Bill Smith: The state has put CARD in a tough spot

2 Sep

I was glad to see some discussion of the CARD parcel tax measure in the ER letters section:

Enterprise Record, 9/1/2019

I attended a CARD meeting about the proposed parcel tax. CARD is in a tough position, the state legislature does not allow them to raise monies via a sales tax or gas tax, its only by parcel tax or user fee. I also understand CARD user fees are probably already at what the market will bear.

What bothers me is the inequality. Roughly half of Chico’s pre Camp Fire populations owns property, they would end up paying the recreation tax if approved. Yet the other half that don’t own property plus the displaced Paradisians that are qualified to vote, get to vote, on a  tax they won’t have to pay if passed.

It’s the inequality that I can’t stand, not the recreation fee itself. The state has put CARD in a tough spot.

Bill Smith, Chico

Well, I’m glad to hear somebody is attending these meetings. I’ve been to two and attendance was less than 20 people, including local media, CARD staff and staffers from other local public agencies.

Smith says the state has put CARD in a tough position, restricting the agency to raising funding by way of program user fees or public indebtedness – parcel taxes and bonds.

If Smith attended the meeting then he knows about CARD’s pension deficit – over $2.8 million. He knows CalPERS and the employees have put CARD, and the taxpayers, in a tough position. Willmann stood up there and told us, without batting an eye, that for years now CARD has deferred maintenance on district infrastructure but continued to move money into their “pension liability reserve.” In fact, their 2019-20 budget shows an allocation of $700,000 into the reserve fund, and a $261,748 “side fund” payment to CalPERS. Again, I’ll remind everybody – that’s in addition to the 6 – 9% of salary they pay monthly for each employee.

Mr. Smith should take a look at the CARD budgets for the past few years, available on their website.

https://www.chicorec.com/district-budget

He’d see that the agency gets more money from the county every year.

Revenues                  2018-19                                         2019-20         NOTES

RDA pass through   $1,090,000                                     $1,250,000       Redevelopment agency funding, $3 paid for every $1 borrowed

Tax income county   $3,045,000                                     $3,249,000      Property taxes and vehicles fees

Park impact fees            $85,000                                          $80,000     Developer impact funding, restricted to new facilities

Assessments                $136,746                                        $148,881      Fees collected from property owners in newer subdivisions

TOTAL TAX REV        $4,356,746                                 $4,727,881      Increase of $371,135 or about 8%

Program fees             $3,479,080                                       $3,804,255     Willmann says these are adjusted for inflation

Facility Rentals            $499,329                                         $550,988     Includes everything from ball fields to Park Pavilion

TOTAL CARD REV     $3,978,409                                 $4,355,243     Increase of $376,834 or about 9%

You can look at a few more past budgets at their website, you’ll see that revenues increase steadily as Chico grows and property values are high.  New development brings fees to cover new parks, and property values continue to rise in older neighborhoods. This should be sufficient to provide for Chico’s growing needs. But as you see below, the more revenues increase, the faster the salaries and benefits eat them up.  Even though they still have only 34 full time positions. 

Expenses                     2018-19                                        2019-20 

Salaries/Benefits      $5,700,093                                  $6,322,852    Increase of $622,759, or about 11%

Services/Supplies     $2,071,268                                  $2,266,348    Increase of $195,080, or about 9%

Contributions                $15,000                                            $15,000

Contingencies               $25,000                                            $25,000

Notes payable/leases     $1,005                                               $1,000

What I don’t see on the expenses list is a separate notation for the Pension Liability Trust allocations or payments made out of that special account. I wrote a note to General Manager Ann Willmann asking about that, I’ll get back with whatever answer I get. 

Another question I asked Willmann was whether or not the board approved her salary “adjustment” that was on the agenda for the August board meeting. 

https://www.chicorec.com/files/7dd0e72c7/August+15+2019+Agenda.pdf

General Manager Performance Evaluation and Possible Salary Adjustment
The Board of Directors will consider General Manager Ann Willmann’s performance over
the past year of her employment and any adjustment in salary or other amendment of
her employment contract deemed appropriate as a result thereof – Information/Possible
Action

I’ll get back to you with that.

The rest of Smith’s letter is not correct. 

What bothers me is the inequality. Roughly half of Chico’s pre Camp Fire populations owns property, they would end up paying the recreation tax if approved. Yet the other half that don’t own property plus the displaced Paradisians that are qualified to vote, get to vote, on a  tax they won’t have to pay if passed.”

He’s wrong, even people who don’t own property will pay. This tax will show up on property tax bills, commercial and residential, and landlords will raise rents to cover it. For business owners it will be another expense to pass along to customers. 

The real inequality is that it is a flat parcel tax. No matter how large the property or how many units it has, the tag is the same. So the family living in the 1100 sf house on the eighth of an acre lot, renter or owner, will pay the same as the family living in the 2800 sf house on the half acre lot or the apartment complex down the street. 

The other point I gathered from looking at the CARD budget is that no parcel tax will ever suffice.

 

12 Responses to “Bill Smith: The state has put CARD in a tough spot”

  1. bob September 2, 2019 at 6:01 pm #

    “Yet the other half that don’t own property plus the displaced Paradisians that are qualified to vote, get to vote, on a tax they won’t have to pay if passed.”

    Anyone qualified to vote lives within CARD’s jurisdiction so one way or another they WILL pay. The people who rent will have at least a portion, if not all, of the tax increase passed on to them.

    Smith is an economic illiterate if he thinks otherwise, which apparently he does. How much you want to bet he was educated in the public schools?

    • Juanita Sumner September 2, 2019 at 6:57 pm #

      Yeah, we have to remind people, everybody pays, but the smaller property owners and renters pay disproportionately.

      I worry that most people, being products of our California schools, are economically and politically illiterate.

  2. bob September 2, 2019 at 6:04 pm #

    “The other point I gathered from looking at the CARD budget is that no parcel tax will ever suffice. ”

    Of course not. That is why CARD is going to borrow against the tax increase money thus getting even deeper in debt. A real bad idea! The last thing the taxpayers of Chico need is more debt at a time when CARD and the City are drowning in unfunded liabilities.

    • Juanita Sumner September 3, 2019 at 7:18 am #

      Thanks again Bob, I haven’t had time to cover this point either. CARD and the city are both talking about financing bonds with the receipts of their tax measures. You know what’s happened in Sacramento where they are pushing the same scheme – even people and groups who supported their sales tax measure two years ago are angry now because the city isn’t carrying out the promises they made for the spending. Instead of investing in poor neighborhoods to fix neglected infrastructure (sound familiar?), they are using the money to secure bonds.

  3. Scott Rushing September 2, 2019 at 7:32 pm #

    Dear Juanita

    Keep fighting for transparency. The Chico ER won’t. Check out how the Chico City Attorney, really an LA-based law firm, is bleeding the Chico taxpayer for legal fees and court costs for the rogue Chico PD cops who killed Breanne Sharpe, Desmond Phillips, and Tyler Rushing. Mr. Orme will not be sharing this with the public. These costs are kept secret by Orme and his cronies.

    I believe over one half of the city budget is for the police department.

    Scott Rushing

    On Mon, Sep 2, 2019 at 4:02 PM Chico Taxpayers Association wrote:

    > Juanita Sumner posted: “I was glad to see some discussion of the CARD > parcel tax measure in the ER letters section: Enterprise Record, 9/1/2019 I > attended a CARD meeting about the proposed parcel tax. CARD is in a tough > position, the state legislature does not allow them t” >

    • Juanita Sumner September 3, 2019 at 9:19 am #

      Thanks Scott, it’s important to keep this stuff in the public eye.

  4. bob September 2, 2019 at 8:52 pm #

    “I also understand CARD user fees are probably already at what the market will bear.”

    Then why should the taxpayers be forced to subsidize them further?

    • Juanita Sumner September 3, 2019 at 6:09 am #

      Thanks, there’s a point I didn’t get time to cover.

      I don’t believe the user fees are anywhere near “market rate” – in fact, the only reason they are able to offer these programs so cheap, so cheap they can undercut local businesses like Off the Wall Soccer, is that they have a lot of taxpayer dollars to keep these programs afloat. I don’t think any program they do is so popular it pays for itself – how could any program pay the kind of money it takes to keep CalPERS going? And I don’t believe the taxpayers should be on the hook for stuff like pickle ball or water polo.

      Frankly, I don’t think CARD should offer any programs, they should just be responsible for providing and maintaining the facilities the public truly wants. A man at one meeting I attended made it clear he and his neighbors want Shapiro Pool up and running. I believe CARD purposely willfully allowed Shapiro Pool to slip into disrepair in order to bait the public into this tax measure with promises of a grandiose new aquatic center they will never have enough money to build.

  5. bob September 3, 2019 at 10:43 am #

    Here is a great article by Richard Ryder. It regards how the local media reports on proposed tax increases, specifically school bonds. But the local media does the same for all local tax increases.

    With two tax increase measures already on the ballots for next year (one in March and the other in November) CUSD won’t add to that, especially since they got a tax increase in 2016, but I’d bet that in 2022 or 2024 CUSD will have another tax increase on the ballot.

    Anyway, what Ryder mentions applies to the CARD property tax increase and the City sales tax increase. Just read the ER’s last editorial about CARD’s tax increase. Wolcott blames the deferred maintenance on the long over recession instead of the true cause, the pensions. Wolcott doesn’t even mention that CARD will use the tax increase money to get us into even more debt. All Wolcott does is repeat what CARD told him and he encourages everyone to attend CARD’s dog and pony show that pushes for the tax increase.

    People, that’s not journalism!

    http://www.flashreport.org/blog/2019/08/18/avalanche-of-ca-school-bonds-on-your-ballot-in-2020-biased-press-will-help-them-pass/

    • bob September 3, 2019 at 10:46 am #

      If there were any journalists at the ER this is the type of reporting we’d be reading in their paper:

      In this day and age, EVERY CA school bond is for pensions. EVERY one. Pension obligations (and pay increases) are gobbling up more and more of school budgets. Employee costs in the San Diego Unified School district recently have EXCEEDED the entire district school budget. But not one bond measure will tell you that. Seldom will the press reveal this fact.

      Instead the bond proponents will list capital improvements and even MAINTENANCE costs as the reasons the bonds must be passed. School budgets are to be spent for the benefit of the district employees. Everything else is being fobbed off on local taxpayers.

      What Rider said above applies to CARD and THE ENTIRE city government of Chico.

      • bob September 3, 2019 at 10:49 am #

        Much of it relates to the unspoken press policy of “deference to authority.” After all, the bureaucrats and politicians are the “experts” who tell us what we need to know.

        Ain’t that the truth. But in my opinion, the ER is too lazy to seek out anyone but bureaucrats and politicians.

      • Juanita Sumner September 3, 2019 at 10:58 am #

        Thanks Bob, good reading for under the fan during these last days of Summer.

        I agree, Chico has no real reporters anymore. I remember Dr. Richard Ek, he was great. Not only did he hold the CSUC student paper (The Orion) up to a higher standard, he continued to practice diligent journalism long after retiring. And, even though he was a CalPERS pensioner, he shined a light on the whole system.

        Doc Ek told me to keep writing, that’s what I intend to do.

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