Yorba Linda City Council to consider spending surplus cash, aka 'excess operating reserves'

A decade after the economic downturn that peaked in 2008 finds Yorba Linda's government operations on a decisive upswing, as City Council members look forward to spending some surplus cash after the books are closed at the end of the current fiscal year June 30.

The recessionary times took a toll on local government, with council members scrambling to cut as many dollars as possible from the city budget, perhaps best symbolized by a split 3-2 vote in 2010 to eliminate the town's most-watched event, the July 4 fireworks show.

The three votes retained a scaled-down event, but it's interesting to note the elected officials never touched their two fully city-funded retirement benefits, a defined-benefit plan based on their salaries and a defined-contribution plan awarding them “deferred compensation.”

(Voters took the pension matter into their own hands in the November 2014 general election by eliminating pension and other benefits for future council terms on a 16,061 to 2,714 vote.)

Now that property, sales and other tax revenue streams have rebounded, officials find the city treasury's reserve funds increasing more than conservatively predicted in the council-adopted budgets each year.

Last year, council members put into practice a newly adopted policy regarding what they called “excess operating reserves,” which are considered to be revenues above the long-standing council policy of keeping 50 percent of a year's operating budget in reserve funds.

At that time, the council had some $4 million in excess reserves, with members allotting about $3.2 million for various projects, including nearly $2 million to repay an outstanding balance of funds loaned from reserves for the Town Center project.

Other uses for last year's excess: $320,490 sent to the state's Public Employees Retirement System to continue a 20-year pay down of the city's unfunded pension liability from 30 years and $200,000 deposited to a trust fund for the city's unfunded retiree healthcare liability.

Also, $670,000 was appropriated to speed up one phase of landscape transition for street medians and $75,000 for consultant hours to assist staff with various landscaping projects.

This year's excess reserves are currently estimated at $2 million or 6 percent above the 50 percent of a year's operating budget required under council policy, an amount that could be higher by the end of the fiscal year June 30.

With $800,000 set aside so the city will meet the 50 percent reserve policy due to growth in budget expenditures, $1.2 million is available now for added council-directed spending. As council did last year, members deferred action on using excess reserves until after June 30.

Among recommendations for immediate use of the excess were faster landscape street median transitions, funds for a Main Street-Lemon Drive improvement project and more contributions to reduce pension and retiree healthcare liabilities.