Submitted by Daron Case
A “buzz-word” being used a lot lately is “fiscal prudence.” Prudent is an adjective defined as:
“Acting with or showing care and thought for the future.”
When Coronado’s Re-Development Agency (CDA) began in 1985, I don’t think we could foresee the amount of development required to pay off the bonds. Moving back to Coronado I am stunned at the increased density and neglect of a reasonable floor area ratio (F.A.R.) being used. Coronado is bursting at the seams with density.
A recent poll on the Coronado Electorate Facebook group showed over-development is the #1 issue concerning residents this campaign season.
On June 19th, the City Council approved a $145 million bond issue to accelerate re-payment of the Successor Agency’s (SA) debt (the SA is the former CDA). Once the debt is gone, Coronado Unified School District (CUSD) will return to a better student funding status known as “Basic Aid.” In order to achieve the “optimal redemption strategy” by the year 2027, our Treasurer said that we need “additional tax increment monies being received above and beyond what the current growth in our assessed value is.” Because tax increment comes largely from new development, in order to pay off the debt by 2027 we need new development greater than we have now.
While the focus was on dog parks last week, another item was on consent (item 5i) – a staff recommendation to give $33 million from the $145 million in new bond debt to the current Community Development Agency. The list of projects for our current CDA exceeds $250 million. The City Manager clarified that only $112 million will be used to re-finance the SA debt, meaning only $112 million is needed to get CUSD back to Basic Aid. Right now, $33 million is being paid to Coronado by the State of California in principal and interest through the year 2036. Because we are issuing this extra $33 million in bonds and using it to pay off the debt we are owed by the State, it eliminates the obligation of the State to pay us back. Councilman Mike Donovan asked our Treasurer a question during the June 19th Council meeting: “How much in round numbers are we going to lose?” The City Treasurer responded: “I haven’t done a specific calculation so I don’t have that number for you available.”
If development concerns you, pay close attention. This bond debt refinance will be again paid through more development. Once the debt is paid off, 100% of the tax increment used to pay debt will go to CUSD. If CUSD needs more money than Basic Aid provides, new development is where it can come from. In 2027, how much money will CUSD need every year beyond Basic Aid? How much development will be required per year to provide that amount? How much more development can Coronado sustain, as we have already exceeded the capacity our infrastructure was designed for in terms of traffic, parking, sewer, and density?
It appears we are not only in the process of closing down the old Re-Development Agency but we have also just started a brand new one. Are we acting with care and thought for our future?
image: Google Maps