Commentary: Costa Mesa should place entire surplus in rainy day fund

What to do with Costa Mesa’s $11 million surplus?

During recessions, cities have to dip into their rainy day reserves to make ends meet. And then, during subsequent economic recoveries, there are surpluses used to restore the foregoing lost reserves. That is the way it is supposed to work — the economic peaks and valleys balancing out to ensure the solvency of cities over the longrun.

But politicians are often loathe to fully restore the expended reserves, partly because politicians don’t score points with a bookkeeping entry. They prefer to say, “See that new library? I voted for that. See that lovely new sports field for your kids? I voted for that.” The latter presumably will help them get more votes.

They just love to spend money that is not theirs. Perhaps if it was their own money, they might be a bit more frugal.

Another way of looking at it is this: When the economy goes south, the politicians blame it all on “the economy” and rightfully so. But when the recovery comes, they never give credit to “the economy,” but they will go out of their way to take personal credit. This goes on everywhere, not just in Costa Mesa.

Regardless of party affiliations or political philosophies, all they really did, for the most part, was be at the right place at the right time. And yet they would have us believe that if not for their efforts the earth would no longer be able to spin on its axis.

The fiscal year that ended June 30 resulted in an $11 million surplus for Costa Mesa. Meanwhile, cities, such as Fountain Valley, Westminster and La Palma, may have to raise sales taxes to help make ends meet. (It should be noted that the latter cities are not blessed with either a South Coast Plaza, nor Costa Mesa’s property tax base.)

In coming years, these cities will no doubt be joined by legions of others throughout California who will be unable to bear the burden of unsustainable pension benefits. And unlike the federal government, our cities cannot print money. So their day of reckoning may be just around the corner.

The invasion of sober-living home operators is beginning to create a plague that is not helping the situation. With 29% of the sober-living homes in Orange County residing in Costa Mesa, this will in time create a huge financial drain on our city. We will be burdened with increases in homelessness coupled with addicts who wash out of rehab and turn to crime to support their expensive habit. Whether our city leaders fight this in the courts or double our police force over the next eight to 10 years, either way the costs will be in the millions of dollars.

The proper thing to do with that $11 million surplus, from a fiscally conservative viewpoint, is to transfer it completely to the rainy day reserves. Plain and simple.

In my view, those reserves are more than $20 million shy of where they need to be. Yet what has been initially proposed by the politicians and bureaucrats is to apply only $2.6 million to the reserves. Costa Mesa’s spendthrift politicians (liberals and conservatives alike) appear to be burning the midnight oil thinking of ways to spend the bulk of that surplus. Spend, spend, spend!

Nobody knows when the next recession will hit, but rest assured at that time a new set of unlucky politicians will be left holding the bag, and the city may then have to consider layoffs.

Costa Mesa resident AL MELONE is a candidate for city council.