Home Brentwood Brentwood to Appeal Court Ruling Ordering Payback of $20 million in Redevelopment Funds

Brentwood to Appeal Court Ruling Ordering Payback of $20 million in Redevelopment Funds

by ECT

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An April 2 court decision may require the City of Brentwood Redevelopment Agency (RDA) to pay back $20 million to the California Department of Finance for money spent on public improvement projects.

In 2011, the state dissolved more than 400 local redevelopment agencies in an effort to balance the budget. Property tax money that previously went to redevelopment agencies to improve blighted areas was instead sent to schools and other agencies.

in July 2013, the City of Brentwood filed a lawsuit challenging the constitutionality of the Department of Finance demand to have the Redevelopment funds paid back—believing the city did not owe since the money had already been spent prior to dissolving of the agencies.

The court initially issued a tentative ruling in favor of the City, which determined that DOF’s demand was unconstitutional.

The DOF then requested an additional opportunity to argue its case, and the court granted its request. When the State made its additional arguments, it claimed that the Court’s decision could have a financial impact on the State of approximately $3.4 billion dollars. According to the State, if Brentwood prevailed in this case it would have set a precedent for other cities to seek refunds or sue on similar grounds.

According to the Sacramento Bee, they reported in January that 150-jurisdictions spent the money similar to how Brentwood did which is how they came up with the $3.4 billion impact.

In a Press Release that went out Wednesday night from the City of Brentwood, they state that On April 2, 2014, the court issued its final decision, which reversed its tentative ruling and held that DOF’s demand was not unconstitutional. Although the court stated that the “City’s arguments are persuasive” and that it found “merit in much of the City’s arguments,” it allowed DOF’s demand out of deference to the State Legislature.

Brentwood says it is very disappointed in the trial court’s ruling, but it is confident that it was acting within the rules set by the State prior to and during the dissolution of the RDA; has a strong legal basis for its position; and intends to appeal the decision.

In total, more than 175-lawsuits across the state have been filed against the Department of Finance.

Press Release from the City of Brentwood

Before redevelopment agencies were dissolved as a part of the Governor’s proposal to balance the State’s budget, the Redevelopment Agency for the City of Brentwood (“RDA”) made several payments to the City of Brentwood (“City”) to fund five public improvement projects. These projects were part of the City’s long range planning to redevelop the downtown area and included refurbishing and widening more pedestrian friendly sidewalks; installing new utilities; planting new trees; and restoring a City park. The projects were a success, and since their completion, small business vacancies have significantly declined in the City’s downtown area.

However, as part of the wind down of redevelopment agencies, the Department of Finance (“DOF”) demanded the return of approximately $20 million of the funds the City used to construct these projects and had already paid to the contractors for the work performed. Rather than face significant financial burdens in an effort to pay money to the State that had already been spent (and that the City strongly believed it did not owe), in July 2013, a lawsuit was filed that challenged the constitutionality of DOF’s demand.

The court initially issued a tentative ruling in favor of the City, which determined that DOF’s demand was unconstitutional. The DOF then requested an additional opportunity to argue its case, and the court granted its request. When the State made its additional arguments, it claimed that the Court’s decision could have a financial impact on the State of approximately $3.4 billion dollars. According to the State, if Brentwood prevailed in this case it would have set a precedent for other cities to seek refunds or sue on similar grounds.

On April 2, 2014, the court issued its final decision, which reversed its tentative ruling and held that DOF’s demand was not unconstitutional. Although the court stated that the “City’s arguments are persuasive” and that it found “merit in much of the City’s arguments,” it allowed DOF’s demand out of deference to the State Legislature.

The City is very disappointed in the trial court’s ruling, but it is confident that it was acting within the rules set by the State prior to and during the dissolution of the RDA; has a strong legal basis for its position; and intends to appeal the decision.

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3 comments

Arne Apr 10, 2014 - 5:41 am

I hope Brentwood prevails in its appeal.

JimSimmons42 Apr 10, 2014 - 5:45 am

Funny how Brentwood won and then the state wanted more time to argue. The system is rigged. Hope Brentwood can set the precedent for other cities so Governor Brown can stop moving money around to make himself look better.

been here for a long time Apr 10, 2014 - 4:02 pm

If we lose can we give them city hall?

Comments are closed.