Yes, Charlie Harper was an idiot – are we idiots too?

6 Mar

Sorry to be a broken record these days, but I can’t emphasize enough that this Pension Obligation Bond that Staff is trying to force through will tank our town. While there is a complicated mess going on in our town right now, all related to poor management, the POB is the worst thing coming at us right now. I’ll repeat – this bond would cement the taxpayers into paying the pension deficit created by Staff. Meaning, all our resources would be drained into paying the deficit by way of the bonds – not to mention, a proposed sales tax increase. The POB comes before any other “obligations” – like roads, park, sewer and other infrastructure. And, as the economy tanks, the revenues will turn into debt, the biggest debt the city has ever taken on. Don’t be a dupe – the sales tax measure and the “roads” bond are just part of the exhaustive scheme to finance the POB.

Our biggest financial problem is Staff and their unsustainable salaries and benefits. Instead of trying to control employee costs, City Manager Mark Orme and Financial Services Director Scott Dowell have convinced council that we can just put it all under the rug with a POB. 

I’ll guess I’ve done more research on this topic than any member of council. I’ve tried to share what I’ve found – here’s an article I sent to Kasey Reynolds and Sean Morgan. I chose them because I’ve had a pretty good rapport with them in past, and the other night when they voted YES on the sales tax increase and the “roads” bond, they at least tried to fake wanting to vote NO. So, I think they are malleable – you know, like metal – if you put enough heat on it and beat it with a hammer, you might get what you want. 

A recent article from, 2/17/21

“In the recent years, the Government Finance Officers Association (GFOA) came out with a stern advisory for local and state governments to NOT issue pension obligation bonds (POBs) to meet their unfunded liabilities and made a case for them being ‘complex instruments that carry considerable risk.’ It’s also important to note that some of the large municipalities that filed for bankruptcies in the United States had some exposure to pension obligation debt – including the City of Stockton and City of San Bernardino – in the years leading up to their insolvencies.”

Here’s an important point I want to come back to later – 

“Primarily, these pension liabilities are based on a few factors: retirement age, mortality, projected salary increases attributed to inflation, across-the-board raises and merit raises, increases in retirement benefits, cost-of-living adjustments, valuation of current assets, investment return and other matters.”

For now I’d like to look at how exactly these bonds work and why the risk isn’t worth it for Chico.

Right now Staffers, especially Mark Orme and Scott Dowell, are trying to mislead council as to the risk of this scheme. 

“One of the biggest challenges and largest variables in the aforementioned list of factors is the investment return on the pension portfolio; this single variable is also responsible for creating the large unfunded liabilities for many of the local governments.”

This is the risk that was ignored in the late 1990’s, when CalPERS said they could fund the outrageous pensions by playing the stock market, and here’s what happened:

“For example: a pension fund assumes an investment return of 7% for the year and bases its actuarial pension obligations for local cities and counties; however, the financial markets had a terrible year and the pension fund only generated 2% returns – this means that the 5% gets added to the unfunded liabilities portion for cities and counties – because that money, originally expected to be generated through investment returns, is still needed to fully meet the pension obligation for city and counties.”

On the one end, CalPERS was making bad investments – we see now, many of those were based on bribery and personal gain. On the other end, CalPERS kept promising better returns, and cities, counties and other local entities all over California started making unsustainable agreements with employees, giving across the board salary increases and overgenerous benefits packages. Even as CalPERS has failed again and again, government agencies like City of Chico have ignored the crisis, continuing to agree to over-generous salaries and perks, even lately creating three new management positions, with salaries over $100,000/year.

Here’s an older article (2013) that details “CalPERS’s three-decade-long transformation from a prudently managed steward of workers’ pensions into a highly politicized advocate for special interests.”

It was at long before that – early 2000’s – when former city manager Tom Lando made an MOU (memo of understanding) for Chico employees (including himself) that “attached salaries to increases in revenues, but not decreases…”  That MOU resulted in Lando’s salary going from about $65,000/year to over $130,000/year. In retirement, he is now making about $155,000 (that’s where the COLA comes in). 

The gentleman mentioned in that article, Alfred Villalobos, committed suicide about a year later over allegations that he had been bribing/accepting bribes to unload bad stocks. Just a year ago, another scandal led to the forced resignation of Chief Investments Advisor Ben Meng.  Meng resigned Aug. 2019 after questions arose about why he did not recuse himself from decisions by CalPERS to invest in private equity funds in which he was holding stock!  CalPERS made a more than $1 billion investment in April 2019 in a Blackstone fundMeng owned stock in, and Meng never recused himself.

Meng’s successor, Henry Jones, was also asked to resign, critics accusing him of concealing ethics violations made by Meng. Jones denied everything, saying, “CalPERS has known about questions regarding Ben’s Fair Political Practices [Commission] disclosure filings...”

So there it is – Meng disclosed his investments in those private equity funds, but the board still not only appointed him Chief Investments Advisor, but approved a $1 billion investment in those same equity funds.

So, CalPERS is a total disaster of fraud and corruption, and everybody’s known it for at least six years,,  but the city of Chico didn’t change a thing, just kept doling out higher salaries and refusing to raise the employees’ share of the cost to a sustainable level. 

Let’s go back to that first article – “Primarily, these pension liabilities are based on a few factors: retirement age, mortality, projected salary increases attributed to inflation, across-the-board raises and merit raises, increases in retirement benefits, cost-of-living adjustments, valuation of current assets, investment return and other matters.”

Chico makes all of the above mistakes, failing to manage employee costs. I like to refer to this bit from “Two and a Half Men” – 


Yes, Charlie is an idiot. Get what I’m  saying? 

This is how the city of Chico spends money. New Public Information Officer? Homeless Coordinator? Another management position for Public Works? Complete with inappropriate shoes? All three positions created – not filled, created – in the last year, by Mark Orme, at salaries over $100.000/year. 

Does this sound like prudent management to you? Frankly, I think the first thing we need to do, is get rid of Orme, and send his buddy Dowell right out the door behind him. 

And then, in 2022, we should probably dump Reynolds and Huber. Because they just signed on to the sales tax increase and the “roads” bond. Coolidge already alluded to those revenues being used to service the POB. Another note from

“Furthermore, the taxable form of pension debt is often secured by some sort of revenue sources, like sales tax or property tax, which means that the issuance of this debt cuts into a municipality’s debt capacity that could be used for other purposes. Issuing taxable debt to fund the pension’s liability increases the jurisdiction’s bonded debt burden, and potentially uses up debt capacity that could be used for other purposes. Also, the taxable form of debt is often issued without a call option, which makes it hard for a municipality to refund the debt at a lower interest rate in the future.”

Remember what Coolidge said at Tuesday’s meeting – “it’s open for discussion… what size bond and what percentage of that sales tax would go for a road bond…”

Orme, Dowell, and Coolidge, are knowingly trying to dupe us into thinking that sales tax increase would be for public safety, and the “roads” bond would be for roads. “Special” taxes, oh yeah! 

Don’t be a dupe, tell them you’re not buying it. 


2 Responses to “Yes, Charlie Harper was an idiot – are we idiots too?”

  1. bob March 6, 2021 at 3:28 pm #

    Well, Charlie is the morons on the city council. We need the guy in the blue shirt and tie to explain the financial situation to our Charlie. The cup with all the holes is the pensions, OPEB and all there rest of the ever increasing government employee compensation. The water is our tax money.

    Problem is…we don’t have the guy in the blue shirt and tie to explain it to the idiots on the council. Sure the guy in the blue shirt and tie is a crook BUT at least he tells Charlie the truth.

    Instead, we have Orme WHO IS EVEN WORSE. Orme lies and only tells the morons on the council there is no alternative but bury the taxpayers in more debt and tax increases.

    And why wouldn’t he…he’s one of those gooberment employees with a fat ass pension and ever increasing salary. See the conflict of interest? And there’s others such as the public employee unions giving money to those who run for city council and then turn around and “bargain” with the city council for their compensation.

    When you have such blatant conflicts of interest how can it NOT be obvious that THE SYSTEM IS CORRUPT!

    • Juanita Sumner March 7, 2021 at 6:05 am #

      Yes, there’s another point I will repeat repeat repeat – Orme has got to go.

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