Arcata Ordered To Pay $2.4 Million By End Of Week

◼ Imagine the City of Arcata bankrupt and its top staff, plus the City Council, all in jail. - Kevin Hoover/Arcata Eye

Those not-impossible consequences could result from a decision made last week by the state’s Department of Finance (DOF). More immediately, the City has to pay an unexpected bill in the millions of dollars.

In a Dec. 15 letter, the DOF has told the City of Arcata that it is exercising its authority to “claw back assets that were inappropriately transferred,” and expects a payment of $2.415 million made to the county auditor by tomorrow, Dec. 21.

The stunning blow stems from the City’s efforts in March, 2011, to salvage the affordable housing projects it had been funding via the Redevelopment Agency. When the cash-strapped State of California dissolved redevelopment agencies and claimed the funds, the City scrambled to transfer and obligate those monies before they could be taken away.

But in its letter to the Successor Agency (which succeeded the defunct Redevelopment Agency, or RDA, and is composed of members of the City Council), the DOF called Arcata out on its fancy maneuvers, saying the City had no legal grounds on which to make the funding transfers... More at The Arcata Eye, click the link.