Santa Clarita / Antelope Valley : Water Agency Sues to Block Santa Clarita Plan : Utilities: The suit contends $1.1-billion redevelopment proposal jeopardizes debt payments. Officials dispute claim.

The Castaic Lake Water Agency has filed a lawsuit against the city of Santa Clarita in an attempt to block a $1.1-billion city redevelopment plan that could jeopardize the agency’s ability to pay for its Rio Vista water treatment plant and other debts, an agency official said Friday.

The Santa Clarita City Council unanimously adopted the plan in February to help the city recover from the Jan. 17 Northridge earthquake, improve its infrastructure, redevelop blighted areas and build affordable housing.

Bob Sagehorn, the water agency’s general manager, said his agency filed the suit in Los Angeles Superior Court on Thursday asking a judge to void the recovery plan because its funding could threaten the water agency’s ability to repay its debts.

Under state law, the city is permitted to use increases in property tax revenues to fund improvements, such as the recovery plan.

Otherwise, the taxes would go to public agencies such as schools, county government and the Castaic Lake Water Agency, which receives nearly $6 million annually in property tax revenues.

Sagehorn said his agency had already planned to use its share of future increases in property tax revenues in the redevelopment area to pay off $132 million in debts, including the Rio Vista water treatment plant in Santa Clarita.

“We had already spent the money,” Sagehorn said. “They’re trying to spend the same dollar twice.”

Sagehorn said his agency stands to lose as much as $300 million over the next 30 years, the length of time it is expected to take to implement the city’s recovery plan.

City officials dispute the agency’s figure. City Manager George Caravalho said the agency stands to lose somewhere closer to $3 million over the 30-year implementation period.

“The redevelopment agency is not going to put their (the water agency’s) debt repayment in jeopardy,” Caravalho said. “It is absolutely ridiculous.”

Through the lawsuit, the agency specifically accuses the city of improperly declaring that the recovery plan is exempt from the California Environmental Quality Act because it is an emergency project stemming from the earthquake. The suit alleges that only 20% of the billion-dollar plan addresses earthquake needs.

The suit asks the court to vacate the city’s approval of the plan, to require that the city have an environmental impact statement prepared and to block the city and its redevelopment agency from carrying out the plan until the dispute is resolved.

Caravalho maintains the city acted within the law when it declared the recovery plan exempt from the environmental quality act guidelines because it includes $3 million for quake recovery and $15 million for infrastructure repairs.