CLEARLAKE — The City of Clearlake passed a $3.84 million Redevelopment Agency budget on Thursday. Debt service allocations account for the highest expenditure within the budget.
According to city staff, the RDA Housing Fund must be repaid before tax increment revenues can be used to carry out any economic development and public infrastructure improvements. The repayment obligation stems from a 2000 settlement agreement with Clearlake Housing Now requiring the Project Fund to repay the Housing Fund.
“The 2009-10 Budget estimates that the Project Fund will owe the Housing Fund $652,790 on July 1, 2010. We have reduced the amount owed from $2,212,861 to $652,790 since 2006-07,” City Administrator Dale Neiman reported. “We may be able to make the last payment next fiscal year and then we will be in the position to proceed with street improvements and other public infrastructure improvements.”
Neiman reported that the agency is currently not in the position to use any major amount of available bond proceeds because interest earnings are helping to pay debt service payments. If the interest earnings revenues were not used for debt service, the Project Fund would have had a deficit of $220,000 in 2007-08 and a $150,000 deficit in 2008-09.
“In addition, the money owed to the Housing Fund would have been much greater because lower payments would have been made and the interest and principal owed would be increasing,” Neiman reported. “The longer we use the interest earnings to help pay the debt service the sooner the Housing Fund will be repaid and then money will be available in the project funds for economic development, loans and public infrastructure improvements.”
Progress was made last year in meeting the city”s housing production obligations. The RDA obtained affordability covenants on 38 units between 1990 and 2008. Affordability covenants were obtained on 107 units last year for a total of 145 units. “Our requirement is to have covenants on 168 units,” Neiman reported. “As a result, we only need an additional 23 units to meet our production obligation.”
No money was allocated for capital projects in the next fiscal year. Project Fund ? Series A, which are non-housing, tax-free bond revenues, was budgeted at $600,000. The money is earmarked for a tentative project for commercial development of the airport property.
A copy of the Redevelopment Agency Fiscal Year 2009-10 budget is available in its entirety for public review during regular business hours at Clearlake City Hall.
Contact Denise Rockenstein at drockenstein@clearlakeobserver.com or call her directly at 994-6444, ext. 11.
