Teachers, management on 'same page': no pay increase for Placentia-Yorba Linda employees

Agreements reached with the two unions representing most employees in the Placentia- Yorba Linda school district don't include salary increases for the just-completed 2016-17 school year, a plight attributed to California's four-year-old Local Control Funding Formula.

And prospects for pay hikes in future years don't look promising, according to Linda Manion, president of the Association of Placentia-Linda Educators, which represents district teachers in negotiations with school management.

Manion told me a three-year projection of state funding “is not hopeful at this time,” since the provisions in the funding formula result in less money for Placentia-Yorba Linda schools than many surrounding districts.

She said that teachers and administrators have been lost to other area districts due to a wide discrepancy in salaries offered, while noting the teachers' organization agrees with the district that “the money is not there” for pay increases.

That accord is unusual, since teacher and management perspectives on school finances are often at odds, but Manion said the district and teacher association “are on the same page” as both are contacting state legislators and other officials to bring fairness to the funding formula.

One small bright spot is that the district will pick up all rate increases for medical, dental and vision benefits for eligible employees in the 2017-18 school year.

The one-year cost for 989 participating certificated employees will be $67,750 and for 452 participating classified employees $21,500. This year's total cost for the health benefits for certificated and classified employees was $18.1 million and $8.3 million, respectively.

The Placentia-Linda Unified Managers group with about 130 members also received the zero percent salary increase for the past year and small benefit increase for next year. Each action was approved on a 5-0 vote by the district's elected trustees at a June 20 meeting.

An added item in the classified employee contract is that salary discussions will begin within 10 days of a presentation to trustees of 2017-18's first interim budget. District spokesperson Alyssa Griffiths told me that budget is due at the county Dec. 15, with data as of Oct. 31.

A three-year certificated contract ended June 30, so negotiations are expected to begin on a new pact the coming school year. The three-year classified contract runs into 2019.

Teachers will begin the next school year with the same wages earned for 2015-16: from $49,649 for a first-year teacher with a full California credential to $102,774 for a 30-year veteran with specified advanced education credits.

For 2016-17, the Fullerton Joint Union High School District paid credentialed first-year teachers $55,585 and 23-year veterans with advanced credits $112,679. The K-8 Fullerton School District range was $54,415 for a first-year teacher to $111,906 for a 24-year veteran.

Interest earnings on Yorba Linda investments increase under private-sector management

A seven-month-old agreement with a private-sector asset management company appears to be paying off big for Yorba Linda in the form of higher interest earnings on a major portion of the city's investment portfolio – jumping 40 percent so far on an annualized basis.

City Council members were advised of the growth earlier this month in a report from Finance Director Scott Catlett, who put the total amount of the initial annualized increase at $224,000.

According to Catlett, the portfolio was earning an average interest rate of 0.8 percent at the end of February, before the PFM firm, hired in December, assumed management on March 2. By March 31 the average rate was up to 1.44 percent and by April 30 up to 1.47 percent.

Preliminary figures for the end of May indicate an increase to 1.49 percent. About $40 million was under PFM's management in March and April and close to $45 million by the end of May.

“The focus of the city's investment strategy remains on the safety of the city's funds, but with more active management there is a significant potential for increased interest revenue to the city,” Catlett stated.

The city had a bit more than $101 million in cash and investments on April 30: $19.6 million in cash and money market funds, $17.6 million in the state's Local Agency Investment Fund, $24.6 million in Redevelopment Agency bonds and $40 million in PFM-managed investments.

The PFM-managed investments were earning from 1.36 percent to 1.96 percent interest and include stakes in U.S. Treasury bonds and notes, U.S. government securities, corporate notes, commercial paper and certificates of deposit for the April average of 1.47 percent.

The non-PFM managed holdings earned from 0.39 percent to 0.82 percent in April. Excluding the bond funds the city holds as the successor to the former Redevelopment Agency, the city's average portfolio for investing has ranged from $71 million to $77 million since February.

Catlett noted that with a portfolio balance of some $70 million and an average interest rate of 0.8 percent, the city could expect $560,000 in annual earnings “in an environment with static interest rates.”

But with an overall average of 1.12 percent for the city's portion of the portfolio and the PFM-managed portion, the annualized interest earnings would be $784,000, or 40 percent higher.

And “average interest earnings are anticipated to continue to rise in the future,” Catlett stated.

Expertise provided by PFM comes at a cost, but as Catlett noted, the city's interest earnings have already increased by considerably more than the $41,000 annual cost of servicing $45 million in assets.

City securities are not held by PFM but are in “an investment safekeeping account at Bank of New York Mellon,” Catlett stated. PFM has trading authority, but the securities remain in the city's name and under city control, with earnings deposited directly to a city account.

Yorba Linda enters final year of five-year contract with Sheriff's Department by paying 4.2 % more

Yorba Linda will enter the final year of the city's first five-year contract with the Orange County Sheriff's Department on July 1 by agreeing – on a 5-0 City Council vote – to pay a 4.2 percent increase in cost to $10.44 million to continue the existing level of service and staffing.

In the same vote, council members directed city management staff to begin discussions with the policing agency to extend the current contract for five more years through June 30, 2023.

The city ended a 42-year relationship with the Brea Police Department after a contentious nine-hour meeting in April 2012 with a 3-2 council vote and later approved a five-year pact with the county to begin July 1, 2013, although services began six months early on Jan. 5.

Assistant City Manager David Christian reported to council that a recent assessment “shows adequate staff for now,” but a reappraisal will be needed due to Town Center development, a steady increase in calls for service over the past four years and increasing population.

A new provision in the contract allows the city manager and county executive officer to approve changes that have “a fiscal impact of one percent or less” without returning to the council or board of supervisors for approval, Christian noted.

“This is intended to expedite and simplify minor changes...that may come up from time-to-time,” stated Christian, adding that staff “would anticipate keeping the council fully appraised of any amendments and would reserve the right to take changes of less than one percent to the council if warranted.”

The contract calls for services to be provided by 40 full-time equivalent positions and an added 12.9 regional and shared staff personnel. The latter includes traffic and auto theft positions and a motorcycle supervision sergeant.

Regular staffing includes a lieutenant (the city's chief of police services), four patrol sergeants, a half-time administrative sergeant, a half-time investigative sergeant, three investigators, one investigative assistant, 21 patrol officers and three motorcycle officers.

Also: one crime prevention specialist, two community service officers for parking and traffic enforcement, a community support deputy, school resource officer and one office specialist.

More than half of the total contract cost, $5.9 million, is attributed to the costs of providing the 21 patrol deputies and the three motorcycle deputies, at $245,351 for each of the former, and $250,688 for each of the latter. Cost for the lieutenant is $358,667.

Unions representing the deputies and managers negotiated a 1.5 percent cost-of-living raise effective July 7, with another 1.5 percent effective in January. Health insurance costs jumped 4 percent to $1,281 monthly for safety personnel.

The department serves 13 of the county's 34 cities and unincorporated county territory, including Yorba Linda's two county islands, Country Club and Fairlynn.

Yorba Linda's Redevelopment Agency bonds to be refinanced to lower interest costs; Y.L. Water District $35.5 million portfolio earns interest

Two interesting money matters to report this week:

First, Yorba Linda is still dealing with finances related to the city's Redevelopment Agency that was dissolved by state mandate five years ago after 29 years of collecting the increases in property taxes resulting from higher land values in areas designated for economic renewal.

Latest action involves refinancing bonds sold in 1993, 2005 and 2011 for an anticipated $1.63 million in savings each year through 2031, “an overall 37 percent reduction in debt service as compared to the existing payment schedule,” reported Finance Director Scott Catlett.

Issuing refunding bonds has been approved by the City Council and a separate oversight board and is now awaiting approval from the state Department of Finance, expected next month. Savings includes unspent portions of the agency's final bonds that were approved for sale in 2011.

Interest rates are expected to drop from a current 5 percent to 6.35 percent range to 3.5 percent and 3.8 percent for $42.6 million in outstanding bonds. Some $6.8 million in 1993 and 1998 bonds “did not meet the savings requirement to justify a refinancing,” Catlett stated.

Savings “will accrue to all of the taxing entities that benefit from excess tax increment generated by the former redevelopment project areas,” Catlett noted. Entities include the city, school and water districts and several county agencies.

Redevelopment areas once included 2,640 acres in the Savi Ranch business development and Hidden Hills residential on the eastend and 344 acres in the Town Center and Imperial Highway commercial zoning on the westside.

Second, some $35.5 million in cash and the investment portfolio held by the Yorba Linda Water District is earning an average 1.05 percent yield, according to a report viewed at a May 23 meeting by the district's five elected directors.

April interest on the portfolio was $43,533, with the January through April earnings totaling $279,289, according to a report prepared by the district's senior accountant Kelly McCann.

Most of the money is in two pooled investments: $18.9 million with the Investment Trust of California, created by the California State Association of Counties and League of California Cities, and $5.5 million with the state treasurer-administered Local Agency Investment Fund, for a total 1.15 percent return.

Other earnings: 0.13 percent for $3.1 million in US Bank and Bank of the West money market accounts; 1.05 percent for nearly $1 million in Federal Home Loan Bank securities; and no interest on about $575,000 in Wells Fargo Bank and Pershing checking accounts.

And some $6.4 million is held in certificates of deposit at 27 different banking institutions, earning an average 1.22 percent interest. Most accounts are just under the $250,000 insurance threshold, with interest rates ranging from 0.74 percent to 2.43 percent and maturities from this year into 2022. 

Nixon's Community Development Block Grant program has long benefited Yorba Linda

Yorba Linda has long benefited from one of President Richard Nixon's signature ideas – the Community Development Block Grant program that allows federal funding for projects that provide assistance for low- and moderate-income areas and income-qualified households.

Although Nixon left office in 1974, and the program was implemented in 1975 during Gerald Ford's presidency, Nixon had proposed combining several programs under one umbrella to streamline federal assistance and reduce administrative expenses.

Block grants won bipartisan support in Congress because liberals liked addressing poverty and urban blight, while conservatives favored private investment, reducing the role of the federal government and returning tax dollars to local communities.

Yorba Linda has received $3.6 million during the past 15 years, although the amount of each year's grant has dropped nearly 70 percent since 2003.

This year's total is expected to match last year's $195,000, when the federal Housing and Urban Development Department releases the coming fiscal year's allocations to 1,209 participating governmental bodies.

In a report to the City Council, Pam Stoker, the city's economic development manager, explained that county officials asked cities “to begin the application process, so that there will not be a delay in awarding grants for the start of the fiscal year (July 1).”

The federal housing department determines grant amounts by using several measures of community need: population, extend of poverty, housing overcrowding, age of housing and population growth lag in relationship to their metropolitan areas, with citizen participation in grant use planning required.

The council unanimously approved the allocation of funds as follows:

--$50,000 in rehabilitation grants to income-qualified homeowners for general property improvements and repairs to meet local codes, standards and ordinances in the neighborhood improvement program through the city's community preservation division.

--$40,000 for Americans with Disabilities Act improvements in public areas for retrofitting about 12 of the 40 ramps at critical intersections that need work to meet ADA standards (about $3,400 per ramp).

--$37,000 for ADA improvements in private areas to replace two obsolete elevators at the 52-unit low-income Evergreen Villas senior community on Yorba Linda Boulevard at Avocado Avenue, east of Imperial Highway.

--$29,250 for operational costs related to the weekday senior lunch program at the Yorba Linda Community Center in the city's senior nutrition program (15 percent of total grant). Meals are served at 11:30 a.m., except at 11:15 a.m. Wednesdays, for a $3 suggested donation ($5 for under age 60).

--$39,000 for program administration, including overall development, management, coordination and monitoring, based on a maximum allowable 20 percent of the total grant, with equal shares going to the city and the county.