City May Tap Cash Reserves to Pay Civic Arts Plaza Bills : Finances: Thousand Oaks could use funds earmarked for the golf course, treating waste water and providing liability insurance.

Seeking quick cash to pay construction bills at the Civic Arts Plaza, Thousand Oaks council members tonight will consider plucking $13 million from city reserves as a stopgap financing measure.

Finance Director Robert Biery has recommended pulling funds from seven city accounts, which are earmarked for programs such as operating the public golf course, treating waste water and providing liability insurance.

The council would then replenish the funds, with interest, after selling surplus property to raise money.

This maneuvering became necessary when the council decided to wait out the recession before auctioning off the former City Hall building at 401 W. Hillcrest Drive.

For years, city leaders had counted on selling the hillside parcel to finance the $64-million Civic Arts Plaza. With that sale postponed due to the sagging real estate market, they had to look elsewhere for funds.

So they turned to their own pockets.

Like an individual dipping into his bank account to pay off credit card debt, the city can take money from a flush fund to cover a shortfall elsewhere in the budget.

But unlike individuals shuffling money from one pocket to another, the city must repay its “internal loans” with interest, to be sure each fund maintains the appropriate balance in the long run.

Because the city is both debtor and creditor, the finance director can charge lower interest than the prevailing bank rate. The city can also remain flexible about the term of the loan, paying off the principal and interest when money becomes available.

To raise enough cash to settle accounts with itself, the city will likely have to sell several properties in addition to the former City Hall on Hillcrest Drive, Mayor Alex Fiore acknowledged.

For example, the council could get rid of a passel of undeveloped parcels in the Greenwich Village neighborhood near the Moorpark Freeway, Fiore said. Or it could sell the 11 acres on the eastern edge of the Civic Arts Plaza to a movie theater chain or another private developer.

Whatever land ends up on the auction block, Fiore said he feels certain the city will be able to pay off its internal loans within a few years.

“There is nothing philosophically wrong with borrowing from yourself,” he said.

Under the proposal up for debate tonight, the council would have to nearly drain at least one fund and take significant chunks from other accounts to cover costs at the Civic Arts Plaza.

Fiore insisted the city would retain enough cash in each account to cover daily needs. “This doesn’t create any kind of shortage,” he said.

And City Manager Grant Brimhall added his own assurance: “There would be no reduction in any of the services or functions that flow from these funds as a result of the borrowing.”

But Councilwoman Jaime Zukowski expressed concern that juggling money from one fund to another could leave the city shorthanded should an unexpected need arise.

*

Hardest hit would be the asset replacement fund, which pays for updating city equipment such as computers, cars and maintenance materials.

Biery’s plan calls for borrowing $4 million from the fund, which had a balance of just $4.8 million at the end of last year. Brimhall said the fund has grown since last year’s budget report, providing an adequate cushion, but he could not state the latest account total.

“We need to know, does this affect our other choices, our other spending?” Zukowski asked. “I would like to know how these (loans) will impact other areas in our city.”

Council members will confront that question head-on tonight, as they consider two demands on the golf course fund.

To cover costs for the Civic Arts Plaza, Finance Director Biery has suggested borrowing $1 million from the golf course account. That would leave barely enough money to cover another proposal up for a council vote tonight--a $2-million project to spiff up the Los Robles Golf Course by replacing the aged irrigation system and rebuilding the cramped tee boxes.