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City of Brea gets rave review from The National Civic Review

5 years ago by in ( City Guide , News , Old/New , Welcome to Brea )

The City of Brea was reviewed back in spring 2012 by The National Civic Review, who has entered its 101st year and is published with National Civic League, and is also the proud winner of the 2012 Apex Awards for Publication Excellence. Below you will find The National Civic Review Case Study IV on Brea named, “Fiscal Sustainability and Bottom-Up Change in Brea, CA, written by Michael McGrath. The article gives a background of the City of Brea noting that “Brea has a history of innovation in the field of public engagement dating back to the late 1980’s” which the writer assesses is an inspiration for Brea leaders to continue the path of incorporating creative thinking. Hence the article talks about what Brea has accomplished these last few years and why we are in such good shape.  It is a long but good read!

Case Study IV Fiscal Sustainability and Bottom-Up Change in Brea, California

BY MICHAEL MCGRATH

If you visit the city building in Brea, California, you may have a hard time finding a cup of coffee. One of the cost-cutting measures adopted after the 2008 global financial crisis was to eliminate free coffee in city offices. If the policy seems harsh or even petty, the stuff of water cooler uprisings, rank-and-file employees are hardly in position to complain. It was their idea in the first place. In fact, it was one of several hundred suggestions put forward in a bottomup budget strategic planning process designed to find solutions to the fiscal crisis. For months and months, staff members from all levels of the city organizational chart met twice a week to discuss ideas about how to cut costs, streamline departments, and find new sources of revenue for the city. As one local manager described the situation: “Most people are willing to jump in and help out if you set them up in an environment that is safe and fulfilling for them, so our fundamental premise was, given the right information, a group properly motivated will make better decisions than an individual, and that was our fundamental premise and we went forward on that premise.”

Brea is a relatively affluent suburb in southern Orange County, but, like other California cities, it faced a severe and long-term budgetary squeeze in 2008 thanks to the national economic downturn, increasing costs of employee salaries and benefits, lower levels of property and sales tax revenues, and “take-backs” of local revenue sources by the state. By 2010, in fact, the city had experienced eight straight quarters of declines in sales and property tax revenues. The city’s financial staff began to adopt conservative financial projections in 2007, preparing the city for dramatic reductions in spending. Reflecting a local tradition of innovation and collaborative decision making, city manager Tim O’Donnell decided to embark on an experiment in organization change, adopting stakeholder decision making and community engagement as a strategy for addressing the long-term fiscal crisis. Brea has also distinguished itself from neighboring communities by seeking innovative cross-cutting partnerships to find new cost savings and ways to increase revenues.

Brea’s official motto, “City of Oil, Oranges and Opportunity,” reflects the community’s origins in the early twentieth-century California oil boom. Brea’s median household income in the 2000 census was about  68,423, which was well above the statewide median. The city’s population is about 67 percent white, 25 percent Hispanic, and 18 percent Asian. In the 1970s, city leaders actively courted a state highway through the city, hoping that it would enable them to attract a major shopping center, the Brea Mall, which is now one of the largest shopping centers in Orange County. Brea’s economy is a mix of retail, business services, and corporate offices. Brea’s Art in Public Places Program, which began in the 1970s, was one of the first such programs and is therefore considered something of a model.

 Background

Brea is governed by a five-member city council, elected at large for terms of four years each. Elections are held every two years (in the even-numbered years) to fill alternately two and three seats. Each council elects one of its members to serve as mayor for a one-year term. The council appoints a city manager, who is responsible for implementing policies adopted by the council. He or she directs the activities of the major city departments and advises the council on matters affecting the city. The council also appoints the city attorney to provide counsel on city matters. Members of the commissions are appointed by members of the council. There are also numerous committees and citizen advisory groups that allow input from the community.

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c 2012 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com)

National Civic Review DOI: 10.1002/ncr.21064 Spring 2012 A Publication of the National Civic League

Brea has a history of innovation in the field of public engagement dating back to the late 1980s, when then city manager Frank Benest opted to hold a participatory planning process to design a new downtown. Members of the community worked together to come up with ideas for the plan. City staff members met with members of the professional resource team to translate the ideas into a conceptual plan for downtown Brea. Over a period of weeks, the competing development firms created proposals basedon the downtown vision, which featured pedestrianfriendly spaces, a mix of housing, and new cultural and recreational pportunities, such as outdoor jazz concerts. The community designers rated the various proposals, and the city council selected one of the firms. Brea’s redesign of its city center was considered a great success. In fact, the city was named “best bounce back burb” by Sunset Magazine in 2006, largely because of its very livable and walkable downtown area.

Brea has a history of innovation in the field of public engagement dating back to the late 1980s.

Given this history of successful innovation, it is not surprising that Brea staff viewed the economic fiscal crisis as an opportunity for further innovation. Brea’s financial staff began to notice troubling signs in the national economy in 2007 and began to reduce revenue projections accordingly. “We were really early on projecting that things weren’t going to be good,” noted one Brea  anager. “We started working as an organization to solve our budget problems. Lo and behold, in 2008 financial markets started tumbling, and in 2008 we already had a draft plan. We had already been thinking about what would happen to our organization if we had to reduce revenues.” City officials took pains to understand the nature of the fiscal crisis and to consider possible ways of reducing costs and finding new sources of revenue without downgrading city services. The first step was to change from a two-year to a one-year budgeting process, so budget trends could be tracked more closely. City staff began to take a look at every department, its costs, and the services it provided. To undertake this organizational analysis, city manager Tim O’Donnell launched a collaborative planning effort. The Brea police department had already been experimenting with bottom-up approaches to organizational change and leadership development, and its former chief, who retired, had developed a new career as a consultant on organizational development and facilitation. As one local manager described the situation, “We get problems all the time, so we have a choice. We can either hunker down and slam through this and do the typical cross-the-board cuts, whatever it takes, or we can use this as a live experiment of sorts and test out these theories we’ve been dabbling in over collaborative leadership. Organizationally, we made a conscious decision that we wanted to do a kinder, gentler approach to problem solving around the budget by engaging in engagement, and we took a breath and decided okay, we are going to learn howto do this with this big budget problem we have.”

Budget Strategic Planning Process

In spring of 2008, an e-mail was sent to all employees of all levels and ranks asking them to participate in meetings to develop ideas for budget solutions. About seventy-five employees came to the first meeting. Detailed budget information was given to the audience. Some initial training took place. Members of the budget strategic planning (BSP) committee met twice a week over a year. Participants coined the phrase “learner practitioners” to describe an extensive and time-consuming learning process by which each department presented information about its workings to the entire group. One of the benefits of the process, say participants, was that staff from the various city departments got to know in detail about the activities and budget constraints of the other departments. This process allowed people to do big-picture thinking and not be blinkered by their own departmental interests. “We now look at it that leaders come from everywhere in the organization,” noted one participant. “They don’t just come from the top. It’s not just the executives. They play a vital role and there are things that need topdown management, but when it comes to issues like [the financial crisis], everybody is a stakeholder in how we do business now.” To quote from a staff written case study on the collaborative budgeting process:

National Civic Review DOI: 10.1002/ncr Spring 2012 31

On average, about 30–35 employees attended each meeting (but not always the same employees). Subcommittees of employees conducted periodic briefings of other departmental employees and of labor union representatives. The City Council was formally briefed during Council study sessions by others on the committee. Fairly early on in the process two members of the City Council were invited to attend some meetings. Eventually, any Councilmember had an open invitation to attend, although they were limited to no more than two at any one meeting because of Brown Act restrictions.

The model involved asking open-ended questions to the group then meeting in smaller groups of eight people to discuss and  evelop responses to the questions. Then each group would report out to the larger group and record the answers on flip charts.Consensus would be reached on each question before the group moved on to the next. Members of the budget strategic planning group were asked to use the public findings on priorities and values to develop tiers for cutting the various departments. Tier 1 represented items that could be cut without having much effect on city services, the low-hanging fruit. Tier 2 represented service-level reductions that were not ideal but could be accepted. Tier 3 represented things that staff members didn’t think it would be a good idea to cut. Tier 4 included things that would functionally mean you didn’t have a department and couldn’t provide the services to the public. Participants said most people came up with very significant cuts to their own departments, including the police. Their willingness to find more than a half a million dollars in reductions inspired other staff members to do the same. From these tiered lists, BSP members developed a balanced budget for the city council, eliminating thirty-five full-time and several part-time positions, including police officers, although only eleven of those reductions resulted in actual layoffs or early retirement, and reducing service levels in every department.

In addition to the staff committee meetings, the city held a community-wide meeting to develop general principles for the budget-making process. Large group presentations of the city’s fiscal condition were followed by smaller group discussions and reporting out the findings to the larger groups. Participants were discouraged from offering specific suggestions about budget cuts. Instead they were asked to talk about community values and service priorities. What made Brea a special place? What was most important about the community? The BSP used the findings from the community meeting to guide the development of its budget proposals.

Government Reorganization

The BSP continued to meet the next year, working to develop ideas for reorganizing city government to exact further cost reductions. A similar process was used, with large-group discussion and small-group interactions reporting out. The participants were asked, in essence, “If you had to redesign the city today from scratch, what departments would you have? What would be your core mission? What departments would function today?” The group selected a committee of ten to synthesize the  rganizational chart. People worked in teams of four or five to come up with their work charts, and the group incorporated them into what was called a commonality chart. The committee discussed the pros and cons and looked for places to put employees in the new organizational structure. The plan was implemented in three phases. Nine city departments were reduced to six. An assistant city manager position, who was also the general services director, was eliminated via retirement. Four other  epartments were eliminated, and three new departmentswere created, combining functions from other departments. The reorganization reflected the city budget proposal’s reduction of thirty-five full-time and several parttime positions.

By far the most controversial reorganization proposal involved the fire department. Brea has had a fire department since its earliest years, and the community has a strong attachment to it. The costs of fire services, however, were growing steadily, and thecity began to look at possible scenarios for contracting costs. Keying off the budget crisis, members of the firefighters’ union wanted to outsource fire services to the Orange County Fire Authority, which had good benefits and opportunities for overtime. The BSP recommended considering outsourcing but did not take a position on whether to outsource to the county. City councilmembers, however, thought the change would be more advantageous for the firefighters themselves than for the community as a

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whole. The issue became very contentious during the 2010 council elections when the firefighters’ union spent considerable sums to support particular candidates. By a three-to-two vote, the council majority nevertheless decided to keep the fire department in Brea but to make “creative changes in operations.”

City staff members came up with a proposal to consolidate fire operations with the neighboring small city of Fullerton. Fullerton official were initially cool to the proposal, but as the financial crisis worsened, they became more receptive. The number of fire trucks was reduced, and the department was reorganized in an agreement with Fullerton to share command and administrative staff. Under the agreement, fire command staff costs would be split 60/40. It is estimated to have saved the city of Brea $600,000 during the first year. As one former local elected official noted, “The bottom line is that the fiscal crisis forced us to carefully evaluate the tradeoffs and cost of each option over the long term. After careful deliberation, the council majority decided to  aintain our own fire department with significant savings resulting through creative changes in operations while maintaining public safety. The political dimension made it very painful, and called for very tough decisions—but, nevertheless, we successfully stepped up to the challenge for the long-term interest of the community.”

New Sources of Revenues and Savings

Brea city government has a long history of entrepreneurial thinking and structural innovation, dating back to the late 1960s. The City of Yorba Linda, which incorporated in 1967, had been receiving police services from the Orange County Sheriff’s Department. After months of discussions and negotiations between the cities, an agreement was reached to have the Brea Police Department provide police service to Yorba Linda. This was the first time in California history that a municipal police agency provided police protection to another city. In fact, special legislation had to be adopted in Sacramento to allow the agreement to go forward. In 1970, Brea police officers began routine patrols in Yorba Linda. Nine new officers and three new cars were authorized. The department’s records system was revised to accommodate the new contract. More recently, Brea began to offer information  technology services to small cities in Orange and Los Angeles counties that don’t have their own departments. More than a dozen cities currently receive their IT services from Brea. The arrangement saves money for the other cities and brings in revenue for Brea. Another advantage, noted a public manager interviewed for this case investigation, is that it gives Brea’smanagement leadership a “wonderful glimpse at how other organizations are working, what makes them work well and not so well.”

City officials continue to be resourceful and creative in seeking savings and new revenue sources, beginning with the police arrangement with neighboring Yorba Linda. More recently, the city embarked on a major public private partnership with Chevron Energy Solutions to save money through the aggressive use of solar energy panels. Interestingly, this idea was originally proposed by a maintenance manager who had been reading about the use of solar panels on public buildings. He brought the idea to theattention of the city manager and a member of the city council, who happened to be an architect. Brea is now the largest public provider of solar energy in Orange County. During a twenty-five-year period, the arrangement with Chevron is projected to save$13 million in energy costs without appreciable risk to the city.

Other examples: When the city purchased land for a new sports park, which opened in 2008, local officials negotiated for the mineral rights (oil revenue) that went with the property to offset costs of operating the park. When Orange County recently wanted to extend the life of a nearby landfill, the city negotiatedfees that ultimately will result in about $30 million paid to the city, which has to bear much of the truck traffic to the landfill. Brea has also obtained shares in the California Domestic Water Company by negotiating with a developer to obtain some of its Cal Domestic shares (toward watering the property) as part of the approval process for a new development. City manager Tim O’Donnell on his own initiative convened a group of managers from six cities in Orange County to discuss ways of group purchasing basic supplies, such as slurry seal, gravel and sand, and gasoline for city vehicles.

Conclusion

The budget strategic planning effort earned Brea a Helen Putnam Award for efficiencies in service

National Civic Review DOI: 10.1002/ncr Spring 2012 33

delivery and operations from the League of California Cities, but, when it was undertaken, the process was not without doubters.  despite its participatory and open nature, the collaborative budgeting process generated suspicion and controversy among labor groups, which objected to the fact employees from outside their departments were having an influence over their operations and staffing. Some members of the city council fretted that the city manager was “abdicating” his responsibilities by delegating budget authority to a group of employees. To quote from the unpublished case study written by city staff:

When reports were made to the City Council by budget team members, 20–25 other employees showed up on their own time to lend support to their colleagues. This had the unintended consequence of intimidating some Council members who felt pressured to accept the briefings without question. (Over time, this abated as the Council became more familiar with the process and some started to attend the meetings.)

The process was exceedingly time intensive. Some citizens complained about using taxpayer monies to pay for staff time in endless meetings. Indeed, in the first year, the committee missed the budget deadline by three weeks. Some council members were very critical of the missed deadline. The process could be arduous and time consuming in the first meetings, note participants, until they developed a new ground rule allowing any member of the group to stop the conversation when it was becoming too lengthy or beginning to move off point. But this did not happen before some time-wasting discussions occurred.

One participant recalls that one discussion regarding the policy on bottled water consumed up to two hours of discussion in a meeting that happened to be the first one attended by a council member. “We spent an hour and half talking about bottled water. I was dying. This council member is sitting here going how much money is this costing to talk about bottled water. But the exactly same process we used to talk about bottled water was the same process we used to talk about cutting people out of the police department.” Another BSP participant noted that the first year of the process was far more difficult than subsequent experiences and that the most recent budget process was far smoother and easier.

Brea’s forays into departmental sharing, both by “contracting in” and by consolidating administrative staff with a neighboring city, offer a promising model for other communities to consider. Although controversial, the fire department restructuring with Fullerton’s appears to be working, and it has saved the city about $600,000 so far. With the ongoing squeeze between flat or declining revenues and growing salary and pension costs, the ability to share senior management stuff with other  ommunitiescould be a real source of savings. It is arguable that there are too many cities in California to begin with and economies of scale could be helpful in an era of tight budgets and difficult fiscal conditions.

Brea is in an enviable position to address the challenge of fiscal sustainability. It is a small and affluent community that combines an ethic of fiscal conservatism with a track record of excellent and innovative public management. In the midst of the worst economic downturn in decades, the city has managed to balance its annual budgets and maintain a healthy reserve fund, a feat that has eluded many other California cities in recent years. In fact, its general fund reserves have grown by about $2.6 million since the onslaught of the great recession. The city has avoided mass layoffs, opting instead for removing or consolidating positions as they become vacant, and has not resorted to pennywise solutions, such as furloughing city workers. Between 2008 and 2010, the city cut about $6.4 million from its budget and eliminated thirty-two full-time positions. A hiring freeze was initiated as well as a merit pay freeze. The city has negotiated a new tier with lower-cost pension benefits for new hires. Department consolidations and entrepreneurial efforts to find new revenues and cost savings have no doubt assisted in Brea’s efforts to achieve fiscal sustainability, as one elected official we interviewed affirmed. The city has an AA credit rating from Standard & Poor’s. A recent citizen satisfaction survey found that about 96 percent of respondents were happy with the local quality of life, which was reportedly an increase from an earlier survey.

Michael McGrath is editor of the National Civic Review.

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Author :

"Thank you" for visiting Beautiful Brea Old & New (BBON). First & foremost, I am a proud mother & wife. I am also a well-rounded independent contractor. But you can call me an enthusiastic cheerleader, supporting wholeheartedly the City of Brea --a charming town with character & innovation, turning 100 years old in 2017!

  • Carolyn Campbell

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