Conflicting views of financing PV Town Center project
Original post made by Renee Batti, news editor of The Almanac, on Apr 10, 2007
Town may never need to tap line of credit
By Ted Driscoll
The town of Portola Valley is embarking on the construction of a wonderful, safe and green town center complex thanks to the stunning generosity our citizens. Other than a contribution from the general fund to cover the town's administrative building, the funding is coming entirely from charitable donations.
Some of the contributions are in the form of pledges to be fulfilled over the next 18 months. And some gifts have been identified but not announced yet. I am very confident that we will reach our goal of funding this project without going into debt. Like any large construction project where timing of revenues is not the same as the bills, fiscal prudence argues for us to secure a line of credit to bridge short-term cash flow gaps.
In 1998 the town faced an $11 million construction bill to rebuild upper Alpine Road after the El Nino storm damage. At that time, for the same reason, we secured a line of credit from the county for $3 million. Ultimately, we never drew against it. With careful financial management we were able to cover the expenses ourselves. San Mateo County has again agreed to help us with a line of credit -- this time up to $4 million.
I am confident that history will repeat itself. Our extraordinary team of volunteer fundraisers continues to make great progress and is most of the way home, with strong prospects still ahead. Our construction team completed the first phase of the project on time and slightly under budget. Last week we accepted bids for most of the remainder of the project and we are significantly under budget. This is a complex project; there are challenges ahead; our team is working hard to manage these risks and thus far everything is going well.
The town of Portola Valley is about to do an incredible, unprecedented thing. We are going to renew our community spirit, and refresh and enrich our community facilities, making them safe and insurable again. And we are going to do it while simultaneously lowering taxes, and without a bond or entering into long-term debt, thanks substantially to the incredible generosity of our citizens.
Town is skirting promise to avoid borrowing against general fund
By Charles Engles and Ed Wells
In the fall of 2005, a group of Portola Valley citizens led a campaign against renewal of the utility users tax in the November election.
In order to defeat this campaign and pass the tax renewal by a narrow 52 to 48 percent margin, the current members of the Portola Valley Town Council adamantly denied the main allegation of the citizens group -- that they would borrow against the general fund, which the utility tax supports, to build the new Town Center without submitting the borrowing to the voters (the so-called Trojan Horse).
As a further election move, council members committed themselves to a financing plan based primarily on existing reserves and private donations, and pledged that if more money was needed, they would submit a general obligation bond to the voters.
Despite commendable efforts by many dedicated volunteers and donors, including several members of the citizens group, fundraising has come up short. Now the Town Council is planning to do exactly what they promised they would not do. Without voter approval they are planning to borrow money from San Mateo County to help finance the Town Center project.
There are two fundamental problems with this action. First, it violates a crucial pledge the council made to the voters to win the utility tax election. Second, it perpetuates the council's misguided belief that they know what the voters want without counting any votes.
In the next few days and weeks we will have a chance to see whether Steve Toben, Ed Davis, Ted Driscoll, Maryann Moise Derwin, and Richard Merk are the honorable public servants they appear to be or opportunistic politicians willing to put their pet project above their personal integrity.
Charles Engles and Ed Wells are members of the Portola Valley Taxpayers' Committee Against Measure H.
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