College Bond Could Help Bankroll City’s Capital Projects

By Olin Ericksen

July 27 -- If the City wants to complete a slew of unfinished capital improvement projects over the next few years, it may want to consider piggy backing on Santa Monica College's new $175 million bond initiative.

That's one suggestion City Council members will mull over Tuesday when they discuss taking on the hefty college bond that would provide $75 million in joint projects with the City.

According to an analysis by the City's financial advisors, the City's capital improvement list -- consisting of 37 projects -- cannot be fully paid off through debt financing.

Over the next five years, the City will not have enough money in its general fund to pay off debt incurred bankrolling various City projects, assuming that expenditure and revenue projections stay constant, according to an information item from staff.

"That doesn't mean that the City's running out of money," said Steve Starks, finance director for the City. "It just says that our ability to fund projects is shrinking."

The City’s ability to fund its capital improvement projects also hinges on whether the State enacts “take-backs” from cities in an effort to bridge a historic budget gap and whether local voters approve an increase in the hotel bed tax in November.

Although the analysis lists several alternatives for funding-- such as prioritizing projects, or hedging on city maintenance projects such as street lights and retrofits -- it seems to highlight the "partnership opportunities" associated with linking up with the SMC bond initiative.

"Certain unfunded capital projects could potentially be realized, either sooner or with greater certainty of funding, through partnership with Santa Monica-Malibu Unified School District and/or Santa Monica College.

Among the joint projects funded by the proposed bond are “site acquisition for field space, improvements to existing fields, marine biology studies, and improvements to the yet-to-be-developed Civic Center early childhood center and the Palisades Garden Arboretum.”