State to Study Initiative’s Bond Impact

The state treasurer’s office Friday requested a copy of the proposed slow-growth initiative in Orange County to study whether its passage would imperil the repayment of bonds.

The districts securities division in the treasurer’s office requested a copy of the initiative from Board of Supervisors Chairman Harriett M. Wieder’s office by Friday.

On that day the Districts Securities Advisory Commission in San Francisco will consider the application of the Moulton Niguel Water District to sell $16 million worth of bonds for water and sewer facilities, the water district’s assistant general manager, John Wiper, said.

The commission will make a recommendation to the state treasurer, and if the treasurer approves, the bonds can be sold, said Arthur Lampert, assistant districts securities officer.

Lampert said the treasurer’s office did not want the bonds sold if new homes could not be built, since the purpose of the added facilities is to service planned new homes.

He said the office also wanted to be sure that there will be “enough homeowners to pay the debt service on the bonds.”

Lampert said the answer to both questions appeared to be yes because the Mission Viejo Co. has county approval to build enough new homes. The facilities would be needed and there would be enough homes to pay off the bonds even if the initiative passes.

The Moulton Niguel Water District covers about 25,000 acres in Laguna Hills, Laguna Niguel and a part of Mission Viejo, Wiper said.

The slow-growth measure, formally known as the Citizens’ Sensible Growth and Traffic Control Amendment, will be on the June ballot if proponents get signatures from nearly 66,000 registered voters.

If it passes, it would set strict conditions in unincorporated county areas that developers would have to meet before they could build major new developments.

Russ Burkett, an initiative backer, agreed that state officials “should wonder” if the bonds will be repaid, though he said he was unaware of the state request Friday.

Burkett said bond sellers’ nervousness about the petition might lead investment banking firms to charge developers more to sell bonds, even though tens of thousands of new residential units could be built if the initiative passes because they already have or are about to get county approval.

A company would sell bonds and have new homeowners repay them through their taxes, Lampert said. If there are no new homeowners because of a halt in construction, another means of payment would have to be found.

Regarding the Moulton Niguel Water District request, “so far as we know, everything is OK,” Lampert said. Even if the initiative passes, “We are satisfied that enough units, several thousand units, have been approved by the county (and) would not be affected.”

There will be a “sufficient number of units to make use of the facilities that the bond funds would (pay to) install and enough so (homeowners) would also be able to make payments on the bonds,” he said.