Completion of Thousand Oaks Plaza May Require Some Juggling : Funding: Failure to sell old City Hall means officials may shift cash in other accounts or borrow from a bank.

Facing an $11-million shortfall in funding for the Civic Arts Plaza, Thousand Oaks officials are considering borrowing money or dipping into reserve accounts to cover the final nine months of construction.

The funding gap--representing nearly one-sixth of the facility’s total price tag--stems from Thousand Oaks’ failure to sell the old City Hall at 401 W. Hillcrest Drive.

In drafting the arts plaza’s $64-million budget, city planners counted on the hilltop property and terraced building to bring in at least $11 million.

But with the real estate market sagging and the local economy moribund, no prospective buyer has bid on the building, which sits on 34 acres of steeply sloped land amid gnarled oak trees and knee-high grass.

Rather than slash the price, city officials have decided to hold on to the parcel until the economy revives.

In the meantime, however, Thousand Oaks needs cash.

Finance Director Robert Biery plans to present the City Council with a memo next month outlining three options: issue municipal bonds, borrow funds from a bank or shift money from other accounts to pay the construction bills.

None of those choices sit well with Mayor Elois Zeanah.

“The city should have had a contingency plan in place in the event its rosy financial analysis or economic projections did not pan out,” Zeanah said. “Instead, it gambled. This gamble did not pay off. We are now in a financial crunch.”

Zeanah added: “The majority on the council has backed the public into a wall. Public funds have been committed, and we have a project in progress. There is no escape except going further in debt, which I abhor.”

For all Zeanah’s angry rhetoric, however, other council members seemed to take the upcoming financial pinch in stride.

“I don’t think it’s a sin--not at all,” Councilwoman Judy Lazar said. “We are a financially sound city.”

Although he has not yet settled on a final recommendation, Biery said he favors borrowing from a bank or tapping municipal reserves to cover the $11-million shortfall.

Possible sources of quick cash include the asset replacement fund, which pays for new city vehicles and other equipment; the self-insurance fund, which covers some of the city’s liability in case of lawsuits, and the development fund, which contains money from builders of the Dos Vientos and Shapell projects.

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“My own preference all along has been to sell the building, but not at a fire-sale price,” Biery said. “I have no problem doing something in the interim while we wait for the economy to improve.”

Because he would only touch reserve funds, set aside for long-term projects, the money-shifting would not affect day-to-day services or the city’s overall fiscal health, Biery said.

And if the city suddenly needed to purchase new computers, for example, he could replenish the asset replacement fund by shuffling money from other accounts, Biery added.

“We would assume that there would be no impact,” he said.

Councilman Frank Schillo also endorsed the fund-swapping idea, arguing that he would rather come up with creative financing than auction off the old City Hall at a bargain-basement price.

‘In five years, the real estate market’s bound to turn around,” Schillo said. “And if not in five years, in 10 years. There’s no big hurry. We have funds set aside on a long-term basis that aren’t going to be used . . . so why not just borrow them and pay ourselves back?”

But Councilwoman Jaime Zukowski said she was troubled by the city’s need to borrow--even from its own reserves.

“The public was promised that the city had cash in hand to construct the (Civic Arts Plaza),” Zukowski said. “To me, that means cash in hand,” not a piece of property slated to be sold at some future date.

“I guess the days of ‘pay as you go’ are gone,” she added.

Already, city officials have had to transfer money from one municipal fund to another in order to satisfy the Civic Arts Plaza’s complicated funding plan.

The city’s Redevelopment Agency, which draws its funds from property taxes assessed on businesses along Thousand Oaks Boulevard, was supposed to cover the full cost of the performing arts facility--the 1,800-seat auditorium and 400-seat theater.

Money from the sale of two former City Halls--at 401 and 2150 W. Hillcrest Drive--was to pay for the government portion of the project, including new municipal offices and public meeting rooms.

But midway through the project, the Redevelopment Agency ran out of cash. So far, the taxpayer-supported General Fund has lent several million dollars to the Redevelopment Agency to cover cultural center construction costs.

Since both the General Fund and the Redevelopment Agency are part of the city of Thousand Oaks, the loans are really just an accounting matter. Nonetheless, Zeanah has repeatedly criticized the money transfers, out of concern that the General Fund will be depleted and city services will suffer.

Echoing a statement she first made three years ago, Zeanah said: “I question whether citizens are willing to sacrifice other public needs to fund the spreading megalopolis blob of Jungleland.”

Other city leaders, however, said they were willing to cut the council some slack.

“It’s very easy to point fingers and say we should have planned for this,” Chamber of Commerce President Steve Rubenstein said. “But our best plans were made when the economy was booming--not just good, but booming. We didn’t foresee a recession like we’re in now. Yes, I’m disappointed. But outraged? Not at all.”

Ironically, the same sagging economy that has blocked the sale of 401 W. Hillcrest Drive has also cut construction costs on the Civic Arts Plaza, saving the city some substantial sums.

With the project nearly 85% built, and all the major bids awarded, the Civic Arts Plaza remains under budget, said project Manager Edward Johnduff. An ongoing federal investigation of the project’s construction manager, Lehrer McGovern Bovis, for alleged fraudulent billing, has not slowed progress on the building, Johnduff said.

In addition to across-the-board savings on the construction costs, the Civic Arts Plaza budget got a bit of a boost when Amgen bought one former City Hall for a higher-than-expected price. The biotechnology firm purchased the building at 2150 W. Hillcrest Drive for $12.2 million.

As for the remaining City Hall, the Thousand Oaks City Council is considering purchasing an adjacent hilltop and adding that 27-acre parcel to the existing site, to make a larger and presumably more desirable lot.

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Meanwhile, a citizens committee has recommended leasing 401 W. Hillcrest Drive as office space so the city can reap some revenue while awaiting a better real estate market. But the building was gutted a few years ago while city crews removed asbestos, and it has not yet been restored.

The same 401 W. Hillcrest Drive task force has urged the council to focus its search for buyers on large corporations or educational institutions. Other suggested uses include a restaurant, sports complex, wedding center or condominiums.

And one group of citizens has recommended dividing the parcel into several chunks, because developers might be eager to snatch up the flat areas but reluctant to purchase the steep hillside.

Whatever the marketing strategy, most city officials remain bullish.

“Once the market turns around,” Schillo said, “we’ll do well. There’s no question about it.”