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.

Silence Isn’t Golden.

matter

(Thanks to Hugh MacLeod for his insightful doodle and thought for today.)

Assuming that Council does the right thing about Koreagate, that those who screwed up are held accountable and that the door is permanently closed to that sort of shenanigans, we have plenty on our plate that deserves close attention and it’s time for the folks that call Brea home to speak up.

The 560 Fund.

bigdump_aThe 560 Fund is Brea’s payback from Orange County for keeping the Olinda Alpha landfill open through December of 2021 and these monies were to mitigate the traffic, noise, road damage and provide other “community benefits.”

This purposefully nebulous phrase was slipped into the contract language to ensure there was virtually no limit on the number or type of boondoggles that could be foisted on an unsuspecting public.

DumptruckTotal income is expected to exceed $30 million dollars, and to date we’ve received $10.5 million and have less than $3 million left.  The 560 Fund has evolved into an obvious slush fund to avoid having to use the General Fund money to pay for the project du jour.

Again, the 560 Fund was never meant to be a slush fund but that is precisely what it’s becoming.  So… let’s play follow the money.

No return on our energy investment.

solarStaff tricked Council into making the first bond payments for the Solar Energy project, totaling over $1.7 million dollars, using the 560 Fund.  In case you forgot, that’s the green project staff sole sourced from Chevron Energy Solutions by duping Council into believing the project would pay for itself.

Though I don’t believe it’s been conducted yet, Chevron get’s to audit themselves, which our Finance Director characterizes as a cost saving effort.  Really?  Do you think for a minute they’ll admit to cutting down the cherry tree?

Judging a book by it’s cover.

libraryThere are those that would like to tap the 560 Fund to give a gift to the County of Orange by buying and remodeling the old Tower Records building, turning it into a new library.  Without question, this library idea is a project easily in the umpteen million dollar range.

The RDA already blew the chance to build a multilevel parking structure on Super Block 1.  Does anyone really think the city would take a property the scale of the Tower Records building off of the tax roles and then give it away?

Where do you plan to be in 2030?

engagementStaff wants to dig into the 560 Fund to pay nearly $300,000 dollars to some outside consultants to create public engagement opportunities under the guise of “Envision Brea 2030.”  The ruse is to get input from Breans, across all demographics, to help guide Council and staff as they plan their Brea of tomorrow.

Were you at the Community Center for the budget workshop to help set priorities for the Budget Strategic Planning (BSP) group?  Did you attend the public meeting to give input on reorganizing Brea’s Fire Department?  Did you participate in the group asked to suggest how to develop Rails to Trails and the community building on the Birch Street Golf Course? Were you able to let the city know what we might need for affordable and senior housing in the future?  Probably not, most people weren’t

Staff has made it quite clear that, unless you’re lucky enough to be one of Good Ol’ Brea’s pet special interest groups, you can keep your thoughts and ideas to yourself.

How about starting a savings account?

Wouldn’t it make more sense to set whatever is left of this 560 Fund aside, invest it, let it grow and have it available if and when we should get blindsided with some crisis?

We need to put a stop to their, “If we’ve got it, we’ve gotta spend it.” mentality.  What’s wrong with demanding that staff live within their means?  It’s what you teach your kids!

But wait… there’s more!

Under the single label of fiscal responsibility, we have an almost unending list of serious issues to keep an eye on.  In addition to Brea’s growing unfunded pension liability, now there’s rumored to be an OPEB (Other Postemployment Benefits – medical retirement) shortfall currently $17.3 million dollars and growing at nearly 30% each year. To make matters worse, Brea is totally unfunded for this liability.

We’re still trying to maintain a high functioning Fire Department with oversight by Fullerton and rebuild a Brea Only Police Department after getting dumped by Yorba Linda – neither situation having been properly reviewed by Council or a status report to the community provided.  What’s really working, and what isn’t?

You can also put CFD’s (Community Facilities Districts) on the watch list too.  Hamstrung by Prop 13’s capping property tax increases to no more than a limited inflation factor, CFD’s are a way to dodge Prop 13 and generate uncapped revenue.

When is a CFD not like Mello-Roos?

housingWhen it double taxes citizens, making them pay twice for the same infrastructure (police, fire, paramedics, etc.), all without a sunset clause when the costs have been recouped.

Even though they publicly admitted having reservations about double taxation and equity issues, Council members Moore and Marick joined with Garcia and Murdock last night (05/21) to approve CFD’s for Central Park Brea and Taylor Morrison developments – without having the broad discussion promised by staff, as Council member Simonoff reminded everyone, or conducting the public hearing (slated for 06/04).

At the public hearing, only the developers, as “property owners” will add their vote of approval, largely because they’ve had their feet held to the fire and just want to get on with things.  Who speaks for the almost 600 ultimate property owners that, through their CFD fees, will be stuck paying the bill… not until everything is paid off, but forever?  Where is their vote in this matter?

Isn’t it generally understood that the creation of new taxes requires a vote of the people?Don’t use the excuse that this is a fee when it’s obviously a tax.

How much longer can we afford a silent majority?

citizenTime’s up I’m afraid.  If you think you can continue to sit idly by, keeping your opinions to yourself, and everything will work out fine in the end… you’re wrong.  We can’t avoid confrontation any longer.  It’s never been more important than right now for everyone to step up and be heard.

Remember, if you’re not part of the solution…