View Mobile Site
 

Ask the Expert

Signal Photos

 

Our View: City’s fiscal model should be shared with Sacramento

Posted: July 15, 2012 9:31 a.m.
Updated: July 15, 2012 9:31 a.m.
 

The economic news from around the state of California is getting more and more unsettling as cities contemplate insolvency.  Three cities Stockton, San Bernardino and Mammoth Lakes have file for Chapter Nine protections.


A half-dozen more are on the edge of insolvency and scores a calamity or two away from being the next Stockton.

Some cities like San Jose and San Diego have taken draconian measures to keep the wolf from their door only to face the wrath of citizens who are unwilling to give up the services and entitlements they have accumulated.   

The trend in California mirrors the news in Europe, where countries such as Greece, Italy and Spain, as well as many developing nations, face economic collapse because in large part their fiscal decisions were made from political considerations rather than financial prudency.

Sounds like a familiar theme. No matter what the platform — international, national, state or local — living beyond your means is not sustainable.  

We believe that the worst in local government finances is yet to come because it takes time to emerge from these difficult conditions and the state and federal governments are facing their own deficit catastrophes.

When this is all said and done, there will be fewer cities left in California.  Will our own city of Santa Clarita be on that list? We think not.  

The city of Santa Clarita appears to be on solid ground. In an inquiry from the Editorial Board, City Manager Ken Pulskamp, listed eight guidelines that make the city different from other California cities that are facing insolvency.

n Don’t allow “good economic times” decisions to adversely impact “bad economic periods.” It is an economic fact that financial charts over time go up and down.

Programs and staffing should be done in a manner to maintain an even keel.  It is essential that funding be allocated for future expenses and reserves be held for real emergencies.  

n Live below your means. Hold down perks, fancy cars and unnecessary frills.

n Run lean. Keep smaller employee populations working 100 percent of the time.

n Have a realistic five-year plan. Work at completing a plan that does not depend on uncollected or uncollectible revenues.

n Demand full cost recovery when setting fees.  Total expenses must be recovered.

n Do not create ongoing projects and expenses from one time revenues. Grants, special funds, sunset clauses, etc.

n Diversify revenue sources. The bulk of San Bernardino’s revenue came from a utility users tax.  When the economy took the tax down, it drained the city’s financial condition. Santa Clarita uses a diversified collection of revenue sources minimizing its risks.  

n “When in doubt, contract out.” City-owned fire and law enforcement agencies are, and will continue to be, an escalating drain on municipal resources.

The city of Santa Clarita’s current financial condition is a result of hard work and political sacrifice by council and staff.

 The Editorial Board has great admiration for that and only hopes our local officials can teach it in Sacramento and Washington D.C.    

 

Comments

Commenting not available.
Commenting is not available.

 
 

Powered By
Morris Technology
Please wait ...