SAN BERNARDINO, Calif.—This old city at the foot of the mountains limped to its bicentennial two years ago, its finances in tatters from a housing bust that sapped tax revenues and ballooning salaries and pension obligations for city workers.
Then came the final blow—Gov. Jerry Brown’s decision to eliminate state funding for local redevelopment agencies to help close California’s yawning deficit. The move cost the city $30 million annually and highlighted something else: San Bernardino was using about $6 million of those funds to back fill its general fund.
Without that money, things only got worse. The city hit bottom last week when it filed for bankruptcy.
“One might say it was the nail in the coffin in terms of our unbalanced budget,” Mayor Patrick Morris said of losing redevelopment funds.
Across California, from tiny Huron in the Central Valley to Oakland to Calexico in Imperial County, the loss of redevelopment funds was felt most by communities in the worst financial shape. Like San Bernardino, many relied on the funds for basic government functions.
“Redevelopment had become like the line of credit that a business operates on,” said Larry Kosmont, a Los Angeles-based economic development consultant who advises a number of California cities. “When the music stopped, the cities had no chair to sit on because that was their immediate cash.”
Critics say that buttressing general funds and paying municipal salaries was never the intention of redevelopment money. And cities may have abused the system if they were in fact using funds for project-specific purposes removed from boosting run-down areas. More click link…….
via Loss of redevelopment cash hurts struggling cities – San Jose Mercury News.
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I am stating the obvious, there is not a Califoria city that should be counting on Federal and/or intergovernmental funds. It is likely that California will continue to spiral downward. We are fortunate to have the 12 million in an unreserved,undesignated fund. Now is not the time to think it is ok to spend from that fund for non-emergency items.
Where is that 12 million hope it is real and not a sham maybe the city can show certificates of deposit , or maybe ca corrupt little cities have their own way of keeping the people’s funds in a safe and secure investment making us some extra bucks lol.
Mark
I will ask them to take me to the vault. lol
“Balanced budget requirements seem more likely to produce accounting ingenuity than genuinely balanced budgets.”
Huh?
What?
Are you talking about creative accounting? If that is what you are referring to then most times that will be seen for what it is and caught by those that can add.
If there is suspected illegal accounting then there should be an investigation. A suggestion would be to have a forensic audit. This is different from a financial audit as they have separate objectives that do not overlap. Request a forensic audit if you suspect asset-theft fraud. Request a financial audit for assurance that your financial statements, in all material respects, fairly state your financial position as of a certain date. An auditor conducting a financial audit is charged with performing audit procedures to discover financial fraud but not asset-theft fraud.
It is a no brainer, the city says they have 12 million of the taxpayers dollars, Just show the owners. How hard could it be?
JUST SHOW US THE M ONEY