State decision could lead to lawsuit, budget hole in H.B.
The state Department of Finance is refusing to pay back millions of dollars Huntington Beach once loaned to its now-disbanded redevelopment agency, a decision that may lead to litigation and leave a large hole in the city’s general budget.
Following a decision in December by the state Supreme Court that declared the state’s redevelopment agencies (RDAs) unconstitutional, cities began submitting listings of legally binding agreements or contracts the disbanded agencies had to their county auditors and the state finance department for a review — and payback, said City Manager Fred Wilson.
Those listings included bonds or loans the RDAs had issued for various projects. The process was part of the agencies’ winding-down activities.
Part of the listing Huntington Beach submitted in February was $71.8 million the city advanced to its former agency over the last 20 to 30 years.
The state is now contending that the $71.8 million the city loaned to the agency is not repayable under the law that was passed to dissolve redevelopment, Wilson said.
“At this point, we don’t believe we’ll see any of that money,” he said.
–Mona Shadia, @MonaShadia, HB Independent
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