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Focus on Finance The most important item facing the city is its finances. My focus for the next few months is looking at the fiscal health of the city and how the declining reserves have impacted the infrastructure. I have reviewed numerous official city documents and have done extensive benchmarking. What I have discovered is that for the last 5 years, according to the Mission Viejo’s Cities Financial Transaction Reports, the city has had a Deficiency of General Revenue Over Net Expenditures:
This yearly report is a one page summary required by law to be published in the local newspaper and is posted on the State Controller's website. The Investment Portfolio has seen significant declines in value. Per the Monthly Treasurer's Report for Fiscal Year ending June 30, 2008, the city had $45.6 million in investments and cash on hand. It began Fiscal Year 2010/11 with $42.4 million and closed out the year with $39.4 million in cash and investments. For Fiscal Year 2011/12 it further declined to $37 million. Total Discretionary Reserves have also been on the decline. Per the 2008 Annual Report, these reserves were $30.4 million on June 30, 2008. The latest Annual Report reflects an ending balance of $26.5 as of June 30, 2011. Fiscal Year 2012 ended with $26.3 million, as reported in the Quarterly Financial Report released October 1, 2012. Council policy calls for Total Discretionary Reserves to have a target level of 50% of revenues. To meet that target level, over $7 million has been tapped from the Asset Replacement Reserves, according to the city’s Quarterly Financial Reports. So as a 5 year overview, according to the yearly snapshot on how the city is financing the cost of city funded public services, there is a collective deficiency of $24 million in revenue; as shown in the Treasurer's Monthly Reports, our cash and investment portfolio has lost $8.6 million in value; Discretionary Reserves have fallen by $3.9 million And we have seen a $6.1 million increase in unfunded liabilities for retirement benefits, from $9 million in June 2008 to $15.1 million as of June 30, 2011, according to the city's former and current Directors of Administrative Services. Measures need to be taken in order get us back on track. It is my opinion that we cannot continue to sustain the current fiscal practices and expect to be able to deliver the same quality services that have made Mission Viejo a safe and successful community to raise our families. [An edited version of this article appeared in Saddleback Valley News on Dec. 28.] |
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