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Council hears financing options to accelerate Santa Paula's pavement program; staff recommends pay-go but offers blended loan scenario
Summary
Advisors presented three ways to accelerate the Measure R-funded pavement program: a PAYGO five-year plan, a blended $8 million loan plus pay-go to shorten construction to ~2.5 years, or a financing-only approach; staff and council debated inflation risk versus interest cost and the need to coordinate underground utility work.
City financial advisors presented three alternatives for accelerating Santa Paula's pavement-management program using Measure R receipts: (1) pay-as-you-go (PAYGO) expanded investment to $4 million per year for five years; (2) a blended approach with an $8 million financing and $12 million PAYGO that would accelerate the program to roughly 2—2— years; and (3) a financing-only approach.
Christian Sprunger of NHA Advisors summarized the tradeoffs: option 1 minimizes interest cost but exposes the program to a longer construction horizon and therefore greater inflation risk; option 2 incurs interest costs (NHA modeled roughly $1.6 million cash-flow interest on an $8 million, 8—10-year structure) but shortens…
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