State officials have blocked funding for high-profile improvement projects in Roseland and north of Sonoma in the wake of California's move to dismantle local redevelopment agencies.
Several cities, including Santa Rosa, Petaluma and Sebastopol, were awaiting word from state auditors at the end of last week on their fate of their projects.
The thumbs-down message from the state applied to the proposed conversion of a Roseland shopping center into a commercial and residential complex and to completion of street, sidewalk and lighting upgrades to Highway 12 north of Sonoma in an area known as the Springs.
Sonoma Valley Supervisor Valerie Brown said she wasn't surprised by the state action, and surmised that local redevelopment projects will be uniformly rejected.
"I'd be very surprised if they could pick and choose what gets a go-ahead," Brown said Sunday.
Brown is chairwoman of a seven-member local panel, called the Oversight Board, charged with disposing of all redevelopment agency assets and returning the property tax funds they collected to local agencies, such as schools and special districts.
The board is scheduled to meet Friday to plot its next step.
Brown said the board will talk to its attorneys "and figure out what happens next."
"We're having trouble just separating out what it means to the various entities," Brown said.
At stake are dozens of projects worth millions of dollars, including reconstructed Highway 101 interchanges in Petaluma, as well as the Roseland and Springs area improvements.
City and county redevelopment agencies were ordered dissolved by Feb. 1 as a part of Gov. Jerry Brown's plan to use the money to balance the state budget. Local governments were required to submit to the state a list of their planned projects for continued funding.
In its letter to the county, a state finance official said that the Roseland and Highway 12 projects are not "enforceable obligations" and will be returned to the Oversight Board for its reconsideration.
The Department of Finance said last week it had received project lists - called Recognized Obligation Payment Schedules, or ROPS - from five of the 10 redevelopment oversight boards in Sonoma County.
The state was in the midst of reviewing lists that came from Cotati, Santa Rosa, Sebastopol, Sonoma and the county.
As of close of business Thursday, the state said it hadn't received lists from Healdsburg, Petaluma, Cloverdale or Windsor. Petaluma Economic Development Director Ingrid Alverde said she sent the city's approved list to the state on Thursday.
The state initially set an April 15 deadline to receive the lists from all 400 of California's former redevelopment agencies. But several agencies hadn't even set up the required oversight boards by then.
According to the state, Cotati's initial review has been completed. The state said several Cotati projects set to receive $1.8 million in funding through June don't appear to qualify. Those same four items and one other, totaling $1.9 million from July through December, also appear not to qualify, the letter said.
The letter said it was returning Cotati's list for reconsideration.
Cotati City Manager Dianne Thompson couldn't be reached on Friday for more detail.
Department of Finance spokesman H.D. Palmer said Santa Rosa's and Sebastopol's lists were being reviewed. The first review is supposed to be done within three days.
"If we find we need more time, then we notify (them) and another clock starts running off 10 calendar days, during which we will seek further information, clarification or validation of the items we flagged," he said.
The state has received lists from a little over half of the state's former redevelopment agencies. Thirty-four were "auto-denied" for missing information, 114 have been completed and 88 letters were issued, Palmer said. Another 75 letters were supposed to be issued this weekend.
At the end of the review period, the state will send a letter with its findings. Agencies can challenge denials.
Alverde said the process has been confusing for agencies because of conflicting deadlines and unclear mandates. That may leave funding for in-progress construction projects in limbo.
For example, she said, the ROPS lists for January through June are supposed to be certified by July 1. But by that date, all the money obligated to those projects may already have been spent.
"That leaves us all in the middle trying to figure out how we move forward in the most efficient way so we don't lose taxpayers' money," she said. "This is really uncharted territory.
"There's no clear path for resolution of any kind. What I'm hearing from people in my industry is that this is ultimately going to be settled in court to create precedent and rules."
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