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DP logoSave Dana Point

Dana Point voters’ approval of Measure H over Measure I (by a huge 18 percent margin) is a watershed moment in recent city politics. The significance of this vote reaches beyond the Town Center plan.

It is a loud “no confidence” vote in the majority City Council members: Olvera, Viczorek, Tomlinson and Muller. Dana Point voters also issued a firm rejection of the misguided practices of the city manager and the city attorney who appeared to support Measure I over the wishes of the residents they serve.

The struggle between Measure H and Measure I, as well as the Strandsgate issue, expose how far out of sync the Council majority and staff leadership are with Dana Point residents. Trust in our local government has been severely damaged.

Many concerned citizens have been writing letters, participating in public events, speaking at Council meetings and taking legal action (with the Surfrider Foundation) against the city for years now. That is what responsible citizens do.

Largely, those citizens’ efforts have met with resistance, obstruction, friction and contempt from city leaders.

This is what motivated voters to put Measure H on the ballot in the first place. The fact that the Council and staff tried to defeat citizens’ Measure H was only a small symbol of that contempt. There were more.

The level of discontent with our current Council majority and the top leadership on the city staff has finally reached a tipping point. Now, Dana Point has voted loud and clear.

Measure H wins, but more importantly, Dana Point wins.

Dana Pointers will not tolerate collusion between developers and city leaders, political and economic bullying of constituents, misinformation, intimidation or the unbridled disrespect shown by some Council members for their own voters.

Dana Point has reason to be proud of the success of Measure H. Residents banded together, like the neighbors we are, out of affection for the community we treasure.

With this resounding win, residents rejected the heavy-handed politics of developer money. We voted, by a large margin, to bond with our neighbors to demand better governance.

To submit a Letter to the Editor, send us an email at letters@danapointtimes.com.

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comments (17)

  • It’s amazing how eerily silent the Measure I people have been since the election. They spent over $80,000 (and still counting) of mostly developer money along with Dollar Bill Brough sending out totally fabricated mailers to defeat Measure H and yet still got soundly trounced by the voters. And yet the world didn’t end on June 7th when it comes to future development in Dana Point as Measure I supporters erroneously predicted but now Long Term Resident can’t build his 10 story building that he was hoping to put up if Measure I won…like this letter says “Dana Point Wins”.

    • Long-Time Resident Reply

      If you’re referring to Long-Time Resident (me), I never said Measure H’s passage would be the end of the world. It will just cause a large loss in revenue to the City, as no mixed-use other than probably Majestic/Raintree will get built in the LD for the foreseeable future.

      The Zephyr project behind Denny’s, the Harbor renovation now underway, and the expensive developments above the beachfront Strand, will still keep us moving forward, although at a slower rate.

      Also unlike a couple gloom and doom posters (including F. Underwood, in the “Letter: Yes on H; I Has Inadequate Parking” thread) who said the City’s net work decreased or will decrease by $30 million, that is incorrect. The City’s finances are in good shape. Because of our abundant natural resources, even the no-growth pro-H crowd can only do limited financial damage.

      • LTR
        Since you think the city’s finances are in good shape, maybe you could tell us what the total fund balance was in 2008 and what it is in 2015 or 2016. Maybe you could tell us if city revenue ever exceeded expenditures from 2009 thru 2016.

        What basis do you have for saying the city’s finances in good shape? Have you looked at the numbers? They do not support your comments.

        • Long-Time Resident Reply

          My position that the City’s finances are in good shape lends some support to the pro-H crowd, since the loss of future revenue to the City because of H’s passage may not be that big of a deal. In my opinion it just means that future investments such as the Doheny revitalization will be delayed.

          The most recent Balance Sheet and P&Ls are for fiscal year 2015. The BS show almost no debt, and assets totaling $204 million. The P&L shows $91K in net income.

          Fund balances have gone down $23.5 million from 2009, but so what? Cash has lost an average of 4.1%/yr over the last 50 years, using the understated CPI as a measure. I’d rather see the City spend money on infrastructure improvement to improve quality of life of the citizens, than hold a depreciating asset (cash or cash equivalents like Treasuries) that provides no benefit to the residents. (The maximum maturity of the City’s Treasury holdings is 5 years, so there would have been very little benefit to the City from the bond bull market over the last decades.)

          Banks and the federal government are the beneficiaries of those who hold onto cash over long periods of time.

        • Long-Time Resident Reply

          Corrections:

          The City has no debt, there are almost no liabilities compared to assets (liabilities are $2.6 million).

          Also the $23.5 million decrease in fund balances may be overstated somewhat because of “GASB 68 implementation during fiscal year 2015”. Prior results were not restated.

          In my first comment, “net work” should have been “net worth”.

          • LTR
            I dont think you understand the city’s finances at all. The “assets” of $204 million you referred to are the depreciating assets already purchased with city funds or otherwise owned by the city. The assets are sidewalks, street lights, computer cable, lawn mowers, desks etc. They are depreciating assets that have to be replaced and the city has set aside only $2.5 million to replace all those items when they wear out. Reserves for replacement of assets are barely more than 1% of the total assets that will need to be replaced. Is that financially prudent? No.

            Further there is no balance sheet and no P & L, in the conventional sense. The equivalent of a P & L is revenue and expenditures and these have been running in multi million dollar deficits for 5 of the last 7 years and indeed arguably every year of the past 7 years. That is why total funds declined from $55 million in 2008 to $25 million projected at June 30 2016. It is an amazing record of mismanagement and yet council members like Joe Muller go around telling people that we run surpluses every year and our financial position is the envy of every city in south Orange county.

            The KoolAid being passed around at the corner of Golden Lantern and Acapulco streets is amazing stuff.

          • Long-Time Resident

            Not all of the City’s assets are depreciating: land represents $54.4 million; also, the remainder of the $204 million in assets already takes into account depreciation. But they are not marking their buildings or land to market. If they were to sell City Hall (purchased in 1996) and lease it back, they would obviously show a large gain which would increase their net worth.

            Their Balance Sheet shows net worth did go down $3.5 million from 2014 to 2015, but GASB 68 implementation during fiscal year 2015 is largely responsible for that. “Had GASB 68 been in effect during fiscal 2014, the net position above would reflect [only] a SMALL DECREASE.” And like I said in the previous paragraph, if the City were to mark their assets to market, I’m sure net worth would have gone up over the last year, as real estate and rents in the City have increased steadily over the last 5 years.

            You can’t focus on only one balance sheet item, “total funds”, and get an complete picture: $204 million in assets (understated if marked to market), $2.6 million in liabilities, no debt, and about zero in net income is a strong financial position.

            (One thing you may be right about is that their P&L and Balance Sheet (pages 7-8) are not conventional. The net income/loss from the P&L goes into equity in the Balance Sheet at the end of the fiscal year. Since they say their net worth would have gone down slightly had consistent accounting standards been in place, the net profit of $91K on the P&L should have increased net worth slightly, not decreased it. It’s also possible that “small decrease” should have been “small increase” and is a typo.)

          • Long-Time Resident

            Make that $5.7 million in liabilities, read from the wrong column.

          • Long-Time Resident

            Land represents $54.4 million or 27% of the City’s assets which doesn’t depreciate. The remainder of the $204 million in assets already takes into account depreciation of $6.3 million in 2015. The City’s net worth was flat from the prior year, taking into account GASB 68.

            You can’t focus on only one balance sheet item, “total funds”, and get a complete picture: $204 million in assets (understated if assets such as City Hall are not marked to market), $5.7 million in liabilities, no debt, and about zero in net income is a strong financial position.

          • Actually, per page 15 of the 2015 Comprehensive Annual Financial Report, the City owns $270 million in gross capital assets including land of $54 million. In terms of discussing the ability of the City to prepare for the ultimate replacement of those assets, it is probably not a good idea to even consider accumulated depreciation. The original cost of those assets, net of land, or about $215 million, includes primarily infrastructure ($187 million) which is all its roads, sewers, bridges, etc. The original cost of those assets is unlikely to be a good approximation of replacement cost which could be much higher. This is simply a basic comment on the City’s ability to replace capital items, which is unfortunately pretty scary. While roads are maintained through annual resurfacing projects, what happens when sewers and drainage and even bridges start to show signs of age and need replacement? Or, God forbid, what happens if there is an earthquake or other natural disaster that significantly impacts these assets? Are you really suggesting that we sell City Hall?

            Most cities have long term financial goals of providing for asset replacement. (Check out Laguna Niguel if you want to see some really good long term financial planning). Dana Point has a capital projects reserve of $2.5 million. It doesn’t take a financial genius to see that we’re going to have trouble funding Doheny Village , let alone any other major asset replacements unless we start saving for the future – now. Yes, we have no debt, which is laudable, but do we even have a line of credit or a relationship with investment bankers in case we need an emergency bond issue? How easily can the City access funds if an emergency occurs? We have a $6 million emergency fund, but how far would that go?

            Worse, with operating deficits every year in the past 7 years (see page 80 of 2015 CAFR) how does the City go about rebuilding the financial cushion that was decimated by the Lantern District project? The Council, encouraged by Bill Brough, Carlos Olivera and Steven Weinberg and egged on by the Town Center Alliance. has spent just about every spare cent in the Treasury that wasn’t tied up as emergency or cash flow reserves. It’s own consultants admit it will be decades before that project breaks even, so don’t count on increased revenue from Lantern District to keep us solvent. Can you imagine the developer giveaways they’ll endorse to make Doheny Village happen, (if it happens at all?) It’s sad but true. Our Council emptied our collective wallet in one small area, leaving the rest of the town to cope with areas that have been waiting decades to get a little attention. Somehow they forgot that they represent ALL of Dana Point, not just their Town Center friends.

          • Long-Time Resident

            RC:

            No I wasn’t suggesting the City sell City Hall, although it could be done in an emergency to raise funds vs getting a loan.

            Minor point but we did have an operating surplus in 2014 (pg 80 which you referred to).

          • The operating surplus in 2014 includes an extraordinary item, $3.5 million from the sale of Capo Beach property. The $3.5 million was reinvested back into the amazing Dead Prado project the same year. After adjusting for that we had an operating deficit in 2014. That makes it 7 years of continual operating deficits from 2009 to 2015.

            It should be noted that several self proclaimed “Republican conservatives” in this town willing support these deficits by voting for irresponsible spending year after year as sitting members of the city council. They compound that by investing nearly all of our liquid resources on $20 million of unnecessary street and landscape construction with a projected payback of 30+ years. Dana Point is not being run in a fiscally responsible manner but we sure do have an extraordinary number of highly paid city staff, music concerts, car shows and bike races. Yippee!

          • Long-Time Resident

            On 2nd thought selling the City Hall in an emergency to raise funds wouldn’t be a good idea because real estate is not the most liquid of assets. The City does have $12 million in Treasuries (pg 36) that could probably be sold in an emergency. However. I’m not an expert in government finance, so maybe there is some restriction that I’m not aware of.

  • Anyone have a web link to this info? I’d like a look-see myself. Finances usually aren’t debateable except in certain business cases where spin us used in reporting problems.

  • LTR
    Point taken on the land value being not depreciating but .. what portion of $204 million is depreciating – streets etc and is $2.5 million in reserve sufficient to cover that. Marking to market fixed appreciating assets is not relevant. Accumulating adequate reserves to replace depreciating assets over time is the point.

    With demonstrated budget deficits year after year the questions remain “are city finances prudently and conservatively managed?” Clearly dumping $20 million into Del Prado and PCH and leaving no available funds for development of other areas of the city with potential was a waste of city assets.

    • Long-Time Resident Reply

      Another consideration is that the City sometimes receives matching funds for fixing depreciating assets. In yesterday’s CC meeting, it was mentioned that the City will receive $320K – $340K in matching funds from other governmental agencies for repaving part of Del Obispo St.

      My comment on marking assets to market was not meant to bolster the case that the City had set aside enough on repairing depreciating items, but that the City’s overall finances are in good shape. If anything it would bolster your concern that the City has not set aside enough in reserves since the ratio of (reserves / depreciating_asset_values) would be lower.

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