SR-900-001-01
Council Meeting: June 22, 2004 Santa Monica, CA
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Consideration of a Proposal by Santa Monica College for a $175M
November 2004 Bond Measure Partnering the College, the City of Santa
Monica, the City of Malibu and the Santa Monica-Malibu Municipal School
District
Introduction
This report conveys information regarding a proposal by Santa Monica College for a
partnership between the College, Cities of Santa Monica and Malibu and Santa Monica-
Malibu Unified School District to improve opportunities for education, culture, child care
and physical activity in the community, funded by a November 2004 $175M bond
measure that is under consideration by the College Board of Trustees. Staff
recommends that the City Council hold discussion regarding the concept, provide timely
feedback to the College given their preferred schedule for proceeding, and give
associated direction to staff and City representatives to the Liaison Committee if
appropriate.
Background
On June 7, 2004 the Santa Monica College Board of Trustees heard a staff proposal for
a bond measure that would provide for capital project objectives of the College and
potentially address capital interests of the cities of Santa Monica and Malibu and the
School District. College staff had previously researched needs documented by the
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other institutions and spoken with staff to identify potential projects that bond funding
could support.
At their meeting, College Board members acknowledged the research behind the
proposal and welcomed the concept of institutional partnerships. They questioned the
public?s willingness to support another bond measure, the short time period for decision
making regarding the measure, the ability of the potential partners to sustain operating
costs of capital projects achieved and the effects of those operating costs on other
institutional and community priorities. The Board encouraged their staff to conduct a
poll to gauge community support and to engage the elected officials of the other
institutions in discussion of the proposal.
The College staff will make a presentation to Council this evening and to the Malibu
Council on June 28. No date has been set for discussion by the School Board. In
addition, the matter has been agendized for less formal discussion at the
College/District/City of Santa Monica Liaison Committee meeting of June 30. The
College intends to act on the matter in July, perhaps as early as July 7, for timely
inclusion on the November ballot if it is their decision to go forward.
Discussion
Among the considerations Council may wish to explore in addressing the College?s
proposal for partnership are the following:
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1) Proceeds from the bond measure will flow to the College. Legal and practical
agreements yet to be crafted will determine how partner institutions will realize
benefits of the measure and what they themselves must bring to the table.
2) Capital Project Priorities and Operating Costs ? The City has a lengthy list of
unfunded capital projects. Council and staff have not had opportunity to discuss
and evaluate them, rank them by priority and develop a comprehensive long-term
funding plan for their accomplishment. While City staff is cautiously optimistic
about fiscal recovery, the growth potential of both the capital and operating
budgets must be regarded as limited over the next several years. Unanticipated
opportunities for funding may be considered as they arise, but in the absence of
a strategic plan could divert resources and delay realization of higher priorities.
The legal and practical nature of agreements that would implement the
partnerships is not yet defined. Among possible arrangements, the College may
look to partners for one time capital funds to supplement bond proceeds in order
to achieve a particular project?s objectives, to provide capital development funds
for property they acquire with bond proceeds or to provide ongoing operating
costs of projects for which they bear acquisition and development costs. If the
Council supports the measure, careful prioritization of projects for inclusion in the
measure would be essential to ensure that other strategic capital and operating
priorities are not displaced.
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3) Specificity and Nature of Projects and Educational Use ? The measure is
proposed to qualify with a 55% majority affirmative vote. This necessitates that
an educational benefit be derived from every project it eventually funds. The
College has identified projects it currently believes have that potential. As the
proceeds of the measure will be realized over an extended period of time, the
College indicates that the language of the measure will provide flexibility to
respond to changing conditions. In considering partnership, the City Council
must have a comfort level with the degree of flexibility the measure will provide
and must determine if shared use for educational purposes in fact optimizes City
partnership projects currently contemplated given current objectives for their use.
4) Sequence of Project Funding ? The full proceeds of the measure will be realized
over a period of years. With four institutions potentially sharing benefits, a fair
and rational process for determining sequencing of projects will be essential.
The short time frame for placement on the ballot as well as the flexibility of the
measure and extended receipt of proceeds make it infeasible to work this out in
advance.
5) Nature of Relations With Potential Partners ? As noted above, funds from the
bond measure will flow to the College. A series of agreements between potential
partners would formalize the sequence of projects and the benefits and
obligations of partnership. The form and nature of those agreements will not be
determined by the time the measure is placed on the ballot and voted upon. The
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City and College have had a sometimes contentious relationship over the years,
often centering on impacts of College expansion and student parking on
neighbors. Most recently development of the Madison School Campus as a
performing arts center and plans for a new Bundy Campus have divided the two
institutions. The institutions have, however, cooperated in funding Celebrate
America, on the City grant-funded Pico Partnership and through the shared
operation of the Santa Monica Swim Center, constructed by the City on the main
College campus. Council will need to consider whether the relationship between
the organizations is sufficiently strong to embark rapidly on an undertaking of this
financial scope and duration.
6) Other November Ballot Measures ? Staff has recommended that Council place
an increase in the Transient Occupancy Tax on the November ballot. Success of
the measure is an important element in balancing the City budget and meeting
community expectations for service delivery. The November ballot is anticipated
to include a number of statewide fiscal measures and at least one regional fiscal
measure. An additional local fiscal measure may confuse or aggravate voters
whose support is essential for passage of the City measure.
7) Taxpayer Fatigue ? Local property tax bills already include charges for such
recent voter approved measures as District parcel taxes and capital initiatives,
the property acquisition and construction for the Main Library, and College capital
initiatives. The City Council has been considerate in the past in deferring ballot
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measures to address City capital needs in favor of the District?s timing
considerations. The District contemplates addressing further facility needs,
possibly as soon as 2006, and, in a relatively few years, parcel tax renewal. It is
not clear whether the proposed measure, albeit benefiting the three institutions,
is optimally timed to avoid taxpayer fatigue that could affect other community
priorities.
Recommendation
It is recommended that the City Council consider the College presentation of a potential
bond measure, hold discussion and provide direction to staff and City representatives
on the Liaison Committee.
Prepared by: Susan E. McCarthy, City Manager
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