C.A. 3rd;
C077799

The Third Appellate District affirmed a judgment. The court held that the Department of Finance (DOF) may not resort to “self-help” to force a city to repay funds improperly transferred to it by the city's former redevelopment agency.

During the freeze period under the legislation that eventually dissolved community redevelopment agencies in California, Culver City's former redevelopment agency made an approximately $12.5 million unauthorized transfer to the city. After discovering the unauthorized transfer, DOF authorized the county auditor-controller to reduce by about $12.5 million the tax increment revenue made available to the city, as successor agency, to pay the successor agency's enforceable obligations. In a prior action, now final, the Sacramento Superior Court held that the reduction to the amount made available to the successor agency for payment of its enforceable obligations was proper because the former redevelopment agency's transfer of $12.5 million to the city was unauthorized under the Dissolution Law. The former redevelopment agency should have retained the $12.5 million to pay its bills rather than transferring it to the city. DOF did not seek an order requiring the city to repay the $12.5 million. Following that judgment, the city did not repay the $12.5 million, and DOF continued to authorize successive reductions to the allotment of tax increment revenue to the successor agency to pay its enforceable obligations. The city, asserting it had no duty to pay the money back, sought mandamus relief to stop DOF's successive reductions of tax increment revenue to pay the successor agency's enforceable obligations. DOF sought an order reversing the former redevelopment agency's transfer of $12.5 million to the city and requiring the city to return the money.