1993-02 CRA - Laserfiche WebLink

Home Browse Search

. local General Obligation Bonds are a method of raising financial resources at the local level. However, General Obligation Bond authorizations have more often been defeated than approved, largely due to the Proposition 13 tWo-thirds vote requirement. The ability to obtain the approval of the local electorate of a General Obligation Bond is difficult, controversial, and sensitive. and has become a vehicle of "last resort" toward attaining capital facilities. In addition, there appears to be a general consensus among the electorate that new private development should bear the burden of financial mitigation of the impact private development creates on education, rather than to impose such a financial burden on the general community. This general attitude constrains the ability of the District to have successful General Obligation Bond elections. Mello-Roos Community Facilities District ("CFDU) financing can also be used to finance facilities. However, such financing vehicles require the support of property owners, which is extremely difficult to attain in an urbanized area. In addition. CFDs require a ratio of assessed valuation to bond financing comparable to 3: I. In the community, it would be unlikely that the District could attain the required support for a CFD. or to attain the required ratios to fully cover the financial requirements caused by the redevelopment program of the City. . An alternative to General Obligation Bond financing is the utilization of a Parcel Tax or property tax override. These have the same tWo-thirds voting requirements as General Obligation Bond authority, but have greater flexibility of use by the District for non-capital facility requirements. As with the General Obligation Bond authorizations, a successful Parcel Tax election would appear to be difficult to attain in the community. User Fees in the form of higher class admission fees and higher fees for the use of the District's facilities can be imposed by the District as a supplemental source to other revenues. However, the magnitude of these fees required to meet the capital facility requirements of the District would result in User fees having to be so high, that it could eliminate access to the District's facilities by certain low- and mid- socio-economic segments of the community. and the Project Area. In addition. higher contract fees to the business community for use of the facilities, and for educational services, would detract from the relationship that the District has and needs to continue to maintain with the business community, so as to improve the educational level and employment skills of the community's and Project Area's labor force. These educational opportunities are advantages to insuring a revitalized Project Area. . The California Community Redevelopment law is based upon a basic assumption that the use of the statutes are necessary to remedy physical, social, and economic liabilities in the community which cannot be expected to be revened or alleviated by private enterprise acting alone. The financial burden or detriment caused by the redevelopment program of the City upon the District creates another layer of economic liability on the community, and as such, without adequate mitigation will create future adverse physical and social conditions in the Project Area and the community. Although there are a variety of financial vehicles which are available to the District to alleviate these conditions, there appears to be a variety of constraints with each such 8-7 Page 11 of 14