What will become of $30 million city surplus?

18 Oct

Dave Howell sent this right-on analysis of the Sept 23 Finance Committee Meeting:

That finance meeting WAS PACKED with crazy and outrageous information. And the local media DIDN’T MENTION ANY OF IT!

Here are some key takeaways the local media should have covered:

Last year at this time we thought the unfunded pension liability we were on the hook for was $128 million. Well, this year the bureaucrats and consultants say $146 million. AND NOW THEY TELL US WE OWE ANOTHER $140 MILLION IN INTEREST! But these numbers are low because they don’t include the 4.7% under performance from last year and also the prior year’s under performance. IT IS OBSCENE! WHERE THE HELL IS THE LOCAL MEDIA ON THIS?

UAL for CalPERs is 146.3 million which is a 43% increase over the last 5 years. UAL payments are now 9.9 million in 2021 and will grow to 13.2 in 2026. And remember this is assuming an unrealistic 7% CalPERs return. In all likelihood this number will be even worse as over the last 20 years CalPERs hasn’t come close to 7%. CalPERs return has only been 5.5%.

The City’s pensions are only 67% funded.

In addition to leasing the streets Morgan talked about the possibility of leasing the airport! WHAT A SCAMMER!

What was just as revealing was after the snake oil consultants left the meeting. Dowell went into the June and August financial statements. (What happened to July?) The city’s cash flow is up OVER $30 MILLION from last year resulting in an $8.8 million surplus! (You would think with a 30 million increase in cash flow the surplus would be even more.) And it sounds like these numbers will probably increase over the next few months. It turns out that despite the doom we were told the COVID crisis would have on the City’s finance, the crisis has generated a huge windfall for the City, similar to the Camp Fire situation.

Naturally, they didn’t even think of giving any of the surplus back to the taxpayers or using it to fix the streets. They are pigs at the trough and will take everything they can get, so even with millions in surplus you can bet they will be talking tax and fee increases next year! It just shows that no matter how much money they take, all of it and more will be devoured by pensions, other post employment benefits and raises. These people are parasites and they will bleed the people of this community dry! DON’T LET THEM DO THIS TO YOU!

Here was an interesting letter to the editor. How did the letter writer know about the surplus? I didn’t see it reported in any of the local media. Did the letter reader watch the video?

City budget surplus? How to help ALL city dwellers? Pave the streets and upgrade shoulders to sidewalks. Smooth pavement and safe routes help everyone. People can get moving: on foot, by bike, on skates or boards. Even in the car, the experience of quietly gliding over newly paved roads is a stress-reducer. Come on, council! Do what it takes: set money aside, get grants, and do it. Please!
— Kristi Ayars, Chico

4 Responses to “What will become of $30 million city surplus?”

  1. Scott Rushing October 19, 2020 at 12:09 pm #

    Hi Juanita: You have written another good article. Unfortunately, the politicians are not listening to your sage advice during this election season. After the first of the year, I will be pressing for reform in the CPD and BCSO.

    One item you nailed is the lack of media. There are no investigative journalists in Chico. You know what is available and social media has killed traditional media.

    Your group needs to show up at meetings and raise your voice. There is power in public pressure, regardless of the cause.

    I live and work in Ventura, but I have decided to make a public comment at both the Board of Supervisors and Chico Council at least once a month starting in January. I may be a voice in the wilderness, but I’m driven. This new killing has energized me to press for change in law enforcement. Changes will save taxpayer money as well. The Chico budget is about 50% dedicated to the law enforcement group, and they want more money. Officers can be replaced by cheaper yet effective behavioral health professionals and Community Srvice officers, to counsel the homeless through the process of getting out of the parks and public areas. It is much cheaper for the taxpayer to attack the problem, not the people.

    Adding new cops will increase the unfunded pension liability and take taxpayer money from basic services to highly paid cops.

    I am fortunate to have money in the stock market. I am pleased to get a 5% annualized yield. I carefully trade selected stocks and mutual funds. Cops get a guaranteed pension with little contribution *and zero management*. That plan is NOT sustainable. The projected yields are way too high, over 7%. Treasury Bills, guaranteed by the federal government, are paying under 1%. I am skeptical that state financial advisors can “beat the market.”

    Lastly, I am a real estate broker, and I watch how Chico’s home prices have skyrocketed since the Camp Fire. Each new sale at record prices means a flood of new property tax money into local city and county coffers. In effect, the City of Chico got a financial boost from the tragic fire. These new homeowners will not default on tax payments, so the county has a new cash cow. Despite all of this the UAL is increasing. *You know why,* but I doubt many Chicoans are watching and acting.

    I don’t see anyone but you fighting the fiscal battle. You know city officials would like you to go away quietly. Please don’t do it!

    Best- Scott *Scott Rushing*

    On Sun, Oct 18, 2020 at 2:42 PM Chico Taxpayers Association wrote:

    > Juanita Sumner posted: ” Dave Howell sent this right-on analysis of the > Sept 23 Finance Committee Meeting: That finance meeting WAS PACKED with > crazy and outrageous information. And the local media DIDN’T MENTION ANY OF > IT! Here are some key takeaways the local media shoul” >

    • Juanita Sumner October 21, 2020 at 1:12 pm #

      Well, I have to give the credit to Dave Howell – he actually watched that meeting, all of it, that was a gobstopper. Then he caught stuff I had not had a chance to blab. It’s nice to get somebody else’s analysis, sometimes I know, I sound like a broken record.

      Thank you for your analysis here – yes, it seriously pisses me off to watch these idiots make horrific financial decisions for which they will never be held accountable.

      Right on about housing prices – this has been the city mantra for many years – “we need more affordable housing, so we need to gut the requirements for building…” But somehow this always raises the prices through the roof.

      And yeah, that means our city is getting tons of revenues – but they still cry poormouth because the UAL is insatiable. Reminds me of one of my favorite episodes of Star Trek ( I know you’re a Trekkie Scott!) – The Doomsday Machine. Leftover from ancient nuclear wars in some forgotten solar system, it roams space, eating everything in it’s path to sustain it’s energy. It annihilates whole solar systems, but never has enough. That’s the CalPERS fund, eating millions a year but still broke, leaving cities, counties, and other local agencies all over California in ruins.

      And our UAL continues to get bigger because of poor management on our end – the city has added THREE NEW MANAGEMENT POSITIONS in the past year, at over $100,000/year salary, plus very generous benefits packages. They given the cops an automatic raise schedule, with little or no personnel review. Orme says there have been no raises – God, he is a shameless liar. He himself took a 457 plan, into which we put roughly $20,000/year in addition to his CalPERS package.

      So thanks Scott, I’ll pass that along to Dave too!

  2. BC October 23, 2020 at 11:11 am #

    What do conservative Pro-Trumper’s and Progressive/LBGTQ/Needle Exchange/Homeless Advocates have in common? A lot! It turns out that most important issue for all groups is the same one: lack of money due to municipal spending and pensions.

    Where you stand in the political spectrum usually guides your go-to issue. If you are progressive your issues might be social justice, equality, fairness, and racism. On the conservative side of the isle your issues might be budget control, limited government, lower regulation, or other. While the causes, personalities and social platforms of the groups could not be more different, they share the most basic common goal which is moving their cause/agenda forward.

    But reckless municipal spending does not move ANYBODY”S agenda forward. There is not adequate funding in the city budget for your issue. Do you want to build affordable housing to help the homeless? Do you want financial support for people of color? Do you want to fix potholes, clean up the park, fund the library, more community support for public safety? Regardless of where you sit politically or socially, there is no funding for your issue. And there won’t be. Not now, not next year, and perhaps not ever.

    When it comes to municipal finance, there is the pension issue, and everything else. Full stop. Nothing else even matters. If you don’t pay attention to the pension issue and the manner in which it soaks up all available municipal funding, then you are not truly an informed advocate for your pet social issue, whatever it might be. Suppose your issue is low-cost housing renovation loans for transgender folks (a very abstract example). You can not fully support this cause without understanding that there is no funding for your issue. To get the funding you might need, you need a municipal government willing to prioritize the spending to fund your initiative. They cant. They have no flexibility. They might soon be one quarter Billion dollars in debt!

    Informed websites like this blog don’t even have the resources to properly pin down the number of debt owed by the City of Chico. Is it $140 million, $120 million, plus or minus the7% promised by CalPERS?

    Everybody should be upset about the municipal dept. of Chico. If you are a progressive, it should upset your sense of equity, fairness and income distribution. If you are a conservative, it should upset your principals of limited government and municipal overreach.

    It seems like the folks on the right pay more attention to this issue. The folks on the left are so concerned with their social justice, they don’t seem to see that it can actually never happen under the current spending structure.

    Vote your best interest, but be a bit enlightened about the bigger picture.

    • Dave October 23, 2020 at 5:27 pm #

      The only thing we can count on is that the local politicians and bureaucrats will do all they can to raise taxes and take on more debt and continue to divert as much money as possible from roads and everything else in order to kick the can down the road as far as possible. And they don’t care how that will affect anyone but themselves. We need to call them out at every chance.

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