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Legal Firm Hired To Recoup Funds
$1.6M At Stake
2015 Council

At the Dec. 5 Oakdale City Council meeting, the City of Oakdale entered into a contract with a Sacramento law firm to assist the city in getting repayment for loans it made to the former Oakdale Community Redevelopment Agency.

According to City Manager Bryan Whitemyer, in the 1980s and 1990s the City of Oakdale provided loans to the Oakdale Redevelopment Agency and over the years, the city received annual installment payments from the agency until Governor Jerry Brown and the State of California dissolved redevelopment agencies altogether in 2012.

At that time the city was left with a balance on the loans of approximately $1.6 million.

When the legislation dissolved redevelopment agencies in February 2012, it required successor agencies, which the council acts as for Oakdale, to periodically file a Recognized Obligation Payment Schedule listing payments that are owed on the commitments that the successor agencies inherited from the dissolved redevelopment agencies.

Whitemyer told the council that city staff has worked with the state to have the loans and balances owed recognized as “enforceable obligations” so that the outstanding balance could be recovered.

“The State Department of Finance denied the city’s request to have these loans recognized as enforceable obligations,” Whitemyer said, adding that he felt the state was being “hardnosed” about the process.

Whitemyer said he initially thought the course to recover the outstanding balance would have been an administrative process but that the city would now need help from an experienced law firm familiar with the procedure.

“I wish it wasn’t this difficult,” Whitemyer said, “We’re willing to do what we need to do to get this money back.”

In his presentation, Whitemyer recommended the city retain Iris Yang, a redevelopment consultant and attorney with Best, Best & Krieger with offices in Sacramento. He added that in the past Oakdale has had great success with the firm and staff believed that it was in the community’s best interest to consult with Yang on matters once again related to the former Oakdale Redevelopment Agency.

Oakdale’s City Attorney agreed with Whitemyer, stating that Ms. Yang has represented cities throughout the Central Valley.

During discussion, Councilman Tom Dunlop said he felt the state was punishing those cities that took it upon themselves to loan their redevelopment agencies the money rather than have them use banks that, at the time in the late ‘80s and ‘90s, were charging interest rates close to nine percent.

Whitemyer stressed to the council that none of the fees for the attorney would come out of the city’s General Fund. He said Redevelopment Successor Agency Funds were available for this type of purpose so as not to impact the city’s regular budget.

The council voted 5-0 to pursue the matter.