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Mailbag: Leaders, columnist cite misleading figures

November 08, 2010

This is the amount our leaders feel is essential for the continued operation of the city in the event of an emergency - earthquake, civil unrest, etc. Other sub-sections of that part of the drawer are designated for workers' compensation claims; accrued compensated absences (vacations upon termination, for example); general liability claims; post employment benefits and a section designated for use to balance the following year's operating budget. The remaining compartment is the "undesignated" segment.

The "Total unreserved" sub-total, which Moorlach/Bever and Lobdell call "Savings," — for the fiscal year ending June, 2007, was $55,057,757. For FY ending June 2008 it was $50,467,786. For 2009 it was $33,716,155. The difference between 2007 and 2009 is $21,341,602, a significant amount, but not even half the myth shoved off on the readers by Moorlach/Bever and Lobdell. The number for the year ending June 2010 has not yet been authenticated, but city staffers estimated it will be in the area of $30,000,000 — still well short of that $50 million proclaimed by Moorlach/Bever and Lobdell.

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The "undesignated" segment, that portion that might be available for use balancing the next year's budget beyond the amount "designated" for that purpose, has gone from $13,984,367 at the end of FY2007, to $14,145,980 at the end of FY 2008 (It increased because the "self insurance" segment, $2 million, was shifted from "Reserved" to the "Unreserved" section of the drawer, down to $1,339,359 for FY 2009. By now it is likely the "undesignated" section of the Fund Balance is completely depleted.

In the budget adopted by the City Council earlier this year for Fiscal Year 2010-11, $9.4 million was "designated" from the Fund Balance account to help balance the budget — more than double the previous year. Due to the downturn in the economy, all forms of revenue — Sales Tax, Property Tax and the Transient Occupancy Tax — are down, so even that amount may not be sufficient, which is why the employee bargaining units have come back to the table with proposals to help mitigate that shortfall. The employee "contributions" recently approved provided $3.7 million in relief, leaving just about $6 million shortfall remaining. In previous years, we might have just used more from the "undesignated" Fund Balance segment.

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