Pension Tsunami Part 2: The lies, the lies, the lies – district manager claims CARD “debt-free”, meeting attendee reminds her of the pension liability

17 Aug

As I  was sitting at CARD’s “informational meeting” last Tuesday (8/13), I wanted to argue with the things Ann Willmann was saying, but I am always afraid to speak up at those meetings. I’ve been  attending CARD and city of Chico meetings for years, and I’ve found if you are not careful with these people they will just shut you out. Former CARD director Steve Visconti repeatedly ignored my requests to be placed on the Aquatics Facility Feasibility Advisory Committee (AFFAC) , and when I asked to be noticed of the meetings he simply told me there weren’t any. I’d  find out about them after-the-fact when there would be an item in the board agenda. So, yeah, these people intimidate me sometimes, that’s a fact.

But somebody really needed to ask more questions, the crowd of less than 20 observers was silent as she continued to spin her web.  At one uncomfortable point, Willmann talked about CARD being debt-free. There are so many things wrong with that statement, I just sat there in shock. The first thing I thought was, “Yeah, you paid off the loan on Lakeside Pavillion with money you should have been using to maintain other, more appropriate facilities.”   The district bought Lakeside Pavillion, sagging with rot and needing a  new roof, for over $1,000,000, with over $100,000 in interest.  Then there was at least $100,000 in repairs.  So, Willmann was trying to say, that instead of being stupid for buying an old crapper that has no recreation facilities, CARD was being smart for using money that should have  been going to serve the public to pay off a bad loan before it got worse.

That’s the same BS they are using to explain their many recent large payments to CalPERS.

As I sat there scribbling notes and grinding my teeth, the guy next to me raised his hand and corrected Willmann.  He corrected her, saying, “but you’re not debt-free,” asking, “Is it not disingenuous not to mention the unfunded pension liability?” He recalled it was over $2,000,000, and then Willmann corrected him –  $2.8 million.  And I could tell she was uncomfortable with the question, very flustered.

She said, “We are working toward aggressive payment to save interest…” 

I’ll say they’ve been damned aggressive, as Willmann admitted earlier in the meeting, deferring maintenance on district facilities while making “side-fund pay-offs” on the pension deficit. “Side-fund pay-off” means, payments in addition to the “employer’s share” of current employee benefits – in the hundreds of thousands a year. Last year they established a “Pension Stabilization Trust” like the one the city made up, into which they siphoned more than $1,000,000, funding taken from payroll, for additional “side-fund pay-offs”.

I was happy that the man next to me did not let up. He asked pointedly, “what about pension reform?” He reminded everyone that most private sector workers don’t  get pensions, that they’re lucky to get a 401K.  And he opined that no matter how much money the taxpayers kick into this scheme, the deficit will not get paid down until there is true reform. “The can is just getting kicked down the road…” he said.

Willmann was visibly side-blinded by his comments. Her lips were taut when she glared at him and asked, “What would you suggest?”

He didn’t miss a beat – “either get rid of pensions altogether or make the employees pay more.” He suggested 401K’s into which the employer puts a “defined contribution,” meaning, we agree to one contribution and no CalPERS to raise it any time they make a bad investment. What we have now, a system that was never vetted before the taxpayers or voters, is “defined benefits,” meaning we continue to pay as much as CalPERS demands, based on their die-hard scheme to make the difference off a volatile stock market using really, really bad judgement.

As I expected, an exasperated Willmann barked back, “we can’t get out of CalPERS, buyout is nearly impossible…” Which is a plain lie, other agencies have done it. For perspective, CARD only owes $2.8 million, the city of Chico owes almost $150,000,000.

Willmann, her voice cracking,  revealed that she’s only recently started paying 8%. That’s right. Up until a couple of years ago, she claimed, “prior management paid nothing…” Sure, she’s right, but what she didn’t mention is that she was a member, a “classic” member, of prior management, and also paid NOTHING. A couple of years ago, CalPERS demanded “classic members” start paying, at 2%, inching their way up to 8% just this 2019/20 budget cycle.

Still sounding like she was going to bust out in tears, Willman went on to say she’d been to CalPERS, “asking them for reforms… we chose to save taxpayers’ money by paying it off as fast as we can…” 

Staying with CalPERS and continuing to allow employees like Willmann to pay less than 10% will only drag us deeper into debt. CARD’s debt has increased by over $1,000,000 since 2015. And I imagine you’ve heard about this week’s stock market downturn?

Again, the man next to me took up the offensive. “The city is  falling apart because the money is being transferred from infrastructure to pensions.” At this point Willmann  was ready to bargain, trying to shut this guy up. “So, you want the measure to say no money goes to pensions?”

To which I would respond, the parcel tax money would just free up the rest of the budget to make the side-fund pay-offs. Duh Lady. But my neighbor went back to “more meaningful pension reform, tax increases won’t solve it…”   

Looking desperately around, Willmann asked if anybody else had a question. Silence. So my neighbor took up the conversation again, reminding Willmann that the city was undergoing a building boom right now, and that would be generating a lot more revenue. This, as Willmann had pointed out, would include builder’s impact fees, which are only allowed to new facilities. That would make sense, developers should pay for facilities necessitated by new construction. And then the new housing  generates  more property tax  revenues, which mean more money for infrastructure upgrades and maintenance. But Willman still insists CARD needs a 30 year parcel tax, just to maintain infrastructure?

Suddenly a tiny, nasal voice came up from the back of the room – CARD board member and former city councilman Mike McGinnis. McGinnis was on the defensive. “We need to be aggressive in paying the pensions deficit…we didn’t create the pension system…” He then said, “more and more people are moving to Chico…we need to provide more recreation…”

First of all, the mission of the district is RECREATION, not PROVIDING A SALARY/PENSIONS TROUGH for a bunch of bureaucrats that don’t have anything to do with providing recreation. Second, all that NEW HOUSING COMES WITH IMPACT FEES AND CREATES NEW, HIGHER PROPERTY TAX REVENUES. In fact, those new houses won’t only be more expensive, they will raise the property value of houses directly around them.

This is the kind of “leadership” the CARD board provides. In fact, as city councilman, Mike McGinnis participated in many of the decisions that drove Chico into bankruptcy, including approval of ever-increasing salaries and benefits for city management. 

So, do you really think you want to entrust more tax money to an agency that seems to believe the taxpayers are just another herd of cash cows to bail out their pension fund?  

 

 

 

6 Responses to “Pension Tsunami Part 2: The lies, the lies, the lies – district manager claims CARD “debt-free”, meeting attendee reminds her of the pension liability”

  1. Jim August 17, 2019 at 7:17 am #

    Self serving public bureaucrats. Nothing new here. They couldn’t care less about the parks they only care about themselves.

  2. Scott Rushing August 17, 2019 at 8:41 pm #

    GREAT ARTICLE JUANITA.

    On Sat, Aug 17, 2019 at 5:39 AM Chico Taxpayers Association wrote:

    > Juanita Sumner posted: “As I was sitting at CARD’s “informational > meeting” last Tuesday (8/13), I wanted to argue with the things Ann > Willmann was saying, but I am always afraid to speak up at those meetings. > I’ve been attending CARD and city of Chico meetings for years, and I” >

    • Juanita Sumner August 18, 2019 at 5:15 am #

      You had to be there Scott, words could not describe that meeting.

  3. Suzanne Wong August 19, 2019 at 5:52 pm #

    Was the guy next to you, perhaps, Jon Scott who ran for city Council this past Fall?

    • Juanita Sumner August 23, 2019 at 8:43 am #

      No, I’d recognize him. I haven’t seen or heard anything out of him since that last election, I wonder what he is up to these days.

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