Costa Mesa city officials have called an emergency meeting for Thursday to discuss a property tax payment the county claims the city owes.
The city has until Thursday to pay $1.4 million to the Orange County Auditor-Controller or it will be slapped with a 10% penalty, according to a letter sent to Costa Mesa’s Housing Authority on Monday.
The money is owed from Costa Mesa’s now-defunct Redevelopment Agency, which received property tax money from the RDA zone without it being siphoned through county and state agencies. County officials said the $1.4 million will be reallocated to public agencies as if there was never an RDA, meaning Costa Mesa will get some of that money back, but not all.
For every month after Thursday the city forgoes paying the amount, the state will include a 1.5% penalty on top of the original 10%, equaling about $161,000 a month starting in August.
The City Council and Housing Authority, which replaced the RDA, called the meeting to discuss whether or not the city should pay.
The meeting is scheduled for 2 p.m. in City Council Chambers, 77 Fair Drive.
State lawmakers voted to dissolved RDAs across California after Christmas last year to help plug state budget deficits. The California Supreme Court upheld the law, which took effect Feb. 1. Cities were required to submit a list of financial obligations their RDAs still owed. Costa Mesa’s amounted to more than $10 million worth of debt.
The county auditor is acting on behalf of the state, said Frank Davies, a property tax manager in the county’s auditor-controller office. The $1.4 million is the property tax revenue generated in Costa Mesa’s RDA for the first half of the fiscal year.
Costa Mesa is one of 14 Orange County cities who were asked to repay RDA money. Huntington Beach owes about $630,000 and Irvine owes $120,000. Brea owes the most with $15.5 million, followed by Westminster which owes about $9 million.