November 23, 2011 6:17 PM
Brooke Edwards Staggs

VICTORVILLE • The city is $7.5 million short to make its annual debt payment due Dec. 1 — a shortfall that could trigger default and further downgrades on the already precarious bonds.

Victorville owes $10.6 million for eight Southern California Logistics Airport bonds, which date back to 2005 and carry some $330 million in outstanding balances.

With SCLA $101 million in the hole and tax revenues dwindling due to plummeting property values, the city in the past has relied on interfund borrowing to make the debt payment. However, this year redevelopment funds are frozen as the state works to dissolve those agencies.

The city had to deposit a year’s worth of payments into a trust account when it took out the bonds, Mayor Ryan McEachron said by phone Wednesday evening. And so those funds will be used to cover the shortfall until the city receives a scheduled tax increment distribution in March and is able to repay the trustee.

“Obviously this is going to be concerning to bondholders. There’s no way it shouldn’t be,” McEachron said. “It’s unfortunate but we’re going to work through it.”

Victorville quietly disclosed the shortfall to bondholders on its website Wednesday. Then staff was out of the office early for the Thanksgiving holiday, unavailable for comment until Monday.

McEachron said the City Council was advised by its attorneys not to comment further on the issue, with Victorville open to potential litigation from bondholders.

Get complete stories every day with the “exactly as printed” Daily Press E-edition, only $5 per month! Click here to try it free for 7 days. To subscribe to the Daily Press in print or online, call (760) 241-7755, 1-800-553-2006 or click here.

Brooke Edwards Staggs may be reached at (760) 955-5358 or at