Private developer fund deficit due to $6 million pension liability

19 Nov

What a day I had yesterday, started it off with that Finance Committee workshop Downtown.  I was on my bike, bouncing through the park by 8:20, the air was damp and smokey and my muffler was wrapped around my head. When I rode home about an hour and a half later, the sun had warmed up and the day positively sparkled. I was home by 9:45 and off to work. All day I thought about what I heard at that meeting, and it really pissed me off.

Hey, do any of you remember that story out of Manton, just east of Red Bluff, about a group of school kids waiting for their bus one morning, witnessed a fight between a bear and a cougar over a deer carcass?  I can’t remember how that played out, who got the carcass, but the kids described it as quite a sight.  Well, yesterday I got to watch our mayor, Mark Sorensen, and one of our long time local developers, Pete Giampoli, go at it over a $6 million pension deficit. 

A couple of days ago I was complaining about the report for this meeting –

https://chicotaxpayers.com/2015/11/14/consultant-report-if-we-stopped-subsidizing-new-development-we-could-get-a-whole-nother-cop/

So yesterday I went to the meeting to see what the developer community had to say about it. There they were – Webb and Giampoli, and a few others, an old realtor named Doug, the usual suspects. I’ve watched Bill Webb get older,  but I am still waiting for him to grow up.  I know they read the consultant’s report because they carried it up to the dais and referred to various entries, questioning this and that. I know they are pissed because  the report makes them look like leeches – taking services from the city for which they pay less than the average homeowner. The homeowner has been subsiding the developers – when we put a new roof on our house, we pay about three times what they pay for the permit.

The real stinker –  ‘cuse my pun – is sewer connects. You probably know the homeowner pays thousands – our neighbor paid about $17,000 – just for the hook-up. Just to tap into the trunk line that runs past your house. Meanwhile, I got Tom Lando to admit, at that same time, about 2003 – developers were paying $3500 per unit. Why? Because developers are not made to pay for the trunk line to be laid, but the homeowner is expected to pay for that. That’s why the homeowner is charged by the “frontage” of their lot, the actual street length of their property. So, if you have a wide shallow property, you will not only pay more than the developer, you’ll pay more than your neighbor with the same size lot, but his is narrow and deep. Get what I’m saying?  Homeowners have been taking a screwing for years, while developers have oftentimes skipped without paying any fees. The city has been “deferring” fees – so the developer does not have to pay until his job is “built out”, or finished to the last lot. How long you think it’s going to take them to finish Meriam Park?

Ever hear of the Winchester Mystery House? That lady wasn’t crazy – check the records, she never paid one dime towards permits for that mess. As long as she kept building something she didn’t have to pay.

Developers have enjoyed a sweet hayride in this town, all the while telling us of the benefits they provide. They provide jobs – well, at least as long as the boom lasts. They provide housing – at inflated market prices that will fall in a few years and leave people all over town in foreclosure.  They destroyed our housing market over the years from 2005 – 2007, and the city went along with it for the one time fees. They might have thought property tax values would go up, but that was short lived. As foreclosures swept our town, property values went plummeting. A house on our street that originally sold for almost $600,000 last sold for less than $400,000.  Families were ruined.

 Over that period, city council signed an MOU attaching city salaries to revenue increases, “but not revenue decreases”, and salaries Downtown roughly tripled.

A couple of these developers tried to tell the city, the business has up-turns and down-turns, and the city should have responded to the downturns by cutting expenses Downtown. Frank Fields and Sean Morgan were quick to bring up the lay-offs, but forgot to mention – new positions have been hired since, and salaries have been raised. Morgan even made a creepy speech about how “the people who were responsible for this (our current financial morass) are gone now, you don’t see them around town anymore….”

See, he’s afraid to say, “Dave Burkland”. For your information, Sean the Idiot, I just saw Burkland at Mangrove Safeway the other day. He looked right at me and my husband with that “oh GOD!” look. He lives out off Hwy 32, west of town, in a great big nice house, and hauls in over $100,000 in pension a year. Wow, he’s so punished!  Hennessy pulls down a great salary in Temecula and her family still lives in a posh pad in North Chico. Unless she is caught literally stealing, she will enjoy a pension of over $100,000 for the rest of her life.

Morgan makes this speech at almost every meeting, reminding everybody that our new, fiscally conservative council is on the job! But, guess what – they’re not.

First I listened to Fields lay out the kind of mess we’re in – over $6 million pension deficit, just in the Private Development Fund. Yeah, remember that cost allocation Bullshit I told you about – well the developers got their introductory lesson yesterday. Yes, through the magic of cost allocation, the city can dip into funds to pay salaries and benefits and pension for employees who have nothing to do with that fund – they were at a meeting one day where that fund was discussed…

The developers railed, they said the cost study must be wrong.  Mark Sorensen became impatient – I’ll say it – bitchy.  He really attacked Pete Giampoli, telling Giampoli he wanted a specific point from that cost study that was wrong. I know Giampoli wanted to say, “the part where we have to pay the pensions”, but you know what, Pete Giampoli doesn’t have the ganas to say “shit” when he has a mouthful. I think “Giampoli” is the Italian equivalent of “peindejo.” 

Here I sat, like Little Black Sambo – watching the tigers fight. They both suck as far as I’m concerned, but I have to agree with the developers on this pension liability crap. And then, Consultant Chad Wolford moved up to the microphone to tell them both to put their peckers back in their pants.

I like Chad, he’s funny. I could tell he’d dealt with these developers personally, he used first names. I could tell he was slightly insulted by the cracks about his cost study, he assured us that the study was completely objective. He also pointed out he’d answered all their questions previous to the meeting – “in every case the critics had not read the study or had not listened to me when I explained it…”

The study involves the “actual” expenses – and, sorry, that includes the pensions – related to the services they receive – for example, plan checking. Through cost allocation, they’re not only paying for the employee who comes out to the job site and handles their plans, they’re paying for the maintenance and utilities for his office space at City Hall, they’re paying for the assistants who help that employee by making copies and coffee, they’re paying for the janitress who comes through to clean the coffee pot and empty the trash cans. 

And, since they laid off so many of his co-workers, plan checker man  told us, he’s “in the field all day and in my office until 7 o’clock at night…”  That’s Overtime sweetie, and they allocate that.

Sure you pay for that in private enterprise, but Giampoli reminded us – in the private sector, there’s competition to keep prices and salaries reasonable, affordable. The city has quite the monopoly here, and they get to make the rules. And they charge more for these services than the county charges, without any apology. 

Chad was not hired, he reminded us, to decide whether salaries or compensation were fair, he was there to tell us what those expenses were and what were our options for cutting the divide between revenues and expenses. He’s nobody’s friend, he has no dog in this fight. I bet if he did have a dog in this fight, it would have no hind legs.

http://twain.lib.virginia.edu/projects/price/frog.htm

As I listened to the consultant I realized I was running out of time – I promised my husband I’d be home by 9:45 so we could get a jump on our work day. He was home oiling and sharpening his chain saw, rounding up all the rakes and loppers, getting ready to spend a sunny afternoon clearing brush and cleaning up tree trash with our son. I was looking forward to a day of running between burn piles with a pitchfork, cause I’m a weirdo.  I started toward the front door of the chambers, pulling on my jacket and digging my hat and scarf out of my bag. I lingered in the front entry to put away my notebook, and I heard Chad saying something about the “real problem,” so I got my notebook back out and stood listening by the door.

He explained very plainly that when city management went through two rounds of cutting workers from the payroll, “you didn’t reduce the cost of overhead”. He doesn’t mean, the PG&E bill. He said, “management salaries, compensation and pension.”  The mayor and his “conservative council”  laid off all the worker bees, but they didn’t lay off any management. In fact, they hired more management and raised management salaries. 

Right now, our management employees are all veterans of the CalPERS system. As such, they are not subject to the new legislation that forces public employees to pay half their expenses – they pay 9 percent of pensions of 70 percent of their highest year’s earnings at age 55. 

Frank Fields made it very clear – the private development fund deficit is “largely due to pension obligation.”  They’ve emptied the General Fund making transfers, now they want the developers to pay more.

And not just the developers – they did not, in front of me, address the problem of homeowners paying so much beyond actual cost. 

PS:  Now you might want to read the conversation I had about a year and a half ago with Mayor Sorensen, in which he says I made up the pension deficit. That Mark, he’s a crack-up.

https://chicotaxpayers.com/2014/03/04/2508/

PSS: The consultant made a remark that stuck – he included city council as “overhead“, and actually mentioned that we could cut our city council. That’s true – a lot of towns operate fine with five, we have seven. I don’t have a current figure, but last time I checked, the mayor gets a $9,000 “stipend,” the other councilors get almost $7,000 each, and then they get health insurance packages ranging from about $8,000 to over $20,000 (Sorensen was taking a $21,000 package last time I checked, in addition to whatever he gets as city manager of Biggs). Cutting two councilors would mean a minimum savings of two $7,000 stipends and two $8,000 health insurance packages – $30,000/year.

 

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5 Responses to “Private developer fund deficit due to $6 million pension liability”

  1. Jim November 20, 2015 at 9:39 am #

    The City government is screwing us almost every way they can.
    I’m starting to think it’s time to leave.

    • Juanita Sumner November 20, 2015 at 10:17 am #

      don’t even think about it Bud, I might have to put you in the stocks! (Last Man On Earth joke)

    • bob November 20, 2015 at 12:52 pm #

      The City government is screwing us almost every way they can.

      You ain’t seen nothing yet. Just wait until the elections. They will be screaming for tax increases and more bonds.

      I’m starting to think it’s time to leave.

      If you’re going to make the move it would be best to leave California. This state is insane.

      But if not it is definitely time to start shaming our so called public servants and get the word out every way possible how they are taking advantage of us.

      • Juanita Sumner November 20, 2015 at 4:48 pm #

        I will admit, I’ve thought about leaving many times, but come to the same conclusion – this is like some disease among cities, it has spread all over California, and probably across the US.

        Hmmm, where would we go. It might be fun to compare some other cities with ours, knowing what we know, where would we choose to live?

  2. bob November 20, 2015 at 12:49 pm #

    Sorensen was taking a $21,000 package last time I checked,..

    That’ll buy a lot of Preparation H and he needs it.

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