Wednesday, April 25 , 2018, 4:02 am | Overcast 52º


Local News

Legality of Goleta Project Funding Called Into Question

City officials moved forward with San Jose Creek restoration improvements banking on state funding

Goleta officials do not believe they took a gamble in moving forward with construction of the San Jose Creek restoration project without securing prior state funding.

Questions about known risk are beginning to surface more than a week after city officials learned that the California Department of Finance has denied Goleta millions of dollars to fund its flood-control project, which was supposed to be finished later this year.

The state is disputing just over $18 million, $14 million of which is related to redevelopment bond proceeds.

Whether the city acted legally and was eligible for the requested redevelopment funds were concerns raised last year by the Oversight Board to the Goleta RDA Successor Agency.

In a letter dated Sept. 10, 2012, the board monitoring the distribution of funds asked the State Controller’s Office to rule whether the transfer of redevelopment fees to the city in March 2011 was consistent with state law.

The letter was sent merely to ask a question and not to imply fault, according to Santa Barbara County Assistant CEO Renee Bahl, chair of the oversight board.

“We had a lot of discussion on was this legal or eligible,” Bahl told Noozhawk. “We couldn’t figure it out. The dissolution of the redevelopment issue is very complicated. The timing was part of the issue. We really didn’t have a leaning. Our question was, in fact, just a question.”

Although no direct answer ever came back, Bahl said she suspects the state’s response came in last week’s letter.

City officials are preparing to defend the project — designed to widen the creek to improve fish movement and relieve some flooding and drainage issues — during a “meet and confer” session with the state Department of Finance next Thursday in Sacramento.

If the funds are still denied, Goleta officials have mentioned legal action as a viable option.

Officials have also made clear that the city doesn’t have an extra $18 million to pay for the project.

City Attorney Tony Giles said officials have not taken a risk but have come under review because of timing and the “unusual and ambiguous” language added after the law dissolving redevelopment agencies was passed in June 2011.

“Some of that ambiguity just comes out of the way the law was adopted and the additional changes that were made over time,” Giles said. “This project has been on the boards for a long time, even before the city was incorporated. We felt pretty comfortable based on that this was a reasonable and appropriate expenditure.”

He said the city and RDA entered into an agreement in 2009 to do work for the San Jose Creek project, with RDA reimbursing the city for costs. In 2010, the city and Santa Barbara County Flood Control District entered into a separate agreement to complete the project in which the city would pay all costs minus the $5 million provided by the flood district.

After the RDA transferred about $14 million to the city for the project in 2011, the state tweaked rules about which pre-existing projects qualified for such funding, Giles said.

“The law kept changing after we took the actions,” he said. “At the time that every action was taken, we took careful consideration of the law. The things that call us into question came up much later. We calculated what those risks were. I think (the state will) understand and see that the actions were appropriate.”

Assemblyman Das Williams told Noozhawk this week that his office would be glad to help Goleta defend its redevelopment funds, something Santa Barbara has successfully done with its parking lots project.

“We’d be happy to help the City of Goleta move forward, but I hope they of course do ask and work with us to help save whatever we can save,” Williams said, noting that Goleta officials have not yet reached out. “I don’t think it’s fair to criticize the City of Goleta for not being able to see the future. The future is often hard to read.”

Noozhawk staff writer Gina Potthoff can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made through PayPal below, or click here for information on recurring credit-card payments.

Thank you for your vital support.

Maestro, Mastercard, Visa, American Express, Discover, Debit

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >