Sunnyvale's Sweetheart Housing Loans Raise Concerns
SUNNYVALE (KPIX 5) -- There are new questions about how Sunnyvale is spending taxpayer money.
We first told you about top executives, getting giant low-interest housing loans.
For instance, it was the city of Sunnyvale's low-interest loan that helped assistant city manager Hanson Hom buy a townhouse in 2007.
The city's loan was at 4 percent interest for 45 years.
But Hom only had to pay 2 percent for the first five years.
And in 2012 the city didn't jack up the rate. Instead, it lowered it to 1.1 percent.
Terms of the loan allowed the rate to be reset after five years "if" market rates dipped which they did.
Sunnyvale Employee Association President John Simontacchi is asking, "Are you taking care of the one percent?"
Simontacchi isn't the only one asking questions.
A memo we obtained from the city finance department's Juan Castro sent to his superiors earlier this year shows confusion in the city about Hom's loan, because it apparently wasn't completely documented in 2012.
One manager stated Hom should be paying 4.2 percent, another doesn't have an answer.
Finally, Castro writes, "It seems no one wants to touch this topic."
The city eventually did go back and properly document Hom's loan, but only when he was about to retire last February and five years after the fact.
Simontacchi says, "They're changing the policy to adhere to what they have already put in place. That does raise questions...Is everything on the up and up?"
But Sunnyvale spokesperson Jennifer Garnett said, "Everything for Mr. Hom's loan was done properly."
Garnett showed us a 2012 letter notifying Mr. Hom of the change in his interest rate...which is apparently the only documentation from that year.
"At the time, the determination was made to document that information via a letter to Mr. Hom," Garnett said.
The city's long standing practice of giving very low interest, so-called sweetheart loans, to its executives is a sore subject in Sunnyvale, especially among workers who say they have not had a raise in five years.
Their union will take a strike authorization vote Tuesday, and it is expected to pass easily.
