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City receives letter from State Controller’s Office regarding RDA transfers

By   /   July 9, 2014  /   3 Comments

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Earlier this year, the State Controller’s Office (SCO) conducted a review of asset transfers made by the former Twentynine Palms Redevelopment Agency’s (RDA) to the City of Twentynine Palms, occurring after January 1, 2011. Thereafter, on May 29, 2014, the SCO issued a letter to the City along with a draft report.

The draft report identified two transactions made by the RDA between January 1, 2011 and January 31, 2012 which the SCO seeks to disallow. These transactions consist of two separate loan repayments from the RDA to the City: (1) one in the amount of $2,011,750; and (2) one in the amount of $126,850. The first represents a loan from the City to the RDA for general redevelopment purposes made in 2009. The second represents a loan from the City to the RDA in 1999 for use to purchase four properties on Donnell Hill.

In March 2011, City Staff transferred the money from the RDA to the City’s General Fund to make sure the two loan amounts were repaid, in accordance with loan repayment provisions which were agreed to at the time the loans were originally funded.

The SCO has asserted that the repayment transfers, which total $2,138,600, from the former RDA to the City must be turned over to the Successor Agency, and ultimately to the County of San Bernardino for distribution to the affected taxing entities. If that were to occur, the City will not be repaid until a later date which is not yet certain, in accordance with a somewhat complex formula that staff is still evaluating.

On June 13, 2014, the City of Twentynine Palms responded to the SCO’s letter and provided additional information which it believes demonstrates that the loan repayments were appropriate, including its belief that the SCO’s position violates the California Constitution as amended by Proposition 22. The City’s response urges the SCO to correct the findings of the draft report before finalizing it.

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About the author

Vickie Waite

Vickie is currently serving as the Public Information Officer for the City of Twentynine Palms. Ms. Waite is a long time resident of the Morongo Basin and Founding Publisher of the Sun Runner Magazine. Along with her late husband Terry Waite, Vickie was instrumental in acquiring much of the Public Art you see about town. While we do not always see eye to eye, I value her as a close friend and confidant.

3 Comments

  1. Well… so much for the resounding victory for Minoz and the city. This is a lot of cash for the Successor Agency (the city) to turn over to the county. Errors were made by the city and the public is paying the price.

    Hopefully, the 2014 elections will drop two of the bandits (Harris and Mintz) on the city council that seem to believe city resources are infinite regarding pet projects which do little for people that actually live here.

  2. Local radio reported this morning that the “STATE SAYS TWENTYNINE PALMS HAS TO GIVE BACK $2 MILLION.” !!!
    http://www.z1077fm.com/local-news/todays-full-newscast/

    Here we go again… Rutan & Tucker and their main man, Patrick Munoz, are going to make another killing in court appeals. The bond was a bad business arrangement for the city and all its taxpayers from the start and everybody knows it, even council members.

    There has to be change on the council. Harris and Mintz are incapable of being objective. Their egos and legacy are at stake. All important RDA decisions have to be left open — if possible — for the next objective seated council.

    This council is in a political quagmire and are up to their ears in debt and serious problems they are incapable of remedying. Forget the nice guy stuff… the people’s business comes first and the city must be put on track again.

    The folks seated the council are incapable of making prudent and responsible decisions pertaining to the the old rda and Phoenix Project.

    They will only compound the many headaches they have brought upon the city and its taxpayers because of their biases and inability to be objective.

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