Uh-Oh, Here Comes The State Again! (Updated)***
Costa Mesa Communication Director Bill Lobdell sent out the following brief, but cryptic, press release a few minutes ago:
The State of California is demanding that Costa Mesa pay an additional $1.4 million in property taxes generated from its redevelopment areas by Thursday or face a 10% penalty and the taking of $1.4 million in sales tax. The City disputes it owes the money. The City Council will hold a special meeting Thursday at 2 p.m. to vote on the matter.
ANTICIPATING BAD NEWS
His message included an agenda for the meeting, which will be a Closed Session event, but the results will likely be "reported out" at the end of the meeting. We have NO idea how long this meeting might last, but hope to attend to hear how the city plans to handle this very important issue.
WHAT TO DO?
This appears to be highway robbery on the part of the state, so I'm going to be VERY interested to see how our council handles this. This very well could mean even MORE legal fees! Geez!
THE COUNTY COLLECTS...
...OR THE STATE PUNISHES
That "or else" is the State withholding the $1.4 million due from our Sales Tax revenues due to be paid to us on 7/17/12 PLUS a 10% penalty! Here's an irony for you superstitious folks - the county will notify the State of our non-payment on Friday, the 13th!
THE MONEY WOULD STAY HERE FOR RE-DISTRIBUTION
If we make the payment that money DOES NOT go to Sacramento, it stays in Orange County and is placed in a trust fund and will subsequently be re-distributed to various agencies within our old Redevelopment Agency area. That would be The City, the NMUSD, the Costa Mesa Sanitary District, the Mesa Consolidated Water District and any other special district in the old RDA area. By not making the payment we, The City, suffer big time. We would NOT be receiving just over $1.5 million in Sales Tax revenues (including the penalty). Plus, all those other agencies will also suffer. Sounds like it will be a short meeting tomorrow.
The following images are 1) the demand letter and 2) the calculation of the purported debt by the Auditor-Controller. Click on each image to enlarge for easier reading.