Mayor Pro Tem responds to OC Register’s Measure HH editorial

October 29, 2016

As Mayor Pro Tem of the city of Fountain Valley, I am upset and irritated that The Orange County Register has not provided the full facts on the city of FV’s financial challenges.

 

The city has $120 million in unfunded pension liability and bond debt. The proceeds of HH would go to pay off that debt and eliminate over $1 million of interest expense annually.  The article simply stated that HH would be used to eliminate the annual budget deficit.

 

The dissolution of RDA has put the City in additional hardship. Many cities will be in similar position as FV in the next few years.

 

Today there are 219 sales tax initiatives already in place and 58 additional will be on the November ballot. The city has been fiscally responsible and set aside $30 million in reserve. We only have $15.5 million that is available for operations, of which $9.6 million is required for working cash flow. The city’s reserve is depleting and soon there will be nothing we can tap into to close the structural deficit so essential services will be impacted.

 

Measure HH on the November ballot is to maintain vital safety services for our residents, meet its financial obligations, eliminate debt by paying off bonds, and restore the reserves account that has had to be tapped seven of the past nine years.

 

The City Council approved the FY 2016-17 budget of $1.7 million deficit without funding the following:

  • Park improvements & equipment replacement ($200,000)

  • General Fund funding of citywide street maintenance ($350,000)

  • Additional police officers ($220,000)

  • City Security Camera update ($255,000)

  • Senior Center roof preventative maintenance ($10,000)

  • Repair of City Hall/Library fountains ($85,570)

  • Backup Cardiac Monitor ($13,600)

 

The structural deficit will grow to $5 million in FY 2020-21 and if we don’t do anything it will grow to $8 million.

 

Since 2002, City Council has:

  • Reduced the city workforce from 257 to 221, including outsourcing Building Division and landscape maintenance (savings of approximately $2 million)

  • Reduced healthcare subsidies for city employees (savings of approximately $1 million)

  • Implemented a 3-tiered retirement system in 2012 (savings will continue to increase each year with new hires)

  • Required all city employees to contribute to their own retirement (savings of approximately $1.7 million annually)

 

If approved by voters, HH is estimated to generate $11.5 million annually for 20 years, which will be used to close the structural deficit as well as pay off the $120 million debt obligation.

 

The 1 percent sales tax increase is shared by residents and visitors. This is only on taxable items so prescription and grocery goods are not impacted. This 1 percent sales tax is the lowest-impact option. Fountain Valley is a bedroom community so we don’t have the commerce or tourism that many towns have.

 

Opponents of HH including two City Council candidates were asked directly if they have “A Plan” to resolve the City’s financial challenges and no one has presented and/or shared a plan.

 

Yes on HH keeps our town solvent, healthy and functioning as it should. Again, a citizen oversight committee will ensure the proper use of the funds.

 

John Collins

Mayor Pro Tem

City of Fountain Valley

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