SANTA PAULA : Tax Note Issuance of $6 Million OKd

The Santa Paula City Council has taken a big step in its plan to revitalize the city’s economy, authorizing the issuance of $6 million in tax notes to fund the city’s new redevelopment agency.

Although the city adopted a redevelopment project area more than two years ago, it was unable to raise money for the project until a dispute with the county over its share of property taxes was resolved.

After an out-of-court settlement was finally reached last month, the City Council this week unanimously approved issuing the tax allocation notes and created the Santa Paula Public Financing Authority to oversee it.

Funds from the five-year, tax-free notes, expected to be sold with a yield of between 6% and 6.5%, should be available by November, said Marshall Linn, the city’s bond counsel. Linn said the notes would cost the city $390,000 a year, well below the city’s anticipated revenues for the current fiscal year.

So far, the actual flow of property tax dollars to the Santa Paula Redevelopment Agency has exceeded the city’s estimates, Linn said.

After expenses and the cost of a reserve fund are deducted, the city should receive $4.3 million for projects in the redevelopment area and $1.3 million for low-cost housing, Linn said.

“We have just taken a heck of an important step,” said Mayor Alfonso C. Urias after the council, in its role as the financing authority, approved issuing the tax notes. The redevelopment agency has not yet approved spending any of the money on projects in the redevelopment area.