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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, www.danapoint.org. 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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