City of Novato v. Bosler CA3
The City of Novato entered into a 1983 cooperation agreement with the redevelopment agency (RDA) it had previously created. The cooperation agreement provided, among other things, that Novato could advance funds to the RDA for a redevelopment plan and the RDA would reimburse Novato with 10 percent interest. Novato subsequently made various loans to the RDA, and the RDA made payments to Novato.
After dissolution of the RDA, the Department of Finance (DOF) determined that Novato was required to turn over more than $5 million for distribution to local taxing entities because the RDA made payments to Novato that were not supported by enforceable obligations. Under the dissolution statutes, loan agreements between a city and the RDA created by the city are generally not enforceable obligations. Novato, both in its municipal capacity and as successor agency of the RDA, filed a petition for writ of mandate challenging DOF’s determination. The trial court entered judgment in favor of
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