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    Santa Paula: Street Repairs, Relocation of City Departments and DEBT

    By Sheryl Hamlin

    The Community Workshop on March 18, 2019 at the Community Center brought out about seventy five people. The program was broken into three segments: Street Repairs, Relocation of City Departments and Audience Questions.

    Pavement Management and Street Repair

    The subtle difference between this 2019 street repair proposal and the previous street repair plan presented in May of 2018 was the concept of extended life maintenance. The city will identify streets which need minor repairs and fix them to extend their lives another decade or longer, thus avoiding the expensive rebuilds which most of the streets need. This is called “pavement preservation”.

    Historic methodology involved fixing the most deteriorated streets, which are the most expensive to repair, so fewer miles were repaired.

    According to the report, the 55 miles of Centerline roads may be classified as follows: Good (14), Fair (15), Poor (17) and Very Poor (9).

    There will also be a city-wide “digout” program where huge potholes are dugout and filled across town.

    Including unspent Measure T monies from the current fiscal year, the FY 2019-2020 budget could be $1,565,000 with funds from both SB1 and Measure T. Read about SB1 here. Note too that Governor Newsom has threatenedd to rescind SB1 funds if cities do not meet their housing quotas.

    Relocation of City Hall

    Although City Manager Rock introduced this segment with the caveat there are no new taxes, he failed to mention the increases citizens will see as a result of the proposed loan of $21,225,000 from the California I-Bank at 3.5%. Citizens will see increases as follows:

    Extend Measure T

    The 30 year loan extends from 2020 to 2050. Payments are approximately $960,000 annually. 45% of this payment will come from Measure T. This means that Measure T must be extended past the sunset date of 2036. It also means that the City has just usurped the function of the Oversight Committee, whose role it is to recommend the percentage distribution of Measure T monies, as explained by Rose Chacon during the citizen comments sections.

    Raise Enterprise Water and Sewer Rates

    The Water Fund will supply 13% of the loan payment and the Sewer Fund will supply 4% of the $960,000 payment, which means that those funds must raise their revenues (rates) to supply the loan payment portion, as well as to supply the 15% transfers the city already takes from these funds. City Manager Rock explained that there has not been an increase in seven years .

    Property Tax Increases

    Property taxes could increase because the City Manager suggested Proposition 13 caused cities to lose money since 1978 omitting that CalPERS has been taking more and more from city budgets for years, particularly after the retroactive pay hike granted by former Governor Grey Davis. Read about the Davis pension deal here.

    Rock also forgot to mention that in 1998 Santa Paula formed a Redevelopment Agency. According to the LATimes, the RDA spent $3.5 million between 2000 and 2008. The result was 104 units built and a few rehabilitated. Read this LATimes report. The SP RDA received a very poor report card. Monies to fund the RDA were diverted from secured property taxes which would have gone to the General Fund. What benefit was the RDA to Santa Paula? Where is this theatre project now? It can be estimated from various documents that the RDA will have spent $13-$15 million when the final bonds are repaid in 2026.

    The Rock Relocation Plan

    Bifurcation of Government

    The City has been negotiating with the owners of 270 Quail Court and 1547-1580 Lemonwood Drive near Hallock. The purchase price is $9 million subject to close within 120 days. The City Manager did not say if there was an active contract. The plan requires $5 million of tenant improvements. Departments to relocate are: Police, Public Works, Engineering, Community Development, Water Utility Services and the Corporation Yard, Street Maintenance, Fleet Maintenance, Human Resources and Information Technology.

    The City plans to enter into negotiations to purchase the United Water Conservation District property at 106 N. 8th Street for the future home of City Hall. Employees at this site will be: City Manager, City Clerk, City Manager staff, City Attorney, Police Store Front, Athens Environmental and Finance Department. Here is the listing for the UWCD building. Note the minimal transit score and the square footage. City Manager Rock contends there will be a larger council chambers without showing conceptual plans.

    Financial Presentation

    The financial portion consisted of two Powerpoint slides. One showing the debt service payment for the $18 million 30 year loan ad 3.3% from 2020 through 2050. The second is the allocation of the payments to the various departments and/or expected revenue sources as shown below:

    Sources of Annual Loan Payment per City Presentation

    Questions and Answers

    Citizens asked about two dozen questions. Some of the notable questions were as follows:

    Pension Debt

    Q: The most recent CAFR (Comprehensive Audited Financial Report) projected over $20 million in pension liability debt. How can the city take on more debt? A: City Manager Rock said that this is not a true comparison.

    Q: Measure T exceeded the projected budget. Why? A: City Manager Rock said that price increases caused more tax revenue to be collected. For example, he said that when the $15 minimum wage went into effect, they saw increases because the businesses passed this on in the product prices.

    Q: Do heavy trucks pay for using the roads? A: Yes, the solid waste hauler, gravel trucks and Vista pay usage fees.

    Q: Will current facility be sold? A: Yes, the city expects $1.5 million for the current City Hall complex.

    Q: Did city look at only moving Police? A: Yes, expensive seismic upgrade required on current building.

    Q: Was depreciation included in the financial analysis? A: No, this should be done because the city has never budgeted for maintenance. The City Manager did not say when a more complete financial presentation would be presented. This should include the planned increases projected by CalPERS. The City Manager should return with a professional pro forma such as the one performed by Sedell/Castania for the fire annexation.

    Q: Why do cities not maintain streets? A: City Manager asserts this was the result of Prop 13.

    To watch the video, click here.

    For more information on author click sherylhamlin dot com

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