$74.5M Money Grab October Surprise
After a 3 month hiatus due to severe health problems, Councilmember Wei teleconferenced in from Taiwan at the October 15, 2024 meeting delighted to be present because she, and the council majority Mohan and Fruen, look at the taxpayer reserves set aside for the CDTFA audit as lottery winnings.
These are our tax dollars which had not been earning interest until Councilmember Kitty Moore inquired about a ballooning account at Wells Fargo (see $64.7M Blog Post). We must be cautious and frugal fiduciaries with the public funds and not rush to spend. Moore recommended to hold the money in a committed Economic Uncertainty Reserve, and was supported by Councilmember Chao, but the reckless majority, days before the election, voted to mix the funds into the General Fund, ready to spend.
Wei stated:
“This is a good meeting to come back to because we have money to spend.”
Mayor Mohan then stated: “We wanted to make sure you had good news to celebrate, Councilmember Wei. This was deliberately done.”
“This was deliberately done.” - Mayor Sheila Mohan
Wei happy to spend our tax dollars.
Be very concerned about this because the reserves were pulled out of the committed reserve and moved to Unassigned in the General Fund, ready for a spend free-for-all without any direction from Council to do so. The funds could have simply been renamed Economic Uncertainty Reserve 2, as Moore suggested, and let the public weigh in on what they believe the funds should be used for, be it an interest earning rainy day account which would earn as much interest as some of the staff-proposed taxes earlier this year, and have an actual Financial Analyst with experience in one time funds provide the public and Council with their expertise, to do the best for our community. Also alarming was that out of the $74.5M set aside, an undisclosed liability account was set up to return an amount of money to the taxpayer in question which has not been told to the Council or public. So the city does not have the full $74.5M. When faced with uncertainty, the prudent approach is to safeguard the funds in a committed account and seek advice. The expression ‘only fools rush in’ applies here.
Why the rush to spend?
City staff is ready to spend our tax dollars without any publicly disclosed direction from Council as to where it should go.
“The City Council will have its first opportunity to discuss options for use of the funds reallocated from the STRCR at its November 19 meeting. Staff recommendations that will be presented at that meeting are currently being developed.” - October 15, 2024, Item 8 Supplemental Report page 13.
An astute member of the public stated:
