Tradition of Fiscal Responsibility
Brea Continues a Tradition of Steadfast Fiscal Responsibility
Financial conservatism has been a principle for Brea since its incorporation in 1917—from the first City Council to our current elected officials. Traditional standards have served Brea well, as these policies have persevered and are integral in how we operate to this day. In fact, Brea has weathered the persistent national recession better than most California cities because of its long-standing conservative policies. Here are some examples of routine operational procedures that demonstrate fiscal responsibility.
Balanced Budget—The Brea City Council requires adoption of a balanced General Fund Budget. This is at the core of fiscal responsibility. Projected revenues must match projected expenditures. Deficit spending is not allowed. A mid-term budget check verifies projections and (if necessary) adjustments are made so the budget remains balanced. Conservative budget planning helps identify potential problems and solutions. Careful, five-year budget projections are also developed and updated to keep the budget on track.
Healthy General Fund Reserve—Even in the middle of an unprecedented recession, the City maintains a healthy reserve fund, which exceeds the City Council mandate of 8-10% of annual General Fund expenditures.
Fixed Asset Replacement Fund—Money is methodically earmarked for the replacement of capital items in this fund as a planning and budget tool. Similarly, a strong Risk Management Fund ensures the City can cover its Worker’s Compensation obligations without undue stress on General Fund Reserves.
Diversified Investment Portfolio—Brea safeguards public funds by prudent investing practices. An Investment Advisory Committee, consisting of a City Council Member serving as the Chairperson, the elected City Treasurer, two Administrative Services staff members and two public members provides oversight. The Finance and Development Committees are other opportunities for City Council representatives and staff to discuss financial decisions and plans.
AA Credit Rating from Standard & Poor’s—S&P increased Brea’s credit rating last year to AA because of the City’s excellent fiscal health. An impressive achievement anytime, but even more so in the middle of a recession. To determine this rating S&P considers the City’s reserve fund, budget practices, expenditure patterns, budget balance sheet and investments. A good S&P rating helps to lower the cost of borrowing with favorable interest rates and is a positive in the bond market. (S&P is a 150-year old company that is considered worldwide as a leader of financial-market intelligence. S&P provides independent credit ratings for industries in 23 countries.)
Financial Foresight—Assertive action helped Brea manage the worst of the recession. Early measures such as reducing expenditures, freezing salaries and hiring, city reorganization and entrepreneurial efforts prevented severe cuts to city services.
Successful Redevelopment Programs—Redevelopment improved neighborhoods, preserved and restored historic buildings, financed affordable housing, stimulated the City’s economy and helped support local businesses. The Brea Sports Park, Community Center, Fire Station No. 2, Civic & Cultural Center, City Hall Park improvements and the Brea Historic Museum are examples of projects that may not have been possible without Redevelopment. It's important to note that Redevelopment activities did not increase individual taxes, but rather used the gains in revenues from improved property values in redevelopment areas.
Economic Development—Mixing fiscal restraint with visionary thinking is a balancing act that city officials have perfected over decades. It’s the reason Brea can attract businesses like Target, Sprouts, and Total Wine even in a down economy. This winning formula is validated by private-sector businesses that choose to invest in Brea. New business provides employment opportunities, stimulates the economy and can also provide new revenues for City Services.
Global Intellect—Strong fiscal responsibility is not just about balancing both sides of the ledger. Brea City officials understand that actions taken at the international, national, state and regional level impact the Brea community and that participating at these levels is important. City Council members and staff serve on a variety of boards and committees that promote the interests of the Brea Community with tangible results.
Transparency (financial and otherwise)—Proactive communication has been a value of the City of Brea long before the term “transparency” was coined. Brea City Council meetings have been televised on Brea’s Cable Government Access Channel 3 for more than 30 years. Meetings are also available on AT&T Channel 99 (Brea) and streamed via the city’s website. The city newsletter (the Brea Line) has been publishing since at least 1979. Brea was one of the first Orange County cities to have its own website beginning in the mid 1990’s, and was a leader among municipalities adapting social media as a communication tool in 2009. The complete City budget and Brea employee salary tables have been available on-line since at least 2000. Citizen commissions and committees, public forums and surveys have provided feedback to Brea City Councils for as long as anyone can remember.
From a balanced budget and a healthy Reserve Fund, to long-range planning, Brea is a successful example of an organization that is true to its conservative roots while still asserting a progressive vision for the future.