Court: Mission Viejo Can Keep its $2.65 Million

Mission Viejo can keep its $2.65 million after winning a lawsuit this week against the state and county.

The city was told it owed the money to various local governments following the dissolution of its redevelopment agency. See a list of these governments below.

But City Treasurer Cheryl Dyas said the state's calculations were wrong and the city owed nothing more.

Here's how Mayor Frank Ury put it: "The state in its wisdom decided to bill us twice for something we’d already paid for."

Dyas did a "superb job" arguing that the city owed nothing more, City Attorney William Curley said. And she "did it with such a level of sophistication that the state and county couldn’t figure it out."

That's what led to the city filing a lawsuit, which was announced in July, he said.

Many other cities chose to pay the state under protest rather than risk penalties, fines and the withholding of taxes for nonpayment, Curley said. Those governments will now need to take their money back from the state if they wish to have it returned.

Curley said the city’s "hard line" position "paid off handsomely."

Here are the governments that will not receive any portion of the $2.65 million:

• South Orange County Community College District
• Saddleback Valley Unified School District
• Orange County Fire Authority
• Orange County Department of Education
• County of Orange
• Capistrano Unified School District
• Moulton Niguel Water District