Special loans for city workers
By Joann Groff joann@theacorn.com

Of the 88 full-time employees of the city of Calabasas, only four live within the city. The longest commute is 66 miles one way. Many employees can't afford the high-priced homes in the city, but that situation may change, officials said.

The City Council recently discussed a program that could make living in Calabasas possible for those who spend their days at city hall. The program would give full-time municipal employees the opportunity to take out a city loan to buy or build a house within city limits.

"The purpose of this program is not necessarily altruistic," City Manager Tony Coroalles said. "This is for the benefit of the city in terms of increasing employee effectiveness. The idea is by making the employees stakeholders in the city."

The program would increase employee retention and help attract high-quality personnel, said Coroalles, who also pointed out that better employees would be more of an asset to the city in times of emergency.

Coroalles recommended that the city loan up to one year of an employee's salary, initially as an interest-only loan. The city would place a lien on the property for the outstanding balance.

Then, after three years, based on the recommendation of the employee's supervisor and the approval of the city manager, 20 percent of the loan would be forgiven each year. The employee would still be paying interest only until year eight when the loan amount would be zero.

"What forgiveness gives you is that over the five years the loan is being forgiven, it gives the employee an incentive to stay in employment with the city," Coroalles said. "Without it, there's no incentive to remain in the city. . . . Essentially what you have is, for a year's salary, you are locking in an employee for eight years."

Coroalles suggested using $500,000 from the general fund for initial funding.

Councilmember Barry Groveman had concerns about employees not performing up to par.

"What happens if the employee is a problem?" Groveman asked. "How do you solve the problem of someone who stays but is not the best employee and now you are giving them a bonus."

Coroalles said that the forgiveness portion would only be granted to employees who meet acceptable performance standards.The council discussed how to choose who would be awarded the loans. Coroalles said employees could be chosen by longevity, seniority or on a first come, first served basis, the latter being his preference.