COSTA MESA : City May Use Bonds to Pay for 3 Projects

The city is considering financing three major projects, including the construction of a sixth fire station and a senior citizen recreation center, by issuing $15 million in lease revenue bonds.

The city had attempted to fund these projects--Fire Station No. 6 north of the San Diego Freeway, the Senior Citizen Recreation Center at Pomona Avenue and 19th Street and the Victoria Street widening project--through the capital improvement fund in the 1990-91 budget. However, a revenue shortfall required the council to scrap the projects in order to have a balanced budget.

City residents will not be charged any additional taxes or fees if the city decides to issue the bonds, officials say. However, the city will pay back $1.2 million a year for 20 years to pay off the bond debt.

“The City Council narrowed it down to these three projects as being very essential to the community,” said Rick Pickering, assistant city manager.

“Currently the city does not have a fire station north of the 405 Freeway and this will be the city’s first senior citizen recreation center. Victoria Street is one of only two arterial streets that cross the Santa Ana river bed.”

The city bought about 100 parcels along a 1.2-mile section of Victoria Street between Harbor Boulevard and Canyon Drive with money from the sale of $17 million in revenue bonds in 1988, Pickering said. The street construction project, after demolition, is expected to cost another $8.1 million.

The fire station, including a fire engine, equipment and supplies, is estimated to cost about $2.3 million. The senior center will cost about $3.3 million, but about $1.3 million of that will be covered by federal Community Development Block Grant funds.

In addition, the city will pay $2 million for issuance of the bonds and other costs related to the transaction.

The city hopes to have the bond revenue in hand to award construction contracts for the fire station and senior center this fall and to continue acquiring properties and removing buildings along Victoria Street. A construction contract for the street project is not expected to be awarded until mid-1991.

In addition, the city is still paying off a bond issued to build the Civic Center complex. The city expects to pay off the remaining $1 million at 4% interest in 1996, Pickering said.

The council will decide at its Aug. 20 meeting whether to issue the lease revenue bonds for the three projects.