The City Council of the City of Mission Viejo took action today to authorize the City Attorney to commence legal actions intended to slow down the State’s efforts to take further monies from the City. This action stems from recent legislation, AB 1484, which was passed as part of the State’s budget adoption in late June.
The passage of AB 1484 has placed additional requirements on the County Auditor-Controller’s Office, the State Department of Finance, and local agencies such as Mission Viejo. AB 1484 also established what can be considered draconian and irrational timelines for performance that further complicate and hinder the process. Under AB 1484, the County Auditor Controller was required to calculate, based on State Department of Finance direction, the amount, if any, that may be owed by each City’s Successor Agency to taxing entities, if an affected taxing entity has not received the full amount it is entitled to pursuant to State Code. This calculation was to be completed by July 9. City Successor Agencies are then to remit what has commonly been referred to as a “residual payment” by July 12.
In the case of the Mission Viejo Successor Agency, the residual payment was calculated to be $2.6 million based on published State DOF data. However, the methodology used to determine this $2.6 million residual payment contains significant material and gross miscalculations. Most notably the calculations did not recognize the over $1.6 million in payments made by Mission Viejo to the various taxing agencies (such as school districts) which were made on February 28, 2012. The County’s Auditor-Controller’s Office acknowledged these $1.6 million in payments were made, among others, but noted they were directed to utilize State published data that did not include these amounts. The County Auditor-Controller also believes they are not authorized to make adjustments. The State Department of Finance also agreed that the total $2.6 million calculation is incorrect; however, they were not able to deal with any appeals and corrections within the timelines established in the legislation.
Because of the unrealistic timelines established in AB 1484 and the uncertainty as to which agency has the authority to make adjustments to published data, the City of Mission Viejo Successor Agency was left with only the option to seek judicial intervention. The goal is to have a judge order a “stand down” on the payment and distribution of the demanded money, until such time as the State establishes an appeal process and then allows the County Auditor-Controller and City Successor Agency to resolve the matter.
It is the City Council’s hope that the State and County will agree to a stand down, for the same purposes, and eliminate the need to go to court.