Director of Development Services Bill Avera on Tuesday informed the Hollister City Council that the California Department of Finance had disapproved the $140,000 of budgeted payments from the RDA’s successor agency to the Hollister Downtown Association and Economic Development Corp.
For the current fiscal year that ends June 30, the HDA was receiving a total of $65,000 and the EDC a total of $75,000, all in equal monthly payments. It means over 80 percent of the funds have been disbursed.
As part of the dissolution arrangements for redevelopment agencies throughout the state, each agency was required to get approval for their “Recognized Obligation Payment Schedule” from the California Department of Finance.
The reason for the disapproval was stated as “No document supports these items” because, according to Avera’s presentation, no formal current contract existed between the Hollister RDA and either the HDA or EDC when the items were budgeted for the RDA.
The RDA was officially dissolved in February, but claw-back provisions mean that there is the possibility up to six months of payments, or $70,000, might be at risk as approved obligations.
Avera went on to say the city is hoping for legislative or administrative relief from this ruling. If relief is not granted, the most likely scenario is the state will withhold an amount equal to disputed obligations from future property tax disbursements to the city, according to Mary Paxton, manager of the former RDA.
