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Placentia council green-lights $150,000 to finish Old Town streetscape design, delays bond until funds accumulate
Summary
After hours of testimony and financial briefings, the council authorized $150,000 to complete the Old Town Streetscape master plan and directed staff to delay bond financing until the EIFD has accumulated sufficient tax-increment or other funds to provide the $1 million upfront city contribution. The motion passed 4–0 with one not voting.
The Placentia City Council voted May 6 to fund the final design work for the Old Town Streetscape project and pause issuance of bonds for construction until the Enhanced Infrastructure Financing District (EIFD) has accumulated sufficient incremental tax revenues or other identified funding to meet an anticipated $1,000,000 city contribution.
Council approved a motion to allocate $150,000 to finish design documents — including adjustments to accommodate fire apparatus turning radii — and to advertise construction bids with alternates so the core streetscape can be delivered within a $10,000,000 construction cost target. The motion passed on a roll-call vote of four in favor, one not voting.
The decision followed a lengthy study session in which city staff, the Measure U Citizens Oversight Committee and financial advisers from Cosmont presented projections and risk assessments for the EIFD. Consultants told the council the district’s cash flows run 30 to 40 years, and under the current development forecast the EIFD would likely require general-fund subsidies or deferred city receipts during the first 8–10 years while private development matures.
“We forecast that in year 11 you start generating more revenue than you put out for debt service,” a consultant said during the presentation. The consultants also estimated a full repayment horizon of roughly 30–35 years for the city’s initial contribution and related deferred receipts under the proposed bond structure.
Under the proposal presented to the council, the county pledged to contribute up to $3,500,000 of its share of incremental property tax to the EIFD; the county’s participation was a key factor cited by several councilmembers in weighing whether to move forward. Staff said the district would capture the tax increment above a 2021 base year for parcels inside the district, and that the city would dedicate half of its 13.6% property-tax share to the EIFD while retaining the other half for the general fund.
City staff and consultants outlined alternatives to reduce early-year debt service, including a smaller project scope (for example, $6–8 million instead of $10 million) and variable amortization methods that would align annual debt service with the expected growth of tax increment.
Councilmembers expressed competing concerns: some warned that delaying construction risks rising costs and could damp private investment; others emphasized that current general-fund reserves and ongoing debt obligations mean the city should not commit $1 million until that money is identified. The council ultimately chose a compromise that funds completion of the design to keep the project shovel-ready while pausing bond issuance until the city has a clearer funding pathway.
Next steps directed by the council include finishing the Streetscape Master Plan design, preparing bid documents with alternate bid schedules to meet the $10 million construction target, and returning to council for contract and bond authorization once funding for the upfront $1,000,000 is secured or the EIFD’s tax-increment receipts reach an agreed threshold. The council’s action preserves the county partnership but defers the city’s formal loan or bond commitment.
