CalPERS nears insolvency – meanwhile city of Chico uses “cost allocation” to rationalize fund pilfering to pay pension costs

27 Feb

Thanks Dude, for this recent article regarding CalPERS insolvency. Former CalPERS board member and erstwhile gubernatorial candidate (2006?) Steve Westly has been speaking up about CalPERS growing pension deficit, warning the agency will collapse if it is not bailed out or “reformed.”

I don’t know what he means by “reform” – to me, this would mean, no more 70 – 90 percent of highest year’s salary at age 50 – 65, cut employer contributions to 10 percent (based on merit and years employed), and make the employees pay their own retirement package. 

Here’s an article from last year that chronicles this mess we’re in from the beginning.

Of course now everybody is screaming for “reform” because they know the system is about to collapse and they won’t get their dough.  Most of these “reformers” mean, taxpayers pay more. That’s what the city of Chico is up to at tomorrow’s Finance Committee Meeting.

Chris Constantin first introduced the concept of “cost allocation” a couple of years ago. It is a process by which they transfer money out of the general fund to pay salaries, benefits and pensions for city employees. It’s very confusing, unless you are the consultant who is hired to explain it every year. That would be Chad Wolford. 

Two years ago, Wolford told us we were “spending too much money on overhead” – meaning, management salaries, and particularly, management pensions.

In response, the city raised pension shares but made adjustments to ensure employees would not have to pay. Mark Orme and Chris Constantin accepted what amounts to 401K plans, which they report will not add to our pensions costs – wrong again Chris! They still got salary increases, and we will have to pay them that deferred compensation, it just routes CalPERS. To me, this is just greed. Look at their salaries:

Click to access OrmeEmploymentAgreement10-2017.pdf

Orme demands over $200,000 in base salary, but expects us to believe he has our best interests at heart? 

Tomorrow, at an 8:30 am Finance Committee meeting, they will go about “allocating” their fancy lifestyles onto the backs of the taxpayers, taking money that should be providing street maintenance, sewer plant updates and other services for those of us who pay for them, and putting it toward their 70 – 90 percent (do the math on Orme’s salary) pensions. Read the report here:

Click to access 2-28-18FinanceCommitteeAgendaPacket.pdf

This is sneaky stealing, if you ask me. The taxpayers are never privvy to this stuff – wonder why they hold these meetings at 8:30 in the morning while you are rushing to work? 


7 Responses to “CalPERS nears insolvency – meanwhile city of Chico uses “cost allocation” to rationalize fund pilfering to pay pension costs”

  1. Rob February 27, 2018 at 11:14 am #

    It is obvious that the cost of housing has followed the pension crisis – up up up. After Davis signed this deal with the public employees in 2000, I watched the houses in my neighborhood go from about $80 – 100,000 to over $300,000 in the span of a couple of years. Regardless that the developers were building like crazy, no matter how many subdivisions they put in, the prices kept going up. It was shocking, now I see what was behind it.

    Westly didn’t run much of a campaign up here in 2006, and people had no idea what was happening with the pensions. Think he’s planning to run again in 2022?

    • Juanita Sumner February 27, 2018 at 11:19 am #

      That is pretty obvious, thanks Rob.

      I had forgotten about Westly, he made a quick stop here in Chico but I don’t remember anything about it. Boy, have we learned a lot since then! Looking back at my blog, I realize just the last 6 years has been a big learning experience for me, I hope other people have learned too.

      Maybe Westly is thinking of running – it seems these people never do anything out of the goodness of their heart.

  2. bob February 27, 2018 at 1:33 pm #

    “It’s very confusing, unless you are the consultant who is hired to explain it every year.”

    Well, not according to Little. Here’s what he put out in the ER opinion “Hits and Misses”

    Hit >> The city of Chico can’t be charged with a lack of transparency, at least where its budget is concerned.

    At 10 a.m. March 8 in the Old Municipal Building, city fiscal guru Scott Dowell will explain the mysteries of Chico’s budget in a community workshop.

    It’s a first, in our minds, and a far cry from years ago when the “finance minister” was hesitant to share any information about city finances. Of course that was because there was funny business going on.

    According to Dowell, the workshop is so the public can better understand where city money — our tax dollars — comes from and is spent.

    I don’t know what city Little is writing about but it sure as hell is not Chico.

    I would love to go to that presentation but I have to work that day. I would ask Dowell about all the deferred maintenance from the “cost allocation” and get him to fess up that all this money that should be going for infrastructure maintenance (and not just the roads) is going for pensions and raises. I would ask him just how much does Comcast pay the city. I have emailed Presson but she never responds. I would ask Dowell to tell us ALL the hidden taxes we are paying, not just from Comcast but ATT, Sprint, Cal Water, etc. I find that nearly impossible to find but according to Little the city government is transparent which is just pure BS!

    • bob February 27, 2018 at 1:36 pm #

      And I bet that workshop of Dowell’s is the beginning of a campaign by the local bureaucrats and politicians to get a tax increase. Why else would he be doing this now?

    • Juanita Sumner February 27, 2018 at 2:18 pm #

      Wow, Little has some nerve – I wonder if he or his lawyer would like to elaborate on “funny business”. Casual statements like that can get you taken to court. I wonder if Jennifer Hennessy has read this.

      As for Presson, cc the city council and Mark Orme when you e-mail her.

      Here’s what I’ll say for Dowell – he thinks if he does this stuff right in front of everybody it’s okay. Like a flasher.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: