How Will Half Moon Bay Spend $13.15 Million?

The City of HMB held a Special Meeting Wednesday evening to publicly discuss how the $13.15 million the City has been awarded over Beachwood, through insurance mediation, would be spent. It was held at the new Department Operations Center and the agenda can be found here.

Marina Fraser was the only Councilmember not in attendance, which proved to be a factor. The City hired the Jones Hall law firm and the William Euphrat Municipal Finance advisers, which were present at the meeting, to advise them on options for spending the millions.

When I arrived, one of the bond experts was providing the presentation, accompanied by a PowerPoint slide show. Handouts were available. What most might believe an easy task wasn’t; not at all. The experts the City hired were charged with finding and developing options for the City to pay off the Beachwood debt as soon as possible; but there is a labyrinth of rules, regulations, laws and pre-payment obstacles that complicate the matter. The experts provided the City with five options, plus the current 30-year schedule.

In the end, Option 4 & Option 1 carried the day, but with Council member Fraser out, it ended in a 2-2 tie between them. Both Options pay the debt down the fastest, with Option 4 being the most expeditious, being done with the Beachwood debt on Aug. 1, 2019 & Option 1 having our final payment Aug. 1, 2025.

There were four speakers from the public, two of which spoke before I got there, and two after — of which I was one. The other speaker asked for money for a new library and there was discussion to that, but in the end the comments from Councilmembers Patridge and Muller were crystal clear: Get rid of this debt and please do it ASAP.

Both Alifano and Mayor Kowalczyk entertained the idea of using some of the money for capital projects, like a new library, but all Council members were very sensitive to the public’s continued outcry to dump the debt, and in the end those were the two Options discussed.

Some of the comments from the Councilmembers include:

Naomi Patridge - “I hate debt. We gotta reduce that debt. When it comes to the public, I’m a tightwad.”

Allan Alifano - “We are going in a very positive direction. Reduction of our debt is our goal. Priority has to be to be able to reduce this debt.”

John Muller - “99% of the public want debt reduction. Reducing debt would free up more capital.”

Rick Kowalczyk (Mayor) - “I support debt reduction. However, there are other dynamics. There is a desire to construct a new library in HMB. If we go out in 2 years to fund a library, we’ll have to pay fees all over again.”

In the end, with Councilmember Patridge leading the charge and becoming a tad emotional, she pled with her peers to take the quickest Option 4 and get rid of the debt. Councilmember Muller went even further, asking the experts and staff about how to lock up the money to pay off the bonds in an irrevocable manner, in the event new Councilmembers get elected and can’t resist the stash of cash.

It was a good meeting; cordial, educational, emotional, and informative, with a lot of give and take and a lot of very good questions. Everyone listened to everyone else and I am very pleased with the process and intended result.

Due to the 2-2 tie, the Council will take the matter up again, seeking conclusion, at the next fully attended Council meeting.

I would be more than happy to answer any questions asked on this meeting as well as provide a little more color; but I didn’t want to start out with a book.

I will take this opportunity to repeat part of my comments to the Council last night: I stood before the Council last night and thanked them. I thanked them for the courage it took to discuss pursuit of this money. It took even more courage to decide to go for it and commit, and it took yet more courage to stick with it. I, like many, thought they were nuts...and they may be, but not on this. They were right and I was wrong. It did work.

In addition, let’s remember that they made their decision when the City was on the precipice and all Hell was breaking loose from all sides. Council member Muller even mentioned that the City was within a day of having to come up with the entire $41 million to satisfy the Federal Judgment when they bought the Build America Bonds. That is cutting it very close and had to be tremendously stressful.

They well deserve the gratitude of the community and myself on this one. Hat’s off.

What do you think? Do you think some of the money should go toward a new library or all of it should pay off the debt?

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