Arcata Makes Plan To Pay State $4 Million Dollars Owed

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Arcata City Council met to discuss how they will pay the state the $4.5 million in misappropriated redevelopment funds that the city owes. The city voted unanimously on a plan that will pay the state back over a 12 year period.

 

The city met in response to growing pressure by the state's Department of Finance to pay back money the successor agency spent despite the 2011 closure of the agencies. The city transferred just over $2 million to the successor agency, mainly going to finish the Sandpiper Park project.

 

Under the plan the city will pay back the $2 million dollars from the successor agency and the city will pay the remaining balance.

 

Mark Wheetley, Vice Mayor of the Arcata City Council said the city adopted the proposal because the city had an obligation to pay back the state.

 

"The city now needs to make sure we meet those obligations and do it in a cost effective, transparent way. That's what we intend to do," said Wheetley.

 

The city plans to pay $1 million dollars upfront, and $300,000 for the remaining ten years. Part of the funds will be paid through the sell of the Sandpiper Park housing project, the remaining by property the former redevelopment agency, now successor agency, holds.

 

"It's fiscally conservative," said Wheetley. "We have to meet all of our ongoing city services and obligations."

 

The council said the Department of Finance may not accept the cities proposal.

 

In the special meeting Deputy Director of Community Development, David Loya, that he believes the agency will accept the proposal.

 

"The communication that I've had with the department of finance staff leads me to believe that if the city proposes a reasonable solution to resolve the amounts that are required that the department of finance would agree to it," said Loya.

 

Loya said that the payment plan is designed to be paid back slowly, but can be paid off sooner if the city has the funding.

 

"The city has to balance protecting it's services that it offers," said Loya.