Saratoga News

Photograph by Robert Scheer

Administrative Services Director Thomas Fil joins in the applause at City Hall as Mayor Gillian Moran ceremoniously burns the deed of trust the city paid off 14 years ahead of schedule.

City wipes out debt for Civic Center upgrades

By Sarah Lombardo

With the strike of a match, the Saratoga City Council wiped out almost $2 million worth of debt for the city. City staffers, councilmembers and Mayor Gillian Moran watched as a symbolic deed of trust for the Civic Center was burned last week to commemorate paying off the almost $1.98 million used to improve and expand the Civic Center on Fruitvale Avenue.

"I think it represents a significant fulfillment of an obligation the city took on several years ago," Interim City Manager Larry Perlin said. "The citizens of Saratoga now own the improvements to these buildings free and clear."

The retirement of the debt comes 14 years sooner than the city expected, and in a year when the city went through drastic cuts during six months of budget hearings after the failure of the utility-users' tax at the ballot box last November--which may leave some residents asking just where the extra funds for this payment came from.

Administrative Services Director Thomas Fil said the money to pay off the city's debt came from three sources: property taxes, construction fees and savings. According to Fil, the city received much more in the way of property tax receipts and construction fees during the past few years than staffers had expected. Also, the city spent less than originally budgeted. This combined with a healthy reserves fund, and the debt could be paid off.

"We were able to make the payment and still stay within the amount for reserves," Fil said. He stressed that the city's reserves are still $2 million, the minimum level required by the Council.

The city has been paying for the Civic Center improvements since it signed a lease agreement with the ABAG Finance Corporation Oct.1, 1992. Had the city not paid off its debt now, it would have continued to pay interest on almost $2 million for the next 14 years, at about $200,000 a year, according to Fil. "Our children today in kindergarten would be in college when the last check would have been written," Fil said.

"Paying off debt is probably the number-one obligation that the city has--every city," Perlin said. "That we chose to do this should suggest that financially the city is in sound shape. We incur a one-time cost, but in the long run we will save money. People ought to feel good about that. This is a benefit to the people of Saratoga."

The City Council actually approved the plan to retire the debt earlier this year during one of the city's many budget hearings. The idea came from the city's Finance Advisory Committee to use one-time sources of revenue for one-time payments of debt, according to Fil.

"Instead of implementing policies [that could continue to cost money], we targeted one-time expenditures," Moran said. "A lot of this extra money came in through construction fees, and we are putting it to good use."

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