A lawsuit filed by the city of Galt against the state for withholding half a million dollars in property tax revenue it said it was entitled to has been dismissed.
The suit was against both the state Department of Finance and the Sacramento County auditor-controller’s office. But 30 minutes before the first court hearing last month, City Manager Jason Behrmann said the agencies agreed to turn over the $509,000.
The money is needed to pay bond debt service related to the now-defunct Galt Redevelopment Agency.
In the lawsuit, the city specifically requested a restraining order against the county government agency that would prohibit it from transferring property tax revenue to the state where it could be unrecoverable, according to the claim filed July 11.
Last year, the state ordered the dissolution off all redevelopment agencies and in February ruled that any financial obligations and remaining projects by overseen by a so-called successor agency made up of local representatives.
The action challenged the constitutionality and legality of actions of the auditor-controller in refusing to distribute the money. Not doing so would cause the successor agency to default on bond debt service payments required to be paid in September.
The auditor-controller indicated that it was not certain that the Department of Finance had approved the payment of the bond debt service and therefore would not release the funds to successor agency unless ordered to do so by a court.
Contact reporter Jennifer Bonnett at email@example.com.