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Joe Muller

By Joe Muller

Over the last couple of months some members of the community have implied the city is in dire financial straights. I assure you this is not the case. Yes, we have some prospective fiscal hurdles to get over. However, it is important to note that the city currently has total reserves in our general fund equivalent to 43 percent of our projected annual revenues. The recommended acceptable level of such reserves is only 16 percent. This is important information, but it is equally important to realize the two-year budget adopted last Tuesday night by a 4-1 vote is not just balanced, but actually has surpluses in both FY18 and FY19. The potential hurdles I mentioned earlier don’t occur until 2020.

So why the concern then? Because currently our projected revenue trend (money coming into the city) is starting to converge with our expense trend (money going out of the city). And this is a problem requiring that we take steps to get in front of and remedy to make sure those lines do not cross. One of the options is to cut expenses. It is always a good idea for the government to operate as leanly as possible, but let’s be honest, do we really want to cut services?

During Tuesday night’s Council meeting there was a robust discussion over proposed cuts to several areas of the budget, including many of the community services and activities that the city provides and/or sponsors for our residents. My concern was we have not had our strategic planning meeting so we haven’t yet defined the city’s spending priorities. Coming to the realization that some of these cuts were outside the one arena I was concerned with—community activities—I decided to make a tough decision and voted to approve the proposed cuts.

But what was most encouraging about Tuesday’s meeting was that three of my four fellow council members agreed with me that economic development must also be looked at and discussed as a way to increase revenue and address our potential financial issues. (Mayor Debra Lewis alone resisted considering economic development and its resulting increase to city revenues, apparently preferring to focus solely on cuts. As puzzling as this position was, it became even more so when she thereafter alone voted against passing the budget which incorporated cuts the Mayor had directed staff to make).

We need to come to grips with the fact that our largest revenue source in the city is the Transient Occupancy Tax (TOT hotel tax). It is true we have multiple hotels in the development channel and these hotels will alleviate some of the pressure we are currently feeling, but they won’t close the gap. If we don’t diversify our revenue streams the next recession will put us in a tenuous situation. In 2020, we have a proposed $1.6M budget deficit. Let’s face it; we only have one immediate opportunity to close that projected deficit – the Lantern District. The city made a large investment in the area to try and achieve the first phase of revenue diversification. It is estimated the Lantern District could generate up to $1M in property and sales tax revenue. Doheny Village is an important piece to our diversification puzzle but is still years out as we work on the specific plan. The Lantern District is the best opportunity we have to see the sales and property tax revenues we need to close the gap.

It has been said when it comes to economic development that no city can survive the status quo. In other words, if a community is not growing, it is dying. We need to come together as a community to ensure this is a problem Dana Point will never face. I am very much encouraged by the fact that four-fifths of our city council, along with some extremely hard work from city staff, worked through our differences to collaborate on a budget which maintains and strengthens the city’s sound financial position and who are committed to the economic development of our city to help keep that intact.

I invite Mayor Lewis to join us.

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comments (5)

  • Councilman Muller, I applaud your call to do something about the issues we face in the Town Center, but I hope you will steer away from proposing something like Measure I again. I personally believe it is one of the main reasons we are now stuck with Measure H. Measure H was bad, but I was potentially worse, so we are now stuck with the lessor of two evils. It was encouraging to watch 4 of 5 council members work hard towards passing a solid budget. Mayor Lewis’s anti development stance is very perplexing, as it goes against many of the statements she made during the election. Unfortunately, I believe her close ties to Capo Cares and Save Dana Point make it very difficult for her to maneuver. She has thus been stuck voting against just about everything put in front of her. It’s laughable that she wrote an article in the times touting the passage of premium police services after voting against it. My guess it was not something Buck and Toni supported.

  • Monarch Beach Cares Reply

    Council member Muller: I thank you and the three other members who do understand that future revenue growth is possible, As a relatively newcomer I am concerned about the lack of development with the Town Center/LD, especially since that has been a highlight of the town over the past few years and one of the primary factors in my decision to move to DP years ago (on top of the fact it went thru years of discussion and the city spent so much on the separation of PCH and Del Prado and the building of the sidewalks, etc….). Those empty holes are lost revenue and the current mayor is mistaken to think we can’t grow.

    In fact, I, along with two others are looking for opportunity in the LD right now, our only hold up is the restrictive height restrictions currently in place. It would be great if you and the other three sane member can come to terms with how restrictive the new Measure H is and seriously consider changing the measure to allow roof top bars and elevators shafts (ADA complaint of course).

    For the first time in 6 months, I see action on the council that addresses reality, not one sided Capo, Capo, Capo, from our mayor that only sides with her friends, Capo Cares and Toni Nelson (who is reaping more benefits than anyone). We are all in this together, a great LD district will lead to a great Doheny Village, which will lead into a better city for all, and of course Capo. On top of that we have the County working on the harbor project. If we can get some momentum, this city can be a true five star city. Development is opportunity for improvement. Thank you once again, you and the other three members are seeing clearly.

    • Monarch Beach Cares: Why not identify yourself? Capo Cares did in fact support Mayor Lewis solely because she was not beholden to developers and special interests. Capo Cares members are residents who plan to be here after the these developers who would build build build and leave us without proper parking, traffic congestion and a mess. Toni Nelson is one of the good gals without a financial interest in the City. The attacks on Toni and Mayor Lewis are from developers trying a new tactic since the last 2 failed. Join me in praising Toni and Mayor Lewis’s hard work in protecting our beautiful city from over-development. Realize that pitting Capo against other portions of the City is merely a way for these special interests to divide residents who care about the best interest of the City.

  • Anna, seriously pitting one part of town against the other? That is what Capo Cares does and especially Save Dana Point. I jokingly say MB Cares because it’s a joke, get it. Most of the revenue in town comes from MB yet most of the expenditures goes to Capo? (42% of the capital expenditure budget since 2005) As most folks in MB would want, we would rather have a nice downtown (that’s the Lantern District, not MB), especially since the city spent $26m on redoing the downtown, yet construction has stalled and we are wasting time and money, as empty lot after empty lot stays empty and no revenue comes in. It’s like building half of a car, now put the engine in, please.

    As a citizen of the town, I want all areas to be nice, especially downtown and Capo. But Mayor Lewis and Ms. Nelson only focus on Capo, Capo, Capo. Example, a few days ago at the Planning Commission, It’s my understanding from a few in attendance that Ms. Nelson left right after a Capo dwelling unit project was approved (of course she was against it, she likes dirty lots over new units that fit within the master plan), but she left right before the most important topic, our parking? She brought in her 20 grassroots groupies and they booed and hissed and then left. If they really cared about the town, wouldn’t they stay for the parking segment? I thought they cared about Dohney Village, Capo Parking, etc…. No, in reality, they only care about Capo. And, why do Capo Cares people always say at council meetings :I’m from Capo”? Why not just say, “I’m from DP”?

    Best interest of the city or Capo? That is the question. And, BTW – developers are not evil, they build things we all enjoy. Most of downtown looks like a bomb went off, some have referenced Detroit, that might be too harsh, but it is sad too see. I would love to see some of the old crumbling buildings redeveloped, empty lots built on, restaurants opening (so I don’t eat in LB too much). If we had growth and rehabilitation we also could see tax revenues increase, etc….. Keep rooting for your mayor, the one who wanted to cut the police service budget (that’s great for Capo, more druggies, needles, homelessness, etc….), the one who helped pass the restrictive Measure H, the one who has stopped all development, the one who tries to rule the council as her own, yet is only 1 of 5. Anna, I would look at who you have supported in the past and ask them a question of them: Do they care about DP? or just Capo?

    • MB Cares, your personal attacks are disappointing and unnecessary. It’s possible to disagree by focusing on the issues without the pejorative language aimed at individuals.

      A couple of counterpoints to your points:
      1) The height restrictions you’re against were not instituted by Measure H. They were part of the original, consensus Town Center plan. Measure H only stopped the Council from violating the height rules by granting exceptions.
      2) Do you have any evidence that Mayor Lewis wanted to cut the police contract? My understanding is that she pushed for a review of the contract. Reviewing contracts, especially large ones, seems like something we would want the City Council to do.

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