For those who read this morning OC Register you will see a report in the local section entitled “City staff to recommend L.N. City Hall builder.”
Having just discussed this future Capital Improvement Project, CIP, with Laguna Niguel City Manager Tim Casey let me provide some additional details and one correction on this future facility.
Tim commented on one discrepancy in that the Register account states that the project cost “includes” $4 million already spent to buy the site. That is inaccurate. The current total CIP estimate for this 40,000 square foot facility is $25 million. The facility will have a two story administration area with a single story for their council chamber as well as a 2,500 square foot Community Room.
Tim told me that 40 to 50 Laguna Niguel residents attended Monday’s city council meeting to look at the three prospective renderings as provided by LPA architects. He added that they received 32 pages of positive feedback with only one resident expressing concern on the project via e-mail as to the economy and the costly Capo administration building (which led to the recall of CVUSD school Board Members).
In our discussion I compared their approach of paying all of the City Hall project costs in cash as compared to the city of Mission Viejo whose city hall, that opened for business in 2002, was funded by creation of bonded indebtedness. We borrowed $17,450,000 in 2001 for construction of our City Hall and library expansion and, as of June 30th, have an unpaid balance of $15,350,000 for which the interest on the Bonds range from 4.125% to 5.10%. It is worth noting that although no one knows what the future has in store on interest rates our city Treasurer reports that the projected “12 month total rate of return/City portfolio will yield 1.7%” for FY10-11. As such we are currently upside down on our investments over debt service.
Mr. Casey says that the policy of Laguna Niguel is simply to “pay as you go” which I fully support. He pointed out that the city of Laguna Niguel “has never issued debt.” Unlike the massive and costly CUSD administration building Tim stated that they “have always put residents first” proudly citing that they have spent $30 million on parks and recreation improvements and $55 million into infrastructure improvements. They have also built, and is currently expanding, their own Community Center.
As to this new City Hall Tim told me that their city hall project has been in the making for the past 17 years. For example. Each year they have set aside one million dollars for lease payments even though the current city hall lease obligation is $600,000 per year. As of now they have set aside funds for this project which now total $19 million. He anticipates adding another million in their upcoming budget.
In analyzing the decision to pay cash they have looked into amortizing the cost over 30 years which would result in an annual mortgage payment of $1.6 million dollars.
The city of Laguna Niguel has an annual budget of $40 million. They have established a policy where to date $17 million has been set aside in a “rainy day” fund, and $22 million for infrastructure reserves not including the City Hall set aside.
I also like the comment by City Manager Casey that “any underspent appropriations” will be put into this CIP.
We agreed that their timing is perfect. In this recession they have discovered that contractors are willing to accept work simply to “cover direct costs” which our son-in-law is doing in his own housing related firm.
Tim said that they plan to utilize an alternate delivery method and plan to hire a construction management firm to manage the CIP working closely with the architect.
Let me close by commending the city of Laguna Niguel for their “pay as you go” Policy and express my thanks to city manger Casey for his candor in our discussion.
There are too many small cities in Orange County, each with their own civic centers/city halls and admin. structure. How about combining Laguna Hills with one or more nearby cities, thereby reducing taxpayer administrative costs and duplicate city edifices? We do not need approx. 36 cities in such a tiny area as OC – talk about the cost of government! Besides, isn’t it Laguna Hills that prides itself in contracting out virtually all services with a very small “core” staff? If so, why the need for 40,000 square feet? All seems a luxury the stressed taxpayers could do without.
casual observer.
Please be careful with south county city names. In this case we are covering LN, not LH. Laguna Niguel Vs Laguna Hills. We also have Orange county cities named Laguna Woods Village and Laguna Beach. Confusing?
As to the number of cities with thei rown city halls you do raise an interesting point. Most of these newer OC cities are less than 20 years old. Just as you will discover that we have 35 cities in the county a dozen have felt it to be more cost effective to contract with the OCSD to reduce costs.
The real question is the criteria set by LAFCO in determining when a community desires to form a city. Check them out on Google.
Thanks, Larry. I did get my Laguna wires crossed in my post – wonder how that could happen? Seriously, I do question the efficiency of so many cities and also recognize, however, that residents are free to incorporate as they choose (by election), just that there is a limit to the amount of public funds available for these jurisdictions, as the current economic climate is proving. Local control does have quite a price. Consolidation, anyone?
been around a while.
Going through my files the verdict is that I am a pack rat. Case in point is a report from Dec 1998 on consideration of Mission Viejo “annexing” the adjacent unincorporated areas of Ladera Ranch and Las Flores as they each fall in our “sphere of influence.”
Our consultant looked at many factors and came to the conclusion that we would be absorbing a deficit from either or both areas that would require the County yielding a larger slice of the “County’s General Fund property tax revenue.”
The fiscal impact of annexing Las Flores was worse in that “the land use mix in the Las Flores community is unbalanced. It includes little non-residential property in the overall tax base.”
I mentinon this as the Register recently reported Las Flores desire to be annexed by Coto or RSM.
Perhaps the smallest community in OC to become a city was the community of Laguna Woods with 16,500 residents living in the Laguna Woods Village retirement community.
I attended the meeting of their city council when they used their eminent domain hammer to force the business owner, where they leased space on El Toro Road, to sell them that building for a City Hall.
Larry, you are right in that the fiscalization of land use – the pursuit of sales tax generating properties – stymies logical incorporations and/or annexations. Other examples that come to mind: Midway City, Rossmoor, North Tustin. Perhaps if Mission Viejo and Rancho Santa Margarita became one?