CM officials react to report, call findings flawed
By Chris Rooney
Published: Wednesday, June 22, 2011 10:52 AM PDT
The Marin County civil grand jury published a report painting an unflattering picture of Corte Madera’s money management, but town officials insist the findings are flawed.
“Corte Madera: Weathering the Economic Storm?” was released June 3 and focuses primarily on a perceived shortage in Corte Madera’s financial reserves and the purchase of Park Madera Center.
“Reserves are the equivalent of municipal savings accounts,” the report states. “Cities set aside reserves to pay for anticipated needs such as vehicle replacement, capital projects and future liabilities. These are called committed reserves. Reserves also provide a safety net during periods of economic uncertainty. These are called unrestricted reserves. In spite of its relatively robust per capita revenue, Corte Madera compares poorly against other Marin municipalities in a key measure of fiscal stability: it has the lowest combined unrestricted and committed reserves — both in total dollars and as a percentage of its budget — of any of the 11 cities and towns in Marin.”
Town officials, however, say the grand jury didn’t delve deep enough in its researching and oversimplified its analysis.
“There’s no mention of the money we’ve put into infrastructure,” Mayor Alexandra Cock said of the report. “They didn’t look at the town’s assets.”
Cock said the town has routinely maintained its infrastructure and has ongoing flood-mitigation expenses that are dutifully kept up to date. The end result is that the town does have lower reserves than other municipalities, but it has also managed to stave off storms and flooding — the exact type of damage that has devastated nearby San Anselmo more than once.
Cock added that the grand jury compared Corte Madera to such different communities, including Emeryville, that the findings were skewed. Beyond that, she said, “Taxes are collected for the benefit of the people, not to just sit in the bank.”
Council member Carla Condon echoed Cock’s sentiments. She said she was “disturbed” by the grand jury report and said, “It didn’t give a realistic picture of what our financial situation really is.”
She also said preventive infrastructure has been vital to the town. “Rather than keep the level of reserves at a high amount, when we see an imminent need for repairs and maintenance, we do it. Unlike other cities without our level of flood control, where tragic things occur.”
Both Condon and Cock said some of the information they provided to the grand jury was omitted from the final report, particularly the town’s assets.
One parcel was discussed in the report — Park Madera Center, which was purchased in 2006 for about $10.6 million. In the past five years, like many properties for many Californians, the purchase has not turned out as profitable as expected. The report states, “Since buying the property, Corte Madera has paid a total of $1.7 million out of the town’s general-purpose fund to make up the difference between the Park Madera Shopping Center’s net income and the annual debt service for the property.”
“We were lauded for that decision,” Condon said of the purchase of Park Madera. “No one anticipated what happened [with the economy], but the fact that we own it is another asset.”
She added that part of the adjacent park is owned by Larkspur City Schools and the purchase was made to compensate if the district expands — which it is currently planning to do with the addition of two portable classrooms.
Condon also said the town was probably facing its last chance to purchase Park Madera Center and another part of the reason was to be able to expand its park and recreation facilities.
Cock said the Town Council had recently passed a plan to bolster its reserves, countering at least part of the grand jury’s criticism. “Yes, we have a goal to increase our reserves,” Cock said. “We passed it at our last meeting.”
Cock said a pivotal reason to have stronger reserves is to increase the town’s ability to secure loans. Having money on hand improves a town’s credit score and strengthens its burrowing ability.
While dissatisfied with the grand jury’s findings, Cock did say that having an outside voice can lead to some positive changes. “We could improve our budget process and our budget reporting process. We can make it more understandable for everyone.”
In all, the grand jury made three recommendations:
• Corte Madera should adopt and adhere to written finance policies that govern appropriate reserve levels, debt management, financial forecasting, budgeting practices and public participation in financial decisions.
• Corte Madera should develop and use a budget template that adopts and clearly communicates a long-term view of the town’s priorities and financial status; establishes a relationship between proposed expenditures and community goals, priorities and desired service levels; and provides a concise summary that will facilitate public understanding of the budget.
• Corte Madera’s elected and management leadership, in collaboration with its employees, constituents and community stakeholders, should develop and commit to a written fiscal recovery plan that will over time establish financial resiliency for the community.
Condon and Cock said the Town Council will draft an official response in August.
Contact Chris Rooney
at scope@marinscope.com.
http://marinscope.com/articles/2011/06/22/twin_cities_times/news/doc4e0223182f4d9389756859.txt
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