Finance director says review 'not fiscally conservative'

City refutes every point made by the O.C. Employee Assn.-funded review and explains why.

October 17, 2011|By Joseph Serna

COSTA MESA — Though there's more than $26 million in one-time money Costa Mesa could spend to save jobs, using it would weaken the city's financial strength in the long run, according to Tuesday night's City Council agenda.

In response to an Orange County Employee Assn.-funded review by Harvey M. Rose Assn. of San Francisco, Costa Mesa Finance Director Bobby Young said Rose's spending suggestions are "not fiscally conservative and do not use prudent financial planning to ensure the financial stability of the city of Costa Mesa."

In May, Rose presented his findings of the city's finances going back five years. While the city didn't have any "hidden" pockets of money, as the OCEA and other council critics suggested, there was plenty of onetime, spendable cash, Rose concluded.


Some of the money could be spent to save jobs until the economy recovers and the city sees higher sales tax revenue — about 40% of the city's revenue source, Rose suggested.

But for each of Rose's 10 suggestions, Young explained his rejection. In some instances, it appears to come down to philosophy.

Rose suggests the city does not need to have enough reserves to cover every single employee's leave pay if they all quit on the same day. The city has enough in reserves to cover 75% of the city's employees. Rose suggested the city lower it to 19%, freeing up more than $3 million.

That wouldn't be "good acceptable financial planning," the agenda concludes.

The financial review came amid the council's budget discussions in May leading up to its adoption in June. The council had approved laying off hundreds of city workers and potentially outsourcing their jobs to public agencies or private companies.

A court order limited that option to public agencies, and the city continues to move forward with the process. Three city services — emergency services equipment replacement and maintenance, street sweeping, and signs and markings services — could be put out for bids with council approval Tuesday.

Twitter: @JosephSerna

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