Analyst Casts Doubt on Library Bond Proposal
A plan by City Councilman Zev Yaroslavsky to sell $30 million in general obligation bonds to help restore the burned-out Los Angeles Central Library may be prohibited by federal tax rules, a council committee was told Monday.
The Recreation, Library and Cultural Affairs Committee recommended approval by the full council of a revised budget of $152.4 million for renovation and expansion of the library--$42 million more than originally budgeted.
The increase is because of design changes, underestimated costs and inflation.
The committee was told by Daniel McGowan, a chief analyst for the City Administrative Office, that the city may be precluded by federal tax laws from selling tax-free municipal bonds if the revenues are used in a sale lease-back arrangement temporarily transferring ownership of the library to private investors.
If the bond revenues are not given to private investors, however, the bonds’ tax-free status might not be jeopardized.
Last Monday, Yaroslavsky proposed putting on next June’s ballot a $70-million bond issue to provide money for the library as well as to repair seismically unsafe branch libraries and replace the 77th Street police station.
Included would be funding for new library construction in the west San Fernando Valley and Watts.
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