The Fiscal Cliff

The Fullerton City Council is holding a special meeting tonight – a 2024-25 Budget “workshop.” No work will get done but there will be shopping going on as staff begins its formal press to raise a sales tax.

There is a lot of self-serving verbiage about how well our City staff has performed its tasks up ’til now, but then the hard reality hits because budget numbers can’t pat themselves on the back.

There are some harrowing numbers in the proposed budget – including a $9,400,000 draw-down from strategic reserves. This means of course, that the budget is no where near balanced as City Hall apologists like Jennifer Fitzgerald and Jan Flory claimed when they ran the place into the red almost every year.

M. Eric Levitt. Will he save us from ourselves?

Let’s let our City Manager, Eric Levitt tell the tale:

Financial Stability. The City has been able to over the last two years (for the first time in recent history of the City) to reach and maintain a 17% contingency reserve level. This budget maintains that reserve level; however due to an operating deficit, we will be utilizing one-time excess reserves this year and coming close to that 17% level in FY 2024-25 and below that in years beyond next year

Read. Weep.

The overall picture gets even worse as the levels of reserves slowly dwindle away. After this year Fullerton continues to be upside from $7.5 to $8.8 million each year until the end of the dismal decade. We are not favored with the running reserve funds balances.

Infrastructure is supposedly a big deal. Which reminds me of a quotation attributed to Mark Twain: Everybody talks about the weather but nobody does anything about it. But this year we are told, we can push get going on our deteriorating infrastructure along by borrowing! Once again let’s heed the words of Mr. Levitt:

I have also put together a strategy to increase that funding level to closer to $14 million over the next four years through the use of financing. However, there are both upsides and downsides to this approach which will be discussed with you in more detail at today’s presentation.

Now this should be a red flag: borrowing to perform maintenance, a basic accounting no-no. And what form will the borrowing take? Not a municipal bond, you can be sure, It would likely be by selling certificates of participation or some other dodge to avoid municipal debt restrictions. Here’s the table that shows our Maintenance of Effort (MOE) shortfall without financing.

Now we all know that interest payments are made by somebody, somewhere, and that somebody is you and me. We get to pay the interest on debt incurred by years of municipal mismanagement by people like Joe Felz and Ken Domer and Jeff Collier who get to sail off to a glorious and massively pensioned retirement at 55 years of age.

And finally, to circle back to the story lead, here’s a distasteful nugget carefully slipped into the City Manager’s report:

“Staff recommends City Council review options over the next year to stabilize the budget and ensure the City remains financially sound.

Jesus H. There it is. Not quite explicitly stated, but we know very well where this is going. Another general sales tax effort, just like the ill-fated Measure S of four years ago. The seeds for this have already been planted, of course, in a nasty little taxpayer-funded fishing expedition in the guise of a community survey. Last November I regaled the Friends with this slimy maneuver, here.

How did things get so bad?

By the way, this is exactly the same process City Hall rolled out four years ago. And we will be told By Ahmad Zahra, Shana Charles and Vivian Jaramillo that if we don’t pony up we will be morally deficient.

Well, good luck Friends. This is going to be a long year and you can bet the farm that we will be asked to pick up the check – again.

33 Replies to “The Fiscal Cliff”

  1. The die is almost cast. Whitaker and Dunlap won’t vote to put a tax on the ballot.

    What will Jung do? Maybe he figures to make Jaramillo run as the pro-taxer while he can disavow the tax AFTER it’s on the ballot.

    Not a bad idea.

    1. Junk is barely smart enough to play checkers. Ahmad is playing chess and BEATING FFFF!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  2. We’re doomed. Years of incompetence have led to this moment. But the people responsible are protected.

  3. Inflation will continue to be a hot topic this fall. It’s a great time to add new taxes to the people’s list of grievances. Everybody should feel more pain.

  4. Levitt is in his third year and this is the best he can cough up? This is what passivity looks like from a soon-to-be retired city manager.

  5. It is a stone cold LOCK that, IF a sales tax measure passes, MOST of the $$$ will go staff salaries, benefits and pension payments. That’s exactly what has happened in every other city where the voters were stupid enough to entrust their incompetent elected representatives and city managers will more money.

    1. In Westminster they did this a few years ago and the cops gobbled it all up. Then they had to do it again.

  6. An announcement from City Hall offered YET ANOTHER “survey” for attendees that was geared to push respondents toward “revenue generating opportunities.” The slow roll.

    The City is facing an Operating Budget Deficit for the upcoming year, how would you prioritize and elect to reduce the deficit? Please rank in order of preference*
    (#1 being your recommended preferred action)

    Explore revenue generating opportunities
    Reduce Community Programs & Events
    Reduce Service Levels
    Use Available Reserves

  7. It’s like 2020 all over again. Except the obnoxious Fitzgerald/Flory tag team of greed and incompetence is gone.

    Now we have the obnoxious Zahra/Charles tag team of greed and incompetence.

  8. We must go on bended knee to see the Great Tony Bushali and beg for him to fight a tax proposal.

  9. Is anyone else surprised that Zahra and Charles haven’t proposed a “native peoples” casino to support their spending addiction.

  10. Deficit is only the difference between 2 numbers. Modern monetary theory suggests your city’s budget isn’t that bad. The salaries of your city employees is not the big bad wolf. It’s inflation. Blame Biden.

  11. Notice how Levitt uses the phrase “excess reserves.” What this means is that the reserve fund balances have somehow, miraculously jumped 9 million ABOVE the 17% and they’re there for the plucking.

    I don’t see how this can be, but even so, that 9 mil should be evened out over the next 5 years instead of blowing it all at once.

    1. We’d rather have disciplined, competent staff and elected representatives. That will never happen here, Fullerton being Fullerton and all.

    2. How about we cut expenses first? You can do that without cutting services or raising new revenues. The City has over $120 million a year to work with, how about the City learns how to use those revenues in a smarter way?

  12. Anyone with a business or economics background should understand costs go up and the only way to pay for them is to increase revenue or raise taxes. Bidenomics has led to ridiculous inflation close to 20-24% over the last 4 years.

    In the past, Fullerton’s Economic Development people, cough Nicole Bernard the beacon of waste and theft, the last chick forgot her name since she didn’t do a damn thing to develop business.

    Hopefully Sunayana Thomas the new director will actually focus on economic development. No auto malls please.

    Let’s talk about waste:
    City IT consultants. We tax payers are paying an outside vendor who have proven to be incompetent and ineffective at best. The new wireless microphone and video system they sold the city on is a costly blunder. Several months after implementation, it is still messed up. Let’s not forget former police chief commando Robert Dunn was the IT director when this nonsense was proposed and designed. He could barely complete a coherent sentence and was allowed to be the IT director along with chief of police.

    A review of IT invoices will reveal all sorts of repeat billing for issues they failed to fix the first time and sometimes to correct failures they created. Thousands have been wasted trying to correct the new audio video fiasco they were in charge of installing. They even chose the subcontractor who did the physical install.

    Habla espanol? Ever notice we have a plethora of foreign language translators for our countless meetings. They are paid more hourly than most city staff and are guaranteed a minimum of amount of hours for every meeting. Sadly, while some residents actually need a translator, most do not. Ever notice when the Spanish speaking latin mommies get mad their English flows just fine.

    Many repeat mommies also use translators to extend their three minutes of fame but using a translator and then miraculously speaking English for another three minutes.

    Fullerton wastes tens of thousands on translators. How about using a on-call, as needed service rather than paying for several language translators.

    Drinking on your dime? Downtown bars cost the city far more than they make. Why are we all paying for others to party and drink? Take a look at how much money is spent on police services for the bars. Charge an entertainment tax.

    Rant over for now.

    1. Thanks for the rant.

      What you’re saying is it now costs more to pay for incompetence.

      The inflation is in part due to the massive printing of money under Trump to pay for his tax “cuts” and his Covid free-for-all.

      1. Looks like you missed all the other points she or I guess he brought up. Not to get off topic but Biden is a blunder. I didn’t know Dunn was the IT director and IT is a private vendor. Interstating. And WTF is that true about translators and you can get 6 minutes to speak at public comment if you pretend to not speak English?

  13. In the end, we will win and extract more wealth from everyone in Fullerton to spend as we please and remain wholly unaccountable. It’s a pleasure to take from you and then demand you praise and worship us because, well, we are public servants and you are here to make sure we get big salaries, fat pensions, many holidays, 8 weeks of PTO each year and of course, a 24 hour (actual) work week. You will pay because YOU ALWAYS PAY. We are Heroes, we deserve! Remember, your only purpose is to keep giving us the blood we need — even if it kills you!

    Make sure and vote “YES” for higher taxes. If you don’t, you are a jaded, privileged, extremist, racist, homophobe who wants the city to crumble and die.

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