Chico’s very own “fiscal cliff”

26 Dec

Today I attended the monthly Finance Committee meeting to participate in the ongoing bullshit session regarding our very own “fiscal cliff.” 

For months now committee members Scott Gruendl, Mary Goloff, and Mark Sorensen have sat through a monthly presentation regarding our tense financial future.  New City Manager Brian Nakamura has been trying to politely but firmly shove a single concept down their throats – the “unfunded pension liablity.” 

The UPL is the amount of money that we have agreed to pay our city employees in retirement, but we don’t really have it.  Our city leaders, encouraged by $taff, went along with a scheme hatched by the California Public Employees Retirement System, promising public employees 70 – 90% of their highest year’s earnings with little or no investment on their parts.

CalPERS told cities and other public entities all over California that they could pay only 14 – 18 % of the actual cost of these packages, and the rest would come rolling in from clever stock market investments. Many public entities bought onto this stupidity. It looked very good the first year or so, with 22 percent returns. But after returns like that, you can always expect the market to “correct” itself, and CalPERS has since lost millions of dollars. They’ve  been bailed out once by the state, asking the feds for a second bailout a couple of years later (I don’t know how that turned out). 

Now CalPERS is increasing our “contribution”. Over the last few years the city’s “share” of the premium has grown from about 26 % (of the cost of the package) to about 31%. That’s millions of dollars a year. And, our city council has signed contracts guaranteeing we would pay not only the “employer’s share,” but most or all of the “employee share” as well.

Today Jennifer Hennessy told me that the city pays 7% of the “non-safety” employees’ 8% share, and ALL of the “safety” employees’ share – 9%. 

I know, last month I told you, I had asked Jennifer Hennessy for a dollar amount on that “employees’ share” of the pensions. At that meeting she had told me, $7 million. Later she corrected herself via e-mail, and she used the word “pensions,” specifically. She said the actual amount was $10.1 million. 

But, reading the minutes of that meeting recently, I noticed they’d written “pensions and benefits.” I’d asked that question very carefully. I’d written it down on my notebook the day previous, and practiced saying it clearly and correctly. I said “pensions” at the meeting, and Hennessy said “pensions” in her e-mail. These are two different amounts, health insurance is a different plan.  So, I asked for clarification this morning.

I was told Hennessy had meant “pensions and benefits.” “Pensions are a subset of benefits… ” she said. But, they’re paid separately, they’re different plans, I asked specifically about “pensions.”  I start to feel like I’m just getting the runaround at these meetings. What I finally got was, we pay about $10 million toward pension premiums annually – including roughly $2 million toward the “employee share”.

The whole meeting was a runaround. Why Gruendl would schedule a meeting for the day after Christmas is beyond me. Unless of course, he wanted to discourage people from attending? The discussion was worthless, just a rehash of the discussion had at the meeting in October. New city manager, Brian Nakamura, was not even present – neither were Assistant City Manager John Rucker nor City Clerk Debbie Presson. When I attended last month, they had the same agenda, but another non-discussion. 

They’re just spinning their wheels on this. They’ve had to have seen this coming, it’s been predicted by economists since 1999.   An issue is so important, you need to schedule a meeting for 8am the day after Christmas, but it’s not important enough to DO ANYTHING about? 

I asked Gruendl why the city employees weren’t being asked to pay their own shares. He ducked my question, and  tried to tell me that new legislation that would affect future hires would “forbid” public employers from paying “employees’ share,” but Lori Barker cut in to say, this was not a law, merely a suggestion.  SHEESH! 

At one point during the meeting, Gruendl actually suggested it’s a good thing we’re laying off employees – it lowers expenses, that’s for sure! But he doesn’t mention the corresponding drop in service levels. There’s pot holes on my street you could break a leg in.

That’s their only answer – cut services in a chicken match with the public to see who will cave first. Gruendl is counting on us to knuckle under and pay more taxes to support the increases in our employees’  retirement contribution. 

Ironically, all this on the heels of a 10 minute discussion of the loss of Measure J – another rehash from last month, and the month before. Again they lamented the loss of an estimated $900,000 a year – although, Hennessy said this year’s loss would only “actually” be $500,000 – and then turned around and talked about a $63 million liability for these obscene pensions they’ve promised. The $2 million we pay toward the “employee share” would more than cover the “loss” of Measure J, but I was unable to shoehorn this idea into their heads. They have an agenda, and they’re sticking to it. 

If you don’t think this really stinks, if this doesn’t make you really mad, then you need to take your temperature. Or better yet – stick a fork in your ass – you’re done! 




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