Cost Impacts of Private Underground Utility Districts Continue to Require City Staff Time
The City states the reissuance of bonds will not cost Piedmont taxpayers. Costs for the continuing City staff time appear not to have been factored into the reissuance of the private special district bonds.
Agenda item: City Council Meeting, 7:30 p.m. Monday, October 2, 2017
Consideration of Authorization to Engage a Financial Advisor with Regard to the Possible Refinancing of the Bonds of the Piedmont Hills (Special District that Cost Piedmont taxpayers millions) Wildwood/Crocker, and Dudley/Blair/ Mountain/Pacific/Hagar & Vicinity Underground Assessment Districts.
http://www.ci.piedmont.ca.us/html/govern/staffreports/2017-10-02/underground-bond-refinance.pdf
According to the staff report as stated:
“The City’s General Fund has no obligation to pay or ensure the full and timely payment of the debt service related to refunded debt. Debt service associated with the assessment district is solely the responsibility of the 217 parcel owners.”
As I recall the Piedmont Hills Untility Undergrounding District (PHUUD) Steering Committee had promised they would pay out of pocket some of the $2.3M cost overruns (I have included the $290,000 taken from the Sewer Fund for the Crest Rd collapse).
How much has PHUUD reimbursed the City?
Rick – I don’t know if the PHUUD Steering Committee offered to pay the city back but City Council certainly asked to be repaid – see the final WHEREAS from the resolution authorizing the second $1M below.
Presumably the refinancing is being undertaken to lower the costs of the debt service. As the bond holders, perhaps 217 PHUUD members will pass those savings back to the city.
WHEREAS, while the City Council requests that any funds expended by the City for completion of the construction project that are not recovered from legal actions
against responsible parties be contributed by residents of the District.
RESOLVED: the Piedmont City Council has previously
directed that its Audit Committee work with City staff and outside advisors to investigate and prepare a report
on the City process in relation to the contracts executed regarding the Piedmont Hills Underground Utility District
by no later than April 30, 2010, so that the City Council and the public can engage in appropriate measures to
avoid risk to the City in the future; and
RESOLVED FURTHER: the City
Council has retained outside legal counsel to pursue
any and all legal actions and causes of action against any person, party or entity responsible in any manner for the cost overruns the District has encountered; and
RESOLVED FURTHER: That the City Council finds that for the reasons set forth heretofore that appropriation and expenditure of City funds for completion of the construction work on the Piedmont Hills Underground Utility District serves an important public purpose; and
RESOLVED FURTHER: That the City Council hereby appropriates and authorizes the expenditure of up to $1,060,000 to be paid for the completion of all construction work for the Piedmont Hills Underground Utility District.
Moved by Barbieri, Seconded by Chiang. Ayes: Barbieri, Chiang, Friedman
Noes:
Fujioka, Keating
Absent: None
Garrett, thanks for the update and digging this material out. I recall at the time the PHUUD steering committee representative had stated $100,000 had been raised, this being far short of the $2M+ cost overruns. I had not heard of other funds. As you state, residents who received direct benefit from having their utilities undergounded at taxpayer expense can pass the bond refinance savings back to the City.