Lindsay City Council no longer pays interest on a $1M repayment agreement to TCAG, will not make quarterly payments for 1 year
By Paul Myers @PaulM_SGN
LINDSAY – The Lindsay City Council voted unanimously to get out from under the full weight of repayment to the Tulare County Association of Governments (TCAG) branch Tulare County Transportation Authority (TCTA). In all, the City would not have to make one year of quarterly payments from April 2018 to April 2019, and they will no longer have to make interest payments on the $1 million they agreed to payback for misappropriating Measure R funds on their downtown renovation project.
Instead, under the revised agreement, the City will complete their payments by July 2033 after their $13,105.54 quarterly payments are applied in full to their $706,121.12 principal balance starting in April 2019.
The Council’s vote is the last hurdle to clear on the matter, which was set into motion late last year when mayor Pam Kimball and city manager Bill Zigler met with their Tulare County Board Supervisor Kuyler Crocker. Crocker, who sits on the TCAG Board, brought forth the item for consideration. Kimball and Zigler cited the City’s austere position as reason to lighten the load of their TCTA repayment agreement. After some debate the Board created an ad hoc committee to delve into the matter further and came to the consensus they would offer Lindsay the one year reprieve and remove all interest payments. When the matter went before the Lindsay City Council during their Jan. 9 meeting, they were willing to accept it but admittedly wanted the entire repayment plan forgiven which was an option presented to the ad hoc committee.
Initially councilmember Steve Velasquez said what they were being offered is not their first choice. Another member of the City called the concession a “poke in the eye.”
However, Velasquez walked back his comments during their latest council meeting last week on Feb. 27.
“I didn’t mean for my comments to seem unappreciative. I certainly appreciate what TCAG does for us…I certainly appreciate Ted [Smalley] and what he does for us,” Velasquez said.
Kimball said during the Council’s Jan. 9 meeting that she felt they could have gotten a better deal but conveyed they should graciously accept what was being proposed. And during last week’s meeting she noted the TCAG Board was frustrated over the City’s comments.
“They read the paper and were a little upset…And I said there is a little frustration from the whole thing going back to when it first started,” Kimball said.
The agreed upon repayment plan first started in October 2012 when the City agreed to make payments. In the agreement, Lindsay agreed to pay back $1,048,443 over 80 quarterly payments. The amount was created after an exhaustive auditing process in 2011 revealed the City was misusing Measure R funds for their Downtown Improvement Project devised by then city manager Scot Townsend and former finance director Kenny Walker. The project successfully repaved, remade and recast what is historically considered downtown and the outlying streets from Frazier to the north, Apia to the south, Sweetbriar to the west and Gale Hill to the east. Tax payers were originally told the project would cost $2.5 million in November 2008. The cost grew to $3.7 million in June 2009. And in addition to being funded by Measure R, the County’s half cent sales tax for road, transportation and air quality projects passed by voters in 2006, it was also funded by, gas tax and federal transportation money.
By April of 2011, Brown Armstrong Accounting Corporation conducted an audit of the project’s expenditures and found that $568,000 were ineligible Measure R expenses, $365,000 were questionable expenses for a total of $933,000. The remaining $2.9 million were eligible expenses. After a line-by-line forensic audit was insisted by TCAG the eventual settlement agreement came down to the just over $1 million with the TCTA.