Other People’s Imaginary Money

While imitating the style of Washington’s big spenders, Mission Viejo’s city officials apparently forgot that the city can’t print money. The city is facing serious financial dilemmas, and council majority members (MacLean, Ury and Kelley) are in denial.

For a financial analysis that can’t be found elsewhere, residents can read Brad Morton’s article at http://missionviejodispatch.com/?p=10103#comments . Morton states, “The City Council appears ready to approve a bubble budget Monday [July 20]. The two-year plan appears to be built on omissions, deferrals, reserves and assumptions which create a volatile situation.”

Unlike city hall spinners, Morton presents information that makes sense because it’s true.

Not many citizens try to comprehend the city staff’s version of finance, and those who try can become confused by the doubletalk and other nonsense that money can be spent more than once. As another issue, how can the city tout its reserves and balanced budget without factoring in its debt of at least $18 million? Despite some officials’ implications that the city is awash in cash, community watchdogs have estimated it has less than $500,000 of real free-use money.

As one example of illusion, City Manager Dennis Wilberg says money that is obligated, encumbered or already spent can be called “discretionary.” City hall’s financial wizards say the city has a balanced budget, falsely leading residents to believe expenditures equal revenue. In March, Councilman Lance MacLean wrote in his recall rebuttal that the city not only has a balanced budget, it has $28 million in reserves.

While visitors to the lavish community center notice that it is “gorgeous” and resort-like, the facility’s expansion created a hole in the city treasury when the cost reached $15 million, three times over budget. In sharp contrast to the showcase facility, roads, neighborhood parks and city-maintained slopes are deteriorating. Library patrons are learning of a 75-percent reduction in library materials, and even small amounts of money generated by library-provided services are now being diverted to fill the gap at city hall.

Morton writes that the omission of obvious expenditures from the budget gives the appearance of balance. Sacramento will likely borrow property tax revenues, local gas tax revenues and redevelopment funds from the city, amounting to an additional $2.5 million to $3 million shortfall. The city has already dipped into reserves, and it sold off two $1-million bonds last October to make ends meet.

The council majority members’ denial continues as they brag about the city’s financial health. At some point, the dwindling reserves and revenues will collide with the spin. Perhaps that time will coincide with the recall election of Councilman Lance MacLean. If the city’s claims of financial health are true, then it can easily afford the costs of a recall election. If the balanced budget is just an illusion, then residents will be able to remove one of the city’s big spenders from office by recalling MacLean.