Fiscal neutrality


The plan will pay for itself and be fiscally neutral to the city. (Source: Initiative, sec. 3(j); Specific Plan, sec. 8.2; SunCal's campaign literature.)


Easy there cowboy! That's a hope, not a fact. The developer is supposed to "cooperate" with the city in trying to implement its fiscal neutrality policy, not obligated to meet it. The safety for the developer is built into the initiative through a dollar-for-dollar, lifetime credit requirement towards any services provided for new residents, including police and fire. This is regardless of how income from the project to the city turns out—income from the project is NOT guaranteed in the initiative.

In addition, the city's Executive Summary projects an $18 million shortfall of the General Fund for the next 15 years (during buildout, when the city will fund infrastructure for the developer), and nearly $5 million a year afterwards, for services. The hope is that Mello-Roos assesments on Point homeowners will cover any gaps between the city's expenditure and the developer's return, if any. There is, however, a cap on these assessments of 2%, which cannot increase even if the amount generated is not enough. And since development is not guaranteed at all (Section 2.9 of Development Agreement) the city could be on a hook for a long time, waiting for the Mello-Roos revenues to materialize.

FAQ or Point: