Last updated 8/23/2013 @ 4:55 PM:
Twentynine Palms is one of the cities that has brought a legal action against the state regarding post-redevelopment money.
On April 24, 2013, Twentynine Palms filed a legal action in Sacramento Superior Court against the County of San Bernardino, the State Department of Finance and the State Controller’s Office for writ of mandate, for declaratory relief and injunctive relief.
Status: According to Sacramento Court records a few day ago, as of May 30 of this year, since the State and County filed answers, the case has not moved forward.
“In the Ontario case (see newspaper article below), the garnished sales-tax money would go to the San Bernardino County auditor office, which would distribute it to county schools, the county and other local agencies, including the city.”
Besides Ontario, the finance department this past week ordered the Board of Equalization to withhold sales-tax revenue from Santa Ana. And A Sacramento County judge Monday, Aug. 19, rejected Santa Ana’s attempt to get an injunction blocking the garnishment.
Twentynine Palms seems to erroneously believe it had an executable and enforceable contract based upon an mere implied bond covenant to overcome the powers of the state. The city’s legal action will generate hundreds of thousand in legal fees for Rutan & Tucker because they plan to appeal the case. The state is asking for 29 to pay their legal fees incurred by the state. This could cost 29 taxpayers a millions in legal fees after appeals and protracted litigation.
Twentynine has committed $200,000 as a startup retainer for legal fees to fund the legal action. That amount will increase as time moves forward (as will legal fees of the state to which 29 could be order to pay). Redevelopment associated monies the city is making claim to flies in the face of state law and judicial decisions.
According to Steve Spear this morning, “29 did send those low income monies back to the state and then received $500,000.00 back to the city. It is unknown how much of that returned 2 million was then sent to Copper Mountain College, HDMC, Morongo Unified School District, and the County.”
SACRAMENTO — Signaling a toughening line on local governments that refuse to transfer former redevelopment assets, the Brown administration this week moved to grab $21.7 million in sales-tax money from Ontario.
In a letter to the state Board of Equalization, Finance Director Ana Matosantos ordered the board to withhold the Ontario revenue beginning in September because the city “has refused numerous orders” to transfer the money.
The threatened diversion is one of only four to date. It would be the largest by far, totaling about one-third of Ontario’s estimated sales-tax revenue in the current fiscal year. The money is the main source of funding for police, fire and other local services.
More such moves are possible. Multiple local governments, including Riverside County and the city of San Bernardino, are on a Department of Finance list of local governments that have not followed through on the state’s orders.
Ontario City Manager Chris Hughes said officials are weighing their options and could go to court to block the move.
Department of Finance spokesman H.D. Palmer said the order to divert the city’s sales-tax money was a last resort. The department has resolved many other post-redevelopment disputes with local governments.
Board of Equalization member George Runner, whose district includes Ontario, said he expects the city to seek a restraining order to block the state order to seize its sales-tax money.
“At this point, it’s an issue the city is going to have to work out between finance and the courts,” he said.
[Click on this letter to view the Dof order]
Full story Press-Enterprise | By Jim Miller | Sacramento Bureau
Dated: August 23, 2013
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