The fight over the bond proceeds used to fund the San Jose Creek Project is not over. City staff met with the State Department of Finance to explain the City’s action of transferring redevelopment bond proceeds. Unfortunately, after further review, the DOF determined that the City’s transfer did not comply with State rules. The City maintains that its actions were legal at the time they were taken and that the State cannot legally rewrite the rules and apply them retroactively. The City is suing the State in order to have the matter decided by a judge and not by a financial analyst at the DOF.

HERE’S A LITTLE BACKGROUND: City staff and legal counsel met with the Department of Finance in April 2013 to explain the City’s actions with regard to the transfer of redevelopment bond proceeds. The funds in question were transferred from the Redevelopment Agency to the City pursuant to an agreement for construction of the San Jose Creek Capacity Improvement Project. The need for increased capacity for San Jose Creek to protect public safety in the Old Town area was identified by the County of Santa Barbara as one of the primary reasons for creation of the RDA in 1998. The RDA was consistently working to bring this public safety project to fruition.

Like many cities which had redevelopment agencies with on-going contracts for projects, Goleta is now defending its actions which were in compliance with the laws at the time action was taken. It joins with over 100 other cities suing the State to protect local funds.

In spite of the disagreement between the City and the State, the San Jose Creek Project is moving forward. The Goleta City Council is committed to finishing the project (work resumed in May) this year.