Final Thoughts For 2017.

In the summer of 2011, then City Manager Tim O’Donnell told me that his favorite definition of leadership was, “Leadership is disappointing your constituents in increments they can absorb.” The implication was heinous and has proven to be the underlying rationale of countless decisions made by Council over the seven years I’ve written this blog. Here are a few of the most obvious:

  • Raising Council’s stipend and flex benefits.
  • Burying key decisions and large capital expenditures in the Consent Calendar.
  • Commission and Committee appointees are predominantly political payback.
  • Now defunct Redevelopment Agency created over $200 million in bond debt, most building or refurbishing city property for which there is no property tax which pays off the bond debt.
  • Brett Murdock tacitly appointed to lead opposition to The Brea Open Governance Act and The Brea Accountability Act. Murdock failed to disclose his leadership of the Breans Against Measures T & U PAC and was fined $2,000 by the FPPC.
  • City Clerk, under direction from City Manager and City Attorney violates election law resulting in litigation that was lost on appeal and cost taxpayers almost $1 million dollars.
  • Mayor, Mayor Pro Tem and City Manager take an ill-advised two week junket to Korea and Japan, sticking Brea taxpayers with the bill (Koreagate).
  • Mount a weak attempt to retain the Police Services contract with Yorba Linda.
  • Reorganize Brea FD rather than seriously entertaining the possibility that contracting out the services could save Brea taxpayers a bundle.
  • “Green Brea 2012” was a disaster but continues to be touted by city propagandists as a success. “Greenwashing” at it’s finest.
  • Staff recommends Council pay annual pension obligation at less than 100%, adding to the mounting debt. Brea had a surplus of $21.9 million in 2001, what happened?
  • 560 Fund (OC Landfill) earmarked to mitigate the traffic, noise, road damage and provide other “community benefits” is tapped twice to pay for the solar project – several million dollars. Remember, the one that would pay for itself.
  • Create Landscape, Lighting & Maintenance Districts (LL&MD) and Community Facilities Districts (CFD) to dodge Prop 13 and generate uncapped revenue. Promises made to “revisit” these for possible double taxation and to add sunset clauses has never found it’s way to the agenda.
  • Implement and repeat use of tiered water rates as a means of social engineering (deemed illegal in Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano – 2015).
  • Cal Domestic. Need I say more? If the FPPC, State DOJ and/or OCDA would get off their asses maybe we would finally get to the truth.
  • The perpetual appearance of collusion, backroom dealings and Brown Act violations every time Council reorganizes – never challenged, never proven but always questioned.
  • Madrona. Self-explanatory.
  • A “Civic & Cultural Center Demonstration Garden” proposed as a means of defraying costs of routine maintenance of Civic Center parking structure. Resoundingly rejected by residents.
  • City budget deemed to be balanced for the last 17 years yet Pension and OPEB debt soars to over $100 million.
  • Brea Envisions. Self-explanatory.
  • Originally proposed in January 1999, the just completed downtown parking structure could have been built for $5 million dollars with Redevelopment money without disruption to existing businesses.
  • Apprised of Constitutional due process issues buried within the Brea Municipal Code, triggered by the unilateral dismissal provision in Section 2.16.050, Council dawdles for 16 months without resolution. Will show up on agenda again soon.
  • $73,069,750 spent since 1977 for a “mobile intensive care” Paramedic Program appears to be nothing more than a subsidy for the Brea FD. (This will likely add fuel to the fiscal fires in 2018 as the truth becomes known.)

How the hell does this happen?

It’s become increasingly clear, as I read dozens upon dozens of staff reports that, more often than not, we’re getting only a fraction of the truth. Having reached the conclusion that Council, Commission and Committee members and the voting public in general lack the vision and intelligence to manage their community — staff has gradually hijacked all authority.

At best, only one or two senior city staff actually live in Brea. They have no local roots, no family history, no personal investment or emotional ties to the community. They are here to achieve their personal professional best, as dictated purely by academia and tweaked in a never ending array of seminars and symposiums. That their “product” ever actually benefits Brea is purely serendipitous.

They are here to put in their time, to receive salary and benefits well beyond that offered for comparable work in the private sector and to retire with six figure pensions.

From time to time they make mistakes, we all do. These blunders are the product of bad judgment, ignorance or inattention. These gaffes are committed with our money and are often magnitudes greater than the day-to-day mistakes we make.

Our city’s cancerous corporate culture.

To preserve their lucrative but fragile existence they are inclined to cover up the truth rather than admitting to failure. A corporate culture develops around them that renders them incapable of providing the whole truth. Staff seems to operate in a perpetual state of circling the wagons.

It is an endemic condition that can only be overcome by stripping them of the authority they have stolen and return it to those we elected to do the job in the first place.

And here’s the problem. As this bureaucratic shadow management culture has grown, their influence and power have as well and this creates a vacuum that eventually sucks in our elected representatives and blinds them to their complicity in the improprieties going on right under their noses.

Where do we take our city from here?

Revive “Clean Sweep” and put strong willed candidates into office who will not bow to the corporate mentality infesting those managing city business.

Candidates must give you a true sense of trust and confidence that accountability and transparency are not simply campaign rhetoric, that they will set aside any and all personal agendas (and bloated egos) – keeping a single focus upon what truly serves the people of Brea. Otherwise, they have not earned your vote.

city culture

29 thoughts on “Final Thoughts For 2017.

    • Tony… I worry most about fiscal issues. A perpetually unbalanced budget and the need to cut services. Pension debt. Hidden subsidies and poor auditing practices. Unless the public weighs in, intelligently weighs in, and in large numbers, the system is stacked against us.

  1. Those are all big issues, and all very relevant, which makes it difficult to know where to begin to “fix” anything.

    The thing that is so hard for me to get my head around is how Brea has an annual “pat on the back” report that claims we had a “balanced budget” and have been “wise” in planning for the future, yet we are apparently over $150,000,000 in the hole during all of this.

    It is all too convenient to blame CalPERS or the “Great Recession”. Convenient because 99% of all political/government entities did the same thing and bragged how “beautiful the emperor’s new clothes look” all the while hoping everyone would just shut up and pay no attention to the greatest Ponzi scam ever known.

    You are correct that the solution needs to be free of anyone that partakes in the CalPERS system, or is paid by the city of Brea.

    At this point, only Council can stand up for us and do what’s right. That would mean each would have to sacrifice being reelected and actually put their collective feet down.

    • Dwight… Tim O’Donnell was first to hire True North Research to produce those self congratulatory reports, the same group Jennifer Lilley hired to bail out the Envisions project in the end. Their work has always been suspect.

      I don’t recall who, during Matters From the Audience at the recent Budget Workshop, suggested establishing a Budget Advisory Board of qualified residents with no political axe to grind. I like that idea. Putting a real City Treasurer in charge of such a group also makes sense to me… we just need to elect the right person and give them back all of the authority taken from the position by the City Manager.

      • John… There would be strict beverage control. Members should be interviewed, vetted and selected by City Treasurer plus one member of Council. Two terms of two years maximum. No prior Brea member of Council or public employee may serve.

  2. I’ve always tended to follow what’s going on at city hall on an issue by issue basis. It hadn’t occurred to me to take a broader look at things. Your pointing out the toxic culture that has developed over the years has opened my eyes.

    It’s as important to understand the why behind what’s going on as much as it is to understand the what. I’m less likely to get lost in the details and bureaucratic language once I have a handle on the motivation.

    This is pretty damned upsetting.

  3. The January-February 2018 issue of the Brea LIne sent to residents recently had on page 2, an article entitled “City Faces Budget Limits; Examines Options for Service Efficiency.”

    In essence, the article states that the “City’s professional staff is very mindful of its responsibility to be fiscally smart and forward thinking,” and yet there is reported a General Fund projected shortfall of $2.3 million for fiscal 2018-2019.

    Looking at the 2017-2018 City Budget Report page 18, another way of analyzing it is that the shortfall existed a year earlier for fiscal 2017-2018, because if you take out the the Downtown Parking Lot Loan adjustment transferred into General Reserves, the General Reserves already started declining a year ago and had a projected shortfall, as it was already known that the reserve transfer would be made.

    The article goes on to imply that disappointing sales tax reports and flattening sales tax revenues is “of great concern.” It is a fact that discretionary consumer spending had been significantly down since the financial meltdown (2008) though the budget had budgeted a 2.75% increase in fiscal 2017-2018 which was much more than previous fiscal year of no increase.

    The article also discusses that “sharp increases in benefit related obligations have put extra pressure on estimates.” Again, it is a fact that many suffered financial losses or reduced investment returns because of the financial meltdown including CalPERS, and that CalPERS had a ten year average return of 4.4% annually (Investment & Pension Funding – PDF) while also using a 7.75% discount rate (which rate was lowered in 2012 to 7.5% and kept at 7.5% until July 1, 2017 when it will slowly go down to 7% by the 2019-2020 fiscal year (CalPERS To Lower Discount Rate…) to determine future pension benefit liabilities.

    While some may not think that such rate differential would not result in CalPERS underestimating future pension benefit liabilities, it would be wise to disagree, especially when CalPERS had already had to significantly increase assessments to employers of CalPERS beneficiaries including Brea, and CalPERS expects such assessments to grow by 1-3% annually in the next few years (expect more). Furthermore CalPERS also has recently put in place a risk mitigation policy to mitigate losses in its investment portfolio which usually translates in lower future rates of investment returns, since risk is related to rate of return. So CalPERS could have been blamed, if its changes were recently announced, but its changes were announced over a year ago.

    The article goes on to say that “personnel costs underscore every function performed… and are the largest piece of the operating budget… Tough decisions are ahead in 2018″.

    Actually, the Brea voters, if they want, have an easy decision.

    The last paragraph goes on to say, “The City of Brea practices fiscal conservatism to approve and deliver successful projects and services.” You be the judge of whether City’s professional staff was “being conservative.” The article concludes, “Going forward, the dynamics are changing and Brea will be preparing for adjustments.”

    Very pertinent when seen from Rick’s point of view. The bottom line is to heed Rick’s call to make more than a dent in the “business as usual” mentality and see about real adjustments for Brea’s citizens.

    • Sue… always a treat to hear from those who have devoted the time to get into the details. I hope Brea Matters readers take the time to click the links you’ve provided… the material they’ll find isn’t rocket science.

      Hope you might consider volunteering for a Budget Advisory Board… if we are successful in blowing the status quo to Timbuktu.

  4. I also read today’s city newsletter and was dismayed to see a lie was inserted to blame the deficits on sales tax shortfalls.

    If police and fire are 70% of all expenses, it would seem that is where a reduction should occur.

    Im curious how many firemen and how many police we have total, since the police budget is almost double fire, and I thought they had about the same amount of people.

    • The stock-in-trade of senior management, for a couple of decades, has been the systematic distribution of misinformation through periodic “report cards,” ten city surveys, predigested public opinion polls, slanted staff reports and that infernal propaganda rag the Brea Line.

      It’s time for an independent Budget Advisory Board led by an elected City Treasurer.

    • PD has/had about 100 and FD maybe 50 or so; current information can be found in the most recent complete “budget document.”

  5. Not sure if this is really a Final Thoughts issue, but I recently paid my City of Brea Business License Tax for 2018, and noted that an enclosure with the billing stated, “Per AB1379, the State CASp fee increases from $1.00 to $4.00 on January 1, 2018.” At $1, this fee (whatever it is) has been of little actual consequence, representing only about 3% of my business license payment. But a 400% increase? Wow; that’s worth looking into.

    Cursory research on this matter suggests the whole CASp issue to be a bit sketchy. From my elementary understanding (and I beg to be corrected), CASp funds the certification of ‘amateur architects,’ thus qualifying these individuals (‘lay ministers,’ as it were) to inspect and either reject or certify a business to be in compliance with State laws regarding building accessibility by the disabled.

    BUT, it turns out, that the State has been receiving only 30% of the fee, the remaining 70% remaining with the assessing municipality, doubtless to remunerate cities, counties or whatever for the hassle of levying this fee. Heretofore, the State of California received 30¢ and, in our case, the City of Brea kept 70¢. But now those go to $1.20 to the State and a whopping $2.80 to Brea… and for what? As far as I can tell, there is no City participation in, or responsibility to, the CASp program. So, is that $2.80 simply a gift from the State of California? Youth wants to know!

    Might I respectfully suggest that, with this windfall, the City of Brea reduce the basic $30 Business License Tax by a couple of bucks as a small measure of “good faith”; faith, that is, in local businesses and the owners and clientele who depend on them. And again, if I have this whole thing wrong, please set me straight.

    • Jim… Looked it up. “The Certified Access Specialist (CASp) Program was created by Senate Bill 262 (Chapter 872, 2003) and is designed to meet the public’s need for experienced, trained, and tested individuals who can inspect buildings and sites for compliance with applicable state and federal construction-related accessibility standards.”

      So, seems it’s for building inspectors… not amateur architects. I have no clue what the city has done with the 70¢ or what it will do with the $2.80. If history is any guide, don’t look for a reduction in the Business License Tax.

  6. I started reading Brea Matters about six months ago, from a link I came across on Nextdoor. I’ve discontinued my “membership” there as a sort of solo protest against many of the simpleminded people who refuse to get the facts before they spout off.

    Here the discussion is better informed and more rational. I like and support many of the ideas and suggestions I read here.

    Brea is in a deep financial hole. We need to stop digging and find a way out of here.

    • Bill… Glad you’ve joined us and I appreciate your comments. Encouraging readers to become and stay well informed is on the top of my list… always. The benefits are most felt in the polling booth.

  7. On the matter of the budget, most of the City’s expenses are for the City of Brea’s first responders, which is normal. So any real dent in the budget will have to start with the largest item which is payroll for first responders. While we acknowledge and gratefully appreciate our first responders, the City Council, City Executives, and Chiefs of the Brea FD and PD should do a better job in managing the first responder budget, especially overtime, which in the case of the Paramedics is about 60% of their total regular salaries.

    The safety issue that also needs to be addressed is that Brea while providing full EMT services has no capability to directly transport patients in need of emergent care to the hospital. Instead, as I’ve learned, a private ambulance has to be called, and to make matters worse the EMTs need to wait for the arrival of the ambulance and follow along to the hospital, in the event the patient has an emergency during the ride. The lost time may mean life or death, especially when the injury is internal such as a gunshot or stab wound to a major artery, vein or vital organ, a pulmonary embolism or stroke requiring immediate surgical and other procedures that can only be done by doctors.

    Also why does the hook and ladder truck also often respond along with regular fire trucks and the paramedic rig? Is this because fires are always related to medical emergencies?

    • Sue… Rumor has it that you’re good with numbers. Here’s a WORKSHEET I’ve just put together looking a costs associated with Brea’s mobile intensive care “Paramedic Program” approved by voters in 1978.

      By the third year, FY80-81, the budget had already doubled and the cost per capita (pop. 27,000) was $15.30 – today, almost 40 years later, the budget has jumped 2,756% to $5,512,756 at a cost per capita (pop. 43,000) of $128.20.

      I have never seen a more egregious example of mission creep in my life.

      Budget is almost always well under tax revenue available. Funds do not go into a reserve account but into the General Fund where they’re used to subsidize the FD budget. What the city uses the freed up General Funds monies for is unclear.

      In addition to the monetary issues I also have process related issues.

      Here’s what the ballot measure said in 1978, “Shall the City of Brea levy a property tax rate not to exceed 20¢ per $100 of assessed valuation in addition to its maximum property tax rate established pursuant to Division 1, Part 4, Chapter 3 of the California Revenue and Taxation Code for the specific purpose of establishing and maintaining a mobile intensive care program known as Paramedics within the area of the City of Brea?”

      In FY81-82 the county altered the assessment methodology and rate levied to $0.045 per $100 “Full Taxable Value” ostensibly to pull an end run around Prop 13. What gave them the authority to override what Brea voter’s approved?

      In FY17-18 the city further altered the language, excluding, “the valuation within the Brea Community Redevelopment Project areas.” What redevelopment areas? Why exclude them now? What gave city staff the authority to override what Brea voter’s approved?

      This is pretty “squishy” stuff and I’m expecting more information to come from CPRA requests now at both the City of Brea and OC Tax Auditor-Controller for processing.

      And Sue… what paramedic rig? You mean like Gage and DeSoto drove in “Squad 51” back in the day? We have firetrucks with decals that say paramedic… with a couple of certified EMT’s onboard.

      • In reply and those spreading rumors about me, I am only good with numbers in one area and very good at that!

        Spending money, like the city.

        Perhaps, Redevelopment areas means a lot of the downtown area.

      • Sue… You’re reputation is safe with me.

        We can speculate about which redevelopment areas have been excluded, most of them generate zero tax increment so their exclusion would have no measurable impact. The big question is, who gave City Staff the right to alter what Brea voter’s approved?

  8. Correct emergency response is critical to life and property. Thinking of my experience in facility operations and reliability of our facility utility systems, 100% reliability was our goal. We used a matrix to best prepare us for every imaginable equipment and system failure and emergency. We dissected every imaginable situation related to each utility system, ammonia, chilled water, steam, electricity are a few. We looked at things such as pressure, high, low or none, temperature high or low, flow, high or low, or none, electricity, loss of, or intermittent, and the affect of those on other critical systems, such as lab operations, mainframe computer systems, and then also the time to deal with the event.

    We trained and we trained more, as perfectly as possible, as practice doesn’t make perfect, perfect practice makes perfect results, to be prepared for any emergency event the best we could to prevent a lengthly or costly loss of our facility systems that would affect our employees, our surrounding neighborhoods, or cause a major expense for equipment repair or replacement. Did it cost money for this preparation? Heck yes. Was the budget always scrutinized? Heck yes.

    Public safety and the services they provide are very similar. Emergency response is no doubt an event that response time is of the the utmost importance. These people train and train, and train some more in order to provide the perfect response to every possible emergency that could occur. They are dedicated individuals.

    There are no doubt many factors involved in the decision on providing the levels of service we have for our residents. What are some of those factors? Are there Federal and State laws and standards, insurance requirements, mutual aid agreements, that determine these service levels? Is there a subsidy for mutual aid?

    I don’t know. So, before I speculate on why Brea has a pumper truck that is a paramedic unit, or the ladder truck responds to a medical emergency, a private ambulance service transports and the paramedic unit follows, which by the way, typically a paramedic or two are in that ambulance, people need to better understand what is requiring that level of service.

    Do the 40,000 full time residents here really care?

    No, we rely on our city council to do the discoveries and hold staff to task. Or the many thousand who come here to work every day. Do they care? Most of them don’t think about it or give a kick, until some incident occurs. But, I will tell you, that in my 45 years of working experience here in Brea, for two major companies, there was an organized effort to keep our people safe in our workplace, and that meant joining hands with City of Brea emergency services people who were always willing and never let us down.

    So, who does this budget crunch fall back on?

    Should operating budgets be reviewed? Heck yes. Is it easy to accomplish? Yes, but the process depends on the result you are looking for. Do you gather your peers to do the reviewing and try to recommend change? Is that the most effective way?

    Nope. Too much emotion.

    But to really get it done, the most effective way is to get a McKenzie or other professionals in, who have no personal interest in the results.The city has already said that we are in trouble over the next four years. You really need to get down into the weeds and make the seriously tough decisions.

    What will Council do? Who is navigating the ship and who is doing the steering? I hope we find out very soon.

    • John… The level of thought and effort you put into this is admirable. I hope every Brea Matters reader… reads every word. You’ve perfectly framed the debate that must go on as the budget for the Fire Department is analyzed and set for the coming years.

      Here’s the missing link. You nailed it when you asked, “There are no doubt many factors involved in the decision on providing the levels of service we have for our residents. What are they?”

      Here’s what we’re dealing with John.

      There is one organization, the National Fire Protection Association (NFPA) formed in 1896 by a group of insurance firms, that has created and maintained a set of private, copyrighted standards and codes for usage and adoption by local governments.

      Copyrighted? Yes. In 2013 the NFPA filed suit against Public.Resource.Org, a 501(c)(3) non-profit corporation dedicated to publishing and sharing public domain materials, for copyright infringement. They won.

      The NFPA is the equivalent of a “sole source” provider setting the standards that Brea FD relies upon to establish service guidelines. To my knowledge no Brea City Council has ever challenged their use or citation by the Brea FD to determine the evolution of the department.

      To be sure, Brea FD is not alone in this… every fire department in the country adopts the same guidelines.

      Does the Brea FD make every effort to provide this community with the best service possible? Undoubtedly. And the firefighters I’ve met and known are a dedicated lot.

      So… here’s the tough question.

      Has the department grown, evolved beyond what is truly necessary to meet the needs of this community? Are there areas, particularly in terms of overtime, where policies could be changed? Is the Brea FD possibly the victim of mission creep?

      And what about that Paramedic Program that seems to be more of an alternate revenue source that frees up General Fund monies to pay for other things? It certainly doesn’t appear to be anything like what Brea voters originally intended or what they would be likely to approve on a new ballot measure today.

      Will a “McKinsey & Company” really provide the unbiased guidance we need… and if so, at what cost? Brea has become obsessed with jobbing out the tough tasks to high priced consultants for a long time… a practice that warrants scrutiny as well.

      There will be those that scream blasphemy at me for this and I’m not sure I really care. If we’re unwilling to ask the hard questions we’ll never be able to make the hard decisions.

  9. That’s a lot to digest! Since you said we need study, and experts, I’d like to know what the “paramedic” taxes are in the other OC cities, and what the cost per citizen is in those cities that have paramedic services ? At least see where we fit compared to others, knowing it’s not an absolute measure of how we are doing. I do know we are the third worst city in orange county in per capita pension debt, so it would not surprise me to learn we are way out of whack on the paramedic tax also.

    • Dwight… great point. I’ll add a survey of other OC cities with special tax assessments for paramedic services to my CPRA request(s) to the OC Auditor-Controller. Once we know which cities provide paramedic services, we can make a comparison of costs and level of services.

    • Wow! I’m shocked and getting madder by the minute. How can they get away with this?

      When I vote, for or against a bond or a tax, I want my vote to mean something. I want it to count. I don’t want some county or city employee or elected officials thinking they can change the rules whenever they want.

      That’s crap. That’s not right. When you find out who the guilty parties are please publish their names and we’ll take it from there.

      • Manny… You echo the feelings of many, believe me. It’s time we draw a line in the sand.

  10. The OC Register reports that the California Fair Political Practices Commission investigation ended in November with O’Donnell paying a fine of $100 for each year he failed to report tens of thousands of dollars in income. Did we get to the truth?

    O’Donnell’s signature was electronically generated on staff reports recommending that the Brea City Council buy Cal Domestic stock and water rights, as well as on bond disclosure documents intended to pay for them. He told an FPPC investigator he was not personally involved in preparing the material.

    Really? He allowed staff to put his signature on documents he didn’t review and approve?

    • Joan… I’d like to read that article, please email me a link. Even without reading it I’m willing to go out on a limb and suggest we’re some distance from knowing the truth.

      O’Donnell relied upon a electronically generated signature from day one but I’m sure he knew every nuance in every document that bore his signature. Saying that he was “not personally involved in preparing the material” does not answer the questions whether he orchestrated the content or was completely familiar with what it was. That’s meant to deflect the question and avoid the real answer.

      Serious questions remain regarding stock and water right transactions and Jim Markman will be returning to address Council in February on these matters. Watch the agendas and keep yer motor running’…

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