Council rushing through closed meetings to forward the Pension Obligation Bond, Staff reports misleading – they want to ram this thing through before the taxpayers catch on

15 Mar

Last week Chico City Council and Staff confirmed my suspicion that they are using closed meetings to run Staff’s Pension Obligation Bond by the taxpayers. Without any notice to the public, and only 46 members of the public participating via Zoom, they combined two agenda items. The POB was supposed to be discussed as Item 5.12, but they summarily decided to discuss and vote on it during the Item 5.1 – Scott Dowell’s 5 year projection report.

While the POB was a small part of the 5 year projection, I don’t think it was appropriate to just move forward with the 5.12 discussion. Here’s the thing – I read the agenda ahead, and planned to participate in the 5.12 discussion. When I tuned in, there was no 5.12 discussion, and no explanation why. So, I got cut out. I don’t think that’s okay. 

So I asked the clerk what happened to Item 5.12.  She responded:

The POB was added to the 3/2/16 agenda (with items carried over from the 2/16/21 agenda). Because the POB was tied into with 5 year projection (Item 5.1.), staff discussed the items together.

Council took the following action:  A motion was made by Councilmember Morgan and seconded by Councilmember Denlay to authorize staff to continue exploring the CalPERS Unfunded Accrued Liability (UAL) restructuring including a legal validation process, applicable public outreach and analysis for possible pension obligation bonds, with it noted that this action does not commit the City to move in this direction. Staff was also requested to bring back more information to the Council regarding the process as it becomes available. The motion carried by the following vote:

AYES: Brown, Denlay, Morgan, Huber, Tandon, Reynolds, Coolidge    NOES: None”

I was just floored. Another smooth move under cover of COnVID. 

And of course the report is misleading.

“Staff is requesting approval to continue exploring the CalPERS Unfunded Accrued Liability (UAL) restructuring
including a legal validation process, applicable public outreach and continued analysis. This process would take
approximately four months and prepare the City should City Council decide to issue POBs in the future.”

It’s not a “restructuring,” it’s NEW DEBT. The “legal validation process” is completely administerial – no ballot measure, no voter approval. “Applicable public outreach“? Here’s what it says in the report: “Continued public education and information shared through reports to the Finance Committee and other public forums.” Really? There are no “public forums” right now, only Zoom meetings, with poor reception and limited participation. And that “continued analysis” is going to cost “$10,000 – $20,000”. That in addition to $25 – 30,000 for the “legal validation process“. 

Staff’s report also recommends “initiate a legal validation process” as Step 1, while “Continued public education” is Step 3.

Public education? Shouldn’t it be “public input”? 

So you see this whole thing is being ramrodded in as quickly as possible in closed meetings because they don’t want the public to find out what they’re really doing. 

Normally this is where I would tell you to write to or call your city council rep, but I keep hearing back from folks who have tried that, and got no  response. I can’t report any better from my rep Kasey Reynolds. And you see the vote above – unanimously idiots. So, I would say, don’t waste your time trying to contact them directly, write a letter to the editor of either the Enterprise Record or the News and Review, or both.

And if you really want to get your point across, you have to stick your neck out there a little.  Do your errands in a yellow vest, with “NO NEW TAXES FOR CHICO” scrawled across the back. Place a small sign in your car window saying same. If you have windows on your home facing the street, make 8 x 11.5 signs and post them in those windows. Get some blank postcards, write NO NEW TAXES FOR CHICO on one side, and send it to your rep via snail mail to their home. 

Arlo Guthrie said, “One guy is crazy, two guys are (bleeep!), but three guys – THAT’S a MOVEMENT. And he’s right.  They can ignore one or two of us, but I’m telling you, three, four, five more, and they start to pay attention. 

I will remind you until I’m blue in the face – if we let them sell these Pension Obligation Bonds, we are on the hook for the pension deficit FOR-EV-ER, not to mention, the new debt. Meanwhile, we will watch our streets and infrastructure deteriorate to 3rd World standards. As their investments fail, they will bottom out first the General Fund, and then all the other funds, to service the bonds and pay the still growing Unfunded Pension Liability. As you see in the report referenced above, Staff suggests “Projected costs [for the POB] are as follows and would come from the General Fund:  • Legal validation process: $25,000-$30,000.  • Public education and continued analysis by a municipal advisor: $10,000-$20,000.”

So don’t wait until it’s too late, and then complain – COMPLAIN NOW!


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