Moore On The Downtown Parking Structure.

Roy MooreYesterday, Roy Moore, weighed in on the downtown parking structure and unfunded pension liabilities… tying them together in a most sensible way. With permission, here is the heart of Roy’s message.

BreaNet, Issue #708

If I may, I would like to comment on the proposed parking structure to be built behind the Tower Building on Super Block A. In January 1999 the City Council approved construction of the buildings on Super Blocks A and B. At that time I argued for a parking structure.

We could have built it for five million dollars with Redevelopment money without disruption to existing businesses. The Tower Building would not have been empty for nine years. I still support such a parking structure. The Council has approved the concept but still is struggling with how to pay for it. It is apparent that tapping city reserves will be necessary.

I would submit that before this decision is made the City Council first formulate how to fund Brea’s unfunded liabilities. This most likely would have to look to these same reserves for a possible solution. This is no small problem. CalPERS currently reports that as of June 30, 2013 Brea’s unfunded liabilities are $108 million.

Although much has been done in recent years requiring city employees to contribute toward their maximum to cover their pensions it does not appear that this will totally solve the problem over the next 25 years.

Here is my recommendation for a possible solution.  Brea’s landfill is an asset that I believe will generate revenues until at least 2040. The determinant on when to close the landfill is the height of the “trash mountain”.

There are two reserve funds as a result of the landfill.

The Capital Mitigation Improvement Fund (560 Fund) currently has a balance of $5.16 million. This fund was created by the $10.5 million payment from the Orange County Waste Management for the eight year extension of the landfill. I believe there will be at least two more extensions.

The original amount has already been reduced by 50% to make improvements to Valencia Avenue (valid use of funds), pay two solar bond payments (supposed to be paid from electricity savings) and the Birch Street medians.

The second landfill fund is the Community and Economic Development Fund (140 Fund) which currently has a balance of $3.48 million and results from revenues received for out-of-county trash deposits in our landfill at $1.50/ton. This amounts to in excess of one million dollars a year.

I recommend placing a large percentage (at least 50%) of these two funds (current balances and future growth) into a special unfunded liabilities account to earn interest and be used to periodically pay down our unfunded liabilities.

So what does this leave to fund a new parking structure?

Assume a structure for parking only, no affordable housing and a not-to-exceed cost of $9.0 million: 560 Fund – $2.5 million, 140 Fund – $1.2 million, 110 Fund (General Fund) – $3.0 million, Redevelopment funds – $3.8 million.

This adds up to a healthy $10.5 million.

Note: the redevelopment funds may not be available and depends upon the State Legislature approval of Governor Brown’s trailer bill. Using long term financing could make up the shortage using the annual growth in the 140 Fund to make the payments.

The bottom line is that it is possible to put in place a plan to cover our unfunded liabilities and also provide a new parking structure in the Downtown. How the financing is structured and whether any of the funds are a loan to the Downtown is up to Council.

For what it is worth that is my two cents on the subject. – Roy Moore

Moore on MadronaAs always, thanks Roy.

A Public Response.

Well, it’s time I offered a public response to the folks wondering if I’d been run out of town by our new bloviating blogger. Hardly. His vacuous attempts to wade in on issues without the benefit of a single provable fact have only served to boost readership of Brea Matters.

wading-inYes, there are numerous topics that are high on my interest list… and most involve spending serious coin, setting precedents that may prove harmful in the future, will create greater traffic hassles than we now endure or barely give lip service to the promises of greater transparency and engagement.

Simply put, I have refrained from wading in for good reason. Having been appointed to the Planning Commission I must weigh each issue based upon whether it, or some aspect of it, might find it’s way onto the Commission’s agenda.

My job as a Commissioner is to review and understand every item with an open mind, my opinions set aside in favor of case-by-case judgments made without bias.

Thankfully, I am working with four other Commissioners and a professional staff having deep histories and broad experience in public planning and an excellent grasp of the laws, regulations, ordinances, guidelines and standards that apply.

What about Citizen Clark?

roy-mooreI am taking a page from Roy Moore’s playbook. For sixteen years he successfully chronicled every issue, large or small, in his bi-monthly newsletter BreaNet.

When issues heated up he solicited opinion from the friends and neighbors he faithfully served. He trusted the public and they trusted him.

When issues were formally discussed, BreaNet filled in the gaps in action minutes giving us the details we needed to better understand what was happening down at city hall.

And when the votes were cast, Roy Moore provided a clear analysis of the final results.

What better mentor than Roy Moore?

Roy MooreI can think of none.

I shared my draft of this post with Roy this afternoon. He was kind enough to put down the Sunday paper and share his thoughts on how I will best serve Brea with this blog.

I’m doubly encouraged that he’s considering guest blogging here as a way of continuing his service to Brea. I’m eager to hear his stand on matters like unfunded pension liabilities, proper use of the 560 Fund and whether Brea ought to be paying some outsiders $180 thousand bucks to tell us how to plan for the next decade or two.

I have no doubt Roy will keep a close eye on me and will be quick to take me to task should I need it. So… that’s it for today.

And make no mistake, “I’ll be back.”

 

Follow The Money!

Brea Matters has been purposefully silent since the new Council was seated. Operation Clean Sweep left many exhausted and in need of a little peace and quiet for a change. Now that Council is settling in… I’ve turned my attention to money matters, our largest and most threatening issues.

debt_400Unfunded Pension Liabilities was a widely used campaign buzzword. Though some attempts have been made to rein in it’s almost exponential rate of growth, Brea remains strangled by debt.

I made a list of financial topics to investigate and my initial inquires uncovered a maze of interrelated issues.

Revenue Over Expense, a smoking gun?

Forever I guess, Brea’s P&L (Profit and Loss) statement has concluded with Revenue Over Expense… which has been treated like free money. Honestly, I’d never noticed it before. I am familiar with the myth of free money however.

Every year, Council and staff announce, with much back patting and fanfare, that a balanced budget has been reached. However, try as I might, I can’t remember ever hearing mention of these leftovers.

Typically, I’m told, this money has been put into FARP (Fixed Asset RePlacement Fund). How much has gone into the fund, how FARP spent the money and how big this Revenue Over Expenses might be is still a mystery. I’ll keep digging, we deserve to better understand how our money is being managed.

Do not pass GO, do not collect $200 dollars.

MrMonoplyAt an upcoming Council meeting (I’ll give you a heads-up) staff will, for the first time, suggest splitting the reallocation of Revenue Over Expenses. The plan, I’m told, would reduce the FARP allocation to 90% and 10% would go to Fund 150.

Also known as the OPEB (Other Post Employment Benefits) Fund, OPEB pays for retired employee medical coverage (previously unfunded) plus current employee premiums. The unfunded debt is $16 million. This is the mystery component not generally mentioned in discussions on Unfunded Pension Liability which is now an additional $70 million. Don’t look for a calculator, that’s $86 million and growing.

Roy Moore, in his independent analysis and public presentation on our Unfunded Pension problem a couple of years ago, did include OPEB in his audit and projections. Sadly, neither Council or staff at the time allowed Roy’s efforts to gain any traction.

Bank error in your favor, collect $200 dollars.

wormsWell, if we can fold OPEB into the mix, what about Unfunded Pension Debt? What about repaying the 560 Fund the $1.4 million borrowed to make solar payments? Could we tap Revenue Over Expense for a little money to put drought tolerant landscaping at the Civic Center?

Opening this can of worms opens a lot of questions. I’m confident Council, especially if they seek answers publicly, where we can wade in with our comments and suggestions, will make the sort of policy changes needed.

Doubling up payments to CalPERS makes perfect sense, why hasn’t this been done already? The 560 Fund should never have been tapped to pay for a solar project that was sold, in part, on the basis that it would pay for itself. Why has there never been an audit of this project, framed in terms that all could easily understand?

Defining, once and for all, the proper use of the 560 Fund, conducting audits of O’Donnell’s Fire Department reorganizations and accurately calculating the ROI on the solar energy project have been systematically kept off calendar and away from public input. Why? What are they trying to hide?

Drought garden planted the seeds of public distrust.

FB_palmtree_300The original drought garden, jammed through at the last minute and without considering public input, was a poorly designed masquerade to avoid spending proper funds on a public works project. The story leaked to the public, objections and outrage could be heard from all sides, the Mayor was counseled to postpone discussion and refused.

Today’s Council has a win-win opportunity to bring the “Rock” Garden back for further discussion. Here’s a chance to reverse a major blunder of it’s predecessors, to be honest with the public and clear the air, once and for all.

First, admit that repairing the leak in the Civic Center parking structure and avoiding spending Building Maintenance funds on it was the real objective. Put a standalone item on the agenda for a Public Works project to fix the leak. Pay for it with the Building Maintenance fund.

Put  a second item on the agenda to put drought tolerant landscape on the effected area once repairs have been completed. Tap MWDOC for their sod removal subsidy and Cal Domestic for the promised grant. That’s $17,500 in the bank. Allocate another $17,500 from Revenue Over Expenses. Boom! The budget is now only $35 thousand dollars, not the quarter million as originally stated. Invite CSUF grad students to do the design.

Please, it’s a business, not a board game.

govt_money_400The City Manager has often characterized himself as the CEO of a large corporation as justification for his salary package — twice that of California’s Governor.

Okay, it’s time to start running this city like a real business instead of a board game.

Start trapping all expenses against all projects and programs. No More soft costs. No more robbing Peter to pay Paul. No more hiding special interest projects by calling them something they’re not.

Every time accounting principles are pushed to their limits the door is opened to slip the difference into Revenue Over Expense.

The ball’s in your court now.

Thanks to Operation Clean Sweep and a voting population interested in rebooting City Council, we now have five Council members with open door policies, offering greater transparency and accountability in government and dedicated to fostering meaningful community engagement. Let’s not waste it.

The time to stand up and be counted is now.

Send your thoughts via email to:

Of course you can always come share your thoughts at Council meetings during Matters From The Audience. Check the Council’s agenda on the city’s website so you know what’s coming up. You’re not limited to commenting only on agenda items. Something bugging you? Speak up. Don’t be afraid to ask Council to pull an item from the Consent Calendar for discussion or to move a discussion item from the Study Session to the formal meeting in Council Chambers.

I’d be remiss if I didn’t encourage you to send positive vibes their way too. Council is a big commitment. It’s hard work. It shouldn’t be a thankless job. We have a winning team now, there’s nothing wrong with showing a little team spirit and cheering them on.

Oh, and in the unlikely event you’re one of those who didn’t vote… never mind.