Best in Yorba Linda in 2017

Here's my annual look at Yorba Linda's “best” – with some “less-than-best” – for 2017:

Best example of farsighted thinking: City Council and water district actions to shrink unfunded pension and retirement health liabilities help secure the benefits and save future higher costs.

Best decision by Placentia-Yorba Linda school officials: Trustee areas will benefit students and parents by creating the potential for electing a board with more geographic and ethnic diversity.

Best literary bargain: The Friends of the Library $2 per bag sale each September has residents loading up on quality hardbacks, paperbacks, children's books, DVDs, records and other items.

Saddest service cutback: Orange County Transit Authority decision to drop bus routes through Yorba Linda with no forceful reaction by local leaders increases student, worker cars on streets.

Most interesting political development: A three-man slate that won water district elections last year (Brooke Jones, Wayne Miller, Al Nederhood) has differed this year on some fiscal issues.

Best safety decision: A new city ordinance regulating drone takeoff and landing near special events and emergency response situations adds a satisfying layer of protection for residents.

Best fiscal decision: A new city policy calls for two “deep dive” special audits each year to eye credit card use, surplus property disposals, overtime, contract administration and other topics.

Best new test records: 4,070 AP and 530 IB tests given at Placentia-Yorba Linda district high schools with 83.4 and 95 percent pass rates, respectively, earned college credits for students.

Best example of breaking glass ceilings: First female principals were appointed at Valencia (founded 1933) and Esperanza (founded 1973) high schools: Olivia Yaung and Gina Aguilar.

Worst news for schools: The state's four-year-old Local Control Funding Formula again allows less money for the Placentia-Yorba Linda Unified School District than most districts in the area.

Latest twist in city's unique liquor history: Yorba Linda's longtime ban of alcohol service at charitable bingo games was overturned, putting city on a par with surrounding community.

Best budget news: Property and sales taxes, the city's top two revenue sources, continue to exceed projections presented by city staff in budget adoptions, building the city reserve fund.

Best example of trust in Sheriff's Department: When council voted a 4.2 percent increase in policing costs to $10.44 million, members directed staff to begin negotiating a new five-year contract.

Most unique honor: Although the Nixon family's dog, “Checkers,” never set paw in Yorba Linda and is buried at New York's Bide-a-Wee pet cemetery, the city dog park was named for the pup.

Happiest news for taxpayers: The PFM Asset Management firm has been contracted by the council to help manage the city's investment portfolio, resulting in improved interest earnings.  

Switch to voting by trustee areas nearly complete in Placentia-Yorba Linda Unified School District

Approvals from two more agencies are needed before the Placentia-Yorba Linda Unified School District – also including students from portions of Fullerton, Brea and Anaheim – switches to electing trustees from five specific areas rather than the current district-wide system.

The district's goal is to have all approvals in place by the end of March to allow plenty of time for potential candidates to make plans before the county Registrar of Voters begins accepting nomination papers for open trustee positions in mid-July.

One approval must come from the 11-member Orange County Committee on School District Organization, expected at a January meeting. Placentia-Yorba Linda trustee Karin Freeman is the committee's vice chairperson.

The other approval needed is from the California Board of Education and is in the form of a waiver from a requirement that a trustee area election process and establishment of trustee areas be approved by district voters. Action could come at the board's March 14-15 meeting.

Two positions, now held by Freeman and Carrie Buck, will appear on the November ballot. If the trustee area system receives the final approvals, candidates must reside in the area they seek to represent, with ballots cast by registered voters living in the area.

The Placentia-Yorba Linda trustees adopted five voting areas on a unanimous vote at their November meeting. Trustee areas 4 and 5 are scheduled for the Nov. 6 ballot, with areas 1, 2 and 3 slated for the 2020 ballot.

Buck lives in area 5, while Freeman resides in area 4. Both are Yorba Linda residents. Carol Downey, a Placentia resident, and Eric Padget, a Yorba Linda resident, both reside in area 1, while Judi Carmona lives in area 3. No incumbent trustee currently lives in area 2.

Portions of Yorba Linda, Placentia and Anaheim are in four of the areas, parts of Fullerton in two areas and the district's small portion of Brea is fully contained in one area. Each trustee area has attendance areas from two or more high schools within the trustee area boundaries.

All school attendance areas remain as is, not affected by the creation of trustee areas.

Population ranges from 31,164 in area 2 to 32,357 in area 3, based on the 2010 census, and voter registration ranges from 8,115 in area 2 to 20,790 in area 3, based on November 2014 figures. Language fluency, described as “speaks English less than very well,” ranges from 8 percent in areas 3 and 4 to 29 percent in area 2, based on a federal census bureau survey.

Freeman is the district's longest-serving trustee, first elected in 1989. Downey has served since 2000, Padget since 2008, with Buck and Carmona first elected in 2010. Only trustee not from Yorba Linda or Placentia has been Robert Harkness of Anaheim in the 1960s-70s.

The change from at-large voting to trustee areas is partly due to potential costly litigation for violating the state's Voting Rights Act of 2001.

Yorba Linda Water District directors focus on pension, post-retirement unfunded liabilities

Happily, there's more good news to report on Yorba Linda's pension front – for both the local government workers who are hoping to someday collect promised benefits and the residents who help fund the retirement plans through taxes, rates and fees.

My Dec. 1 column noted the city plan to amortize an unfunded pension liability over 20 years instead of 30 years by making extra payments to the California Public Employees Retirement System and pre-funding a portion of retiree health benefits with payments to a trust account.

Similar action has been taken by the elected Yorba Linda Water District directors that serve close to 25,000 accounts in most of Yorba Linda and parts of Placentia, Brea and Anaheim.

A faster pay-down of the liabilities will save the city and district sizable amounts of money.

The water board wants to have 90 percent of the pension liability funded in 10 years and the same percentage of the post-employment benefits liability funded in five years. Currently, the pension liability totals $8.3 million and the retiree benefits liability $2.3 million.

Directors have chosen a “moderate investment strategy” for the funds placed in the pension and post-employment trusts created with the Public Agencies Retirement Services company.

Also, my Oct. 20 column reported that Fitch Ratings, one of three nationally recognized rating companies, awarded an AA designation for the district's $29 million bond sale earlier this year due to the district's “strong financial,” “healthy debt” and “strong operating” profiles.

However, Fitch continued: “The rating is lower than suggested by the financial metrics due to continued concerns about the district's governance and the electorate's willingness to accept rates that guarantee full cost recovery.”

Now, a November Fitch report affirmed the AA rating and stated, “The board has developed a solid financial policy framework for rate setting,” but the “rating remains lower than suggested by the financial metrics due to the history of rate controversy.”

And, according to the new Fitch report: “The rating could come under downward pressure if the district and community fail to maintain consensus on rates that lead to full cost recovery and continued solid financial performance. The rating is unlikely to move higher until rate controversy eases convincingly on a sustained basis.”

Fitch also stated: “The district's supply position is solid after the district gained access to significant groundwater supplies..., reducing reliance on imported supplies. The district will get about 75 percent of its supplies from relatively affordable local groundwater after new facilities reach full production in 2019.”

Directors voted 5-0 in September to require that Fitch reaffirm the AA rating before issuing another one-time credit. A $44.18 refund costing $1.1 million is included in December bills.

A previous $44.46 credit was applied in August.

Deputy to provide drug, violence diversion education in Placentia-Yorba Linda school district

A deputy sheriff is scheduled to begin work this week in Yorba Linda's public and private schools in a program to provide drug and violence diversion education to 5^th through 12^th grade students.

The deputy's assignment will supplement the existing School Resource Officer program, assist in homeless liaison efforts and be available for operations conducted by the North Orange County Public Safety Task Force.

Funding for the new position comes from a $20 million state appropriation to the task force, which was formed by Anaheim, Brea, Buena Park, Cypress, Fullerton, La Habra, La Palma,

Placentia, Stanton and Yorba Linda.

Yorba Linda's share of this year's outlay is $224,000, with use limited to youth violence prevention and intervention, offender re-entry programs and homeless outreach and intervention. Officials expect additional funds to be appropriated through June 2021.

The $20 million has been assigned to the north Orange County cities by the California Board of State and Community Corrections, a five-year-old independent state agency that provides oversight to the adult and juvenile criminal justice systems and administers grant funding.

One requirement is that the money be disbursed through a community-based organization. Yorba Linda's City Council has selected the non-profit Drug Use is Life Abuse organization created in 1987 to coordinate community responses to youth substance abuse and violence.

The city's $224,000 portion of the $20 million allotted to the 10 north Orange County cities goes through many hands before ending up in Yorba Linda, starting with the state's Board of State and Community Corrections receiving the money appropriated in the state budget.

That board passes the money to Stanton, which acts as administrator for the funds the board has assigned to the north Orange County cities. Stanton then passes the cash on to the Drug Use is Life Abuse organization the city selected to receive its funding.

Finally, Yorba Linda invoices the latter group in monthly installments and passes the funds on to the Orange County Sheriff's Department to pay the deputy, the deputy's benefits and other costs associated with the deputy's services.

Those costs will be $221,921 in the Dec. 8 through June 30, 2018, period, with $137,395 in deputy compensation and $83,526 for other indirect costs, including equipment and vehicle.

The newly assigned deputy will join 26 other full-time deputies allotted to Yorba Linda under the current contract with the Sheriff's department: 21 on patrol, three on motorcycle, one for community support and one school resource officer.

Fourteen other full-time employees and 12.9 regional and shared positions are assigned to Yorba Linda under a contract amendment approved by the council in May for policing costs of a bit more than $10.4 million.

The city's first five-year law enforcement agreement with the county runs through June 30, 2018.

Yorba Linda City Council tackles unfunded pension, retiree health benefits liabilities

Two of Yorba Linda's unfunded liabilities – city employee pension payments and other post-retirement benefits – received renewed attention and specific action at a recent City Council meeting.

Council members want to save money by speeding up amortization of the unfunded pension liability from 30 years to 20 years or less and pre-fund a portion of the city's unfunded retiree healthcare liability.

The council appropriated $320,490 for an extra payment to the California Public Employees Retirement System, deposited $200,000 to the city's Other Post-Employment Benefits Trust and allotted $89,555 from library reserves as the library's share of the two payments.

The city began the accelerated amortization process in June with a $214,555 payment to CalPERS, representing a 19 percent boost over the minimum required contribution to the unfunded liability of $1,131,170.

The extra $214,555 was supplemented with $40,173 the city saved by making the CalPERS payment in July, rather than sending in payments in 12 monthly installments, resulting in the unfunded liability payment besting the required minimum by 23 percent.

“Unfortunately,” according to a recent report presented to the council by Finance Director Scott Catlett, “the city's unfunded liability increased by $4 million or 23 percent last year.”

Catlett noted in his report: “As a result, the city's recent additional payments were more than offset by the increase in the liability.” To maintain a 20-year amortization strategy, the current extra city payment jumped $161,083 from the previous $214,555.

“The city's pension plan has assets totaling approximately $44.3 million (down from $45 million last year), and an unfunded pension liability of approximately $21.2 million (up from $17.2 million last year),” Catlett explained, or 67.6 percent funded, down from 72.4 percent.

Catlett reported that “a number of factors are putting pressure on the plan's funded status, including reductions to the discount rate and significant changes to actuarial assumptions.”

The $200,000 deposited to a trust created to pre-fund a portion of retiree healthcare benefits follows a $234,406 contribution made in June, which grew to $241,910 by Sept. 30, because of interest earnings.

The unfunded liability for these benefits has dropped some $2 million from about $17.4 million as a result of recent changes in benefits for new employees and the plan to begin pre-funding.

Currently, about nine of the city's 101 full-time employees earn lower retiree medical benefits, a number expected to increase in future years.

Financing for these added payments comes from the city's reserve fund. A recently adopted policy calls for the council to consider additional spending when reserves exceed 60 percent of a year's operating budget. Reserves between 50 and 60 percent of a year's budget are labeled “spendable excess reserves,” which totaled about $4 million on June 30.