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The What-Ifs of Using Non-Collected Funds The revised budget for Mission Viejo as submitted to the council uses revenue fund increases with non-collected funds as a basis for its assumptions. When non-collected funds are used, the revenue stream is projected higher than it may be. The use of $775,000 from the General Fund to make up deficiencies of the Mission Viejo Foundation is a primary example. The obligation of the foundation is rescheduled for five years, and funds come from the General Fund. Likewise, the $1.5-million to $2-million obligation of Steadfast is tied up in a lawsuit, and General Funds are to replace it. It’s the same as borrowing from yourself to pay someone else’s obligations. How long could you do that in your family budget? The use of non-collected funds as a budget tool works the same as running up the charge card in your family budget. It only results in painful headaches later. It seems that every time Mission Viejo has financial difficulty, the item is simply rescheduled over later years. The pension obligations and health-care benefit plans are another example. The present thinking of the majority on our council in Mission Viejo seems to be that revenue streams will always increase and, therefore, the city will always be bailed out. Ask some cities that are in financial trouble today if that type of thinking got them into trouble. A “yes” answer will always apply if they are honest with their answers. Mission Viejo can ill afford continuous amortizing of obligations into the future with revenue streams, at best, uncertain and hoping to be bailed out by ever-increasing revenues. It is time to tackle the problems now, pay off the obligations without creating new ones and let the revenue stream go into the infrastructure and pay down the existing obligations and the pension fund debt scheduled into the future. Clean up the mess before it gets out of control while you can still do something about it. James Edward Woodin |
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