Reserves to Be Used for Hotel Shortfall

Oxnard officials have backed away from a plan to borrow money from various landscaping budgets throughout the city to make up for delinquent landscaping fees from the bankrupt Mandalay Beach Resort and Hotel.

Instead, the city plans to use reserves from its general fund to cover the shortfall caused by the hotel and postpone a $90,000 job to clear sand from public parking lots near the hotel. The work was scheduled for this year.

City officials now say they will delay the sand removal until the hotel pays $160,000 in delinquent fees.

As part of the new approach to finance landscaping and beach maintenance, city officials and Mandalay Beach Colony’s 440 homeowners have agreed to a $7 increase in each homeowner’s yearly fees to cover increased maintenance costs in the beachfront neighborhood.

As a result, each Mandalay homeowner will pay $73.80 this year, up from the $67.39 each paid in 1990. But the new agreement is less than the $94.30 fee initially proposed by the city.

“It’s something we can live with,” said the homeowners’ attorney Mitchel Kahn, referring to the fee increase. “It’s a temporary solution for this year, but we will have to keep making long-range plans for what could happen if the hotel continues defaulting on its payments.”

The agreement was reached by Parks and Recreation Director Gary Davis and the Mandalay Colony Homeowners Assn. The agreement is subject to City Council approval. The council is scheduled to consider the matter today.

Last month, the city proposed charging the Mandalay Beach Colony owners and the hotel $147,772 to cover the city’s cost of maintaining the beach. Most of the money, city officials said, would go toward removing sand from public parking lots--something the city had not done in the past.

But homeowners protested in May that it did not make sense to perform more maintenance in the neighborhood as long as the hotel failed to pay its share of the fees.

Meanwhile, the hotel announced last month that it filed for bankruptcy to renegotiate its multimillion-dollar debt. In April, the hotel defaulted on a five-year plan to pay overdue taxes. The hotel owes the county more than $1 million in overdue taxes, interest and penalties. The resort’s tax debt includes about $180,000 owed the city for landscaping and beach maintenance. In past years, the city has made up the shortfall caused by the hotel by borrowing from the reserve funds of other landscaping districts. But starting this year, the city will cover the deficit with money from the city’s general fund reserve, Davis said.

“It didn’t make sense for the city to keep draining the other districts from their small reserve funds,” Kahn said.