mandate to require the June 1 payment to the successor agencies, a temporary restraining order prohibiting the distribution of the funds to the taxing entities while the amount of the payment to the successor agencies is in dispute, and declaratory relief resolving the disputed issues.
“The City and the Successor Agency understand and want to fully comply with the obligations of the Successor Agency under the law. Based upon the continued uncertainty caused by the State Department of Finance’s lack of clear guidance, the looming June 1, 2012 payment date and the critical importance of this issue, we felt we had no choice but to join the other similarly situated cities in taking this action,’ said Culver City mayor Andrew Weissman.
“ We are confident, upon review of the facts, the judge will grant our request for a restraining order.”
The case, City of Palmdale, et al vs. Ana Matosantos, et al, was filed Tuesday in the Sacramento County Superior Court.