Cambria’s services district won’t be moving to the old library building on Main Street, after all.
The district board voted 3-2 in July to purchase the building from the county, and the Board of Supervisors approved the sale. But the district was counting on Municipal Finance Corp. to come through with a loan of $562,500 — which the bank declined to do.
The problem: After building the $13 million-plus Sustainable Water Facility, the district lacked enough money in its general fund to satisfy the bank.
The reason for the loan denial became clear after audience member Christine Heinrichs asked about it during public comment and Board President Amanda Rice repeated the question.
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General Manager Jerry Gruber responded: “The money that’s committed to the general fund from property tax is already committed to the Sustainable Water Facility as part of the agreement within that loan.”
“So that loan prevented the bank from wanting to loan us the money?” Rice asked.
“Correct,” said Gruber, “at least under that financing option.”
Director Jim Bahringer raised the possiblity of using district properties as collateral to help secure the loan, but Vice President Greg Sanders said that probably wasn’t the issue.
“I don’t think the bank is as much concerned about collateral as they are about their ability to access a revenue stream to pay the debt service,” Sanders said. “Because the general fund is encumbered by the existing loan on the SWF, the bank didn’t feel comfortable making the loan.”
Audience member Tina Dickason, who had opposed the purchase agreement, compared the move to purchase the library with “somebody that has nothing in their pantry and goes out and buys a Mercedes.”
Because the general fund is encumbered by the existing loan on the SWF, the bank didn’t feel comfortable making the loan.
Greg Sanders, CCSD board vice president
Because the loan was part of the agreement with the county, the bank’s denial effectively killed the deal — unless the district could come up with another way to finance it. That’s what Bahringer wanted to do, suggesting that the district remove the loan contingency from its agreement with the county.
That would mean, district counsel Tim Carmel said, “that you would be purchasing the library without financing.”
Bahringer proposed doing so, citing an offer from the Lions Club to add 20 feet of its adjacent land to the library property. That addition, he said, could significantly boost the land’s financial worth, giving the district a more valuable asset. The problem would be how to make it work without the loan. The board had previously discussed selling district-owned property on Van Gorden Creek, the skate park across from the Veterans Memorial Building and/or the pocket park at Bridge and Center streets to help finance the move.
But new director Aaron Wharton said several community members had contacted him, urging the district not to sell the skate park.
Another complication: Waiving the loan contingency would require a four-fifths vote under the Brown Act, Carmel said, because directors would be adding an item to the agenda after convening the meeting.
Bahringer moved to do so, with Sanders seconding, but it became apparent they wouldn’t have the votes when Wharton spoke against the idea.
Wharton said the offices the district is renting on Tamson Street are adequate and that “at the current time the purchase of this library building is more of a want than a need. … Just because a good deal presents itself, the timing may not be correct for such a purchase.”
Rice and Director Harry Farmer joined Wharton in opposing Bahringer’s motion.
The meeting was the last for Sanders, who was appointed two years earlier to fill a seat vacated by Muril Clift.
He previously served on the board from 2002 to 2010, and has served as its president three times and vice president on four occasions.
Gruber presented Sanders with a proclamation from the board, and county Supervisor Bruce Gibson was on hand to present a proclamation.
“I’ve always known Greg to be an exceptionally well informed public citizen who comes with deep commitment to whatever job he chooses to direct his considerable attentions to,” Gibson said.
The process of choosing someone to fill Sanders’ seat began later in the meeting, with Rice appointing Wharton and Farmer to an ad-hoc committee that will decide how to go about choosing a successor.
Farmer was also selected to fill Sanders’ post as board vice president for one month until the regular election of board officers can be held in December. The vote for Farmer was 3-1, with Bahringer opposed and Sanders abstaining.
In another matter before the board, directors approved a contract with Bartle Wells to conduct a water and wastewater rate study for the district. The study will include four components, each of which will cost no more than $12,000:
▪ Project initiation and data collection.
▪ Developing 10-year water and sewer financial plans.
▪ Evaluating water and sewer rate alternatives.
▪ Presentations, reports and rate implementation.
A fifth component, updating capacity fees levied on new development, could be done later, directors decided in voting to approve only the other four elements of the proposal. The vote was 4-1, with Sanders — who preferred to also go ahead with the capacity fees update – opposed.
The board and audience also got a look at the district’s newly purchased fire engine, which will be going into service soon.
The board’s next two meetings will be earlier in the month than usual, because of the holidays. They’re scheduled for Nov. 16 and Dec. 14.