City Sues to Avoid Payment to State
City Atty. Thomas A. Kathe filed a lawsuit Monday in Orange County Superior Court challenging a state audit that could eventually require the city to pay as much as $7.9 million into the state gasoline tax fund.
The state is asking the city to return the money plus interest to the fund. The city used gas tax money to pay back a bond funding improvements to Victoria Street made from 1990 to 1993.
The audit states that the city wrongly put up two municipal golf courses as collateral on the bond, and used gas tax funds to repay bond interest.
Kathe said use of the golf courses as collateral was proper and that the state made an auditing error.
State officials could not be reached for comment Monday evening.
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