“It about $2.2 million. CalFires asking for a $6.4 Million Station.”
By: Libi Uremovic | Original Article at patch.com
Beaumont CFD Workshop
February 23, 2015: http://www.ci.beaumont.ca.us/index.aspx?NID=212
47:56 Bond Peddler All Bonds are issued; on the bond side we call it “coverage ratio”. Alan (Kapanicas) calls it on the development side “pay as you go”. It’s the same funds, but the bond market won’t accept bonds unless they’re issued at 110% coverage. Bonds issued to the market get priority on the use of funds. so if we’re short; the first place that’s hit is that 10% overage. Then, because we issue through the Authority, then eventually the Authority can step in its funds, additional reserve funds.
And that’s assuming we don’t have an Escrow. Because if we Escrowed like 25% of the money because only 300 homes are in existence. It’s at that end of the period, that three year period, there were still homes and still an amount in that escrow that hadn’t been released; the Indenture calls for that money to be used to Call Bonds. So we actually reduce the size of the bond issue with those Escrowed Monies.
54:10 Bond Peddler: But you’re making payment on both the Bonds and the ‘Pay-as-you-go’ portion of the facility.
White: Correct. And the pay-as-you-go; you’re talking several hundred dollars per year for police and fire.
Kapanicas: Those are Services.
White: Okay
Bond Peddler: Alan; you’re the tax guy. When you levy the tax on Area 18 a portion of it is for debt service and a portion of it is for pay-as-you-go facilities?
54:35 Kapanicas: Correct. The way to look at it; part was, it was $30,000 per unit for the whole thing in Stetson. Round numbers again, and we’ve talked before Councilman White. $30,000 per unit is fair value. We didn’t issue all the $30,000 because part of what you’re paying for; we’re going to collect the money instead of paying and buying bonds and having to spend it in three years. Some of it, a good example is Oak Valley Parkway. We know that CalTrans in three years will never meet the requirement, they’ll always take longer. Their three years is probably 10 years long.
So, your facilities you purchased; some were purchased immediately; a Water Tank up in Taylor, your portion of sewer improvements, your portion of road improvements, and your portion of future road improvements that you’re paying in the pay-as-you-go.
55:30 Kapanicas So your facilities; again a good example Councilman White used was 7A. 7A was at a time when all of the bonds could be issued at one time. And almost immediately. So all their facilities were paid for in the bond issue; very little in ‘pay-as-you-go’. Probably a 90/10 verses Stetson; it was more like a 60/40, and I may have the numbers, yea about $5 Million to $7 Million, so about a 60/40 pay-as-you-go facilities verses bond debt immediately built facilities.
56:05 White: So does the pay-as-you-go then extend that three-year requirement when you have to build something that the bond were suppose to build?
Peddler: That only applies to bond proceeds. The three year.
White: So, if I look at a lot of these bond issues and even the more current ones, there’s always a list of projects, items the proceeds are suppose to go to take care of. And early on there were a lot of mentions of fire departments and we, I may misunderstand what i’ve been told, but in earlier Council Meeting were were told that there was about $1.9 Million. That $1.9 Million is long past the three-year ability to use it, is that correct? In other words, do we have some money that’s been set aside for fire stations that we can then use ?
57:00 Kapanicas: $2.2 Million is in Mitigation Fees. So pay-as-you-go, thank you, pay-as-you-go many times are Mitigation Fees. Sometimes we can use the mitigation fees immediately to build something. Your mitigation fees for your sewer lift station was already built. When Oak Valley built they built a big enough sewer lift station for you to be able to buy some capacity from. The Original Eight Members built enough sewer capacity that you could buy part of that. You needed a water tank before Stetson could be built because the Water District was on one single tank, without building Taylor Tank, we’re told they would not be able to give you water. And water’s something you want when you buy your house, you want to be able to turn the tap on.
So mitigation fees; some of the CFDs, they could use it to advance some of the mitigation fees, but they weren’t bonded, so the money is sitting there in the mitigation fee account. Now, could we take that money that comes out of the CFD and use it to pay for a fire station. Issue more bonds to build a fire station and use that portion of your pay-as-you-go and others’ pay-as-you-go to pay for it: The answers’ Yes.
58:10 White Okay.
Kapanicas: It’s in mitigation, and it’s about $2.2 Million, but it’s not all CFD. CFD is about $1.8 those mitigation. There have been other homes that paid directly. Every home pays some fire mitigation, as we have talked, at $181 per home. It total’s about $2.2 (million). The problem with the fire department is now they’re (CalFires) asking for a $6.4 Million Station. $2 Million doesn’t get Charlie off to MTA.