Third in a series
Re “City Hall Catches Yet Another Break from Sacramento”
[img]1305|right|Andy Weissman||no_popup[/img]Gradually, financial order is being restored at City Hall following the enormous setbacks Culver City incurred 34 months ago when still-new Gov. Brown struck down Redevelopment Agencies statewide so that he could steer a fresh fat stream of mainly small-town redevelopment revenue into his sink instead.
When the state Dept. of Finance last Friday quietly helped City Hall avoid defaulting on a debt to Sacramento after the Redevelopment Agency was folded, City Councilman Andy Weissman, a key player in the scenario, described it thusly:
“This is one of a handful of elimination of Redevelopment issues we have been debating, arguing, disputing with the Dept. of Finance for the last two years.
“We are now in a position where most of the financial disputes with the state have been resolved, one of them being their previous claim they wanted $22.5 million that they reduced to $2.5million after they recognized that the low- and moderate-income housing money was spent for the purpose for which it was intended in the first place.”
Subtle Distinctions
Mr. Weissman recently was talking about the importance of process to him while the general public is more attuned to results.
Here was an example.
“I think what happened is hugely significant, but not necessarily in the sense many people will think it is,” he said. “It is hugely significant for the good and welfare of Culver City. What was looming was the prospect that the state had given notice it was withholding $11 million of our tax increment, something that had been previously set forth on our ROPS (Recognized Obligation Payment Schedules), the $11 million necessary to pay the bond obligations that were due and payable.
“Absent an affirmative action on the part of the state, acknowledging, in effect, that they were payments that were enforceable and releasing the money, this meant that the city no longer was facing the reality of defaulting on its bond obligations,” Mr. Weissman said.
“The nature of the default would be, in essence, to tell those who bought the bonds in the first place that the city doesn’t have the ability to make the payments and put the bonds into default.
“The short-term consequences of that would be obvious, the upset in the bond community, the black eye the city and the Dept. of Finance both may receive as word of what went on got out. That may have implications elsewhere in the state to the extent there may be other similarly situation communities.
“From the greater standpoint, why I think this is so significant,” Mr. Weissman said, “is that there is much uncertainty as to what the consequences of a bond default would be on Culver City and our credibility.
Bad for City’s Image
“Are people going to want to move to a community that has defaulted. Are people going to want to invest in a community that has defaulted with projects that otherwise would be built?
“I would think this is something the community would not want to risk,” said the Councilman. “We don’t have the resources to pay the ongoing bond obligations if this action had not been reversed last week. It would have compounded year after year.
“I don’t want to call this a victory necessarily, but in terms of resolution of the dispute, it is at least as significant as anything else that we have done recently.”
