Politics & Government

Council Moves to Meet More Terms of Land Dispute Settlement

Design work will begin on a draining project near the Scalzo family property off of Del Obispo Street, and the city will issue up to $3 million in bonds.

More than $70,000 in design work will begin soon on drainage improvements west of Del Obispo Street— with nearby landowners in December.

In that , the landowner, the Scalzo Family Trust, agreed to dedicate land necessary for the city to make storm drain improvements in the drainage channel adjacent to its property—"the point of contention between the parties for many years," City Attorney Omar Sandoval has said.

The Scalzo family sued the city after it received approval from the City Council to build 31 homes on 16 acres at 32281 Del Obispo St., but the family refused to give up 30,000 square feet for the drainage system easement.

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The project is required to be completed by June 30, 2013.

On Tuesday night, the City Council authorized the contract for the design work with Hall and Foreman Inc., an engineering firm that prepared conceptual plans for the earthen drainage in 2007. The council also took one other step to meet the terms of the settlement.

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It voted 4-1 to declare its intentto pay off the remaining portion of the $6.34-million settlement—a price that does not include the cost to complete the drainage project.

One-half of the settlement was due and paid by Dec. 31, 2010. The remaining amount of $3.15 million is due by June 29.

Earlier this year, the council decided it would rather issue bonds to pay off the second half of the payment rather than dip into its savings. Had it gone with the latter option, San Juan Chief Financial Officer Cindy Russell advised, it would deplete reserves to a "dangerously low" level of $2.95 million.

Russell said city guidelines call for the reserves to be at a level no less than 25 percent of the general fund account—the main operating budget.

But Councilman Derek Reeve (who voted against issuing the bonds), and at least one resident, , said it would be wiser to cut spending, thereby reducing the size of the general fund.

"It’s not a good idea to borrow money to bolster reserves," Reardon told the council. "You might as well come to the chase and cut the budget … you'd come to the same place much more quickly."

But Mayor Sam Allevato countered Reardon's financial advice by saying that in the past four years, spending has already been slashed $3 million. And Councilwoman Laura Freese said she was sure the city would soon see more tax revenue, given the .

Councilman John Taylor said that although he would manage his household or business finances differently—by saving money for big purchases—he said this situation is "completely different."

"You don’t know when an emergency is going to hit ... to get the reserves that low puts us in a dangerous position," he said.


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