Bill Would Require City Vote on Bobb Plan : Robinson Wants Awareness of Future Impact of ‘Creative Financing’

Santa Ana City Manager Robert C. Bobb’s plans to raise money for civic improvements by disposing of municipal real estate would be made subject to voter approval under a bill sponsored by Assemblyman Richard Robinson (D-Garden Grove).

Bobb’s proposal, under study by the City Council, would raise $125 million over three years by handing over city parks, fire stations, and police headquarters to a private corporation and then leasing the facilities back for municipal use. Robinson said similar “schemes” are under consideration by the City of Oakland and Sacramento County,

Robinson’s proposed constitutional amendment, introduced last month, would require prior legislative or voter approval of any sale-leaseback type arrangement of municipally owned real estate.

Robinson said the Santa Ana proposal “amounts to very creative financing” in which officials are “making decisions today without the voters being aware that 20 years from now their children will be asked to pay back their loans.”

Predicts Revenue

Bobb said the city would be gaining revenue from “parks to improve those parks, from the library to improve the library system, from the police building to supplement police training--for current and future generations.”.

Robinson said the Santa Ana plan--of which he has only “cursory” knowledge--prompted him to introduce the amendment. Under Bobb’s proposal, after transferring the land, the city would then lease the property back for 30 years, while the corporation issues bonds, backed by the real estate holdings, to raise funds.

Councilwoman Patricia McGuigan said the council has neither approved a plan, nor is it rushing headlong into the sale-leaseback proposal. “I agree with Robinson, that he has a definite responsibility for state finances in the same way we have responsibility to local taxpayers to be prudent,” she said. “But before any financial program is established, the council would have to look at every detail because our necks are on the line,” she said.

Detailed Plan Upcoming

It will be at least two months before a detailed plan is submitted to the council, Bobb said. He said the plan would generate about $8 in private investment on capital projects for each $1 the city provides. Pointing to the $400-million redevelopment of the Fashion Square shopping center, he noted that the city’s share is a relatively minor $8 million, “and we can cite example after example,” he said.

McGuigan said Bobb volunteered to participate in a committee that would work on Robinson’s proposal “to see if amendments could be developed that could be beneficial to the city.” She said the League of California Cities opposes the bill because it would diminish local control of financial matters.

Robinson said he hopes Santa Ana officials, investors and other involved parties are willing to sit down and negotiate. While he is “not wedded to any particular language,” Robinson said, he is unwilling to give up the provision that the ultimate decision on “creative financing schemes” be left to voters.

McGuigan said local officials should take a close look at the proposed amendment, since “it’s going to hinder the ability of cities to finance capital improvements. I’m not certain it’s the responsibility of the Legislature.” Robinson disagreed, saying California’s credit rating “is affected every time one of these local governments comes close to declaring bankruptcy,” he said.

Robinson said he expects little opposition to the amendment in the Assembly: “It’s rare that a chairman loses a bill he authors in his own committee,” he said. If opponents try to defeat it in the Legislature, “I would suggest they are not going to get (their financial plans) anyway,” he added.

As chairman of the Assembly Public Investments, Finance and Bonded Indebtedness Committee, where the measure is pending, Robinson said he makes the decision when a matter comes up for consideration. If it appears opponents will fight the amendment tooth and nail, he said, he will simply postpone it.