Culver City explores JPA and lease-revenue bonds to free reserves and finance housing

City Manager Otis Jones and outside counsel described a proposed joint powers authority (JPA) structure that would let the city access bond markets to fund priority infrastructure and affordable housing projects while removing some constraints on the general fund.

"A joint powers authority would be a separate legal entity from the city," attorney Jade Charbonte said. "The authority's ability to issue lease revenue bonds is the main benefit — and lease revenue bonds do not require voter approval or raising taxes in many cases." (Jade Charbonte, Ora Carrington & Sidelcliff.)

Under the concept presented, the JPA would be authorized by the council and likely staffed by city employees; the JPA would identify lease assets (facilities or revenue streams) to support bond repayment and execute project agreements with the city. Proceeds would fund projects (examples given: affordable housing projects such as Jubilo, infrastructure in the Art District). The city would remain responsible for the annual debt service; consultants discussed using dedicated impact fees where eligible (for example, affordable-housing impact fees) while acknowledging those revenues can be volatile. The general fund would likely remain the backstop.

City Manager Otis Jones said the vehicle was intended to both relieve the reserve restriction created by an existing affordable-housing financing obligation and provide a tool the council could use for future priority projects. He suggested an initial bond size example near $20 million and a typical amortization of about 20 years, with an estimated rule-of-thumb annual debt service near $2 million depending on markets.

Council members pressed on legal and market risks. Jade Charbonte and colleagues warned investor remedies if debt service were not paid; depending on the bond structure investors could have rights to relet a leased asset unless the deal removes that right (which could raise borrowing costs). Council asked staff to return with refined legal analysis, market feedback and examples of board composition, governance, and community oversight for the JPA.

Why it matters: If approved and structured carefully, a JPA bond could accelerate capital investments and allow the city to reconfigure reserve constraints that limit cash flow. But it creates a long-term debt obligation that must be matched to reliable revenue streams or explicit policy backstops.

What's next: Staff and outside counsel will return with more detailed financing scenarios, proposed project lists, governance proposals for a citizen-inclusive JPA board and an analysis of which debt service sources (impact fees, special funds, or general fund) are legally and prudently available.