At the May 16 Encinitas City Council Meeting, the budget was on the agenda for a special joint meeting with the SDWD.Current Mayor Jerome Stocks went out of his way to insist that the information I shared that night and that the Watchdog reporter from the U-T had previously reported, was false, and in error. Stocks continues to insist that our reserves are much higher than they actually are, using S&P Methodology, and using information for the Fiscal Year 2010-11, from the City’s own balance sheet:
Stocks continued to claim, and directed the City Manager to respond to my subsequent oral communication remarks (detailed response to oral communication public speakers is contrary to previous City policy), that we have NO committed or restricted reserves this fiscal year, and that the U-T reporter made a $10 million error! Rather than 4 percent liquid reserves, Stocks insists, in the U-T Blog, that the City had 40 percent reserves in Fiscal Year 2010-11. This is a discrepancy by a factor of 1,000 percent. Unbelievable!
Simply put, when committed and restricted funds are not listed on a balance sheet, then S&P methodology is not being followed, which to me, is a more conservative and more understandable method of accounting. Without using a common basis for comparison, the Watchdog, or anyone else, wouldn’t be able to reliably quantify and compare the liquid reserves of the various cities. Or one could, but doing so would then be like comparing apples to oranges, and would have no statistical significance.
Past budget presentations have been given by the finance director. The City Manager, in taking on this duty, should include an accounting in terms of S&P methodology, with categories listed, under Fund balances, of Nonspendable, Restricted, Committed and Unassigned, as was done for June 30, 2011, according to the City of Encinitas Balance Sheet — Governmental Funds. Conservative methodology presentation is vital for meaningful public accountability and best practices used for reporting the budget and actual liquid reserves.
Lynn Marr is a Leucadia resident.
Filed Under: Community Commentary