Coastal Commission gets an emergency loan from the state to make its payroll
Gov. Jerry Brown’s budget advisors have approved an emergency loan of $1.45 million to the California Coastal Commission after an agency staffer said it was in danger of not making payroll in July.
A letter sent to legislative leaders this week by Brown said this is the second consecutive year of a cash crisis for the commission, prompting a formal audit of its money management.
The money will “address end of the year, day-to-day things that couldn’t be deferred,” said H.D. Palmer, a budget spokesman for Brown.
California government’s fiscal year ends June 30. Lawmakers approved the framework of a new spending plan last week, with several additional budget related items still unfinished.
The Coastal Commission loan, approved Monday in Sacramento, will be repaid from federal grants and state fees that are expected to arrive later this summer. The notice sent to the Legislature this week says that the loan from the state’s general fund will be paid in full no later than Oct. 30.
“We are evaluating our entire system to improve some of our internal controls,” Susan Hansch, the commission’s chief deputy director, said in a phone interview Wednesday.
Hansch said the 2015 cash flow crisis referred to in the letter to lawmakers was the result of a personnel matter, one that she could not discuss but has since been resolved.
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The Coastal Commission has been the focus of intense public scrutiny this year, most of it centered on the February decision by commissioners to fire the agency’s executive director, Charles Lester.
The commission, with broad power over conservation and development issues along California’s coastline, has an annual budget of almost $24 million. Data from the state controller’s office show the agency lists 163 permanent employees with a total monthly payroll of $1.2 million.
Hansch said this week’s emergency loan is part of a larger systemic problem with the timing of money paid to the commission, though she also conceded that the current shortage was worse than other instances of a cash crunch in years past. Coastal Commission staffers originally asked for a loan of $600,000 but state officials determined that the shortfall would be larger than anticipated.
“This loan is bigger than we really thought we needed,” Hansch said.
Although cash flow problems are not unheard of for state agencies, Department of Finance officials said that no other emergency loans of this type have been made out of the general fund this year.
The 12 appointed members of the Coastal Commission do not have a formal role in approving the budget, which is handled on the staff level in coordination with state officials.
“That’s been a sore point, to some extent,” said commission Chairman Steve Kinsey, who said he was briefed about the cash shortage three weeks ago.
Hansch said the agency’s staff will cooperate with the forthcoming audit. And Kinsey said the money woes may help bring some new energy to important structural changes at the agency.
“An audit will shed some important light,” Kinsey said. “There is a message here for us.”
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