The City of Union City is suing the state due to the Department of Finance prohibiting the city from using redevelopment agency dollars to fund programs and existing obligations.
“The City is taking this necessary legal action to protect the public assets of our residents and our General Fund revenues, to continue to provide the current level of City services, to complete transit- oriented development projects, and to support social services programs,” the city said in a press release Tuesday.
Nearly 400 redevelopment agencies across the state were dissolved by Gov. Jerry Brown last February with the agencies’ collective $1.7 billion used to help close California’s budget gap.
As a pre-emptive measure in February 2011, the redevelopment agency began issuing bonds and transferred redevelopment assets over to the city in order to continue redevelopment projects, which includes the ongoing work in the transit-oriented Station District.
Redevelopment dollars also fund low-income housing, rental assistance for low-income seniors at the Tropics Mobile Home Park, employment services for disabled persons and social services for local nonprofit Centro de Servicios, an organization that plays a vital role in quelling gang violence and supporting the community, according to the City of Union City.
The Department of Finance, however, recently rejected the use of those bond and agency dollars for those services and programs, placing the financial burden on the city. The city doesn’t have the financial means to support all of the redevelopment obligations, leaving those programs at risk, city staff said.
On Tuesday, the City of Union City filed a lawsuit against the Department of Finance, the California State Controller and the Alameda Audit Controller, challenging the rejection.
According to city staff, city officials met with the Department of Finance in October and December to stress the importance of continuing the redevelopment agency’s social services and completing the transit community centered around the BART station.
While much of the city’s vision has come to light — the city unveiled its new in November — what remains is “Union City BART Phase II,” a project that would open the east side of the station to allow access to the station from both sides and create a pedestrian promenade. The project has been in the making for more than a decade with millions of dollars invested in it, according to city staff.
“The DOF arbitrarily rejected the City’s factual arguments without serious analysis. Consequently, the City had no other alternative but to file suit challenging the DOF’s unsupported decisions,” city staff said in a press release. “By the State reaching into cities’ general funds to absorb revenues, it threatens Union City’s public assets and the ability to provide local services to residents, especially the most at-risk populations – seniors, low-income families, disabled population and youth.”
This isn’t the first time the City of Union City has sued the state over redevelopment issues.
In July 2011, the City of Union City joined the City of San Jose, the League of California Cities and the California Redevelopment Association in a California in an unsuccessful California Supreme Court lawsuit that questioned the legality of the shutting down redevelopment agencies in the first place.
The issue has been a contentious one for city and regional leaders across the state in recent years, with many equating the state’s seizure of redevelopment dollars to robbery.
Former Union City financial officer Richard Digre said in a 2011 interview that, “It’s like someone jumping out of a bush with a gun saying, ‘Your money or your life.’”
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