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Mildly interesting column but with unsupported conclusions, especially relating to entanglement.
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DETROIT WANTS TO TURN HOMES INTO FARMLAND
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Witness a major U.S. city dying right before your eyes. Detroit is now a crime filled, non-White city with no industry.
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3 O.C. SCHOOLS NAMED STATE'S WORST PERFORMING
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They're in Santa Ana. No doubt, some local know-nothing Pollyannas in Santa Ana (every city has some of these characters) will gush that the schools are wonderful and match any that are found in Newport Beach. Ho hum.
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THE BROTHERS KLITSCHKO BACK IN THE RING
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Wladimir meets Eddie Chambers on March 20th. The CM PRESS picks Wladimir by a KO. Chambers is too small and he's too slow to get on a bicycle. He looks more like a club fighter than a contender.
Vitali meets Albert Sosnowski on May 29th. The CM PRESS picks Vitali to pull out a tough win. Sosnowski is no chump, and he's younger, but Vitali should take him.
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IS COSTA MESA PAINTING TOO ROSY A PICTURE ON FINANCES?
At today's City Council Study Session, staff will present an update to the City Council on expected revenues. We think the update may be too rosy.
Here's why:
According to staff's own report, sales tax revenue at mid-year is down 7.1% compared to the same 6 month period last fiscal year. So, does staff use that 7.1% figure to conservatively estimate what the revenues will be at the end of this fiscal year?
Nope. Instead, it uses a figure of 5%.
Also according to staff's own report the Transient Occupancy Tax (TOT) is down 15.9% compared to the 6 month period in last fiscal year. So, does staff use the 15.9% figure to conservatively estimate what the revenues from the TOT will be at the end of the fiscal year?
Nope. Instead, it uses a figure of 10%.
Okay, so why does it matter if these projections are accurate or not?
It matters because with projections that are too rosy, the City Council will continue spending our money like drunken sailors and put us into an even deeper financial hole in the coming months.
It would be better to assume the worst (and this really isn't the worst, but it is prudent) and accept the 7.1% figure as the way it's going to be for sales tax revenue. Actually, we think it'll be worse, but 7.1% is at least realistic.
And, on the TOT, one has to understand that Costa Mesa is not a destination location. We don't have the ocean and we don't have Disneyland. The CM PRESS expects to see our hotel business drop over the next months, not increase. If we're right, then we should be using the 15.9% figure and keeping our fingers crossed that it won't be much higher than that. We should not be using a figure of 10%.
Also, remember that in the last six months we had a bump in our TOT as a result of the University of Alabama's football team, staff and fans filling up our local hotels. This means that the TOT from that period was actually higher than we might expect and this skewed the number upward that staff is using in its projections.
If the City Council takes a common sense conservative approach, as we suggest, it'll ask staff for more realistic projections and begin the difficult but necessary job of cutting fat out of the budget right now, a little at a time, instead of waiting for the bad news in a few months.
By cutting back now, the pain to all concerned will be less.
But, what if the CM PRESS is wrong and things really are as rosy as staff believes? Well, it'll just mean that the City will be in an even stronger financial position. In other words, there is very little downside in taking the more conservative approach that we suggest.
If, however, we are right, and the City Council foolishly accepts what we think are rosy figures, in 3 to 6 months, staff will come back to the Council and ask to raise fees, etc. because "Golly, the economy was worse than we projected."
One last thing to remember. Costa Mesa is more dependent on revenues from our commercial (mostly retail) sector than many other cities. In other cities, Fountain Valley for example, much of the City's revenue is based on residential properties.
This means that when the economy is booming and people are spending money in our shopping centers in Costa Mesa, and buying new cars here, the City becomes flush with cash. But, when people cut back on their personal discretionary spending, the City takes in less money.
And, dear readers, all indications are that people will cut back even more on their personal discretionary spending over the next few months in Costa Mesa.
It looks to us as though average citizens are becoming more frugal and aren't spending much on unneeded luxury items. Now, the City of Costa Mesa should follow suit and also become more frugal.
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Those are our opinions. Thanks for reading them.
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