HUNTINGTON BEACH : Council to Decide on Unused Bonds

When the City Council reconvenes Monday after the holiday recess, it is scheduled to decide what to do with $10.2 million in unused bonds, a critical issue in the city’s ongoing budget overhaul.

Council members will be deciding between conflicting recommendations from its citizens budget committee and city staff members.

The 11-member Budget Review Task Force, which the council set up last September to help them offset a projected $5.6-million deficit, advises that the bonds be refunded. By doing so, the panel notes, the city would save $900,000 per year in scheduled debt service payments beginning in 1992-93.

City staff members, however, propose that the council use the bonds for five capital projects, each of which would generate new revenue for the city.

Under the staff recommendation, $5 million of the bonds would help pay for the Huntington Central Library expansion, $1.3 million would be used to construct buildings planned for the new pier, and the remainder would go toward three beach parking projects.

Once completed, those projects together would raise more than $1 million in additional income per year, according to a city staff report.

City staff members also cited an independent financial analysis in arguing that the bonds be used rather than refunded.

If the city refunds the bonds, it may still have to issue bonds at a later date to pay for those yet-unfunded capital improvements, city staff members argued. Under that scenario, if the city replaced the bonds in August, 1993, it would pay about $6 million in additional interest and financing costs, officials said.

Also on Monday’s agenda is discussion of declaring the downtown district a business improvement area. That would enable downtown merchants to pool their resources to market the area as a centralized entity, as if it were an enclosed shopping mall.

Before the council may approve such a move, however, it is required to hold a public hearing, which would be scheduled at a later meeting.