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County wins Hwy. 12 ruling

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In a final ruling Monday, a Sacramento County superior court judge sided with Sonoma County in a suit against the state that allows the county to re-enter into construction contracts for the unfinished Highway 12 project in the Springs and the planned Roseland shopping center in Santa Rosa.

Judge Eugene Balonon issued a preliminary ruling last month that basically said the county was in the right to include the two former redevelopment projects as enforceable obligations.

Even though it’s an apparent victory, the state has 60 days, after all the paperwork has been filed, to request an appeal – something 1st District Supervisor Susan Gorin expects to happen.

The state’s Department of Finance had disallowed the new contracts for the two projects on several occasions. The original contracts were voided when the state Supreme Court ruled in favor of the state in December 2011, and dissolved the more than 300 redevelopment agencies statewide.

The county’s Successor Agency re-entered into the contracts according to the letter of the law, but the state thought otherwise and the county sued.

The county has a second suit pending against the state for the money involved in the two projects – somewhere in the neighborhood of $6.8 million. The state wants the money, the county wants the court to decide, and the ruling on the enforceable obligations adds to the county’s case over the money. But that suit won’t be heard until May 2014.

In a second part of the ruling, the judge told the state to refigure money from what is called a “true-up payment” on funds that both the state and the county claimed. The county gave up a disputed $2.2 million only after the state threatened to withhold all county property taxes.

Steve Shupe, the county’s lead counsel on the suit, explained that the second issue has to do with the fact that, when the Department of Finance computed the amount of the “true up” the county had to pay in July 2012, it assumed that the Highway 12 and Roseland agreements were not enforceable obligations.

“Now that the court has ruled that they are, in fact, ‘enforceable obligations,’ the court has ordered DOF to go back and compute what the ‘true up’ payment should have been assuming that fact,” he said. “If we paid too much (which was the case because we had expenditures for those projects listed on our ROPS), then the court says we can recover any overpayments by increasing our future RPTTF payments accordingly.”

Gorin called the ruling “wonderful news.” But she said she expects the state to appeal the ruling

Meanwhile, “we can continue to move forward with the Highway 12 project,” she said. The project is now being paid for from the county’s General Fund with money formerly diverted to the redevelopment agency.

Gorin said she received an email the other day from Tom O’Kane, the deputy director of the county’s Public Works Department, saying that public works would deliver the 90-percent plans for the highway project to Caltrans sometime next week.

Steve Cox, former Springs Redevelopment Advisory Committee member, was also happy with the outcome.

“It was clear from the start that the Department of Finance abused its powers. It’s a shame that the Highway 12 project was delayed and the county had to spend precious resources proving the obvious in court,” he said. “Thankfully, our Board of Supervisors, County Community Development leaders and County legal counsel have had the smarts and fortitude to overcome the state’s misuse of power and put the Highway 12 project back on track. I’m deeply grateful for the county’s efforts on behalf of the Springs community.”