Fiscal Implications of Provinsalia
(6/23/05 Clearlake City Council)


At the June 23 Clearlake City Council meeting there was a presentation on Provinsalia's fiscal consequences for the city: the idea seems to be for the Clearlake taxpayers (or possibly just residents of Provinsalia) to foot the infrastructure bill. There are various options, of which the formation of a "Mello-Roos" district might be the most palatable: the district would sell bonds to finance construction, tp be repaid by special assessments added to residents' property tax bills. But why shouldn't the developer assume some, if not most or all, of these costs? Ultimately the buyers would still pay, but in a more direct way: either the price of the lots would have to be increased to reflect their actual cost, or debt obligation would have to be tacked on to each sale -- more likely, some combination of both. Naturally the developers hope to avoid such an arrangement, since it would put the lots at a relative disadvantage compared to those with infrastructure in place, and they themselves would have to service debt on the unsold ones.

The idea that the public should be saddled with any of the costs of the golf course seems particularly outrageous: there are four 9-hole courses and one 18-hole course in the county already, and added another one isn't going to benefit the community at large. It isn't really being built for the benefit of Provinsalia residents either: the golf course is an integral part of this project because it will lever the lots into a higher price bracket.

At the end of the presentation the question was raised of how and who is to pay for infrastructure costs outside the project boundaries, mainly for improvements to the access roads and additional traffic on existing roads. The presenter (David Zender) said that was a good question and it would have to be investigated. Amen.

Frank Kossler of the Konocti Water District then made a presentation, saying that Provinsalia was within their sphere of influence and they are willing and able to expand their treatment plant and lay pipe to provide water. Costs would be a $3000 per house connect fee, plus pipe to the project (about a mile), at a total cost of $2.1 million. He asked whether allowing fragmentary project-specific water treatment systems was in the public interest. No cost comparisons to the present scheme (buying water from Yolo Flood and treating it on site) were provided.