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The city of Encinitas is in excellent financial shape

On June 10, the Encinitas City Council is expected to approve a balanced budget.

Sometimes a myth surfaces that Encinitas is in financial trouble.

We’ll have a speaker at city hall who accuses the city of fiscal irresponsibility, acquiring too much debt, spending money it doesn’t have, or making reckless choices.

Those accusations are simply unsubstantiated by the facts.

It’s every resident’s legitimate right to disagree with and try to influence what the city decides to spend its money on — whether it’s a debate about the relative value of sports fields at the Encinitas Community Park or supporting the arts community with the purchase of the Pacific View property.

But it’s inaccurate to allege that city leaders are reckless spenders or to suggest that the city is drowning in debt. Neither are true.

Like you, I believe government’s primary obligation is to be a responsible steward of the public’s money.

I don’t want hard-earned tax dollars wasted or mismanaged. This city has potholes to fill and neighborhoods to protect. I’m determined to do everything possible to ensure that fiscal mismanagement doesn’t happen on our watch.

I routinely request that expenditures be justified — not just new expenditures but existing ones. I don’t embrace an ever-growing government footprint.

In the last three years, our financial position has improved, even with the expenses of finishing the Encinitas Community Park and buying the Pacific View property.

The city pays about $5 million each year in total debt service, which gives us a debt ratio of 7.9 percent (debt ratio means the yearly debt service amount compared to general fund revenue).

This is considered excellent. We have a AAA rating — the highest possible.

Our total debt is $76.3 million with the debt service payments decreasing $600,000 in 2017/18 and dropping another $300,000 in 2018/19 as past bonds are fully paid.

Our biggest expenditure is to keep our city safe. We support six fire stations, and we contract with the Sheriff’s Department at a total yearly cost of just under $28 million.

Our most expensive and largest asset is our roads. These are the projects we intend to fund in the next six years: $17.4 million for street paving, $4.8 million for Leucadia streetscape, $3.3 million for Birmingham Drive, $1.5 million for storm drain repair, $1.2 million for Safe Routes to School projects, $1.1 million for artificial turf and lights at Leo Mullen park, and $750,000 for Beacon’s Beach repair.

As the project scope and costs become defined, we have the following still to fund from at least $4.2 million that’s unassigned: at-grade pedestrian railroad crossing at Montgomery, railroad under-crossing at El Portal, downtown fire station replacement, and activation funds for Pacific View.

What is the source of the city’s $90 million yearly revenue? Property taxes generate 42 percent of our budget, sales taxes comprise 13 percent and the rest is fees, charges, assessments and grants. Encinitas is essentially a bedroom community with more homes than jobs.

Some worry about our $32 million unfunded pension liability, which is the difference between the benefits current and retired employees have earned versus the amount of money we have set aside to pay those benefits.

We contribute about $4.4 million a year toward pensions. If we make our annual contribution as required for 30 years, the unfunded pension liability will be paid off, much like a home mortgage.

But pension costs are not flat and a potential balloon payment concerns me. The council will be looking at creative strategies to pay it down faster and last year contributed an additional $260,000.

Responsible management of taxpayer money is a fiduciary obligation that I take seriously.

In my first six months on the Encinitas City Council, it’s a relief to have thoroughly investigated our finances and confirmed that we are managing them with discipline and wisdom.

Catherine Blakespear is deputy mayor of the city of Encinitas.