There was never a recent "For Sale" sign on the historic Daniel Whitmore Home but there are new owners. The city of Ceres has "sold" the historic first Ceres residence to the Ceres Redevelopment Agency (CRA) as part of a clever funding scheme that officials say is both legal and legitimate.
"Yeah, I can see someone saying it is creative," admitted City Manager Brad Kilger.
In the 1980s the city of Ceres purchased the Fifth Street home - built by Ceres founder Daniel Whitmore in 1870 - in order to preserve it as a historical landmark. The home will be kept in the historical mode but the city has sold it to the CRA as a way of freeing up redevelopment agency dollars to be used on a city operation.
Shortly after Brad Kilger became city manager, he wondered why the home couldn't be transferred to the CRA so that all maintenance costs and capital projects would not have to be funded by precious general fund dollars.
"When I got here, the general fund was paying for most of what was going on at the Whitmore house," said Kilger.
Approximately 75 percent of the city's general fund is spent on police and fire services.
But when the city began facing budget concerns last year because of the economic recession, Kilger felt it was time to make a move. A plan was devised to sell the home to the CRA for $374,000 and use the funds to help the city cover the debt at which the new Community Center will be operating. The city expects that the Community Center that will be a money pit for possibly five years or more. City officials predict that the center will lose money to the tune of $128,261 the first year, and $110,516 the second year and an estimated $100,000 the third year. That's where the Daniel Whitmore sale proceeds come into play.
"We've long planned to have the redevelopment agency own it as an asset so that we can continue to maintain it," said Brian Briggs, the city's Redevelopment and Economic Development Manager. "By the redevelopment agency owning the property, we can include it in the (CRA) capital improvement project (list) ... and long-term maintenance."
Kilger said the ownership transfer dovetails into CRA plans to create a historic district as it relates to promoting downtown.
The city also had the option of covering the Community Center operations debt by transferring ownership of the center from the city to the CRA. But Kilger said "the timing wasn't right."
"Our feeling," said Kilger, "was if we have the opportunity to acquire funds for the city by legitimately putting the house in the hands of the Agency, it afforded us some additional funds and we need them for the Community Center so we applied them there."
He said that most community centers operate at a loss in the first years.
City Attorney Mike Lyions said the move is perfectly legal. But he, too, acknowledged that is a great example of city officials being creative in an era of shrinking revenues.
Leonard Shepherd, who regular attends City Council meetings, pulled the item from the March 23 consent agenda for some explanation. City Manager Brad Kilger explained that the home could be more effectively used in the hands of the redevelopment agency.
No fault of his own, Shepherd remained confused. It's a complex issue.
State law allows cities to form redevelopment agencies that siphon off a level of tax revenues devoted for the elimination of blight and for redeveloping older areas. While there are restrictions on how the money is used, RDAs can buy land, typically so it can control development on that land.
"Yeah, I can see someone saying it is creative," admitted City Manager Brad Kilger.
In the 1980s the city of Ceres purchased the Fifth Street home - built by Ceres founder Daniel Whitmore in 1870 - in order to preserve it as a historical landmark. The home will be kept in the historical mode but the city has sold it to the CRA as a way of freeing up redevelopment agency dollars to be used on a city operation.
Shortly after Brad Kilger became city manager, he wondered why the home couldn't be transferred to the CRA so that all maintenance costs and capital projects would not have to be funded by precious general fund dollars.
"When I got here, the general fund was paying for most of what was going on at the Whitmore house," said Kilger.
Approximately 75 percent of the city's general fund is spent on police and fire services.
But when the city began facing budget concerns last year because of the economic recession, Kilger felt it was time to make a move. A plan was devised to sell the home to the CRA for $374,000 and use the funds to help the city cover the debt at which the new Community Center will be operating. The city expects that the Community Center that will be a money pit for possibly five years or more. City officials predict that the center will lose money to the tune of $128,261 the first year, and $110,516 the second year and an estimated $100,000 the third year. That's where the Daniel Whitmore sale proceeds come into play.
"We've long planned to have the redevelopment agency own it as an asset so that we can continue to maintain it," said Brian Briggs, the city's Redevelopment and Economic Development Manager. "By the redevelopment agency owning the property, we can include it in the (CRA) capital improvement project (list) ... and long-term maintenance."
Kilger said the ownership transfer dovetails into CRA plans to create a historic district as it relates to promoting downtown.
The city also had the option of covering the Community Center operations debt by transferring ownership of the center from the city to the CRA. But Kilger said "the timing wasn't right."
"Our feeling," said Kilger, "was if we have the opportunity to acquire funds for the city by legitimately putting the house in the hands of the Agency, it afforded us some additional funds and we need them for the Community Center so we applied them there."
He said that most community centers operate at a loss in the first years.
City Attorney Mike Lyions said the move is perfectly legal. But he, too, acknowledged that is a great example of city officials being creative in an era of shrinking revenues.
Leonard Shepherd, who regular attends City Council meetings, pulled the item from the March 23 consent agenda for some explanation. City Manager Brad Kilger explained that the home could be more effectively used in the hands of the redevelopment agency.
No fault of his own, Shepherd remained confused. It's a complex issue.
State law allows cities to form redevelopment agencies that siphon off a level of tax revenues devoted for the elimination of blight and for redeveloping older areas. While there are restrictions on how the money is used, RDAs can buy land, typically so it can control development on that land.
