Op Ed: CALIFORNIA LAWSUIT EXPOSES ORANGE COUNTY FINANCIAL CRISIS
By: Chriss W. Street
The ballooning Orange County financial crisis continued to spiral down as the State of California filed a law suit to force return of $73.5 million of property tax revenue the County skimmed from local schools and community colleges last November. It seemed bazaar at the time that the supposed “Most Conservative County in America” would increase spending by $145.8 million, then grab the school’s cash and cancel planned layoffs of 490 union workers.
The new lawsuit has caused increased scrutiny of other dicey actions by the County. The biggest shock came from the recently released Orange County 2010-11 Audited Financial Report, which discloses the County is short $30,146,000 in Reserves and out of accounting compliance:
“The County General Fund maintains a Reserve for Contingencies which was established through the Strategic Financial Plan (SFP) process. The target amount for this reserve is 15% of ongoing annual general purpose revenues (excludes fund balance available and one-time amounts and transfers), or $91,446. This compares to the Government Finance Officers Association (GFOA) guidelines for funding contingencies at 15% or higher. The June 30, 2011 balance is $61,300, approximately $30,146 below the revised target.”
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