WATSONVILLE — The City of Watsonville got a bill from the State Department of Finance last month for $4.8 million, and city officials will try to show that the funds — used for redevelopment projects such as the Civic Plaza — were valid.
The issue began in 2006 when the city made a loan from its general fund to the Redevelopment Agency to build the Civic Plaza, the adjacent garage and the community rooms in the library.
The Watsonville Redevelopment Agency paid the loan back in 2011.
But when Gov. Jerry Brown dissolved the state’s 390 redevelopment agencies that same year as a way to shore up the budget, it threw into uncertainty many similar loans and sent city officials scrambling to keep their redevelopment money.
Property tax funds that were allocated to the jurisdictions by the state before the state officially disbanded its redevelopment agencies were now called into question as California claimed the jurisdictions were overpaid.
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