Oxnard Is Sued for Withholding Housing Funds : Government: California Rural Legal Assistance seeks $539,000 for a low-income shelter. Deferral of monies is legal under some circumstances.

A poverty-law firm sued the city of Oxnard Monday, challenging a recent City Council decision to withhold more than half a million dollars from a state-mandated housing fund set up to shelter the poor.

The lawsuit, filed by Oxnard-based California Rural Legal Assistance, seeks immediate payment of $539,000 owed to the low-income housing fund established by Oxnard’s Redevelopment Agency in 1986.

As it has every year since 1986, the Redevelopment Agency--which doubles as the Oxnard City Council--agreed in June to delay putting money into the housing fund until 1996. The state law establishing the fund has a provision that allows such deferrals to finance redevelopment projects or pay debt accrued before 1986.

Attorney Eileen McCarthy, who filed the lawsuit in Ventura County Superior Court, said she combed city records and found insufficient evidence to justify Oxnard’s continued deferral of the housing money.

“It makes me suspicious and uneasy,” said McCarthy of her search, which produced more questions than answers, she said. “So far in reviewing the information I have received from the city, I’m not satisfied that the agency can continue to defer this money.”

Specifically, the lawsuit alleges that city officials failed to sufficiently document the need to use the money for existing debt or to identify the amount needed.

Oxnard City Atty. Gary Gillig said Monday he had not seen the lawsuit, but is confident that city officials followed the steps necessary to defer putting money into the housing fund.

“I’m somewhat surprised and disappointed that litigation has been filed,” Gillig said. “I believe the current agency’s efforts are commendable. We really are trying to address this.”

State law requires redevelopment agencies to set aside 20% of their tax increment--the increased tax paid on property within a redevelopment area as its value increases--toward the creation of affordable housing.

A provision in the law, however, allows agencies to defer the set-aside funds to pay for redevelopment projects and debt established before 1986--the year the housing requirement was incorporated into redevelopment law.

Since then, Oxnard officials have withheld about $3.6 million generated by two downtown redevelopment areas.

In June, at the same time council members agreed to delay putting the additional $539,000 into the housing fund, they ordered city staff members to fashion a plan detailing how the growing housing-fund deficit would be repaid. The staff is still studying the issue.

But McCarthy questioned the city’s commitment to affordable housing construction, noting that housing officials are nowhere near meeting the 1,719 low-income units outlined in the city’s blueprint for future housing construction.

Oxnard is Ventura County’s largest city and one of its poorest, with a median family income of $38,700, well below the county median of 50,091. Yet since 1980, only 43 low-income housing units have been built in the city, housing officials said. During the same period, 4,550 other housing units were built.

McCarthy said the poor have waited long enough.

“This city’s record for construction of housing affordable to its very low- and low-income residents is abysmal,” the legal aid attorney said. “These residents need housing now. A lot of money should be available today to build affordable housing and it simply has not been provided.”