City of Irvine Refutes Inaccuracies and Omissions by the Voice of OC

Monday, May 11, 2020

“Irvine City Council Authorized Nearly a Billion Dollars in Great Park Neighborhood Debt with Less than Five Minutes of Open Discussion”

On April 28, 2020, Voice of OC, an Orange County non-profit blog, published an article with various inaccuracies related to the City of Irvine’s management of Community Facility District 2013-3 (CFD). The Voice of OC asserts numerous narratives and omits significant and substantial detail in various articles. The City of Irvine has provided background and context below to correct the record and refute inaccuracies and omissions made by the Voice of OC. 

Statement 1:  Title: “Irvine City Council Authorized Nearly a Billion Dollars in Great Park Neighborhood Debt with Less than Five Minutes of Open Discussion”
City of Irvine Response:
The City of Irvine has not issued “nearly a billion dollars in Great Park Neighborhood debt.” The City Council has authorized $285 million in bonds to support the development of the Great Park and surrounding neighborhood infrastructure.

The $285 million bond approvals occurred at City Council meetings on:

  • July 22, 2014
  • July 26, 2016
  • August 28, 2018

The videos of City Council meetings referenced in the article show the City Council making requisite determinations that new Improvement Areas can support up to $1.1 billion in bond capacity – these actions are substantially different than what is implied by the author.

Since 2005, the Irvine City Council, composed of different members, has asked multiple questions related to Great Park Neighborhood improvements at multiple City Council meetings. Open discussions have occurred on the CFD formation process, bonding process and financing, improvement area creation, and types of infrastructure, improvements and projects of benefit to the community — much greater than five minutes of open discussion. The link below provides access to replays of all the City Council and Great Park Board meetings since 2005:

Statement 2:  “The total cost of the bonds was not discussed during the Improvement Area creation process.”
City of Irvine Response:
This statement misleads readers by assuming an Improvement Area creation process considers bonds authorization and cost — in this instance, it does not. The Improvement Area creation process referred to in the article considered the following:

  • Subdividing a previously established Improvement Area (Area 2);
  • Assigning the same special taxes on the new Improvement Area as those special taxes assigned to Area 2 (no special tax increase occurred); and,
  • Identifying maximum bond levels the subdivision can support. This determination is based on the scale of already approved development and the special tax rate.
  • Establishing a maximum bond capacity is not an authorization to issue bonds, it is a ministerial review to determine if a CFD Improvement Area can support bond indebtedness.

During the consideration to authorize bonds, the interest and maturity is estimated to account for rate and bond market fluctuations. Interest and maturity are not final until bonds are formally issued, which explains the City Council’s approval of a maximum bond amount.

Statement 3:  “Commenters asked if it was possible for a Homeowner in the Great Park to have a seat on the Great Park Board, but the Council did not respond.”
City of Irvine Response:
On November 4, 2014, Measure V - Orange County Great Park Fiscal Transparency and Reforms Act, a Voter Initiative, was passed by Irvine voters. The Orange County Great Park Board of Directors is prevented by Ordinance No. 14-4 from having unelected homeowners as a part of its membership.

Section 4.D. of Measure V states, “As a prerequisite to the receipt of any funding for the planning, development, operation, and maintenance of the Orange County Great Park, the members of the Orange County Great Park Board of Directors, for so long as the Orange County Great Park Corporation continues to exist, must be solely and exclusively members of the Irvine City Council.”

Statement 4:  “Currently, around 3,250 Great Park homeowners are responsible for close to $280 million in bonds. But with interest, the cost rises to almost over half a billion dollars once the bonds are paid off by 2050.”
City of Irvine Response:
The article implies bonds are inadvisable and costly, but excludes outlining alternate financing options for necessary infrastructure. If bonds are not utilized as a financial resource for cities and counties, needed infrastructure of benefit to the public may be delayed or not constructed.

The City of Irvine has used bonds in Community Facility Districts (CFD) since 2004, with the formation of Central Park (CFD 2004-1), and Columbus Grove in 2005 (CFD 2005-2). Bonds are commonly utilized by government entities in CFDs and Assessment Districts to accelerate development, not only for facilities such as buildings, but also roadways, storm drains, and other infrastructure serving municipalities. There are more than 80 CFDs in place in Orange County and more than 370 in Riverside County.

The article focuses on the selected funding option, but it does not contemplate the other available mechanisms, such as costs fronted by developers and recapturing through significantly higher home sale prices. Public agencies consider all funding scenarios, and select the option with greatest overall public benefit.

Statement 5:  “USA Water Polo has climbed from $50 to $250 and USA Water Polo’s contribution dropped to $15 million.”
City of Irvine Response:
The statement by the author misleads the reader by not clarifying the $250 million cost cap is for three world-class facilities, including:

1)        Multi-sport championship field house for basketball, volleyball, and community classes;

2)        Championship water polo and community aquatic facilities; and

3)        Multi-level parking garage structure to serve the entire Orange County Great Park.

The City and USA Water Polo have engaged in project discussions since 2017, including at several Great Park Board meetings. The initial proposal included a single purpose facility, owned and operated by USA Water Polo. The present proposal features a multi-use aquatics facility, which includes significant community amenities. As mentioned above, the present proposal includes three world-class facilities with a combined maximum of $250 million.  

In Closing:
The City of Irvine, its elected and appointed officials, and staff encourage the constructive exchange of ideas and full participation of the public in the policy decision process. The City of Irvine strives to work in partnership with all media outlets to provide timely and accurate information. Since the City’s inception, correcting the record has not been as problematic as it is with the Voice of OC. To that extent, the City recognizes the complexity of the many items that comprise the public’s business and we are committed to providing truthful and comprehensible information to our residents and business community.