Current council uses past councils' savings
Sitting City Council members often take advantage of a valuable political perk: when unpopular decisions are necessary, they blame former council members for getting the city into the perilous predicaments in the first place.
And with the historic level of council turnover the past decade--11 newly seated members since 2000--plenty of former officials are available to share responsibility for past actions or, in many instances, lack of action.
Of course, prior office-holders didn’t deliberately embark on budget-breaking endeavors, but a few decisions didn’t turn out as planned or they produced unintended consequences.
Lush landscaping has become a watering and maintenance headache, neighborhoods don’t include enough lower-cost housing and a high-end golf course isn’t returning a once-promised $1 million annually to the city treasury.
Roadside greenery, expensive homes and a revenue-producing recreational resource were all popular decisions when made by past councils, but now the city is dealing with budget problems and affordable housing questions that will impact Yorba Linda’s future course.
Fortunately, past councils accomplished one feat that greatly lessens the immediate crisis: they accumulated a massive reserve fund that’s come in useful the past couple of years as the city has dealt with decreasing revenues and increasing expenditures.
According to a mid-year budget update for 2010-11, prepared by Finance Director David Christian, reserves will total an estimated $30.7 million on June 30 or 114 per cent of the city’s general fund operating expenditures.
The reserves total dropped $2.3 million by the end of the last fiscal year and is estimated to drop an additional $2.3 million this fiscal year, Christian reported to council members.
When Christian presented his update at a recent council meeting, the “available for use” reserve balance was $21.6 million, or 81 percent of annual expenses. But the $6 million the city loaned to the Redevelopment Agency in 2001 and 2004 was repaid the next day.
If the repayment is added to the reserve fund, the city’s “available for use” total is expected to be nearly $27.7 million on June 30. The only other loan from reserves is $793,148 to the Black Gold Golf Club.
Total city loans to Black Gold are a bit more than $4.7 million from different accounts, Christian previously reported to council. Interest that totaled $327,592 by the end of the most recent fiscal year has been waived, based on a past council’s controversial decision.
When this fiscal year’s final accounting of revenues is computed after June 30, officials expect property tax income to be stable, sales tax and building permit fee revenue higher and interest income below the amounts estimated when the budget was adopted last year.
In a related action, council members recently took a look at the city’s annual audited financial reports for the fiscal year ending last June 30. The Lance Soll & Lunghard firm issued a “clean” opinion for municipal finances, according to Christian.
The city’s assets were listed at $513.8 million, liabilities $89.4 million and net assets $424.4 million, including $102 million in cash and investments.
Assets for the city-run Redevelopment Agency totaled $82.2 million, liabilities $86.8 million and net assets minus $4.6 million, with $38.3 million in cash and investments.
And with the historic level of council turnover the past decade--11 newly seated members since 2000--plenty of former officials are available to share responsibility for past actions or, in many instances, lack of action.
Of course, prior office-holders didn’t deliberately embark on budget-breaking endeavors, but a few decisions didn’t turn out as planned or they produced unintended consequences.
Lush landscaping has become a watering and maintenance headache, neighborhoods don’t include enough lower-cost housing and a high-end golf course isn’t returning a once-promised $1 million annually to the city treasury.
Roadside greenery, expensive homes and a revenue-producing recreational resource were all popular decisions when made by past councils, but now the city is dealing with budget problems and affordable housing questions that will impact Yorba Linda’s future course.
Fortunately, past councils accomplished one feat that greatly lessens the immediate crisis: they accumulated a massive reserve fund that’s come in useful the past couple of years as the city has dealt with decreasing revenues and increasing expenditures.
According to a mid-year budget update for 2010-11, prepared by Finance Director David Christian, reserves will total an estimated $30.7 million on June 30 or 114 per cent of the city’s general fund operating expenditures.
The reserves total dropped $2.3 million by the end of the last fiscal year and is estimated to drop an additional $2.3 million this fiscal year, Christian reported to council members.
When Christian presented his update at a recent council meeting, the “available for use” reserve balance was $21.6 million, or 81 percent of annual expenses. But the $6 million the city loaned to the Redevelopment Agency in 2001 and 2004 was repaid the next day.
If the repayment is added to the reserve fund, the city’s “available for use” total is expected to be nearly $27.7 million on June 30. The only other loan from reserves is $793,148 to the Black Gold Golf Club.
Total city loans to Black Gold are a bit more than $4.7 million from different accounts, Christian previously reported to council. Interest that totaled $327,592 by the end of the most recent fiscal year has been waived, based on a past council’s controversial decision.
When this fiscal year’s final accounting of revenues is computed after June 30, officials expect property tax income to be stable, sales tax and building permit fee revenue higher and interest income below the amounts estimated when the budget was adopted last year.
In a related action, council members recently took a look at the city’s annual audited financial reports for the fiscal year ending last June 30. The Lance Soll & Lunghard firm issued a “clean” opinion for municipal finances, according to Christian.
The city’s assets were listed at $513.8 million, liabilities $89.4 million and net assets $424.4 million, including $102 million in cash and investments.
Assets for the city-run Redevelopment Agency totaled $82.2 million, liabilities $86.8 million and net assets minus $4.6 million, with $38.3 million in cash and investments.
posted by Jim Drummond at 12:00 PM
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