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SCVNews.com | City Hit with ‘Surprise’ $543K Invoice for Redevelopment | 07-13-2012
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The Los Angeles County Auditor-Controller has invoiced the city of Santa Clarita’s “successor agency” to its former redevelopment agency for $543,415.89, representing excess revenues the agency received during the 2011-12 fiscal year.

City Redevelopment Manager Arminé Chaparyan said the city received the invoice Monday, and the “excess revenues” are funds the city received above and beyond what was approved in the its “recognized obligation payment schedule.”

The billing stems from the passage of AB1484, a trailer bill to the legislation (AB1X26) that eliminated redevelopment agencies. The city named itself the successor agency to the redevelopment agency, meaning meant Chaparyan and her staff were tasked with the dissolution. AB1484 put more on their plate including new deadlines and payments.

Chaparyan consulted with City Attorney Joe Montes, who recommended the city pay back the money even though the city was given just three days’ notice.

“We utilized funding that would have gone toward the taxing entities. At this point we felt that, based on our consultation with the city attorney, that we should make the payment because of that timeline and because 1484 does say that if you don’t make those payments there could be a future sales tax offset penalty. We did not want to have any penalties imposed to the city,” said Chaparyan.

Santa Clarita was not the only city to take a hit. In a press release, State Sen. Sharon Runner complained about the treatment her hometown of Lancaster received:

“Empowered by the partisan measure,” Runner said, “the state Department of Finance directed the Los Angeles County Auditor-Controller to issue a ‘notice of demand for payment’ to 37 cities in Los Angeles County on Monday evening. The notice demanded millions from cash-strapped cities. The City of Lancaster, for example, was billed $5.7 million to be paid within three days.”

She said that in its “haste to comply with Democrat lawmakers’ ill-conceived law, the county miscalculated Lancaster’s financial obligations.”

According to Runner, in order to correct the error, Lancaster City Manager Mark Bozigian and his staff provided bank statements, cancelled checks and bank wire confirmations to the county controller.

The city of Santa Clarita’s successor agency notified the county it would make the payment “under protest” because most of the the funds were intended to be used for pass-through payments to the various taxing entities, such as school and water districts.

“Since we are returning these funds to the county, the successor agency will instead proceed with plans to pay all pass-through payments via retained fund balance after Oversight Board approval,” Chaparyan said.

She considered whether the shortly noticed demand for payment by the county controller was unfair.

“I think based on everything else we’ve seen in the last year, I think ‘unfair’ is probably not the right word to use anymore. I think at this point, it’s expecting the unexpected with the state and the continued requests for additional funds and new bills that are being passed.”

“I don’t think we were surprised,” she said.

Chaparyan said the city had anticipated that the Legislature might approve AB1484, but “they made a lot of changes to it until the very last minute,” she said.

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