At the October 13, 2014 Pacifica City Council meeting, Mayor Nihart took a moment to wag her finger and lecture the citizens of Pacifica on their oh-so-silly notions about this city’s so-called $4 million deficit.
Apparently, there is no such deficit and she’d really appreciate it if everyone would just stop being troublesome troublemakers who are only demonstrating their ignorance by constantly harping about this teensy little pile of disappeared money.
Besides, it’s probably around here somewhere in a drawer, a shoebox, or a dirty sock. We’ve got a guy—sorry, a consultant—poking one of those metal detector wand things around the office. Only $25K to hire this guy. Found him on Craigslist—a real steal. Oops, heh, sorry.
Anyhoo, the point is that we’re pretty sure we’ll find the missing money, which really has noooothing to do with our budget anyway, so everyone can just shut up and settle the hell down!
(transcript of October 13 City Council meeting)
Nihart: City Manager, I’ve heard this enough. I’m…I’m done with it. There is no $4 million deficit.
Tinfow: No, there’s no $4 million deficit in the general fund. What the speaker is referring to and which the council is well aware…in putting the budget together last spring, I did identify some other funds—not the general fund...the general fund is balanced, it’s our operating fund—but some other funds where there are some deficits that we’re investigating at this point.
Nihart: And those funds are funds that are grant funded. They’re special funds, they’re other kinds of earmarked funds that have nothing to do with our budget, our balanced budget, or any of those kinds of things.
Tinfow: That’s correct. They’re referred to typically as special revenue funds—
Tinfow: —with strings attached.
Nihart: —and so when, for example, you get money from C/CAG to build something and you maybe spent more of that than you thought you did and…that’s what you’re tracking down.
Tinfow: That’s exactly right.
Nihart: Thank you. And for anybody who’s confused about that, city manager has gone through it with all of the candidates, so they should be well aware.
Actually, Madam Mayor, the city manager walked you (and the rest of council) through this on June 23, 2014, as I’m sure YOU’RE well aware.
(City Manager’s Message: 2014-15 Operating Budget; June 23, 2014)
The City’s full budget includes more than just the General Fund, even though that is the topic that often gets the most attention and for good reason. However, there are a number of other funds that make up the City’s full financial picture and that are important to understanding the City’s overall financial status.
Fortunately, remedying the approximately $4 million total deficit shown across several funds is a problem that isn't required to be fixed overnight.
Over the course of several years, we can bring these funds into balance on an installment plan with several possible revenue sources such as the following:
Applying future annual revenues we receive;
Assigning a portion of General Fund balance revenues toward the amounts;
Using one-time revenues such as the proceeds from the sale of the Beach Blvd. property;
And lastly, directing available Excess ERAF funds toward these deficits.
An outcome of this approach is that some planned activities over the next few years will be delayed or possibly eliminated. I will return to Council in the first quarter of Fiscal Year 2014-15 with a preliminary plan to fix the deficits based on information collected between now and then including a “second opinion” by a financial services professional to confirm or modify these results.