Muir: The $14.6 Million Already Is Spent – on BillsBy Ari L. Noonan @ 4:00 PM May 31, 2012
Re “City Hall Wins a Financial Struggle with the State, $14.6 Million”
Chief Financial Officer Jeff Muir reacted with characteristic restraint this afternoon to City Hall’s legal victory yesterday in landing $14.6 million worth of former Redevelopment Agency cash that had been earmarked for the state’s always-hungry vaults but was, happily for Culver City, rerouted home.
Putting the so-called windfall into context, “This is like having all your monthly bills come due and actually getting a paycheck from your employer,” Mr. Muir said.
“You expect it to happen, and when it does, you breathe a sigh of relief.”
No fun money here.
None of the revenue is permitted to go toward discretionary spending – its targets are all planned out, debt service.
The money collected from tax increments that normally would have accrued to the late Redevelopment Agency, is due to arrive tomorrow.
“None of it is going to be spent on anything sexy,” Mr. Muir said. “It allows us to pay debt service and not default on that, which is good from my perspective.
“Most of the amount, over $12 million, will go toward debt service in November.”
Every dollar, as prescribed at the first meeting of Culver City’s Successor Agency several weeks ago, has been assigned a landing place.
No cookies or ice cream on the side.
Obtaining the $14.6 is like winning the lottery but being ordered to spend the entirety on spinach, someone said.
City Hall needs to get comfortable to the new metrics, a less lively life than their old routine when the Agency was alive.
Every six months, as Mr. Muir noted, Culver City and every other California community will need to try and put a headlock on Sacramento and wrestle the state for its share of funds, mostly to pay bills.
How long? “Forever,” says Mr. Muir. “As long as there are obligations for the Redevelopment Agency, we are going to have to go through this song-and-dance while having a fight with the state whether there are enforceable obligations.
“This first round was pretty non-controversial in that it was overwhelmingly for debt service. There is not a lot of debate about that.”
Mr. Muir said that future six-month payments will range in the neighborhood of the present $14.6 million.
“The way our debt service schedules work, we have a big debt service payment every November, $12 or $13 million. In April we make more of an interest-only payment, around the $4 to $5 million neighborhood.
“Then we will have to come up with enough enforceable obligations to get us to $14 million or so if we want to get all of the property tax (revenue) we would be eligible to receive.”