SUISUN CITY — California says Suisun City owes it $1.75 million. The City Council doesn’t think so and is going to court to keep the money.
Council members announced Tuesday that the city will fight the state’s demand for money that was used to build the One Harbor Center street extension.
“They are trying to ding us,” Vice Mayor Mike Hudson said. “This is an unlawful action and we hope to win this through litigation.”
The money was fronted by the city for the construction work with an agreement that the city’s redevelopment agency would pay back the city. When property values dropped, the agency paid back the last of that money by March 2011.
Then came Assembly Bill 26, which eliminated redevelopment agencies and allowed the state to take local redevelopment money. One provision of the law stated that any agreement between cities and redevelopment agencies such as the one used to build the street extension was invalid if it was not made within two years of the redevelopment agency’s formation.
A state review of Suisun City’s agreements and funds contended there were several places where Suisun City owed the state money. The city managed to prevail in most of the areas, such as when the state contended the city’s housing fund owed Sacramento more than $2 million.
But last week, the state sent a final determination notice to Suisun City saying the agreement between the city and the redevelopment agency over the $1.75 million payback was invalid and that Suisun City owed Sacramento that money.
Suisun City now plans to file a complaint and apply for a temporary restraining order against paying the money. It will then seek a preliminary injunction to keep the money.
While the amount is not large compared to what Sacramento is demanding from other cities, “this money basically equals our city’s reserve and without this money we will have no cushion (in our budget),” City Manager Suzanne Bragdon said.
Reach Ian Thompson at 427-6976 or [email protected] Follow him on Twitter at www.twitter.com/ithompsondr.