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A kinder, gentler, ambitious Irvine - pockets bulging with cash
December 24th, 2008, 6:30 am · 9 Comments · posted by Teri Sforza, Register staff writer
The Watchdog had a nice chat over coffee the other day witih new Irvine Mayor Sukhee Kang. There are certain Obama-esque parallels to his ascent, which we will try not to belabor - the city’s first minority mayor, his pledge to bring warring factions together for the common good, his intention to promote open and effective government (which we found impressive and hope will at least quell the infantile bickering that so often characterizes Irvine political discourse)….
But on the fiscal front, similarities end.
Irvine, unlike the U.S. government, is sitting on a pretty pot of money that promises to allow it to sail rather smoothly through this gathering economic storm.
Lots of money. Like, cash and investments of nearly $1 billion.
According to the city’s most recent comprehensive audit (a new one is due out soon):
- Irvine’s governmental funds had a total combined ending balance of $710.5 million.
- About 57 percent of that - $407.3 million - is in an unreserved fund, which means much of it can be spent at the city’s discretion*.
- The remainder - $303.2 million - is already spoken for (for infrastructure improvements, debt service, etc.).
Yes, it’s a growing city. Irvine’s spending has more than tripled over the past decade, as the chart below shows:
(Chalk that exponential growth after 2005 up to the Great Park and Redevelopment and Assessment District infrastructure activity, the city said. Revenue increases were mostly attributable to the development fees and land received as a result of the development agreement between Lennar and the city.)
And the city’s general fund - think of it as the checking account used to pay for basic, day-to-day operations - had a reserve of $117.8 million. That’s 77 percent of what it spends in a year. (The state likes cities to have at least 5.5 percent, so Irvine apparently wins the gold star there.)
Kang was a big advocate for building a higher rainy-day reserve into the city’s budget (nearly tripling it from 5.5 percent to 16 percent over the last three years - a result, he says, of his career in business at Circuit City).
But we digress. Kang, an immigrant from South Korea who feels he is truly living the American Dream, came on the board in 2004 and has a vision for Irvine that the city can afford to pursue. Public transportation, Great Park, regional cooperation…. Just as Obama hopes to boost America’s reputation in the world at large, Kang hopes to mend fences with Orange County cities that see it as the prideful, boastful big sister - the beautiful Marcia Brady among plainer Jans, and worse, buck-toothed Cindys.
Kang notes that Irvine - one of the county’s largest and most sprawling cities - doesn’t even have a seat on the regional Orange County Transportation Authority.
Perhaps the mild-mannered Kang will be able to kiss and make up with the rest of OC. As the most amiable member of the troika that runs Irvine (mediating between his cohorts Beth Krom and Larry Agran and the rest of the civilized world), he’s already reached across the bloody divide to fellow councilmembers Christina Shea and Steven Choi. We have our fingers crossed, and look forward to seeing how things turn out.
(* The reserve, city spokesman Craig Reem said, ”is spendable to the council’s discretion, but within the confines of the spending source: For example, Public Safety gets grants, such as anti-drug programs. So, the council can decide the anti-drug program, at its discretion, but the money must be spent on an anti-drug program.)
More Watchdog:
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Maybe the city can use the money to buy itself a soul.
I truly hope Mr. Kang has the best interests of the residents of Irvine in mind for all spending & savings. While kids & schools are important (his big message during the elections), there are those of us who moved to Irvine for things other than the schools. I love living in Irvine and hope the new administration will keep up the great work - without any of us residents having anything to do with “the bloody divide,” as Teri Sforza so eloquently writes.
Wow. Awesome job, Irvine! Travis, you can hate on Irvine all you want. If by accusing Irvine of lacking a soul you mean to say it has problems just like every other city out there does, then sure, you’re right. The difference is that, even with the problems that Irvine has, it still manages to have extra money left over at the end of the year. Funny how cities can end the year and not be able to solve every problem they have (that’s normal, obviously), yet one has a surplus of money while another is broke. Hmmm. Something to learn from this.
Well if they didnt rip everyone off with there stupid Melo Roos! the people of Irvine, would be in better shape too!
Your reporting is wrong. Irvine doesn’t have this kind of money - they will have about $16 milllion extra at the end of the year in reserve; the rest is spoken for. And if the State takes more money away from cities, that money will be gone before then.
Wanda -
Please look at the audit, which is linked to above. All the numbers come straight from there.
The numbers have also gone through several city officials before we published them.
Sounds like the bickering politicians in Irvine at least got one thing right, fiscal responsibility. It may be a benefit to have a 35% Asian population in Irvine, since Asians are notoriously tight with money and Mr. Kang has the right idea, which turned out to be a winner in these harsh economic times. Also, the infrastructure is great! You can tell, when potholes get filled up faster than you can say “Los Angeles”.
Also, kudos to the Irvine Company who planned this Planned Community at the git go! Thanks Donald Bren. Your ideas worked!
Teri-
You are forgetting that these numbers are from June 30, 2007 almost 18 months old!
Yes Irvine is in much better shape than most other cities in the state if not the country but to say that the city spending money the way it has over the past few years and to continue to do so will not be a detriment to its financial condition is not right either.
Also, even though the General Fund Cash Balance can show over $100 million there is a large portion of that (The Asset Management Plan) which is earmarked for specific items and are not to be used for “day-to-day” expenditures. This Asset Management Plan (which the balance is greater than $40 million) is set up to specifically help plan for building rehabilitation as the cities building age over time so that the General Fund Revenues on a yearly basis don’t have to pay for this. And these monies should be left for that purpose and not be used to help fund every day expenses.
This city, like all other cities and even our state are supposed to pass a balanced budget every year. This past June the city council adopted a budget that “borrowed” money (or reduced its reserves) from it’s cash reserves (the one that Mayor Kang is so proud of) to balance the budget because of increased spending instead of cutting back on “frivolous” expenditures which should be done in such economic times we are in.
If you attend or go online and look at the Finance Commission agenda reports that have the Monthly Budget Updates you will see that the City’s revenues are lower than projected and continue to slide.
Again, yes Irvine is in a much better position than many other cities but things can slide very quickly if expenditures are not watched. And things like the Asset Management Plan among other “Special Funds” of the city should not be used to supplement greater “day-to-day” expenditures of the city that are in excess of “day-to-day” revenues of the city.
HOLIDAY REQUEST at bottom.
im having problems getting into Irvine as a very low income multi-disabled woman who has been long term homeless. i came from foster care eons ago, i worked very very hard and lost all. i have disabled and veterans preference. on section8. which i keep loosing due to lack of accessible housing and supports. and advocate from San Diego has now helped me correct some (not the added losses not the added uncovered health problems) in Berkley and OC.
While there are move in specials in much of irvine co. im -after another month of turned down hellish homelessness going to have to find more deposit help AS IRViNE CO refused the reasonable accommodation for disability. What Politics that has the county’s biggest philanthropist also setting policy keeping us out of accessible section 8 housing?
Because i have the typical mis- billed medical charges etc..
that come with medicaid/medical they can be ignored in the credit check until i can get housed and begin repair.
If IRVINE has A SURPLUS MAYBE you WILL HELP SOME of us PHYSICALLY AND MULTIPLY DISaBLED HOMELESS?
YOUR ADVOCATES FOR The DISABLED and senior center DON’T ADVOCATE AT THIS TIME.
PLEASE USE some OF ThE SURPLUS TO FUND AND administer A SEASONS OF ShARING PROGRAM
to help with move in/furniture and beginning food needs. SSI/MEDICL DOES NOT COVER MANY MEDICAL and other NEEDS..
ALSO TO HELP DEVELOP A SHeLTER FoR PHYSICALLY /multiple DISaBLED veterans and others. The one SHELTER in irvine stopped taking single women AVOIDING most all DISaBLED some time ago.
The new shelter on fed land has a 90 day incarceration period forced prayer and said would refuse to allow me out to pursue the housing search and voc. rehab for another 6 months ! until i ,with a BSBA and having done govt. budget work, completed a program including the financial ministry to learn how to balance a checkbook. etc. THEY SAID ESCORTS WOULD BE REQUIRED EVEN FOR MEDICAL VISITS ! I’M not INSURED for strange fundamentalists in my car.
and dont want them violating ME and my HIPPA..
MOST of US, DISABLED even returning VETERANS DONT DESERVE JAIL TIME AND a lowest common denominator program designed to rehab addicts criminals and HS drop outs. WE SHOULDN’T BE FORCED out of ORANGE COUNTY or into expensive and dead end institution -like settings.
yes, the others need special programs and a medical rehab - but VETERANS and people who are multi -disabled shouldn’t continue to be either punished or left out because the others are faster and easier.
I WaS UNABLE TO GET ANY local DISABiLITY SERVICES TO ADVOCATE. with county ” support” programs in the housing or shelters for years.
PLEASE NOTE EVEN RETURNING VETERANS ALSO HAVE NO TRANSITIONAL SHeLTER IN ORANGE CoUNTY- still !
JUST A rental -costs more than section8 share a motel room with up to 3 others NO SPECIAL NEEDS ( ESP DIET) considered. they said no to women vets some time ago and sprayed lysol gave me a bad migraine - now its still set up as too $ fro too little
and so you can never afford to leave.
OCHA was dinged by hud fro not de- concentrating. section8.
but Irvine Co. and other developer /owner Policy is a big reason why.
DISABLED who do not have drug and alcohol abuse histories ,especially ones want to access state Voc. Rehab and GI bill are a Good group to help.
Please help US .
PLEASE USE YOUR MONEY and POWER TO stop leaving disabled it eh road.
PLEASE FUND ADVOcACY and STOP FUNDiNG MORE INFO AND REFERRAL to nothing.
PLEASE. please please MAKE SURE PHYSICAL AND MULTIPLE DISABLED HOMELESS ARE COUNTED this time.
So AT LEAST next year we do Exist.
I HAVE TO SAY IT and DESPITE THIS speaking up is WHAT GOT ME HOMeLESS IN THE FIRST PLACE,
PLEASE CONSIDER MY PLEA for me and for those who have no voice.