SJ CM Doan's concerns about unclear RM4 language and council endorsement validated
At the 6.04 SJ City Council meeting, CM Doan probed city staff about the many unanswered questions regarding the mammoth RM4 regional housing bond (which the Council endorsed). Last week, a discredited BAHFA acknowledged that their ballot language had a whopping mistake in it--lowballing annual costs to taxpayers by more than a eye-popping $240 million per year. Transcript from the 6.04 Council meeting (edited for clarity) below.
Bien Doan conversing with Housing Dept director Eric Soliván and Intergovernmental Relations staffer Zane Barnes:
Eric Soliván.: Your question about the duration of the taxpayer period. I can't comment on that today but I can certainly get those details and follow up with your office as to what the extent is over the period of the bonds.
Bien Doan: Regarding the bond repayment period, how long does it take to repay 20 billion dollars?
ES: Typical issues for private activity bonds--which is what this will be-- is usually on somewhere between a 15- to 30-year cycle subject to a number of different conditions.
BD: Give me the years, let's not go into too many details. Just give me the year. For example, you tell me you put up a $20 billion bond and you don't know the duration of the tax.
ES: Well, the city is not putting up the bond, the BAHFA is the issuer of the bonds, subject to state regulation and on their private activity bond issuance.
BD: Right. But we're supporting it, right?
ES: Well, the city council and mayor are the ones supporting it.
BD: So how much would property tax increase if the bond passes? And let's say you know we're being pretty generous at {an assessed value of an} $800,000 home, which is probably a fixer-upper by the time you get through with assessment and everything would be probably $1.5 million. How much would the property tax increase?
Es: There is a total calculation that BAHFA has issued on their website and what the per parcel tax allocation would be. I don't have information in front of me but I'm happy to follow up with your office with those details.
BD: Okay. My understanding of the ACA 1 (now Prop 5) would lower the voter approval from two third majority to a simple 55% for the bond measure, if approved. Can you verify that?
ES: I know that bill's been going through the Legislature, I can't comment from my position.
Zane Barnes (Intergovernmental Relations staffer): Yes, we can confirm that ACA 1 is currently being amended to remove special taxes but it looks at bonds and moving it from 66%-- from two thirds--to 55%.
BD: And what is the oversight for the issuance and spending of these funds?
ZB: As I understand it, the issuance would be through BAHFA and so BAHFA would have oversight, but as long as there's adherence to the expenditure plan that would be encumbered through law.
BD: I am very supportive of creating more affordable housing and getting shelter for residents. But it's just mind-boggling that we keep taxing our taxpayers-- especially with the recent Measure A bond in which there was, according to the state audit, $300 million unaccounted for. So we have to get this out to the public and let people understand how much they will be taxed, and how long it will take to return on the bonds.
I think we as council members should be fiscally responsible and we should stop taxing our residents because our residents right now are struggling. People can barely find affordable food out there, and then here we are continuing to tax people. I hope that we rethink and get the numbers out there to the citizens so that way they can make an educated decision.
Watch the 6.04 Council meeting here.
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