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Soiseth: No more kicking the cans down the road

POSTED April 13, 2018 8:48 p.m.

In the 2014 campaign, I promised a line-by-line analysis of the city’s funds. The central goals were simple: to pay down Turlock’s debt, to pay lump-sum charges when it is to the city’s advantage, to save for large infrastructure projects instead of borrowing high interest loans, to slowly restore departments to pre-Recession levels of service, and to increase the departments’ competitiveness in relation to neighboring communities.

As mayor, this what I set out to do and this is what I’ve done.

With these simple policy principles in mind, we have eliminated a large bulk of Turlock’s unfunded liabilities, primarily the $1,839,608 remaining balance of the fire department’s Public Employees’ Retirement System (PERS) side fund and the $3,600,474 remaining balance of the police department’s PERS side fund. By also using the $2.4 million proceeds from the sale of the old police station and adjacent public facilities in combination with $3 million from the general fund reserve, Turlock retired this debt and will now save over $615,000 per year in principal and interest payments. 

Now, some are saying that Turlock’s finances are not in good shape and that—after three years—Turlock's departments are near “collapse.” Such rhetoric and statements are not only misleading but are flatly false. Here are the facts: when I was elected, our General Fund Reserves hovered around $7 million, while today they have increased to over $11 million. This $4 million increase in the General Fund Reserves is the result of a host of factors, one being the fiscally prudent and conservative spending of our department leaders. To their credit, they have consistently come in under budget by as much as $1 million annually. Along with strong property, hotel, and sales tax revenue, salary savings, and the financial discipline of working within departments’ budgeted means, Turlock is now in a strong financial position.

Additionally, I take every opportunity to secure outside funds for projects that will not put pressure on the General Fund. After the passage of Senate Bill 1, I worked hard to secure the only money available in the county, which means $3 million will come to our city to improve the Fulkerth Road Interchange at Highway 99 and my next effort will be to secure another $3 million in May from the California Transportation Commission. $2.6 million has just been deposited into our accounts for West Main Street from Measure L, with East Avenue and Golden State Boulevard up next—all projects that don’t require General Fund expenditures. Both of these serve as examples of my efforts to alleviate the pressure on the General Fund and allow us to make even more aggressive investments in our city. 

While the foundation for all our financial decisions is our strong reserves, we need to remember that the level of reserves a city has is not a science, but an art. As leaders, we have to balance the need to provide services to today’s taxpayers with the need to have a savings account that can help us weather any future economic downturn. When looking at surrounding cities that face similar strains on their General Fund—primarily those cities that fund public safety out of their General Fund—you’ll see that Turlock is in a relatively strong position: Ceres has a population of 40,000 with a reserve of around $3 million, while Modesto has a population of over 200,000 and a reserve of $15 million; to compare, Turlock has a population of 72,000 and $11 million in reserves. That means there is roughly $75 set aside per person in Ceres and Modesto for reserves, while Turlock sets aside almost $153 per person (over double). Turlock is also only 13% of the county population, yet we generate 15% of the county’s sales tax revenue, a very enviable place to be. 

Our Council has done this so that we can address serious issues when they arrive. When I called a special meeting at the request of the Police Chief to discuss the unreliable nature of our emergency radio system, we were ready financially to stop kicking the can down the road. This is a system that almost every department—along with the Turlock Unified School District, California State University at Stanislaus, and others—have come to rely on, yet previous Councils had neglected to address the issue because it came with a roughly $6 million price tag. The funds to be used would come from across various departments and partners in the community, but a $1 million down payment was made by the General Fund—something we could only do because we are in a position with $11 million in reserves.

Some have ridiculed the Council for saving money, while others have diminished this large reserve. This dialogue is not only counterproductive, but it shows a lack of understanding of how municipal budgeting works. As a Council, we try to strike the balance between “saving for a rainy day” and recognizing when we have arrived at that rainy day; when it is important to have liquid cash or to invest in services for today’s taxpayer. Much like our own residents save money when they know they will be renovating their home, purchasing a new vehicle, or going on a vacation, the city also practices long-term planning and realizes that there will be times of need that require large cash payments. 

I believe it is the responsibility of the Mayor and City Council to guarantee taxpayer funds are used wisely and that Turlock makes the right investments that will strengthen the local economy for generations to come.

 

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