The City of Goleta filed a lawsuit trying to recover $18 million dollars in bond money earmarked for a creek safety improvement project which was taken by the state.
California eliminated local redevelopment agencies in the state two years ago, as part of an effort to secure additional tax revenue to solve its budget crisis.
The State Department of Finance determined the $18 million dollar bond transfer from the Goleta Redevelopment Agency to the City for the San Jose Creek improvement project was improper.
The project is intended to protect portions of Old Town Goleta which are in a flood plain.
More than 100 communities are currently involved in legal action with the state over the elimination of the local redevelopment agencies, with many arguing they should be able to keep local tax revenues already earmarked for specific local projects.