Yorba Linda City Council uses reserve fund to reduce unfunded pension, retiree medical liabilities

Most years Yorba Linda's municipal government collects more revenue from taxes and fees than is needed to cover general fund expenditures, with the overage added to funds held in reserve accounts.

A longtime City Council-approved policy is to keep the reserves funded at 50% of the year's general fund expenditures, and another council-approved policy is to adopt a plan to use the excess funds when the reserves exceed 60% of general fund expenditures.

For example, for the end of the most recently completed fiscal year, the council adopted a plan to utilize some of the funds that exceeded 55% of a year's general fund expenditures for a long-term policy to reduce the city's unfunded pension and retiree medical liabilities.

For the fiscal year ending June 30, council approved an additional contribution of $200,000 to reduce the unfunded pension liability, in addition to a regular payment of just over $2.1 million. Additional contributions vary each year; last year's contribution was $386,624.

In the past eight years, the added contributions have totaled nearly $2.6 million, with the city's regular payments to the Public Employees Retirement System totaling close to $16 million for the same time period.

The most recent payment of $200,000 includes $71,352, which represents savings from prepaying the unfunded liability in July at the beginning of the fiscal year ending June 30.

The city's general fund contributed $166,800 and the library fund $33,200 to the payment, based on the size of the respective workforces.

The council approved an added payment of $500,000 to the city's “other post-employment benefits” trust with the Public Employees Retirement System to reduce the city's unfunded retiree medical liability for the fiscal year ending June 30.

For the past eight years, the additional contributions have totaled some $3 million. The additional contributions have varied each year, from a low $230,718 to a high $511,600. The general fund contributed $417,000 and the library fund $83,000, based on workforce.

When council adopted the budget for the most recently completed fiscal year, a $739,324 surplus was projected, but the surplus totaled $2 million when the city books were closed.

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Drivers in Yorba Linda are now paying an increased fee related to the removal, impound, storage or release of a vehicle, including vehicle removal due to driving without a license or with a suspended or revoked license. The fee has increased from $144 to $174.

Fees are collected by the county Sheriff's Department and deposited in the department's Traffic Violator Apprehension Program that's designed to reduce the number of collisions involving hit and run, intoxicated and unlicensed drivers and drivers with suspended licenses.

Other uses for the fees collected are a public education program to deter violators and a cost recovery program to pay for continued enforcement.