Yorba Linda responds to Grand Jury concerns on retiree benefits, animal shelter, dormant authority

Yorba Linda – along with all other governmental entities in the county – must respond within 90 days in writing to the findings and recommendations from the Orange County Grand Jury that are applicable to city or agency operations.

This city's most recent responses are to eight findings and eight recommendations in three Grand Jury reports dealing with unfunded retiree health care obligations, the county animal shelter and issues with joint-power authorities.

One key report impacting Yorba Linda deals with substantial unfunded retiree healthcare benefits in 32 responding cities and agencies in the county totaling more than $1 billion.

The Grand Jury says Yorba Linda ranks 12^th in total retiree health benefit liability at $18,725,000 and third in the annual cost of benefits as a percentage of general fund expenditures at 6 percent or $1,583,193.

And the city is eighth in unfunded liability per resident at $292 in a $1 to $694 range and third in required annual contributions as a percentage of payroll at 22.95 percent, based on a covered payroll of $7,619,000 and contributions of $1,748,362.

But significantly, Yorba Linda is one of 21 cities that haven't established an account to help fund retiree health care liabilities. The county has socked away $116 million-plus and Anaheim more than $67 million in such accounts, according to the Grand Jury's report.

Yorba Linda officials say they “will begin to evaluate the priority of funding of this obligation during the next budget cycle,” and evaluate “the need to contribute something towards the unfunded liability during the next budget cycle.”

A second report recommends Yorba Linda and 17 other contracting cities “review their long-term commitment to be part of Orange County Animal Care as opposed to pursuing animal-care opportunities on their own or joining with neighboring cities that have shelters.”

The 74-year-old county shelter, notes the Grand Jury, “is rundown, overcrowded and unable to sustain” its “primary responsibility,” the “compassionate care of the county's companion animals.”

This city says it “has and will continue to evaluate” the county entity “as its service provider,” but the recommendation requires further analysis of benefits, costs and schedule estimates.

A third report focuses on joint-powers authorities, including this city's Public Finance Authority, created in 1989 and associated with the now-disbanded Redevelopment Agency. The Grand Jury says the authority should be eliminated due to “the potential for misuse or obfuscation of public funds.”

The city's response: “Over the next several months the Yorba Linda Public Finance Authority will confer with its legal counsel to determine whether its existence should be terminated and what the necessary steps are to carry that out.”

The authority “is currently inactive with no assets, liabilities, revenues, expenditures or reserves,” according to the city.

Council overrules landscape district protests

One of Yorba Linda's more controversial issues – who should pay for what in the Landscape Maintenance Assessment District – continues to draw protests, with many residents challenging the annual fees levied on property owners for “special” landscaping benefits.

But – again this year – the City Council overruled all protests regarding the assessments and forwarded a list of payments due from city property owners for nine arterial (major street) and 46 local landscape zones to the county for collection with 2015-16 property taxes.

The list sent to the county also included fees for three traffic signal zones, a citywide arterial street lighting zone and a non-contiguous local street lighting zone. All together, the fees will total $5.7 million, plus a $1.1 million “general benefit” contribution paid from city funds.

However, despite a 1.3 percent consumer price index increase from the prior year, the $6.8 million total is still short of the some $9 million in expected expenditures for 2015-16, so the shortfall subsidy also will come from the city's general fund.

Many of the protests concern one or more of the local landscaping zones, which now total 46, up from 12 four years ago, although the zones cover the same area. And some residents say the city should not maintain landscaping with no public benefit and on private property with no easements.

“Special” benefits are defined as “aesthetic benefits to the properties within each respective zone and a more pleasant environment to walk, drive, live and work,” noted the latest report from a city-hired consultant that handles many of the landscape district's legal requirements.

“General” benefits are described as “limited tree management, weed abatement, rodent control and erosion control services for the various landscape easement areas,” with a $752 per acre cost for flat or moderately sloped areas and $1,073 per acre for slope landscaping.

The city-paid “baseline servicing, unlike the enhanced aesthetic services funded through the district assessments, would provide benefits to the general public and to the properties both within and outside of the specific benefit zones,” according to the consultant.

Of the city's total 21,142 single-family homes and 1,083 multi-family units, 11,091 and 524, respectively, are within the 46 local landscape zones; single-family owners pay from $46.30 to $479.65 for “special” benefits, depending on the zone.

All properties are in one of the nine arterial landscape zones (single-family owners pay from $43.87 to $52.89). All are in the arterial street lighting zone (single-family: $1.40), and most are in the local lighting zone (single-family: $18.08) and one of the three traffic signal zones (most single-family: $6.26).

Fees for multi-family units are 20 percent less and vary for mobile homes and nearly 1,500 acres of other developed, school, park, golf course and vacant land.    

No 'win-win' label for water cost decisions

Yorba Linda's elected leaders label many of their decisions “win-win” for the community, but neither City Council members nor water district directors are placing that tag on water-use changes resulting from the state's long-term drought.

In fact, there's never been a situation more “lose-lose” than the upcoming rate hike decision facing the Yorba Linda Water District directors, slated for a Sept. 17 meeting at 6:30 p.m. at district offices, 1717 E. Miraloma Ave., Placentia.

To recoup revenue lost because residents are using 36 percent less water, directors plan to raise the “basic service charge” that varies based on meter size.

More than 80 percent of residential ratepayers have one-inch meters, with the current $16.77 monthly charge increasing to $41.57. About 15 percent have three-quarter- or five-eighth-inch meters, with the $10.06 charge rising to $26.29.

Ratepayers irrigating with two-inch meters, including the city, schools and some homeowner associations, will see a boost from $53.66 to $125.61, and the fewer one and one-half-inch meters will jump from $33.54 to $79.77.

While directors are only setting one increase to start this year, opponents see bigger boosts in future years, which will occur if more state restrictions are imposed or if the district's water and energy suppliers raise prices.

Already the district is drawing the maximum allowed 70 percent of its water supplies from the groundwater basin managed by the Orange County Water District. Groundwater is two-thirds cheaper than imported water.

Increases can be defeated if a majority of about 24,000 ratepayers file written protests before the close of Sept. 17's public hearing. Protests must include an address or parcel number and be signed by the property owner. Verification of a large number of protests could take some time, with results not available at the meeting.

Some directors are upset over statements they've hiked their own salaries, but their last raise was in 2003, when stipends were set at $150 per meeting, with a maximum of 10 per month.

Employee increases, officials say, were negotiated before the mandated cuts. They note pay is “lower than the norm in the industry in Orange County,” adding, “We are having trouble retaining our experienced staff as they quickly gain experience and leave for other agencies.”

Directors also receive from $8,963 to $15,124 in medical, vision and dental benefits, except Phil Hawkins, who recently dropped his coverage. Mike Beverage, in office since 1992, receives a CalPERS pension contribution, $1,560 for 2014, according to the district's public information officer.

Sadly, nobody sees this as “win-win” – water officials say the increases are “tied to the penny to the 36 percent reduction,” and, if not implemented, district solvency is “questionable.” And based on recent statements from state officials, the 36 percent cut looks to be permanent.  

Measure JJ: Latest on council salaries, benefits

Remember Yorba Linda's Measure JJ on the November 2014 ballot?

The wording was simple: “Shall the ordinance prohibiting City Council members serving future council terms from receiving pension benefits and health care benefits be adopted?”

And the “yes” vote was overwhelming – 16,061 to 2,714 “no” – but the matter became a political football both during and since last year's recall and regular council elections, as candidates and supporters argued endlessly over who would and who wouldn't be affected.

Now with the law on the books for nine months, I asked city Finance Director Dave Christian to update salaries and benefits for sitting and retired council members, including those who participate in the state Public Employees Retirement System (PERS).

Here's Christian's response, which clarifies who receives “cafeteria” and pension benefits:

“All five of the council members receive a monthly stipend of $500, a monthly phone allowance of $36 (except Gene Hernandez, who opted out) and a monthly car allowance of $100. The monthly stipend will increase to $525 per month for councils seated on or after Dec. 3, 2014 (the current council was seated on Dec. 2, 2014).

“Tom Lindsey, Mark Schwing and Craig Young are all members of PERS, and as such contribute six percent of their stipend into the system. While Measure JJ eliminated retirement benefits for newly elected (or re-elected) council members going forward, Tom was already a member of PERS, and as such they have dictated that he remain a member, requiring contributions from both him and the city as normal.

“However, Tom has given the city a signed statement indicating that he will not file for retirement benefits from PERS upon his separation from service with the city, thus complying with the intention of Measure JJ.

“Council members receiving the cafeteria plan benefit of $1,095 per month are Gene Hernandez, Mark Schwing and Craig Young. Each have elected to have this amount deposited into a deferred compensation account in lieu of receiving health insurance benefits. Peggy Huang and Tom Lindsey do not receive this benefit as a result of Measure JJ.

“The city contributes 21 percent of pay into PERS for the three council members mentioned above (Lindsey, Schwing and Young), who contribute six percent themselves. The only council member receiving dental/vision benefits from the city's self-insured plan is Mark Schwing. The administrative fee remains the same at $9.20 per month. All five...are included in the Employee Assistance Program at a cost to the city of $3.02 per month each.

“The city currently pays 95 percent of the medical insurance premium for retired council members. This will increase to 100 percent in January 2016 (subject to a ceiling of $1,167 per month). The new monthly amounts for the three retired council members are Barbara Kiley, $322.50; Hank Wedaa, $350.32; and Gene Wisner, $644.99.”