CORONA — The City Council voted Thursday night to begin forming a nonprofit corporation to build or improve city facilities such as parks, the civic center and the public library.
The council also moved forward Thursday night with the city's request to annex the unincorporated community of Coronita.
The move to create a nonprofit corporation will better enable the city to borrow money, said City Manager James D. Wheaton, because state law prohibits cities from using general-fund revenues to repay long-term debt. Instead, the corporation could float a bond issue to pay for city improvements, such as new parks.
The city would lease an unimproved park site to the corporation, which would build recreational facilities and lease the park back to Corona.
The corporation would use the city's lease payments--which could come from any source, including park fees or the general fund--to repay its bonds.
"The nonprofit corporation is simply a financing method," Wheaton said. "It may build parks, it may expand City Hall and it may do myriad other things that the City Council wants it to do."
When he was city manager of Laguna Beach, Wheaton said, that city used a similar device to finance the construction of two fire stations and the city's Main Beach.
"Right now," Wheaton said Thursday, "it's practically the only way you can do long-term financing" without using redevelopment tax-increment funds.
The corporation probably would have to pay higher interest rates than would the city, Wheaton said, even though its bonds still would be tax-exempt.
Still, he told the council, "the nonprofit corporation could be a significant partner in the next few years as Corona seeks to meet the obligations that growth and an expanding economy in the community impose."
The corporation's first project would be to buy and develop 12 acres of a 17 1/2-acre park in the northeast part of Corona. American Pacific Corp., the property's owner, will donate 5 1/2 acres to Corona, Wheaton told the council, but "the city doesn't have cash" to pay $1 million for the rest.
In regard to the Coronita annexation, the council unanimously approved three documents declaring that the move would have no adverse environmental impact, formally requesting the annexation from Riverside County and setting a plan for providing public services to the area.
According to that plan, the city would not require Coronita residents to replace their septic systems with sewers, as required elsewhere in Corona.
The city would have to hire additional police officers if Coronita becomes part of the city, the plan states, but the Corona Fire Department already provides most fire services for the area under a contract with the county.