Should Malibu borrow $15 million through a bond issue to buy open-space land, and if so, how should the land be used?
Ostensibly, the city would use the land–as yet undesignated–for public use. But a debate is brewing over whether there should be a cap on how much can be used for improvement.
In a City Council subcommittee meeting Wednesday, councilmembers Tom Hasse and Jeff Jennings, city staff members, and Malibu Coalition for Parks and Land (MCPAL) members Mona Loo and Nidra Winger wrestled over the precise language to be used for the ballot measure. They were fine-tuning language that had already been written by a MCPAL bond measure steering committee.
As being drafted now for the November ballot, the bond measure would have ambitious goals. It will say the land is to be used “for such public purposes as parks, playgrounds, playing fields, trails and community centers in order to serve children, teens, families, adults and seniors with recreation, social and education programs.” It also will be used “to protect natural areas and wildlife habitat; and to limit sprawl and traffic congestion.” All to be paid for with the $15 million.
Both sides, the city and MCPAL, agreed on that part of the language.
But a bottom line, insisted upon by MCPAL, says that “not more than 10 percent of these funds shall be used for improvements or construction.”
Both Hasse and Jennings objected to that restriction. “All politics aside,” said Jennings, “I think that cap is a very bad idea for all sorts of reasons,” adding that “it is sowing seeds for future horrendous problems later on and will probably end up in litigation.”
“I don’t support a 10 percent cap,” said Hasse. He noted that the current council will change in the 2002 election and said that putting a cap on the money for improving the land would be an unfair restriction on future councils, which will have the task of building the ball parks, recreation centers and other uses mandated by the bond measure. “Get rid of the limit, let future councils decide what to do with the land,” he told Loo, chair of MCPAL.
But Hasse also said he was willing to compromise on a cap figure.
However, MCPAL–which includes long-time slow-growth activists such as Ozzie Silna, Steve Uhring and Patt Healy–is not. Those three have said, in fact, that they feel 10 percent usage of the land is already a compromise.
That was revealed in an e-mail sent out by Loo to other members of MCPAL and distributed by her at the council subcommittee. It said: “Steve, Patt and Ozzie feel they have already compromised on the bond–Ozzie’s offering to change the focus of the bond to parks and ballfields and community center usage, and away from pure open space, and then setting up the original 10 percent improvement money when they had always wanted 100 percent for land.”
And to emphasize MCPAL’s firm stand, Loo said she had suggested a compromise of a 15 percent cap to members of the bond measure steering committee. But the MCPAL steering committee voted 10-2 in favor of the 10 percent cap.
Also, at the council subcommittee meeting, consulting firm Public Resources Advisory Group presented details of how Malibu taxpayers might be asked to repay the $15 million general obligation bond.
The tax bite would be apportioned by assessed valuation (AV) of taxable property. Since, as Public Resources pointed out, single-family properties account for 75 percent of the city’s total AV, homeowners will carry the load.
A bond acts basically as a loan by investors, which may include Wall Street investors, banks and private parties.
The Malibu bond might be offered on a repayment schedule over 20 or 30 years. There are three options for repayment. Level Principal pays off the principal early and costs less overall. Level Debt Service pays off both principal and interest at a level rate. Deferred Principal pays more on interest at the start and costs most over the life of the bond.
Property owner taxes vary with each option. Looking at a median AV of $605,460 for a Malibu home and using interest rates in the range of 6.38 percent to 6.61 percent, the average increase over a 30-year bond would be:
- Level Principal–$102 yearly for a total $3,065. Payments start high at the beginning–$244, and end low at the back end–$34.
- Level Debt Service–An average $112 yearly. Total $3,379. High payment of $212 in front. Low payment of $79 at the end.
- Deferred Principal–$120 yearly. Total $3,614. Low payment at beginning of $115. High payment at end of $193.
The Hasse/Jennings subcommittee plans to present these options as well as optional language on a land-usage cap to the full City Council by September.