Santa Paula City Council: Street Repair. Delinquent Bills, Low-Cost Housing and 2015/2016 Budget

By Sheryl Hamlin

The June 1, 2015 Santa Paula City council meeting covered several disparate topics. This article is the first in a multi-part series about this meeting.

Water and Sewer Renovation Combined with Street Repair

Item F on the Consent Calendar was described as follows:

kennedy_jenks

Because of the large amount of the item, $341,509, the Mayor asked for this item to be pulled from the consent calendar which is shown on the agenda. John Ilason, Capital Projects Engineer, came forward with the staff report for this item. He indicated that a city-wide pavement project was already underway by the Public Works Department when he was assigned the re-design of the city wide sewer and water system. Observing that it did not make sense to pave the streets and then destroy them for a sewer/water system renovation, he consulted with the Public Works Department to combine the work. They identified 23 streets city wide, including local streets, collector streets and alleys, where aging pipeline from the 1920s to the 1970s had exceeded its useful life. Staff created an informal RFP which was given to three local companies. Kennedy Jenks won the bid. The streets listed below are in no order of priority:

streets

This is a coordinated effort to tear up the streets and may be inconvenient, said the mayor. While the streets are open, the other utilities, cable, phone, and electricity, will also be able to avail themselves of the trench. The study will be paid for with monies from previous bond sales. It is estimated that the design will take from four to five months and construction could start in 2016 whereupon the Public Works Department will return to council with a suggested schedule. The project is listed in the Capital Improvement Plan (CIP) recently approved by the council and planning commission. This project only considers potable water. No one asked why a purple pipe wasn’t included in the trench for future use while the street trench was open nor did anyone question or suggest streets to add to the list. The item was approved with a voice vote.

Delinquent Bills

According to Finance Director Sandra Easley, a number of water and sewer users in Santa Paula have amassed unpaid bills totaling $27,422.07. She provided a list of all parcels in the staff report. If you are one of these 24 accounts, a lien will be placed on your property for the amount due, which is allowed under California law. To find your parcel number, go to the Ventura County Assessors website and enter your address. The list of parcels follows here. The item was approved and these parcels will be submitted to the county.

 parcels

Low Cost Housing: The Santa Paula Village Apartments

Elisabeth Paniagua, Assistant City Manager, proposed the council hold a Tax Equity and Fiscal Responsibility Act (TEFRA) hearing. TEFRA was a Reagan era law which closed some preferential accounting treatment and added new transaction taxes in order to raise revenue after the 1980-1982 recession. TEFRA has been called one of the largest tax increases in history. The requirement for a public hearing for tax-exempt Private Activity Bonds was added to the 1982 Tax Equity and Fiscal Responsibility Act to the IRS code. So this item on the agenda was essentially the public hearing for the proposed bonds.tefra_hearing

 

The Tax Exempt Private Activity Bond is not issued by a municipality, such as Santa Paula. Santa Paula is the host of the meeting because the collateral property associated with the bonds is located within its boundaries, which in this case is The Santa Paula Apartments. As Ms Paniagua explained, this 56-unit affordable housing complex was built in 1997, at which time multi-family housing bonds were issued in the amount of $3,000,000. At that time, Santa Paula received an in-lieu fee of $13,000 for 30 years (in-lieu of property taxes) and will continue. Now, the property is to be acquired by KDF Communities who plans to refurbish the apartments using an $8,000,000 tax-exempt bond offering secured by the rental revenue of the property.

KDF acquires the funds to purchase such properties from investors who have capital such as major banks. Companies such as KCF who are formed to build or rehabilitate low-cost or senior housing are given tax credits by the State of California which they pass on to partners who provide the capital. Partners could be either investors with capital or financing partners. The bonds are issued under the New Markets to Tax Credits Program of the State of California which is described on their website. The concept is to promote development of low-cost and/or senior housing with the promise of tax credits and tax-free bonds.

No one on the dais asked about this transaction nor questioned the per-unit cost of $142,857. No one questioned if the existing tenants would be evicted while the renovations took place, nor did anyone ask if the financing for the $8,000,000 bond interest and sinking fund of about $600.00 per unit per month would be added to the rental cost. In fact, there was absolutely no discussion about the financing or the fate of the tenants or the irony that low-cost and senior tenants have become an integral part of Wall Street.

The meeting is continued in PART TWO with details about the FY 2015/2016 budget planning process.

Part Three: Wish List Budget

 

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Sheryl Hamlin: With an MS in Industrial Engineering, Sheryl Hamlin spent years in technology with stints at Motorola, Tandem Computers and various startups. She has been on the boards of neighborhood organizations both in San Francisco and Palm Springs where planning issues were her specialty. She now resides in Santa Paula and loves the historic fabric of the city.  Ms. Hamlin’s blog Stealth Fashion  and  technology product ‘ Plug and Play Webmaster’.

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