VACAVILLE — The city’s general fund is poised to take a major hit as Vacaville prepares to return $3.8 million to its former redevelopment agency.
Staff presentations during a previous City Council meeting indicate that the action will shrink the city’s 2014-15 estimated general fund reserve from approximately 20 percent down to below 15 percent, which will fall below the council’s mandated threshold.
The city was put on verbal notice by the state that the multimillion-dollar transaction between the city and its former redevelopment agency needed to be reversed. The city is waiting for a written letter confirming the needed action, said City Manager Laura Kuhn.
Kuhn said it stems back to 2011, the year prior to the dissolution of redevelopment agencies across the state. Cities during that time moved forward with transactions to protect their interests. The city in a previous year had loaned its redevelopment agency $3.8 million to buy the Nut Tree property. The agency paid back the loan during that “clawback” year.
The state says the city has to give that money back to the redevelopment agency, Kuhn said.
“I’m hoping we can negotiate some terms of payment that will be more comfortable to the city,” she said, as opposed to a lump-sum return.
When the state eliminated redevelopment agencies, it required that redevelopment dollars be divided among local agencies, including local schools and special districts.
How much or when the city could get that money back is up in the air. The city will be put in line with other redevelopment obligations.
Reach Susan Winlow at 427-6955 or [email protected] Follow her on Twitter at www.twitter.com/swinlowdr.