Coastal Commission is resolving temporary cash flow problem amid state audit


California Coastal Commission officials said Wednesday that the powerful land use agency is quickly resolving a temporary cash flow problem partly triggered by the timing of grant payments and reimbursements.

Chief Deputy Director Susan Hansch said the commission has now received almost enough money from its funding sources to pay back a $1.45 million loan from the state Department of Finance that was approved in June.

The so-called bridge loan — a common tool used when local and state agencies technically fall short of funding, typically because of delays in the timing of payments — was made to help the commission make payroll in July.


We are not now in deficit, we were never in deficit and we won’t be in deficit at the end of the year

— Susan Hansch, Chief Deputy Director, California Coastal Commission

Hansch, who addressed commissioners during their meeting in Santa Cruz, announced that the agency has received $1,136,270 in grant money and reimbursements for work done for other agencies such as Caltrans. The commission is waiting for agencies to catch up with another $320,000 in payments.

Once all the money is received, the entire loan, which carries no interest, will be repaid all at once as requested by the finance department. Officials say the loan should be paid off in about a month, well before the October deadline.

“We are not now in deficit, we were never in deficit and we won’t be in deficit at the end of the year,” Hansch told commissioners, some of whom had expressed alarm about the budget shortfall.

Hansch said the agency fell behind in receiving grant payments and reimbursements from local, state and federal sources due to personnel issues, the illness of a staff member who submitted invoices, and requirements that work done for other agencies cannot be billed until completed.

The commission, which oversees environmental and development matters along 1,100 miles of California coastline, has an annual budget of about $24 million, with 163 permanent employees and a monthly payroll of $1.2 million.

Follow columnist Steve Lopez and photographer Allen Schaben as they explore what has been saved and what is at risk along California’s 1100 miles of coast »

The shortfall — the second in two years at the commission — prompted the finance department in June to order a financial audit of the agency. It began earlier this month.

When they learned about the bridge loan at their June meeting, Commissioners Roberto Uranga, Effie Turnbull-Sanders, Wendy Mitchell and Martha McClure said they were concerned about deficit spending and possible lapses in management.

“I want a balanced budget at the end of the year,” Uranga said. “We need to do a better job. No one likes to borrow money. We need to get a closer handle on the budget.”

Commissioners Carole Groom, Mary Shallenberger and chairman Steve Kinsey, however, downplayed the loan, saying local and state governments regularly rely on short-term borrowing to deal with temporary interruptions in funding.

“Bridge loans are provided to local governments in Marin County on a regular basis,” said Kinsey, who is also a Marin County supervisor. “More troubling would be for us to exceed our budgeted authority.”

Since the audit was announced, the finance department has expanded its scope to include the commission’s governing structure, its bureaucracy and the efficiency of its operations.

The review is set to be completed in late November or early December and will cost the commission about $300,000, an expense that officials say equals a few staff salaries and could result in layoffs.

“It’s remarkable they are charging us $300,000,” Dayna Bochco, the commission’s vice chair, said at Wednesday’s meeting. “It’s also remarkable that we might have to take away positions when we are already short-staffed.”