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Editorial: Fiscal taboo has its place

June 05, 2010

In what could be a sign of just how bad it is, or a show of poor management of resources, city funds that cover a number of expenses like workers' compensation and lawsuit payouts have hit a $35-million deficit.

Some of that is attributed to worst-case scenario planning, much like withholding a conservative amount in someone's checking account in case a unexpected bill comes due.

But some of it also pegged to the continued under-charging for services between city departments, which means expenses have outstripped what managers had anticipated.

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The end result was bad enough for the city's independent financial auditor to make a negative note of it in the most recent report, prompting city officials to take the unusual step of asking the City Council this week to transfer $2.7 million in reserves to begin a 10-year course correction.

Spending reserves has typically been a taboo at City Hall, and rightfully so. City Council members on Tuesday wisely put off a decision on the transfer to allow for more discussion on the matter.

A key part of that discourse will hopefully center on how this deficit was allowed to balloon to such a large amount without an earlier correction, lawsuit verdicts notwithstanding. City executives should also include a plan for preventing this sort of slide from happening again, even if it does mean years of financial pain.

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