Ojai eases rules for $420K home loan to city manager

The Ojai City Council has approved modifications to a $420,000 loan agreement with City Manager Ben Harvey for a down payment on a house purchase.

The primary change expands the geographic area that would qualify for the loan. Harvey's original employment agreement from January included the same maximum loan amount but specified it be used to buy a home within city limits.

On Tuesday, council members voted unanimously to include Ojai Valley properties within a 6-mile radius of the city.

Harvey receives an annual base salary of $250,000 to lead City Hall. Among other benefits, the down payment loan was offered because of high housing costs and limited housing stock. Ojai is the smallest city in Ventura County with roughly 7,530 residents, according to state figures. It covers about 4 square miles.

The council also authorized an addition to the city manager's employment agreement that allows up to $5,000 for moving expenses from rental housing inside the 6-mile radius to a home purchased within the boundary.

Harvey's initial employment agreement included a temporary housing allowance of up to $5,000 a month for rental housing in the area. The monthly allowance, which started in February, was provided for up to six months ending in July.

Councilmember Rachel Lang said the vote showed the council was supportive of Harvey's efforts to buy a home.

"It is primarily because it is very difficult to find housing in this area, and we really want you to stay," Lang said during the meeting.

Councilmember Suza Francina, who was the subject of a Ventura County Grand Jury report about her housing situation in May 2023 before she found a room to rent in her district months later, joined in the unanimous vote. In a separate item Tuesday, the council voted 3-2 to allow elected members more leeway in finding new housing in their district if they are evicted or otherwise lose housing involuntarily. Mayor Betsy Stix and Councilmember Andrew Whitman voted against the proposal after Whitman introduced a substitute motion, which failed to pass, that was closer to existing rules.

Harvey currently rents a home just outside city limits. The former Pacific Grove city manager still owns a home in Monterey County. He said due to high interest rates, he’s been unable to sell his house and “come away from it whole.”

Homes in Ojai are expensive, he said, with a starter home costing at least $1 million.

“What I found after being in town for almost six months is, it’s a very, very limited inventory of homes available,” he said.

The changes approved Tuesday also modify the timing of interest payments on the loan. While interest still accrues monthly, it can be paid when the home is sold or within six months after Harvey leaves the post, with an extension possible if the home's value has dropped below the purchase price.

Harvey said under the terms of his contract, he will pay the city back with an interest rate based on Ojai's investment in the Local Agency Investment Fund plus a quarter of a percent. The fund, used by most cities in California, currently earns about 5%, he said.

Ryan Grau, executive director of the Ventura County Taxpayers Association, believes the loan shouldn't be made at all, even if taxpayers will ultimately be repaid.

“VCTA believes that providing the highest-paid city employee a below market rate loan, presumably to cover his down payment on an expensive home out of reach for other Ojai city employees, is an outrageous waste of taxpayers’ money,” Grau said in an email.

Ken Pulskamp, executive director for the nonprofit California City Management Foundation, took a different view. He said any kind of funding for housing depends on the size of the city and local housing costs. Some cities have housing loans in city manager contracts, he said.

A city manager in Palmdale wouldn't have issues with housing like one in Ojai or other cities along the coast, he said.

“I think to attract a good city manager, it would not be uncommon at all for a council to put in some type of incentive in terms of bringing down the cost of housing,” Pulskamp said.

Harvey agreed. Previously, a newly hired city manager could move to a new area and expect to be there for a long time. Now, he said, housing is more expensive and city manager tenures have gotten much shorter.

“You can’t expect someone to take a loss each time they move to a new assignment,” he said. “Many cities have recognized this.”

Wes Woods II covers West County for the Ventura County Star. Reach him at wesley.woodsii@vcstar.com, 805-437-0262 or @JournoWes.