Murrieta council reviews $143.6 million funding gap for its top-priority capital projects and a $22.9 million bond option

The Murrieta City Council on Oct. 20 reviewed a staff analysis showing that its 26 highest-priority capital projects would cost an estimated $257 million, with about $143.6 million still unfunded.

The item asked for council direction rather than a formal vote, and no vote was taken. Draft minutes of the meeting, posted with the council's Nov. 17 agenda, say the council gave its direction by consensus.

The projects

Seven of the Tier 1 projects are fully funded and 19 are partly funded, according to a staff report by Finance Director Javier Carcamo. Committed money totals about $113.5 million, including $2 million in grants still pending.

Among the larger unfunded amounts on the attached project list:

• Keller Road Interchange: $63.25 million estimated, $21.4 million unfunded
• Fire Station 6: $23 million estimated, $20.2 million unfunded
• Warm Springs Parkway, Baxter to Keller Road: $15.4 million, no committed funding
• Police Department expansion, phase 2 building: $15 million, no committed funding
• Cal Oaks Sports Park pool: $15 million, $11.65 million unfunded
• Los Alamos Soccer Complex: $10 million, no committed funding

Lower-tier projects would add $83.6 million more, the report says.

Possible money sources

Staff identified about $54.3 million in city money that could be placed in a Tier 1 reserve. That would come from roughly $40 million of an estimated $44 million in unassigned balances of the Measure T and general funds, plus $14.3 million shifted out of the city's economic contingency reserve.

Staff recommended keeping the $40.7 million operating reserve, equal to about 29% of operating spending, steady with no added contributions for now. A staff review of the 2009 recession found the city's revenue fell about 23% over three years and needed eight years to recover.

Staff also modeled a lease revenue bond, which would not require voter approval. Repaid from Measure T at about $1.5 million a year over 30 years at 5% interest, it would raise about $22.9 million and cost about $21.3 million in interest, for $44.2 million in total payments.

Even counting bonds, grants and partnerships, the report estimates at least $31.3 million would still be missing.

Staff recommended using the Tier 1 list as a flexible guide rather than a fixed order. It also suggested the council consider shifting projects that are less urgent, less developed or not well funded down to the second or third tier.

Council direction

According to the draft minutes, the council gave the following direction by consensus:

• Move $14,382,884 from the economic contingency reserve to a reserve for capital projects
• Decline bond financing
• Search for grant opportunities for projects on the priority list
• Lower Fire Station 6's priority within Tier 1
• Prioritize a solution for citywide beautification
• Prioritize projects that are not eligible for funding as the city lobbies

Council Member Lori Stone recused herself from discussion of one project, CIP No. 10060, because she owns property within 1,000 feet of it, the minutes say. The attached project list identifies that number as the Equestrian Center's first phase.

Kangaroo rat fee

The same meeting's consent calendar included the second reading and adoption of Ordinance No. 639-26, which raises Stephens' kangaroo rat habitat fees on new development.

The consent calendar passed 5-0 on a motion by Mayor Pro Tem Ron Holliday, seconded by Council Member Lisa DeForest. The draft minutes record Stone as dissenting on the ordinance item only.