The Shifting Fiscal Landscape.

coins_cFor some time now council leadership and senior city staffers have been hesitant to bring the topic of Brea’s unfunded pension liabilities before the public, either to educate or discuss the current state of affairs.  Attempts to put the topic on the agenda were continually thwarted.

Luckily, Roy Moore remained steadfast in his belief that the people of Brea deserved to understand the situation and had a right to make their feelings, questions and suggestions known.  To that end, on Thursday, February 7th, Roy conducted an open meeting at the Brea Masonic Lodge and presented a clear picture of where Brea stood at the moment.

You can download a copy of Roy’s presentation HERE.

One small step for Roy Moore.

Roy’s dogged persistence, plus pressure from our regular cast of characters at Matters from the Audience, was sufficient to force a change of heart in those who prefer to keep things behind closed doors.  Here’s an excerpt from Roy’s Brea Net newsletter #650:

coins_b“As you know I have been very concerned about Brea’s unfunded liabilities and am interested in pension reform.  I am happy to report that the City Council will finally address the unfunded liability issue during its May 7 Study Session.  The discussion should include the extent of our unfunded liabilities, how they evolved, CalPERS recent decision on increasing the City’s contribution rate to fund employees’ pensions and the impact this may have on city services and what possible solutions are available.  This portion of the Study Session will begin about 5:00 p.m. in the Executive Conference Room.”

One giant leap for Brea citizens.

This is a breakthrough a long time in the making.  All folks with an interest in this topic, especially considering that this meeting will not be televised or adequately documented in minutes, should plan now to attend.

A handful of us, following Roy’s presentation, have stayed in touch and continued our own discussions.  Here are a few of the key questions we feel deserve to be addressed:

  • CalPERS recent actuarial policy change will require participant cities to increase their contribution to the fund by as much as 50% per year beginning in 2015.  How will Brea plan to absorb such a dramatic increase in cost?
  • Is Brea considering changing from a defined benefit retirement plan to a defined contribution retirement plan for Brea city employees?  How will the bargaining units, especially public safety unions who account for the largest unfunded pension burden on taxpayers, respond?
  • How did Brea squander it’s 42 year relationship with Yorba Linda for the contracted provision of police services?  Is there any unfunded liabilities legacy that comes with this loss?  How will the cost of rebuilding Brea’s Police Department impact our ability to keep up with unfunded liabilities?
  • Roy’s chart covering liabilities from 2001 to 2011 (download report above) indicates that Brea had a $10.8 million surplus for public safety and a $11.1 million surplus for miscellaneous – a total surplus of $21.9 million in 2001.  By 2003 that had reversed itself and become a $10.1 million total unfunded liability.  That’s a $32 million swing in just 2 years! If we skipped payments to CalPERS, where did the money go?

Please, come to the meeting and make yourself heard.

I’m sure there will be more questions than answers rising out of this meeting.  Remember that, at 7:00 p.m., the study session will adjourn to the public meeting downstairs which will be televised.

During Matters from the Audience, these and new questions generated by the study session report and discussion can be publicly put to Council and, because “Unfunded Liabilities” is on the agenda, Council and staff may reply without violating the Brown Act.

coins_aThere is also a Budget Workshop set for Tuesday, May 14 in Conference Rooms A and B (Civic Center, 2nd floor) beginning at 3:30 p.m. – not the most convenient time.  It will be staff run and the agenda/format are unclear at the moment.  As I learn more, I’ll pass it along.

Remember, it’s your city.

It’s (mostly) your money and it’s your services that are at stake.  Why would you stay home and not get involved?

 

An Elephant In The Room – Part 1

elephant_aTo launch Brea Matters for 2013, I asked a number of regular readers what they believe are the key issues facing the city during the coming year. The responses were interesting, to say the least.

The respondents include elected and appointed officials, mainstream residents on the high probability voters list and no one on city staff.

Repeatedly, the important issues lumped themselves into two categories, “Money” and “Mechanics.”

The first are issues for which there are specific, calculable fiscal concerns, and the latter centers on issues of policy, protocol and ethics impacting Council’s ability to lead with vision and govern with clarity and fairness.

Council’s obvious dysfunction over the past six years or so, amplified by the criminally unbelievable reorganization fiasco on December 18, leaves many of us with no sense of confidence in Council’s ability to do the work they were elected to do. They’re failing in the most fundamental tasks and seem to have turned a deaf ear to the public outcry for transparency and accountability.

Almost without exception, respondents believe that the fiscal issues facing Brea this next year are manageable, assuming a well functioning Council. And there’s your elephant in the room.

Here’s a rundown of the fiscal issues, in no certain order… sort of.

Pension Reform.

  • Movement must be made in direction of defined contribution versus defined benefit type pensions.
  • The city can no longer afford the extravagant pensions afforded city employees, in fact, we haven’t been able to afford them for many years.

Employee Compensation.

  • Brea needs to establish a new employee compensation policy that is not dependent on any salary surveys comparing us with other cities.
  • Current study shows that all OC cities pay at a similar high level (about 30% greater than the private sector).
  • Further adjustment to salary and benefit plans for public safety also deserve immediate attention.
  • The upcoming review of the City Manager’s contract, in light of recent performance, deserves more than a cursory glance and rubber stamp.
  • Likewise our contract with Richards, Watson & Gershon.

Unfunded Liabilities.

  • There needs to be a comprehensive recognition and addressing of Brea’s unfunded liabilities in general.
  • Roy Moore requested a review several months ago but was rebuffed by Schweitzer, Murdock and O’Donnell. He is pursuing his own independent review. We need to support him in this endeavor.

Redevelopment Agency.

  • We must recover from our past reliance on the Redevelopment Agency to direct growth of the city.
  • A clear explanation of the role of the “Successor Agency” is overdue. The Successor Agency needs to meet when the public is better able to attend and participate.
  • What funds has the state taken? What funds are left? What projects were stranded without funding?
  • What projects do not have the capacity to generate the tax increment necessary to retire their debt?
  • What debts remain and what is the extent of our liability?
  • Where is the old Redevelopment Agency staff and who’s paying their salaries?

Public Safety.

  • Assessing the Fire Department’s progress following the O’Donnell forced reorganization seems to have stopped, at least no reporting has been made public in some time. Have we saved any money or not?
  • The Police Department, following the woefully unexpected loss of the contract with Yorba Linda, is trying to establish a new “Brea Only” organization plan. What is it? How does it work? What will it cost and how will we afford it?

Economic Adjustment.

  • Maintaining a balanced budget without tapping reserves or redirecting funds without full disclosure and public consent.
  • City services and the cost to provide them, all of them, need to be adjusted in the face of a continued slow economic recovery.
  • Dramatic reduction the all travel allotments for Council and Staff.
  • Elimination of the City Manager’s privilege of discretionary spending (without Council review and approval).
  • Allegations were made that Brea is over charging businesses for fire and business permits, this should be reviewed.
  • We must continue discussions with our neighbors regarding “regionalization” of services (expansion beyond Fire Department Command Staff, Police Department and Command Staff, Public Safety Dispatch Services, Maintenance Services, and Service Delivery).

Alpha-Olinda Landfill.

  • Brea is in line to receive in excess of $30 million by the time the closure is complete and how those dollars are spent must have community input.
  • Redirecting of these funds, thanks to nebulous contract language, to replace monies lost in the dissolution of the Redevelopment Agency or any other declining or needy revenue source ought not be allowed.

Well, that’s a summary of the “fiscal issue” responses I received. Most respondents asked for anonymity, I’ve decided to give it to them all. I’m confident they would agree that what they’ve said is far more important than who said it.

As my Gramma used to say, “Eat it up. Wear it out. Make it do, or do without.” It’s how us common folks learned to live within our means. They could do well to learn that lesson down at city hall.

Next post will summarize the “Mechanics” issues. Stay tuned. Undoubtedly feathers will get ruffled.

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