Brea police contract: an 'unexpected' increase

A balanced budget for the fiscal year beginning Friday became a harder-to-reach goal due to what some city officials are calling an “unexpected” increase in costs for the Brea police contract, which consumes nearly 45 percent of Yorba Linda’s revenue stream.

Most of the $592,142 added cost for 2011-12 is due to higher retirement ($344,447) and worker compensation ($132,164) contributions for police personnel, according to a June 21 report by Capt. John Burks, Brea’s police liaison with Yorba Linda.

Why some City Council members were unaware of these scheduled increases is unclear, but a 5.3 percent increase in police costs to $11.6 million, not including overtime, court time and capital expenditures, will be a major topic at council’s July 12 budget meeting.

Council members will look for cuts in various areas when they examine budgets for the 2011-12 and 2012-13 fiscal years. Tax and fee revenues are expected to be right at $27 million each year, according to an estimate presented at a June 7 council session.

But based on the June 7 budget overview, $1.3 million in red ink is anticipated for 2011-12 and another $1.4 million for 2012-13, not including $3.5 million and $2.9 million for previously proposed capital improvement expenditures for the two years.

At a June 21 meeting, two council members indicated they’ll be hunting for potential cuts in the Brea department’s spending plan for Yorba Linda, even though police management “is recommending no changes to any service levels at this time,” noted the Burks report.

“The department feels that the service levels in Yorba Linda are at minimum or near-minimum levels for the effective delivery of services,” Burks wrote. However, he added that “no more than one position” from traffic, school resource or police services could be trimmed without “significant” negative impact.

Elimination of a traffic officer would save the city $162,615, a school resource officer $91,710 or a police services officer $85,195 for the year, based on figures Burks noted for “total compensation and associated operational and support costs.”

Current staffing is 23 patrol officers at $142,896 each; 3 patrol sergeants at $179,959 each; 5 traffic officers at $162,615 each; traffic sergeant at $206,142; 7 detectives at $161,216 each; school resource officer at $158,121 (city $91,710 plus school district $66,411); and 2 police services officers at $85,195 each.

The city shares with Brea a civilian investigator at $54,915 and a crime analyst at $49,969. Another 48 full- and 17 part-time positions are shared with Brea, mostly with Yorba Linda paying 49 per cent for these management and support positions.

The 23 patrol officers are the “primary first responders for all emergencies,” providing 3,406 service hours monthly, with “at least four...working in Yorba Linda at any given time and five…at peak activity times,” according to Burks.

Brea gave sworn officers a three percent salary hike starting July 1 and three percent for July 1, 2012, but officers must pay 2.25 percent of salary for retirement this year and 4.5 percent next year. Total PERS retirement charge is 42.888 percent of salary for 2011-12.

Current sworn officers can retire at age 50 with three percent of salary per year of work. Under a “second tier” plan, new employees after July 1 can retire with two percent at 50.

'Good news, bad news' on city budget situation

Here’s one of those classic good news-bad news situations: the City Council wisely has decided to return to preparing and adopting a two-year budget, but based on a first look at income and expenses, the city will operate with a deficit in each of the next two years.

For the past two fiscal years, the city has adopted single-year budgets “due to the recent economic uncertainty,” according to Finance Director Dave Christian. But now the city will plan for both 2011-12 and 2012-13, reverting to a prudent practice from prior years.

However, less pleasing is an initial budget overview offered at a June 7 council session, with expenses greater than income, leading to a deficit of $1.3 million for 2011-12 and $1.4 million for 2012-13, not including a previously proposed capital improvement tab totaling $3.5 million for 2011-12 and $2.9 million for 2012-13.

Of course, the elected council members are not likely to approve budgets with so much red ink and which would mean a 20 percent drop in the city’s reserve fund for 2011-12 and another 13 per cent dip in 2012-13, from this year’s expected $30.7 million closing.

Council will hold a special meeting on the budget July 12, at which time members are expected to slice deeply into expenses. But faced with a five percent increase in Brea police costs, to $12 million, the potential for a black-ink budget is uncertain.

The new fiscal year begins July 1 and runs through June 30, 2012. When the current fiscal year ends next week, the city will have spent $423,209 more than income, less than the predicted $504,529 deficit when the budget was adopted.

The most recent surplus year was 2009-10, but the $2 million was offset by transfers to other funds, including $2.1 million for fire and mud slide response, cutting $35 million in reserves to $32.5 million, plus $876,519 reserved for loan to Black Gold Golf Club.

Unless cuts are made to the “first look” budget overview, reserves would drop to $21.6 million, or 78 percent of budget by June 2013, again not including the Black Gold loan reserve or reserve for a Landscape Maintenance Assessment Districts contingency fund.

While expenses for the next two years are in limbo awaiting anticipated council cuts, the income side of the ledger is more predictable. Total revenues are expected to drop to the lowest level in several years, a bit more than $27 million for each of the next two years.

Major 2011-12 income will be $12.8 million in property taxes (up .6 percent from 2010-11), $5.4 million in sales taxes (the same as in 2010-11), $2.8 million in other taxes and franchise fees (down 1.6 percent) and $2.4 million in recreation fees (down 1.7 percent).

While property tax revenues have dipped some, dropping 2.5 percent for 2009-10 and 1 percent for 2010-11, sales taxes have increased $400,000 from 2009-10, up 7.7 percent.

Interestingly, 1,600 parcels or seven percent of the city’s total, still have values assessed at the 1975 base year established in Prop. 13, Christian said at an April meeting.


Christian noted in his June 7 report: “Although the reserve balances are still well above the 50 percent minimum [required by council policy], if the economy does not improve enough to cover [the] deficits, the council will need to consider significant reductions in services or capital improvement projects…to balance the budgets in future years.”

Council focuses on affordable housing

Last week’s interesting--but not surprising--3-2 split City Council vote to move forward on formalizing a controversial “draft housing element” foreshadows a renewed focus on housing density and the city’s role in providing space for lower-cost, multi-family units.

The city’s latest state-mandated affordable housing plan allows a potential 1,027 new residential units on 14 sites, with 847 on the city’s westside and 180 on two Savi Ranch locations. Density levels include 631 units at 30-units-per-acre, 141 at 20 and 255 at 10.

In opposition were Nancy Rikel and Mark Scwhing, likely to face voters for re-election in November 2012. Reluctant supporters were John Anderson and Tom Lindsey, whose terms don’t expire until 2014, and termed-out Jim Winder, who leaves council next year.

But big interest on the November 2012 ballot--aside from the city’s vast number of GOP voters eager to defeat President Barack Obama--will turn to a Measure B vote, necessary to permit rezoning of residential properties above 10 units per acre.

The city must “address the substantial constraints to housing imposed by Measure B,” according to a letter from a state official in the imposingly titled Division of Housing Policy Development of the Department of Housing and Community Development.

In fact, the official warned that rezoning on the sites identified by the city for potential higher densities must be implemented by June 2012 or the city housing element would no longer comply with state law.

However, due to election expenses, the state extended compliance to November 2012, which would only cost the city an extra $8,500 to add a Measure B vote to the general election ballot rather than an estimated $104,500 to $179,500 for earlier ballots.

“In addition to direct election costs, it is anticipated that additional city costs would be earmarked for a Measure B education program,” stated a June 7 staff report to council.

Past Measure B elections were expensive, hard-fought and decided by narrow margins.

In 2006, voters approved B, with the provision requiring a public vote on major zoning changes, by a 299-vote margin, after “no” forces raised a city record $174,150 from outside-the-city developers and real estate interests to fund the opposition campaign.

In the first public vote in 2010, voters defeated a proposal to rezone 3.2 acres at Savi Ranch to allow up to 30 units per acre by a 197-vote margin with developer National Community Renaissance spending $44,752 to promote a “yes” vote.

Should voters defeat higher-density zoning changes in a 2012 election, serious consequences might result, such as a court overturning B, lawsuits by low-cost housing advocates and a state take-over of the municipal planning processes.

Density has long been the electrified third rail of local politics and candidates suffer at the polls if they are perceived as soft on the number of dwelling units allowed per acre.

Three of the city’s five original council members were defeated in 1970 after they were pegged by opponents as “high-density supporters,” and the 1970 voter referendum on a 13-acre “apartment zone” behind what is now Henry’s Market nixed the project.

Rikel’s and Schwing’s “no” votes place them on the popular side of the issue and they’ll no doubt cast similar votes on the upcoming ordinances and resolutions to formalize last week’s split decision.

More answers about the Town Center Site Plan

My recent column with questions and answers about the City Council’s newly adopted Town Center Specific Plan drew several e-mails seeking additional information. I have edited and combined some of the queries and researched the following answers:

Q. When will the Town Center be completed?
A. According to one Specific Plan document, the project “is intended to be implemented over the next 20 years,” albeit “construction activity would not be continuous throughout the 20-year period.”

Unlike the single-developer 2004-05 Old Town proposal that died due to widespread public opposition, several different builders are likely to undertake smaller-scoped projects, and the pace of development will depend on real estate and retail marketplace forces.

Q. Where exactly will new development take place?

A. The Specific Plan covers 31 acres bordered by Imperial Highway to the west, Yorba Linda Boulevard to the south, Lemon Drive to the north and Lakeview Avenue to the east, with two parcels east of Lakeview that make up the plan’s Multi-Family District.

Four other distinct districts include Historic Town Center on Main and Olinda streets; the non-contiguous Town Center Commercial with the current library, former gas station and “gateway” property at Imperial Highway and Yorba Linda Boulevard; Civic/Cultural Arts and Public Facilities with fire station, church and potential new library, park and performing arts venue; and Cottage with homes and offices facing Lakeview Avenue.

Q. How will a redeveloped Town Center impact the local economy and employment?
A. One Specific Plan report notes, “Given the project’s relatively small size in relation to the city population and work force, the economic contribution…would not be considered significant.” Current citywide unemployment is 6.3 percent or 2,000 individuals, and the project could create 714 full- and part-time positions by build-out.

The report also foresees a “small increase in population”--estimated at 512 at build-out--“and economic activity potentially generated by the project could be considered growth- inducing,” but “such an increase is not considered substantial, since this increase does not exceed the amount of growth projected for the city.”

Q. What is possible for the long-vacant intersection at Imperial Highway and Yorba Linda Boulevard?
A. Identified as the project “gateway,” the city’s most visible location, now home to annual pumpkin and Christmas tree lots and biannual campaign sign pollution, could support a mix of retail, restaurant and office uses totaling 37,500 square feet and 26 multi-family residential units, according to a recent report by a city-paid consultant.

The consultant estimated construction costs for 30,500 square feet of retail and restaurants and 7,000 square feet of office space at $7.1 million to capture $1.1 million in annual rents. Residential units, averaging 1,200 square feet for two- and three-bedrooms, could sell for an estimated $420,000 each.

Q. What are the next steps?
A. Upcoming are staff reports on financing options, property acquisitions, infrastructure planning and construction costs and council decisions on unresolved policy matters, such as the Imperial Highway pedestrian bridge, disposition of city-owned properties and the feasibility of a performing arts venue and associated parking structure.

Big council decision: new or remodeled library?

One major issue awaiting final determination by the City Council is the future of the city’s public library—an essential institution that has helped fulfill this community’s educational and cultural needs ever since the library’s 1913 inaugural year.

The matter is simply stated: should the library’s existing building be remodeled and expanded or should a new, larger facility be located elsewhere in a revitalized Town Center?

An answer is tied into complex financial considerations, since a new structure designed to meet recommended space requirements and the community’s service needs would cost an estimated $30 million to build and outfit.

Not every council member has addressed the question in public, but a majority appears to favor a larger library on a different Town Center site—if enough money is available from the library’s reserve fund, a potential bond sale with identified reimbursement sources and proceeds from selling the current library property.

At a recent meeting, council members heard, questioned and discussed recommendations from a consultant hired to explore the issue and who delivered a 145-page library “Space Needs Assessment and Building Program” report with a 46-page appendix.

Basically, the detailed study, which gathered public input from a “statistically valid” 515-response survey, 49 focus-group participants and additional interviews, cited a need for a 50,820-square-foot facility to serve the city’s 70,000 build-out population, to replace the current 28,350-square-foot structure, last renovated in 1992.

Of course, with 335,798 visitors logged during the most recent full fiscal year, averaging more than 1,000 each day the facility is open, the library easily holds the record as Yorba Linda’s most-utilized city-owned building.

The current collection of about 160,600 items--expected to grow to 210,000 by 2030--is 86 percent books and 14 percent audio-visual materials and had an annual circulation of 815,000 last year. Interestingly, children’s material is checked out more than three times as much as adult materials.

A new building, with from 153 to 204 parking spaces replacing the existing 83, and landscaping would cost about $20 million to design and build. Another $10 million would fund furniture, fixtures, equipment, technology, public art and contingencies.

The library has a property tax allocation due to 71 years as an independent district before the city took control in 1985 and $10 million in reserves. A bond sale could be paid back by the library fund and pass-through payments from the city-run Redevelopment Agency, totaling $449,315 last year.

Another study by a consultant hired to prepare a market analysis of city-owned Old Town property has reported that 20,500 square feet of retail and restaurant usage, developed at a cost of $4.1 million, could produce $664,000 in rents each year from the library site.

Estimated rents of $36 per square foot “are much higher than the asking rents at other properties in the city; however, the site offers excellent visibility from major arterials,” including the busy Imperial Highway, the consultant noted in a 68-page specific study of development possibilities in the downtown area.

The city-owned site is 81,560 square feet, including the fenced-in, former gas station property, currently undergoing extensive remediation for underground contamination.