Golf course costs versus fireworks costs

Costs to support the city-owned Black Gold Golf Course continue to impact City Council budget decisions as the elected officials grapple with lesser expenses related to such long-standing traditions as the July 4 fireworks show and the October Fiesta Day parade.

A scaled-down version of the city’s 20-year-old July 4 celebration survived on a 3-2 vote last week, one month after $1 million in golf course turf changes were approved, also 3-2.

Decisions regarding the parade, which was canceled for the second time in 41 years last year, and future July 4 festivities, easily the most-attended city events in past years, will be made in coming months as a budget for the fiscal year beginning July 1 is discussed.

This year’s 15-minute fireworks display will cost $23,000, the same as last year, but the council wants $37,000 in other expenses related to day-long Veterans Park activities cut back, possibly including shorter hours, free or recorded music and no stage rental.

Previously, the council dedicated $14,500 earned from leasing the vacant “poppy field” property at Imperial Highway and Yorba Linda Boulevard for pumpkin and Christmas tree sales to the July 4 event.

Meanwhile, work begins on turf renovations at Black Gold, which involves a five-year transition of rye to Kikuyu grass, for $1,216,405, and adding Bermuda grass around tee boxes for $140,000, with $300,000 in water and other savings anticipated.

Hit to this year’s city budget will be $224,145, with expenses ranging from $155,325 to $184,280 the next four years. The first-year tab is a loan from city reserves, with future costs included in annual city operating budgets.

The city already has loaned Black Gold $4.7 million since 2000. Interest has been waived since 2007-08, amounting to $226,943 in lost payments through 2008-09, with this year’s forgiven interest yet to be calculated. A total $1,102,274 interest was paid in past years.

The latest available financial report from course management KemperSports shows a 1.8 percent increase in total rounds played but an 8.3 percent revenue drop for the first seven months of the current fiscal year compared to the same period last year.

Through January, 28,398 rounds were played, up from 27,889, as revenue declined from $3,245,986 to $2,975,288. One success: a “beer of the month” program sold seven kegs and 799 cans for a $1,300 payment from Heineken.

In a separate report, course General Manager Scott Heyn noted that 2,432 free rounds were played in a recent 12-month period, most for promotion, but he added, “There is never a case where a complimentary round displaces the ability to generate revenue.”

Nancy Rikel, Mark Schwing and Jim Winder voted for the successful July 4 motion, with John Anderson and Jan Horton opposed. Horton, Schwing and Winder supported the turf switch, with Anderson and Rikel opposed.

Gas station clean-up presents long-term cost

A number of decisions made by past City Councils are coming back to haunt current leaders as they grapple with serious financial issues in a struggling economy.

One good example involves a costly cleanup of groundwater contamination at a very visible location—the triangle-shaped vacant lot facing Imperial Highway just west of the library.

The site, former home of a gas station that closed in 1999, was bought by the city in 2004. A chain-link fence surrounds the 10,300-square-foot parcel and 17 area wells provide water samples to test groundwater contamination.

Contaminates leached from the station’s underground tanks and passed under Imperial Highway as far as Polly’s Restaurant in the Yorba Linda Station center, according to a report prepared by Assistant City Engineer Jacki Niemi.

The city spent $500,000 in Measure M sales tax revenue to purchase the property and another $500,000 of Redevelopment Agency funds to remove the tanks and check for contamination, which, consultants said, was found to 50-foot depths.

An additional $1,775,000 of redevelopment money is needed over the next five years to “close out the case” and satisfy county Health Care Agency requirements, with the land “unusable until the clean-up process is completed,” Niemi’s report stated.

And that price tag and time period will remove enough contaminate to allow a parking lot or other industrial use, the city-hired consultants noted. A business use for the land would require a seven-year, $2 million clean-up tab.

The city hoped to recoup costs from an Underground Storage Tank Fund, but money is not available at this time, and the city’s waiting-list position is lower than spots open to private entities.

The contaminate clean-up and other costs from past council actions led Mayor Pro Tem Nancy Rikel to respond to comments by former Mayor Allen Castellano reported in my Feb. 25 column.

Castellano, a 2000-08 council member, stated, “I’ve seen a lot of spending taking place within the city without a lot of tangible results.” He also pointed to lower city reserves, which “should only be used for capital improvement projects and/or litigation costs.”

Rikel emailed: “I hope you can discuss the other side of the coin [since] lots of coins will now be spent due to that [past] council’s lack of forethought and concern for the future.”

Among the financial failings noted by Rikel: firing a city manager with a year’s pay and benefits after granting a large raise, selling and paying interest on unused fire station bonds, not comparing police costs for 16 years, not charging developers for Bastanchury Road widening, bulldozing Old Town property and not phasing in new sprinkler systems.

Rikel, a 34-year resident who began attending meetings and critiquing council actions in 1991, won a seat at the dais on a reform platform in 2008.

Furloughs, covert ops, conservation, campaigns

Five items to report this week:

--The economic downturn has resulted in furlough days—and lower salaries—for both city and Placentia-Yorba Linda school employees. In a “share-the-pain” action, school trustees reduced their own pay by a similar percentage starting last month.

School employees are taking up to five furlough days this year and up to seven next year, with trustees cutting their annual $9,000 stipend $195 for 2009-10 and $290 for 2010-11.

The city adopted 13 furlough days for 2009-10. City Council members are paid $6,720 yearly and are allowed up to $11,496 in annual retirement and/or health benefits. Last summer they cut business card, meeting-night meal and car allowance costs.

--Brea police are understandably reluctant to publicize ongoing undercover operations at the growing number of city massage businesses, but a Feb. 2 report to the council related covert visits to “two of the five massage parlors located in town.”

The report stated: a “detective, posing as a customer, did not discover violations at either facility. One of the massage parlors was the subject of a recent complaint from a resident who was disturbed by the parlor’s advertising practices.”

The account concluded: “It appeared the parlor utilizes scantily clad models in both their print and internet advertisements. However, the detective found that this particular parlor was very clean and abided by the regulations prescribed by law.”

--Reported violations of Yorba Linda Water District’s conservation regulations are down considerably from the warm summer months of July and August 2009, when restrictions, including limiting landscape watering to three times a week, took effect.

Eight violations were noted in February. In contrast, 291 “grace period” notices went out in July 2009 and 108 violations were tallied for August, dropping to 74 in September, 28 in October, 15 in November, four in December and seven in January.

Water use is down 14 percent, bettering the 10 percent goal, and four free conservation/ gardening classes at Fullerton Arboretum drew 139 customers. Next class is March 27.

--Kim Palmer’s appointment to the PYLUSD board to replace Judy Miller brings to four the number of trustees from Yorba Linda. Only Carol Downey, a former mayor, lives in Placentia.

Palmer will seek the two years left on Miller’s term, with four-year seats now held by Karin Freeman and Jan Wagner also on the Nov. 2 ballot.

--Former Councilman Ken Ryan, who left office in 2006, closed his campaign committee last month. The five incumbents and past candidates Mark Abramowitz, Doug Dickerson, Robert Potter, Ed Rakochy, John Taylor and Richard Wolfinger have open committees.

Ten committees list debts from loans the candidates made to past campaigns: Anderson $7,000, Horton $5,950, Rikel $19,500, Schwing $14,000, Winder $11,160, Abramowitz $29,050, Dickerson $13,100, Potter $1,392, Rakochy $11,150 and Taylor $20,693.

Redevelopment income slips below expenses

Expenditures will outpace income for Yorba Linda’s city-run Redevelopment Agency this fiscal year, thanks to the state’s $2.05 billion takeaway from property tax revenue generated by California’s 417 redevelopment agencies.

This city’s share of the 2009-10 tax shift is about $5.7 million, due May 10 for placement in the state’s Supplemental Educational Revenue Augmentation Fund. Some $1.2 million more is owed for 2010-11.

This year’s payment puts the city’s Redevelopment Agency income more than $2.7 million behind expenditures, an “unusual” situation, said city Finance Director David Christian. Next year’s smaller shift shouldn’t result in red ink for the 27-year-old agency.

In rounded figures, the city’s total redevelopment income for 2009-10 is expected to be $20.8 million, expenditures $17.8 million and state takeaway $5.7 million. Next year’s estimates: $21 million income, $18 million expenditures and $1.2 million takeaway.

At a Feb. 16 meeting, the City Council voted 5-0 to use about $4.1 million of the agency’s housing set-aside funds to make the state payment, with $1.6 million paid from the agency’s property tax revenue. The housing money must be repaid within five years.

Redevelopment agencies are funded by “tax increment” income from project areas. Tax increment is the increase in property taxes over the assessed amount at the time a project area is created from development intended to eliminate physical and/or economic blight.

Yorba Linda’s first project area was adopted in 1983 and includes 2,640 acres in the Savi Ranch region extending to the eastern city boundary. The area also includes a land swath to the northern border that contains some Hidden Hills homes, a section vacant in 1983.

A second project area was adopted in 1990 with 328 acres that includes Town Center in a corridor running from just west of Avocado Avenue along Yorba Linda Boulevard to just west of Valley View Avenue and west of Prospect Avenue north of Bastanchury Road.

Most of the approximate $20 million in increased property taxes collected each year from these two areas is “passed through” to 17 taxing agencies that would normally collect any additional assessments if the Redevelopment Agency didn’t exist.

The largest chunks of pass-through cash go to the Placentia-Yorba Linda school district (more than $4 million) and the Fire Authority (more than $1.5 million). Among others: a cemetery district, two water districts, three more school districts and county tax agencies.

An RDA’s annual tax increment income can’t exceed debt, which for Yorba Linda includes $60 million in bonds, a $6 million city loan and $15 million due PYLUSD.

Twenty percent of agency income must be set aside for affordable housing programs. The 2009-10 allotment will pay part of the state takeaway, with a remaining balance projected to grow to $33 million by 2014.