It’s the latest twist to the redevelopment drama.
On Wednesday, the city received a letter from the Sonoma County auditor saying it would no longer hold on to property taxes collected by the redevelopment agency and would instead send them to the state, effective immediately.
Previously, the California Department of Finance told county auditors that they could hold on to disputed funds until at least June 30, giving cities time to file appeals.
But after 10 Southern California cities asked for a temporary restraining order on the funds and were denied, the state announced that all revenue from the phased-out redevelopment agency would be redirected to police, K-12 education and community colleges.
In Petaluma, the projects the city had “obligated” the remaining redevelopment funds to include affordable housing, the East Washington interchange, the Old Redwood Highway overpass, the Petaluma River Trail, improvements to the marina and the design portion of the Rainier crosstown connector.
Now $904,000 of that will have to be sent back to the state, taking a significant chunk out of money for COTS’ transitional housing programs, Petaluma People Services Center’s rental assistance program, Rebuilding Together, which repairs homes, and the brownfields revolving loan fund that makes money available for properties with a history of contamination.
Earlier this year, the city agreed to become a successor to the defunct redevelopment agency, charged with winding down the entity and appropriating the remaining funds. There is also an oversight committee to make sure funds are truly used for blighted areas and not go to subsidize developers, a frequent past criticism of redevelopment.
Mayor Dave Glass said the city was working with the state to figure out how to navigate the rapidly changing and turbulent waters of redevelopment, but that there are many unknowns going forward.
“I believe this unfolds in a series of decisions and no one decision suits all,” Glass said. “There is no need to panic, you have to play this thing out and see how it goes.”
CORRECTION: An earlier version of this article incorrectly stated that the brownfields program, which gives money to properties with a history of contamination, would be cut as a result of the end of the redevelopment agency. Only the Revolving Loan Fund aspect of the program, which requires matching funds from the city for environmental cleanup, would be impacted. Patch regrets the error.