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Jay Sowell, Dana Point

At the last City Council meeting, there was a dispute over whether the city had engaged in deficit spending. The facts can be found in a chart on page 80 of the City’s 2015 Comprehensive Annual Financial Report (CAFR), available on the city’s website, The chart shows deficits (annual expenditures exceeding revenue) for the preceding seven years, except in 2014, where a $2 million deficit was offset by a one-time sale of land in Capo Beach for $3.6 million.

City Council has been eroding our coffers for seven years. Page 79 in the same report shows the impact this has had on city funds, which declined from $55 million in 2008 to $33 million in 2015.

$33 million sounds like a lot. However, almost $9 million is tied up in emergency and cash flow reserves. Add to that the amounts set aside for planned capital improvements, a TBID fiduciary account, and other restricted funds, and only $7.7 is million left over that is truly unassigned. That represents only a little more than two months of expenditures based on 2015 figures. And how about funds that might be needed for the replacement of $200 million in depreciable assets shown on the balance sheet?

At the Council meeting, Councilman Joe Muller asked some questions about whether spending for the new $1 million police substation at City Hall was creating a deficit. The Assistant City Manager answered that the money was coming from past surpluses. How long can the city continue subtracting from the Treasury rather than adding to it?

Our City Council members and their backers claim they are prudent and fiscally conservative, but the facts show a pattern of recklessness that can’t continue. Dana Point voters and taxpayers need to keep a close eye on City Hall.

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comments (1)

  • Jay, thanks so much for your informative article. I did a little checking of my own and saw that in the upcoming Council agenda for November 2nd, there’s a September 2016 Treasurer’s report that shows that the $33 million treasury you referred to for 2015 is now down to $30 million. And the 2017 budget they just amended in September shows another planned deficit for next year (revenue of $34.1 million and expenditures of $35.1) and a transfer of $2 million for capital projects, so we’ll be down to $27 million by the end of 2017. At what point will this Council start to rein in spending? Why don’t we have some kind of oversight on these guys?

    Heaven help us if Michelle Brough is elected. Public records show that she and her husband, Assemblyman Bill Brough had two separate notices of default on their Dana Point home (2011 and 2014) and are now living in a fancy rental in Monarch Beach Terrace – check out:
    If she can’t keep her own financial house in order, how can we expect anything other than the reckless spending her husband inflicted on Dana Point for so many years?

    Please be smart, people, and vote for the “real” fiscal conservatives on the ballot – Debra Lewis and Paul Wyatt – the residents’ choice for fair, transparent government and prudent budgets.

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