At last week’s Finance Committee meeting (Feb. 27) Mayor Randall Stone (Chair) and council members Sean Morgan and Ann Schwab heard a consultant’s pitch for a revenue measure campaign, starting with the usual “survey”. City mangler Mark Orme made some interesting comments before introducing the consultant.
Orme stated that since he came to the city in 2013 he has “resisted” revenue measures. “I think there needs to be a high level of trust within the community that those funds are going to be spent prudently.”
I always wonder about public sentiment. Do most Chico voters trust the city council and staff to use their money wisely? And here’s the scary question – what would they know about it?
Orme feels that he and staff have “created a higher level of trust.” opining, “We have learned to live within our means.”
Orme reminisced about his arrival in Chico in 2013, reminding us that the city “has been through hard times.” He talked about “lost” staffers as though they wandered away in a storm or left for better digs elsewhere. No, hit man Brian Nakamura was hired, long time staffers were fired, or in some cases, simply encouraged to take a position in another city. “Hit Man” brought in former co-workers as new management and skipped off to his next assignment. Over the next year or so staff was pared down until there were no more workers, just management. And management salaries have continued to get higher – now in excess of $200,000/year – while they only pay 11 percent of their pension cost.
So I’d really like to ask Orme just whose means he’s been living within.
He certainly did mention the pensions – “one of the big elephants that cruises through any government living room…” He acknowledges the pension deficit. But here’s where the fiction continues – “The city didn’t create it…”
I have to take exception with that last claim. Looking at Orme’s contract here, it’s not hard to see what really happened.
Click to access OrmeEmploymentAgreement10-2017.pdf
“WHEREAS, the Council desires to have Orme participate in CalPERS cost sharing, and pay three percent (3%) of the Employer’s cost, in addition to Orme’s contribution for CalPERS;”
On “Exhibit A” you find the employee share, Orme’s contribution, is 8%. Plus 3% of the “employer share” equals 11%. For 70% of his $207,500 salary at age 60. The city payment has been increasing every year, I believe they now pay 39% but it might be more. CalPERS is constantly demanding more. The other 50 or so percent rides on the stock market. This hasn’t worked out so far – CalPERS promises 7% return but has been lucky to see 1%. This has caused the PENSION DEFICIT, aka PENSION LIABILITY.
Not only that, but Orme, as well as other management staffers, have recently added a IRC 457 plan to their contracts. In addition to their salaries and CalPERS contributions paid, they get tax exempt “deferred” compensation.
“Plans of deferred compensation described in IRC section 457 are available for certain state and local governments and non-governmental entities tax exempt under IRC Section 501. They can be either eligible plans under IRC 457(b) or ineligible plans under IRC 457(f). Plans eligible under 457(b) allow employees of sponsoring organizations to defer income taxation on retirement savings into future years.“
“Effective from the first pay period in January 2017 considered in calculating the maximum IRC 457 plan limit and annually, City agrees to contribute nine thousand dollars ($9,000) , to Employee’s IRC 457 plan. Additionally, effective October 5, 2017 the City agrees to contribute four and fifty-two hundredths percent (4.52%) of base salary to Employee’s IRC 45 plan.”
See, the city most certainly did create the deficit, because they’ve continued to agree not only to CalPERS stipulations but to bigger and bigger salaries (and therefore PENSIONS) and more generous contracts all along. Since 2013, Orme’s salary has gone up almost $20,000. Laying off people who made $35,000 – 65,000 a year while raising management salaries by 10’s of thousands is like taking 5 steps backward and no steps forward. As Orme acknowledged last Wednesday, we now get no services.
“Now we’re a city that’s living within their means that isn’t meeting the needs of the community…”
We need to ask ourselves, what the hell is the use of a city that doesn’t meet the needs of it’s community?
Orme casually mentions the elephant in the room – he is the elephant in the room. Somebody better get him a shovel, he has a huge pile of crap to clean up.
Chico Taxpayers Association 
These pensions are nothing but a giant Ponzi schemes.
They can raise taxes all they want but it’s not going to solve the pension problem, especially as they keep handing out raises and cost of living increases which make the pension liability even worse.
And the next recession will obliterate these pensions. When that happens you can bet that they and their high paid consultant will be back scheming for more tax increases.
Especially if the legislature lowers the vote threshold for tax measures – be sure to write t your state legislators.
A person would have to save nearly $8,000,000, to get a “guaranteed” income from government insured Treasury Bills, for example, to generate an annual pension of $200,000. Certificates of Deposits pay similar lower rates to be guaranteed. Remember, the $8,000,000 would need to be saved after paying all the taxes and living costs we all face. Elite government employees get guaranteed pensions regardless of effectiveness during their career. Such people become expert at self-promotion, not competence.
Hi Scott,
Thanks for explaining this stuff – one of the problems is that the general public, like me, is really clueless to the mechanics of these public pensions. It’s taken me years to understand the most basic premises of the pensions. But, what I understood from the beginning is that the financial options available to public workers are way beyond those offered to the private citizen, and then of course, the private citizen pays the costs.
And you’re right – this kind of entitlement really lowers the basic character of the people we hire for these jobs.
Teddy Roosevelt said we need to get people of the “highest moral caliber” for pubic jobs, but we attract the lowest common creeps.
Meanwhile, I’ve been following the Stephon Clark case in Sacramento, and it’s sickening. His mother made an excellent point – no matter what the boy was doing, no matter what he had in his blood system, he had not committed any death penalty crime, and he did not deserve execution. The cops who shot him were pussies and morons, and I’d like to be able to tell them that to their faces.