The Perfect Storm

A RECIPE FOR OVERSPENDING
Kim Lefner

How does a city get itself into financial trouble? Start with high unemployment; add a steep decline in business revenue; continued spending on non-essential programs and heap more taxation on the residents to pay for it. The results equal a depressed economy and increasing levels of debt.

How does a city get itself out of financial trouble? For starters, we need three true fiscal conservatives on the city council. Without three votes, change is unlikely. That’s why I’m voting for the slate of Derek Reeve, Jim Reardon and Clint Worthington for city council in November. I urge you to check out their website at: www.teamsjc.org .

Here are a few additional suggestions to help restore fiscal sanity...

Too Big to Fail? 

Audit the Ground Water Recovery Plant (GWRP) to find out why we’re spending $200,000 more per month to operate it than if we purchased the water from the Metropolitan Water District.

The rationale for building the GWRP was to create our own independent water source, thereby saving money that we would otherwise pay to an outside water agency. However, according to resident John Perry’s extensive research, the GWRP has been steadily losing money, not saving it. The only reason I’ve heard from the city for continuing to dump money into it is that we have too much invested in it already! It’s this type of thinking that has grown the federal deficit to staggering levels and mortgaged our children’s future.

Despite a 40% increase in water rates already this year, staff and our city council are now proposing an additional increase of up to $22.00 per month, which the council will bring up for a vote on September 21 (mark your calendars!). Objections must be made IN WRITING prior to the meeting. Email them to: cityclerk@sanjuancapistrano.org or mail to: City Council, 32400 Paseo Adelanto. This additional increase can be stopped if more than 50% of property owners oppose it, so please write AND attend the meeting on the 21st.

Pork Barrel Spending

Just say no to paying pricey lobbyists and consultants to obtain more of our tax dollars to spend on non-essential grants and unnecessary programs. Grants are not “free”; they are funded by taxes. In the past two years, the city has spent and/or allocated funds to be spent in the following amounts; $361,000 on lobbyists, up to $184,000 for “open space” consultants, $600,000 on downtown planning consultants, $75,000 on consultants to find out why people don’t shop here, $102,000 on “long term vision and strategic plan” consultants, $10,000 on another “long term vision” consultant, etc.

Many of the grants that consultants and lobbyists are paid to obtain require matching funds from our city. These include:
  • A Federal Grant for the Ground Water Recovery Plant (GWRP) expansion. Our city’s matching share was $500,000. To date, the city has spent around $25 million to build and about $4 million per year to operate the GWRP.
  • $500,000 from the “Open Space Bond” approved by council to match a Measure M “Habitat Mitigation” Grant from the OCTA.
  • $575,000 for a new access road onto our newly acquired $27.5 million “Rancho Mission Viejo Riding Park”, plus nearly $100,000 for consultants to design it. Council also approved $1.35 million for the “eastern open space trails” that the RMV Riding Park purchase agreement requires us to build to connect to the seller’s (the Ranch’s) property.
  • A $400,000 grant for a “Gang Reduction and Intervention Program”. Our city’s share of this was $200,000 for this year. 

Community Redevelopment Agency (CRA)

Redevelopment distorts the free enterprise system by taking from some to give to others. So here’s one worth considering; eliminate or scale it back!

The mere mention of this agency causes most people’s eyes to glaze over (including mine). But I’ll attempt to summarize it briefly because it funnels so many millions of our tax dollars to private developers. The CRA is defined as “a government subdivision created to improve blighted, depressed, deteriorated, or otherwise economically depressed areas; to assist property owners displaced by redevelopment; and to issue bonds or other instruments necessary to fund the programs. Goals are normally accomplished in partnership with private developers”.

Some CRA projects may indeed be worthwhile, such as generating tax revenue by helping local businesses succeed. Like many government programs however, the CRA is subject to abuse. For example; developers support politicians who become beholden to the developers. The politicians declare a property blighted, the property is eligible for CRA funding which is given to the developer through a “partnership” with the city to improve the “blighted” property (no matter that the developer will turn a profit without the CRA funding). I’m sure this is why the CRA is referred to by some as a “developer’s slush fund”.

Councilman Mark Nielsen recently justified this by claiming that we residents get “increased tax revenue” from newly developed CRA property. Indeed, CRA tax increments are higher than what we might collect from residential property taxes. But what Nielsen and city leaders won’t tell you is that revenue is trapped in the Redevelopment Agency, where it can only be spent on more redevelopment or affordable housing or simply be confiscated by the State (as happened this year). None of this money can be diverted to general city purposes.

Property owners should be able to develop their property within the allowed zoning. But using tax dollars to subsidize it, especially for projects that will negatively impact or unfairly burden the community seems an unwise (some say unfair) use of public money. And let’s not forget the costs of redevelopment through increased water/sewer needs, road improvements and traffic “mitigation”, etc. to accommodate the growth. The argument that more development is needed to generate tax revenue creates a vicious cycle of need for evermore development, which threatens our small town historic nature.

These are just a few of the ingredients in the “recipe for overspending” that our city leaders have been following all too well. Fortunately, in November we have an opportunity to change to a more healthy recipe of fiscal responsibility. Your vote is needed.

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