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2 California cities mishandled redevelopment money, audit finds

August 29, 2012 |  7:00 am

A review by the California controller found that two cities improperly handled roughly $350 million in redevelopment money and assets, officials announced on Tuesday.

Both cities -- Milpitas and Morgan Hill, both in Santa Clara County -- protested but agreed to comply with the state's orders, said Jacob Roper, a spokesman for Controller John Chiang. That will allow the redevelopment resources to be split among schools and other local agencies.

“We’re not happy about losing our redevelopment agency, but we understand the process," said Leslie Little, the assistant city manager in Morgan Hill.

California is dissolving redevelopment agencies this year, and Gov. Jerry Brown is counting on using much of the money to help plug the state's budget gap.

Administration officials have been aggressive in securing redevelopment money, although some cities have refused to hand it over. The controller is also tracking the process, and 12 other cities are currently under review.

"My responsibility is to conduct these reviews as required by the Legislature and courts, while also helping local governments to make sense of this process," Chiang said in a statement.


State is on the hunt for redevelopment money

Cities refuse to hand over redevelopment money

Disputes over redevelopment money could entangle state budget

-- Chris Megerian in Sacramento