Local elected officials reveal gifts received

Once each year Yorba Linda's elected officials--City Council members, school trustees and water board directors, along with the top-level managers and consultants they employ--are required to file documents listing economic interests that could affect their decision-making.

State-mandated disclosures include investments, property interests, income sources and business positions. Filers also must report gifts they've received from sources that might benefit from decisions they make in their public positions.

This year, 229 “statements of economic interests” were filed at the city, Placentia-Yorba Linda Unified School District and Yorba Linda Water District by an April 1 deadline. The filings aren't currently online but can be viewed at each agency.

My review of the statements shows a smattering of stock holdings and outside business interests listed by fewer than 20 percent of filers, along with family residences and some rental properties they own.

Three city and two water district management employees reported gifts from companies that conduct business with the agencies. None were noted on any of the 99 school district forms.

Gifts can't exceed $440 in value per year from a single source. Items are self-reported by recipients, and failure to comply with regulations could result in a $5,000 fine per violation.

Of 102 city filings, City Manager Steve Rudometkin listed a $65 golf tournament fee from a land developer, Public Works Director Mark Stowell a $180 dinner/dance from a consultant and Community Development Director Steve Harris a $150 golf entry fee from a consultant.

Of 28 water district filings, Acting General Manager Steve Conklin listed $100 baseball tickets and two $15 lunches from consultants and Finance Director Steve Parker a $180 dinner and dance, $180 Dodger tickets, $250 Angel tickets and $345 Red Sox tickets and dinner from a securities firm, bank and two meter companies.

In addition to yearly reports, new employees must file statements when hired, including the new City Manager expected on board soon. Rudometkin, who retired in December, is now working under a six-month contract

Application deadline is May 10, with the search handled by consultants who placed ads in professional publications listing an annual salary of $200,000 to $220,000 “with executive-level benefits and PERS retirement.” Rudometkin was paid $199,000.

Candidates must show “a true passion for public service,” ethical, transparent and engaged leadership, strong financial skills, a record of success with economic development and land use issues and the ability to “maintain the current high morale among city staff,” the ad stated.

Meanwhile, Rudometkin, a longtime resident who began his career as a recreation aide at 19, says he “loves serving the public” and might reactivate his consulting firm. Some community members have expressed hope the consensus-builder will consider a run for council in 2014. 

Past council members still receive fringe benefits

Relatively small yet surprising expenses tucked away in each year's city budget are payments made to provide medical, dental and vision benefits for former City Council members and their dependents, expenditures that will cost taxpayers $13,746 this year.

And the city cost for medical insurance premiums for past council members participating in the Public Employees Retirement System Health Plan will increase for three years until full coverage is attained.

Currently, the city's retiree health plan pays up to 85 percent of medical insurance premiums or 85 percent of $1,167, whichever is less. “The 85 percent will increase by 5 percent in 2014, 2015 and 2016 until it reaches 100 percent,” according to Dave Christian, city treasurer and finance director.

In response to my query, Christian stated that three former council members--Barbara Kiley, Hank Wedaa and Gene Wisner--collect the medical insurance benefit, and one--Wedaa--has dental and vision coverage provided under the city's self-insured plan.

The monthly city-paid premium contributions are $276.88 for single coverage for Kiley, $314.87 for single coverage for Wedaa and $553.76 for single and one dependent coverage for Wisner, Christian noted.

Kiley, elected to two terms, served eight years 1992-2000; Wedaa, elected to eight terms, served 30 years 1970-1994, 1996-2000 and 2007-08; and Wisner, appointed to an unexpired term and elected to four terms, served 15 years 1983-1992 and 1994-1999 before resigning due to a move out-of-state.

In 1995, after 28 years of taking only a small stipend, a past council added the five elected leaders to the same benefit and retirement package supplied management employees, on a 3-2 vote, with Kiley, Wisner and Mark Schwing in favor and John Gullixson and Dan Welch opposed.

State law says health benefits for council members can't exceed benefits provided management staff.

In a related matter, a reader chided me for not including in last week's column on council salaries and benefits all income members receive. I omitted pay earned by serving on regional agencies because the stipends are funded by taxes and fees collected countywide, not just from Yorba Linda taxpayers.

But here's a rundown of per-meeting pay: $212.50 to John Anderson at the Sanitation District, $120 to Schwing for the toll roads board, $100 to Gene Hernandez at the Fire Authority and $100 to Craig Young at Vector Control. The boards usually meet monthly, but some allow additional sessions.

Appointments are made in December by the mayor with council concurrence. Hernandez, Schwing, Young and Tom Lindsey were named to non-paying positions on 11 other bodies.

And an Employee Assistance Program cited last week should be explained. Christian described the benefit available to council members and city employees as “an overall physical and emotional well-being program offering counseling and personal services in a wide variety of areas.”

Council boosts their fringe benefit package

Around April each year, I ask City Treasurer and Finance Director Dave Christian for an update on the salaries and fringe benefits paid to City Council members.

I'm especially interested in changes in benefits collected by council members because the fringe package totals more than twice the $500 monthly salary and mirrors benefits paid to full-time employees.

Since my report last year, three council members – John Anderson, Tom Lindsey and Mark Schwing – who didn't accept a previous increase in the “cafeteria plan” portion of the fringe package began taking the full amount.

“Last year [the] three were at $833, even though the approved amount was $945. However, during this past year, all three requested to be increased to the $945,” Christian noted. The “cafeteria plan” portion recently jumped 7.9 percent to $1,020 monthly retroactive to Jan. 21 and will increase another 7.3 percent to $1,095 next Jan. 1.

Although some council members refer to the $1,020 monthly payment as a medical or health benefit, the proper term is “cafeteria plan,” as described in the text of a unanimously adopted resolution that set compensation for this and next year.

According to the resolution, the benefit is “utilized first to pay health insurance premiums; any residual amount may be applied to the...member's deferred compensation.” Currently, all five apply the full amount to deferred compensation, Christian noted.

Deferred compensation is placed in 457 (b) plans that resemble 401 (k) plans used by many private sector workers, but with some advantages related to disbursement.

In addition, stated Christian, “All council members except [Gene] Hernandez have a monthly PERS contribution of $123.21 made by the city on their behalf,” and starting July 1, “each of those council members will contribute 2.5 percent of their stipend to PERS, thus lowering the city's contribution by $12.50 each per month....”

PERS, the Public Employees Retirement System, under a “2 percent at 55” formula, will pay a monthly retirement allowance of $80 to a two-term councilperson and $120 to a three-term councilperson, with annual cost-of-living increases, after age 55 for life.

Hernandez, already retired under PERS, doesn't receive the city's dental and vision benefit, which is provided the others “on an as-needed basis,” stated Christian. The city pays $9.20 monthly per person for self-insured dental and vision plans.

Interestingly, an Employee Assistance Program, described by Christian as “an overall physical and emotional well-being program, offering counseling and personal services in a wide variety of areas” is available to council members at a city cost of $3.02 monthly per person.

Hernandez, who pledged in the 2012 election to forgo salary and benefits, says he's donating his salary and intends to donate his deferred compensation to charity. He isn't taking the $36 monthly phone allowance but will accept the $100 monthly auto allowance. 

Yorba Linda economy shows signs of an upswing

One sure sign of a recovery in local economic conditions is an increase in property and sales tax revenue and other development-based taxes and fees remitted to municipal governments.

By that criteria Yorba Linda's economy is on a slight upswing, showing improvement over tax and fee declines recorded after the history-high revenue achieved for the 2007-08 fiscal year.

And importantly, higher tax receipts combined with lower operating expenses, are expected to result in a budget surplus when the city closes the books on the current fiscal year on June 30

Previously, city officials anticipated using “just a little over” $700,000 from the reserve fund that was built up during better economic times, but the current estimate is for an $880,000 surplus, according to a report from the city's treasurer and finance director, Dave Christian.

Additional expenditures could reduce the surplus to $310,000, Christian noted, but even that lower figure would leave the city with $42.8 million in reserves, about 158 percent of a year's worth of general fund expenses, exceeding council's current policy of a 50 percent reserve.

Of course, the general fund budget, which pays for the city's day-to-day operating expenses, doesn't include a separate capital improvement budget. The latter took $1.6 million from the general fund for this fiscal year, which resulted in a $720,000 hit to reserves.

Interestingly, Christian noted the general fund ended the 2011-12 fiscal year “much better than anticipated as well.” Last year's expected $3.1 million deficit turned into an $800,000 surplus, due to $1.5 million in increased revenues and $2.4 million in reduced expenditures.

Income from property taxes is the city's largest single source of revenue, and receipts through December trended “higher than expected,” Christian reported. Although most of the increase is due to the taxes previously siphoned to fund the city's now-defunct Redevelopment Agency, even excluding this $680,000 boost, revenue is expected to be “slightly better than budgeted.”

A projection for this year's sales tax revenue also is up, by “almost” 3 percent this year, with another 3.5 percent gain expected next year. But, as Christian noted, that's down nearly 9.5 percent from the 2007-08 banner year.

Franchise fees – paid by residents in cable, trash hauling and other utility bills – with other income, such as business license, property transfer and hotel-motel occupancy taxes, are “expected to remain stable,” Christian reported. Vehicle license fee revenue was once included in this category, but that income was eliminated in 2011-12.

However, one key economic indicator, revenue from building permits and plan check fees,

is up significantly, with this year's income “trending around 60 percent higher than the prior year,” Christian noted.

Interest income is down 85 percent the past five years “and will continue to drop as higher yielding investments are being called, forcing the city to reinvest at lower rates throughout the year,” Christian stated.

Among the cost savings for this year's budget are $150,000 from unfilled positions and $560,000 from the early implementation of the contract with the Orange County Sheriff.