This is how you get into a deficit, lose money then beg for a tax increase to increase your incompetence and corruption.
“Hymel said it is estimated that the lower interest rates on the bonds made possible by the guarantor program would increase revenue from the bond offering from $85 million to $94 million.
The guarantor program also would save another $1 million because the size of a required bond reserve would be reduced.
Two members of the Coalition of Sensible Taxpayers, a fiscal watchdog group, attended a meeting of the joint power authority’s directors on Feb. 6 to voice their concerns about the proposal.
“You can’t use taxpayer money to guarantee that those units are going to be filled and shift all that risk away from the bond holders,” said Mary Stompe, retired director of PEP Housing. “It’s not fiscally responsible for the county.”
It is not the role of government to provide housing, using tax dollars. This money is taken from public safety, road repair, services for the homeless. This is theft via government fiat. You have to ask the question, what is the public connection of the developers, contractors and unions involved—you will find the reason for this project, it isn’t to help the housing problem.
Marin worker housing plan faces budget shortfall
By Richard Halstead, Marin Independent Journal, 3/3/25 https://www.marinij.com/2025/02/17/marin-worker-housing-plan-faces-budget-shortfall/
An effort to build housing for educators and county workers in Marin has a $17.4 million budget shortfall.
A plan has been floated to close the gap by having the county and school districts guarantee the rental income of the apartments in order to lower the interest rates on bonds to finance the project.
The project, known as the Village at Oak Hill, would involve 135 apartments on a site adjacent to San Quentin prison. They would be priced to be affordable to households earning between 50% and 80% of the area median income.
A household of three earning $88,150 per year in Marin is at 50% of area median income, while a household of three earning $141,000 a year is at 80%.
The bond guarantor program has been proposed by the Marin County Public Financing Authority, which was created by county supervisors and the Marin County of Office of Education in 2023 to finance and manage the Oak Hill project.
In January, county supervisors approved a $108,000 loan to the authority to cover executive management, administrative and fiscal services for the project. Not counting that loan, the county has contributed more than $4.57 million to the project, which has an estimated cost of more than $118 million.
“It’s hard to imagine we can have the project go forward without this,” said Matthew Hymel, the authority’s director and a former county executive. “This project was conceived five years ago when interest rates were at a historic low. Now rates are much higher.”
Hymel said it is estimated that the lower interest rates on the bonds made possible by the guarantor program would increase revenue from the bond offering from $85 million to $94 million.
The guarantor program also would save another $1 million because the size of a required bond reserve would be reduced.
Two members of the Coalition of Sensible Taxpayers, a fiscal watchdog group, attended a meeting of the joint power authority’s directors on Feb. 6 to voice their concerns about the proposal.
“You can’t use taxpayer money to guarantee that those units are going to be filled and shift all that risk away from the bond holders,” said Mary Stompe, retired director of PEP Housing. “It’s not fiscally responsible for the county.”
“If you can’t balance your budget, you don’t have a viable project,” Stompe said. “When I didn’t have a balanced budget, I couldn’t move forward.”
Mimi Willard, president of the Coalition of Sensible Taxpayers, said “the lack of interest by the usual investors is a red flag.”
“It demonstrates skepticism about the financial projections, including but not limited to the rental income over the 30- to 35-year period,” she said.
Stompe and Willard also questioned the size of the $5.9 million fee that is slated to be paid to the project’s developer, Education Housing Partners.
“The objective of the JPA and EHP is to provide high-quality apartments at the lowest possible rent to help recruit and retain the best teachers and other public employees,” Bruce Dorfman, the company’s chief executive officer, wrote in an email. “By securing occupancy guarantees, financing costs substantially decrease, ensuring sustainably low rents while significantly limiting risk due to the considerable demand for new affordable units.”
“No other financing structure that we have evaluated offers these benefits nor provides the simplicity of execution to create teacher/staff housing for school districts and the County,” Dorfman wrote. “Oak Hill is also less risky and more efficient than districts individually pursuing workforce housing on their own sites.”
Under the proposed bond guarantee program, school districts or a group of smaller districts would agree to backstop shortfalls in rental revenues from designated apartments at the end of each year. Because 101 of the apartments would be reserved for educators, school districts would back up 75% of the project’s rental income. Marin County would guarantee 25%, because 34 of the apartments would be reserved for county workers.
Any participating school district or consortium of districts would be required to assume responsibility for a minimum of nine apartments. They would include one apartment priced at 50% of area median income, two at 60% and six from 80% to 120%.
Hymel said that while the goal is to keep rents below 80% of area median income, it might become necessary to charge higher rents to close the budget gap.
“If you go up to 120% of AMI, the gap goes down by about $3 million to $4 million,” he said.
A household of three earning $201,550 a year in Marin is at 120% of area median income.
Hymel said that because the housing is being created by a joint powers authority, the county and participating school districts may legally rent only to their employees.
“The guarantor program offers a series of risk mitigation steps, including the development of district waiting lists prior to leasing units and the flexibility for districts to opt to fill their dedicated units with tenants from other school districts and county of Marin waiting lists,” said John Carroll, the Marin County superintendent of schools.
“Though nothing related to developing workforce housing is totally risk free,” Carroll said, “I believe the safeguards in the plan minimize risk and allow our school districts to play an important supporting role in the development of the first workforce housing project in Marin in more than five decades.”
Stompe said she remains skeptical. She pointed to the problems at Sonoma State University after it spent $42 million to acquire Marina Crossing, a 90-apartment complex in Petaluma, with the goal of providing affordable housing for faculty and staff.
According to the Press Democrat, only 17 of the apartments are occupied by university employees, and 13 are vacant.
Hymel said there is a key difference between Oak Hill and Marina Crossing.
“The rent prices were closer to market rate in Sonoma,” he said. “It wasn’t as good a deal.”
