From the City of Sierra Madre Agenda Report: "Management has concurred that information presented in the basic financial statement is a true reflection of the City records as of June 30, 2007. The fund balances represent the records at the close of this period. In looking at page 7 of the report, the General Fund has an increase in fund balance of $1,036,795 (less $200,000 for interest allocation). The total General Fund reserves as of June 30, 2007 are $3,408,285 (less $200,000 for interest allocation ...)
So here's the deal. While it is good that the City is not broke, there is a big problem that needs to be discussed. I'm going to break this one down slow and easy, because we are talking about a very serious situation, a breach in the public trust that is almost unprecedented. You remember that during our last election there was something called Measure U on the ballot, right? This measure, if passed (which it was, overwhelmingly, and in spite of my vociferous and often stated objections), would raise our User Utility Taxes (UUT) substantially. And why did taxes supposedly have to be raised? Because we were supposedly well on our way to fiscal collapse. And you heard this everywhere. So-called "responsible" officials trumpeted it, the Police Department's union campaigned for it, our mailboxes were stuffed full of cloying junk mail proclaiming it, and hundreds of trusting people put yard signs out announcing their support for Measure U, the "common sense solution" to our fiscal problems.
Here's a passage from Bill Coburn's April 2008 editorial supporting the tax hike, typical of the addled groupthink that carried this debate:
"The City's costs are going up, and its revenue is not. Somehow, more money has to be found to continue to fund City services. The POA has signed a memorandum of understanding that will increase their salary. The City has started paramedic services, the last City in L.A. County to provide this essential service for its residents ... But there's no money to pay for that service after 2009, since it was funded for only two years when started ... And there's no money to pay the POA salary increase. So the Ad Hoc Finance Committee, which reviewed the City's budget and found that there was no way to fund these items without essentially eliminating all other City services such as Library and the Community and Personnel Services Dept., recommended this UUT increase ..."
Bill thought we were going broke because he bought into the official line. John Buchanan, pretty much the author of that official line, was interviewed by his fanzine, the Mountain Views "Observer," in October of 2007. He had this erroneous information to share with the people of Sierra Madre:
"What we also know is that at the end of two years current revenue streams will not cover the cost of existing general fund services. Revenue increases do not keep pace with the cost of delivering existing services."
So how can it be that such esteemed local gents as these two could be so mistaken on this matter? How is it that Mayor Enid Joffe, along with former Mayor John Buchanan, individuals who should have had at least some understanding of City budgetary finances, could have been so completely wrong? So wrong that they actually helped engineer a tax hike based on City Hall provided junk information, information that led so many to believe that the city was sinking into financial ruin?
The answer lies in something that I wrote about on The Foothills Cities blog on several occasions in the run up to the April 2008 elections. At the time that the Ad Hoc Finance Committee was deliberating about city finances, this town was in serious default on a very important Sacramento obligation. In the years 2002-03, 2003-04, 2004-05, and 2006-07, the City of Sierra Madre, despite very specifically worded State of California laws, had not supplied the financial audits on its budgets to the State Comptrollers Office. For each of the first three years Sierra Madre was fined $5,000 for this lapse, with $10,000 being the damage for the year 2006-07. In other words, and I think this is safe to assume, Sierra Madre did not have its books in order, and anything that the trusting souls on the Ad Hoc Finance Committee were being fed by City Hall was based on guesswork, or worse. From the administration of Mayor Enid Joffe back to whatever was running the place in 2002, Sierra Madre's finances were being handled at a hillbilly level of competence. Only 3 incorporated townships in the entire State of California had defaulted on this obligation to the Comptroller's Office in Sacramento four years in a row, with the other two having an average per capita income of under $30,000 per year.
And this is what Mayors John Buchanan and Enid Joffe based their call for a tax increase upon. Information proven by these now completed audits to have been utterly without merit.
MaryAnn MacGillivray, along with Don Watts and Kurt Zimmerman, made the need to clean up the auditing process a top priority when they assumed control of our City government last year. And the results of that hard work are now available for all to see. But these results are shocking. They tell the tale of a city once so blind to its true fiscal condition that its former so-called leadership actually believed it had to coerce the voters of this town into approving a tax hike. One that, as it now turns out, we never actually needed.
I wanted to speak with a city official before releasing this article, and Mayor Kurt Zimmerman was kind enough to not only share his thoughts, but to be frank about the City's predicament. He admits that this is very discouraging because as a community we were voting on a UUT tax hike when the audits were not done. Audits that should have been completed by previous City administrations, but who somehow chose to not honor this extremely important obligation to both the State of California and the taxpayers of this town.
You can only wonder what it is that these people found to be more important.
The encouraging news is that we are actually in good financial shape. And while the police pay increase and paramedic salary costs (among other things) are chewing up a significant part of these newly revealed surpluses, at least we are living within our means. With no tax hike needed.
I asked Mayor Zimmerman about the User Utility Tax and Measure U. What becomes of that? Kurt's answer was clear and simple. "We need to consider getting rid of it."
Kurt pointed something out to me that I want to share here. In a handout from a couple of years back entitled "Six Mayors Say 'No!' Do Not Sign The 2-30-13 Petition," local comedian Glenn Lambdin had this to say. "Initiative 2-30-13, no matter how its intent is disguised, will break the back and the bank of Sierra Madre's struggling economy. We're struggling to pay for our roads, other infrastructure projects, our new Paramedic Program, police library, Senior Center, and Youth Center, etc, etc, etc ..." Strange that the argument against Measure V sounded so very similar to the arguments favoring Measure U. With both being based on financial data now proven to be absolutely false.