Are you conflicted about Measure Z — the one cent City of Manteca sales tax hike on the Nov. 3 ballot?
Then follow the sage advice of Manteca Councilman Jose Nuño: “Trust, but verify”.
Nuño borrowed those words from President Ronald Reagan — the same man who famously said the nine most terrifying words in the English language are, “I’m from the government and I’m here to help.”
Nuno’s comments to “trust, but verify” came near the end of a somber Manteca City Council meeting on Tuesday where the curtain was pulled back on 11 years of convoluted accounting at 1001 West Center Street. The unmasking actually was courtesy of City Manager Miranda Lutzow who — depending upon what side of the rainbow you fall on — is either Glinda the Good Witch of the South or the Wicked Witch of the West.
Lutzow whose idea of urban renewal was to put in place top city management team to reflect her bosses’ desire to get things done has certainly done that.
The departure of top management in the city’s finance department ahead of whatever schedule they personally had in mind is what put things in motion. It revealed tantalizing issues such as a $67 million cash deficit, the municipal general ledger not being reconciled, Caltrans putting Manteca on its “do not fund list”, everybody it seems keeping off-the-book spreadsheets, and a list of accounting sins that would fill every inch of this newspaper.
There are countless questions such as why has the city had the same accounting firm since 1988, why apparently did finance directors and city managers either dismiss or ignore deficiencies outlined in annual audit reports, and why were elected officials over the years treated like mushrooms and not provided monthly and quarterly financial reports? Agencies such as the South San Joaquin Irrigation District generate enough financial data on a monthly basis for their elected officials and the public that it would choke a T-Rex.
But given that only an accountant could be spellbound enough to read through financial books of mystery where counting beans make the heart pitter patter, let’s cut to the chase.
What this is all about, we are assured, is “accounting and not financials.”
Before the straight talk from interim finance director Stephanie Beauchaine and after the update on D.C. politics by Pee Wee Herman being paid big bucks by the city to find out what you can read in a $60 a month subscription to The Wall Street Journal, the council was blessed with the first dog and pony show regarding the city’s investments in at least 15 years.
The people we elect who can spend an inordinate time arguing over a neighborhood request to place a stop sign, have never been briefed about the status of $213 million the City of Manteca is holding onto in investment instruments that are mostly short term for liquidity
That’s right. The same city that is asking you to add a penny to the local sales tax that they believe will raise $12 million annually has $213 million in cash.
Before anyone has a coronary most of that money is legally restricted. It represents state and federal grants, bond proceeds, enterprise accounts covered by user fees such as sewer and water, as well as reserves for everything for capital replacement and economic development to fiscal backup. Assuming the numbers pass the sniff test there is only $47 million out of the city’s $146 million overall budget for this fiscal year in the general fund that covers police, parks, and similar municipal services.
I could go on and on. The point is there is a lot of money and a lot of expenses.
When what is essentially the city’s checking account ran low, people with their fingers on the financial strings of the city basically dipped into — if you will — savings, the kids’ college funds, the mad money, the 401k, and such for a loan that they intend to pay back.
There is the word we’ve been looking for — intend.
It may mortify Stephanie Beauchaine to know developers have been grumbling for years that the city often fails to pay them back for advances they essentially make the city in development agreements.
Development agreements — like the one the city entered into with Great Wolf — are publically reviewed and vetted on an annual basis in the City of Ripon to make sure all parties including the city performs as agreed.
The Ripon Planning Commission did annual reviews and determined whether everyone is in compliance for 10 development agreements at their meeting on Oct. 19.
Given how pivotal development agreements are to the quality of life and economic well-being of the city, Manteca may want to follow Ripon’s lead.
So what about Measure Z? It’s only a penny, right?
But does it make sense to add another $12 million a year to the mix if they can’t properly account for whatever they now have?
Then there is the practical question. Getting the books in order will mean money will have to go where it is supposed to go. While there is no evidence or inking as of now whether that could lead to a situation where we may be facing significant rate increases for wastewater, solid waste, and water, it is plausible.
If that a scenario happens it could very will mean there is more general fund money available for services. We won’t know until all of the accounts are gone through.
And then there is the awkward little question of cost recovery for general fund services such as administration that aren’t being collected from enterprise funds and grants where they are allowed to be covered.
This is awkward because cost recovery was a big politically football back in the mid-1990s when it was imposed as an across-the-board 20 percent charge to reimburse the general fund. Because it was imposed on the golf course that was set up as an enterprise fund it raised the hackles of golfers who, as it turned out, where right to politically club elected leaders given the city just arbitrarily came up with the 20 percent charge.
Somewhere along the line the recovery cost charge disappeared.
The lack of a recovery cost charge is one of the identified deficiencies. To get an idea of how this could have an impact on the ability to let’s say hire more police officers, if a third of the employees are on the payrolls of enterprise accounts that means that roughly the same amount of the human resource budget should be reimbursed by the enterprise fund. Just instituting a recovery charge for the services of one department like HR could underwrite an additional police officer by itself.
There are those hoping that Measure Z could generate funding for more amenities. While it could, it is clear even with a plan things often don’t get done as promised with money that is collected.
City hall is running a little short in the trust department these days. That said not trying to sweep a mess under the rug and to work to correct the current situation is a large step toward earning trust the city never had from some or rebuilding trust they already had from others that they squandered.
The city — to its credit — is working diligently on the trust stage.
We are still always from the verification stage although some may think differently.
That is why before you say “yes” or “no” to Measure Z you might want to consider Nuno’s advice.
Trust, but verify.