Community Corner
Novato's $6 Million Lawsuit Takes Aim at State Agency
Joins growing number of cities throughout seeking to thwart state from raiding general fund.
Novato officials on Tuesday announced that they have filed suit against the state's Department of Finance in a move aimed at thwarting the agency from raiding its general fund.
Novato joins a growing number of municipalities seeking similar action.
The city announced in a press release that it is is “legally challenging a determination issued by the Department of Finance (DOF) that improperly denies a $6 million repayment to the City for loan advances made to its redevelopment agency (RDA). The City loan advances to the RDA were pursuant to a 30-year old agreement between the City and RDA to jump-start community redevelopment projects.”
The city's suit aims to recover that $6 million payment.
“It’s a ‘fox-in-charge-of-the-hen-house’ process driven by an entity with a large stake in the outcome,” said City Manager Michael Frank.
“We followed the rules--in the best interest of our community--and are getting arbitrarily penalized in order to plug holes in California’s budget. This money belongs to our residents, and we are going to fight for it.”
