Archive | April, 2021

Sean Morgan has received over $86,000 in Paycheck Protection Program loans, other council members have received PPP loans, while their businesses have not been shut down – what incentive do they have to re-open our town?

28 Apr

This COVID shut down has hurt people. In Chico, businesses have gone under, people are struggling to make their bills, and the school district reports kids are suffering from depression and even suicidal thoughts. Personally, I’ve watched a few of my older neighbors and friends struggle with their own mental health, and even alcohol and drug addiction.

I witnessed a different kind of insanity on the video of last Tuesday’s (4/20/21) Chico City Council meeting – a cop, out of uniform, masked like a bandit, coming within inches of citizens, threatening to arrest them if they didn’t leave a public meeting.

We’ve allowed our city to turn into a Fascist state. We’ve gone along with the madness. Masks that studies show are not effective, a ruling class allowed to decide which businesses are “essential” and which aren’t, while they foist tax increases, increased builder fees, and rent control on us from behind closed doors.

And they profit, while we lose. Remember when we found out, former mayor Ann Schwab admitted business was up, way up, after the COVID shut down. That’s right, a bicycle business is “essential”. Well, how about a candy store? Council member Kasey Reynolds’ candy story, Shuberts, has not been closed one day since the shut down.

It’s true, certain council members who have been pushing this shut down have profited from it. Here’s a link to the government COVID relief site, the Paycheck Protection Program:

https://www.sba.gov/funding-programs/loans/covid-19-relief-options/covid-19-economic-injury-disaster-loan#section-header-12

And here’s the link to Andrew Coolidge’s loan:

https://projects.propublica.org/coronavirus/bailouts/loans/coolidge-public-relations-inc-2449058603

Coolidge owns “Coolidge Public Relations Inc”, which runs those home, garden and bridal shows at the fairgrounds. I assumed COVID would have shut that kind of thing down, but read that he just had a show in January. I also found that he received $10,400 in COVID relief funding for that business, for “payroll”.

I was able to search the others through that page. I was surprised that Kasey Reynolds would get anything, because her business has actually done quite well during the shut down. She still got $68,500, for “payroll”.

The big winner was Sean Morgan, who owns a business called “InvestorKeep”. He received $86,000 from this program, again, for “payroll”. Frankly, I don’t think he has a payroll aside from his own salary but maybe he’ll chime in on that?

Deepika Tandon owns Guzzetti Catering and Indian Food – she was less greedy – only $5,290 for her suffering. The others do not own businesses that I know of.

You have to ask yourself, what incentive do these people have to re-open our town? These are the people who have ordered the arrest of three people who dared to enter a public building during a “public” meeting. Chief Madden kept telling them they were interrupting a “public” meeting.

The only word I can think of for this is ABSURD.

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See the video here – Coolidge, Morgan and Madden kicking the public OUT of the public house

27 Apr

Attachments areaPreview YouTube video Freedom FightersFreedom Fighters

Mayor Coolidge criminalized those protestors by closing the meeting. He wants the meetings closed so he can raise your taxes without having to hear what you think about it

24 Apr

What a wild week! Three desperados wanted for refusal to leave public property.

https://krcrtv.com/news/local/chico-police-searching-for-3-women-involved-in-tuesdays-council-meeting-disruption

Officials said speakers were given instructions to wait in the speaker line and that only one speaker was allowed into the chamber at one time. Masks were also required for anyone actually entering the Chamber.

Frankly, I think this is the stupidest thing I’ve ever heard. Okay, I’ll wear a mask, I’ll socially distance. But restaurants are open, sporting events are open, children are attending school, and excuse me – grocery stores have remained open the entire time. Why aren’t city chambers open to the public? We are expected to stand outside chambers, in whatever weather, with “protestors” forcing their way into our body space, screaming over the audio from the meeting? Well, here’s what real Americans would do about that.

“According to police, as the meeting started on Tuesday evening, a group of people pushed through the front doors and 15 people entered the council chambers. This forced Mayor Andrew Coolidge to put the meeting into recess.“

I can’t believe what happened next.

Law enforcement spoke to the group of people and explained they needed to fill out speaker cards if they wanted to speak to the city council. They also explained California Penal Code Section 403 to the group: “Every person who, without authority of law, willfully disturbs or breaks up any assembly or meeting that is not unlawful in its character…is guilty of a misdemeanor.”

Obviously, these folks did not break up the meeting, Mayor Andrew Coolidge broke up the meeting. He could have respected these people’s right not to mask, and attend a public meeting in a public chamber, but he didn’t. He called the cops on them.

After explaining the law to the group, police said most returned to the outside. However, three maskless people refused law enforcement’s orders to leave and the meeting was subsequently adjourned. CPD said officers used discretion and didn’t arrest the three people that night.

But, “On Thursday, CPD announced they are currently seeking the identity of the three people to hold them criminally accountable for their actions.”

I feel Coolidge set these three women up – he’s the one who closed the meeting. All those citizens wanted was their right to assemble to seek redress of their grievances before their elected officials. None of them advanced beyond the seating area. You’ll notice, the police aren’t seeking them for their refusal to mask, or their refusal to leave – neither of those are criminal offenses. Coolidge handed the cops a criminal offense by closing the meeting.

Coolidge wanted the meeting closed because he knows a lot of people just won’t attend. I, personally, don’t feel the atmosphere is physically safe, I won’t stand around in the dark in a mob of strangers who could turn ugly at the drop of a hat. I feel Chico City Council and Staff have used COVID to create and perpetuate a hostile atmosphere for the citizens who want to participate in government because they don’t want to discuss the details of the Penson Obligation Bond, controversial new hires, or the recent changes made to management contracts, with the public in the room.

Council and Staff are feeling the push-back – people see what they are doing with the Pension Obligation Bonds, and they see that employee costs are not being managed properly. A reader commented recently:

“We all know Chico is grossly mismanaged no matter which party has been in charge.” I agree, every council has let Staff lead them instead of the other way around. Of course Staff is out for their own gain, with no concern for the taxpayers at large. As for POB’s, “… playing the stock market with public money and without our consent is wrong. These elected and non-elected officials can gamble their own cash to fund their pensions, let’s see how that works for them.” Good point – why don’t they use their own money? Too risky?

This reader reported that she had made similar comments on Chico Engaged for next week’s meeting. I know Dave has chimed in too. I hope more people will. We might still stop this train wreck, especially since I got this comment from Council member Kami Denlay-Klingbeil:

“I have to agree, they are not fiscally responsible. Let alone the concerns that it is a violation of tax payer rights when you look into the state constitution and the super majority requirement from a ballot by the voters anytime the government seeks to assume a new debt.“

Wow, KDK has an awesome point there, and I hope to hear more from her on Tuesday night when this subject comes up at ANOTHER CLOSED MEETING.

Why would a panel of idiots who would violate the First Amendment care about assuming a new debt without the voters’ consent?

 

Pension Obligation Bond on the agenda for Tuesday night, please contact your district representative and tell them this is a bad idea

17 Apr

well, I got the agenda for next Tuesday’s city council meeting, and there it is – staff is bringing forward the Pension Obligation Bond for council’s approval. Four votes is all it takes to “validate” a tax, the proceeds of which will be used exclusively to feather the nests of employees who refuse to make rational contributions to their retirement.

I’ve written here, I’ve written letters to the editor, and I’ve written emails to my district rep, Kasey Reynolds, as well as other members of council. I’ve tried to tell them what I have found in my research regarding POB’s. I’ve read various financial journals, I’ve read reports from public agencies, and the only good things I have read about these bonds come from the Consulting firms that are paid to implement and manage these funds. The Consultants who presented this plan to Chico city council admitted many times there are great risks to implementing these bonds. They also told Council that there would need to be a new Revenue stream to service this Bond, or the payments would be coming out of the general fund at the expense of infrastructure and services. They even mentioned a California City that had to lay off police officers when they could not make the payments on their POB.

Let me explain again how these bonds work. The city has a unfunded balance on employee pensions. With council’s approval, staff will sell bonds, and invest the proceeds in the stock market hoping to make enough money to pay back not only the bond loans, but the unfunded pension liability. If you don’t see the ridiculous nature of this plan, I just don’t know how to get through to you. I just can’t understand a person that would think this is a good idea.

The consultant also explained, that if the city does not come up with a new revenue source to secure this Bond, they will be forced to bottom out the General Fund to make the payments when the stock market doesn’t perform as hoped. This bond supersedes ALL other city debts and expenses- streets, sewer, cops and fire – OMG! – even CalPERS! The consultants mentioned a California jurisdiction that had to lay off cops.

So when I wrote to my District representative, Kasey Reynolds, this morning, I tried to be polite but I really don’t think she’s reachable. She thinks she’s been elected to do whatever she wants, when she’s supposed to be listening to those of us she supposedly represents. I’m afraid that the amount of money she receives from public employee unions during elections has turned her head. I really don’t think she’s qualified or competent in representing the public. She has too many conflicts of interest.

I’d say same for the other four quasi-conservatives who got their seats by promising fiscal responsibility, while taking money hand-over-fist from the unions and their supporters, like Citizens For Safe Chico. CFSC is just a front Pac for Chico PD.

Reynolds is up in 2022, along with Brown and Huber. I have told her, there are a lot of unhappy conservatives in my neighborhood – her tiny new district. . I also think there are more liberals in her new District than conservatives. So, if some unhappy conservative decided to run against her, I think a liberal with a good game plan could blow them both out of the water.

It’s time to remind Reynolds and the other supposed conservatives how they got elected, and who elected them. With these new districts, it takes hardly any votes to get elected. You may have noticed that Schwab lost her ass because she didn’t take Breedlove seriously enough. I believe Coolidge rode into office on the votes that Randall Stone lost to Lauren Kohler. So let’s give Reynolds and the rest of them a good dose of reality before Tuesday night.

That’s firstname.lastname@chicoca.gov. Or you can send an email to the clerk at debbie.presson@chicoca.gov and ask her to forward it to full council.

I wrote this post because last week I read a letter to the editor from some lazy idiot ( I’m sorry to insult this person but I just get so frustrated sometimes…) complaining about rate increases from Waste Management, as well as their threats to fine customers for over-filled bins or contamination in the recycling bins.. That franchise deal with the city was rolled out in 2016. I went to various meetings, and I wrote letters to the editor and I wrote blog posts about this deal. I’m not bragging when I say that my participation in those meetings led Council to reject a proposal to make trash service mandatory, as well as yard-waste service. But I was not able to stop them from allowing the hauler to make annual rate increases and to impose onuris fines. I’m saying, if more of you lazy-asses had shown up at meetings, and contacted your psuedo-representatives, you wouldn’t have to be writing your whiney little letters now, would you?

So, excuse me for being a little short, but PLEASE get off your dead ass and contact your representative about this POB, cuz I don’t want to read your whiney little letters to the editor in five years about how your streets are crapped out, there’s no cops, whiney, whine, whine.

As you know, Chico has a drug problem…

11 Apr

I made fun of Kami Denlay-Klingbeil yesterday, but I’ll say she’s right about one thing – Chico has a horrible drug problem. Part of the problem is lack of enforcement, part of the problem is the transients who move the stuff. And I’ll agree with Denlay-Klingbeil again that there are not enough treatment facilities in our area.

You might have heard about two different recent drug busts involving heroin, fentanyl, and crank. The bigger one made headlines all over the state:

https://krcrtv.com/news/local/traffic-stop-leads-to-large-fentanyl-bust-in-butte-county

https://sacramento.cbslocal.com/2021/04/10/chico-man-found-with-25-pounds-of-meth-during-traffic-stop-south-of-palermo/

Twenty-five pounds of crank – that should send a shiver right up your spine. Because it’s not just being used in the transient camps, it’s finding it’s way into social circles all over town. This guy was also carrying heroine and fentanyl, the use of which among young people here in town is going way up.

What the news pieces did not cover is Shawn Nowlin’s long history of run-ins with local law enforcement, including past felony drug charges, and the usual failures to appear. In 2016 he was finally sentenced for those offenses – including a felony committed while he was out on bail from a previous charge. He received 5 years of drug court probation, with orders to attend a substance abuse class and a 12 step program. Wow, that should make the average criminal shivver in their boots! That probation was supposed to be up in November of this year. Nowlin didn’t make it. I have to wonder, is this his first offense since 2016, or just the first time he’s been caught?

The same week Nowlin was arrested, an 18 year old boy from Oroville was arrested not only for possession of fentanyl, but accused of selling it to kids at the junior high. Those kids had to be taken to the ER, luckily they all recovered.

https://www.actionnewsnow.com/content/news/Oroville-man-arrested-for-allegedly-selling-counterfeit-Xanax-to-teens-574172371.html

But who knows what will happen to the kid who did the dealing – will he get drug probation, so he can go out and do it again? Will he receive “treatment”?

Chico City Council recently discussed the Butte County Behavioral Health budget – over $73 million/year – but they didn’t discuss how BCBH gets that money. They get it for bringing mental patients, drug patients, and freshly released convicts into our community. But they provide little to nothing in services. The money goes into salaries and benefits. Look at the state salary database for Butte County here:

https://publicpay.ca.gov/Reports/Counties/County.aspx?entityid=4&year=2019

This information is for 2019, showing that the county enjoyed a budget of about $134 million/year. I think you’ll be surprised at some of the salaries – our CEO clocks in at a salary of about $250,000/year, with a $59,000 benefits package – total comp over $300,000, for the CEO of Butte County. Scratching your head yet?

Then you see the problem with BCBH – their director is the second highest paid employee in Butte County at about $240,000/year salary with another $54,000 in benefits. Scroll down – a “contract physician” in the Behavioral Health Department makes $216,000/year, with a $59,000 package. Scroll a few pages – I counted 18 BCBH employees making more than $100,000/year, plus benefits packages of at least $25,000 each. These people are all pure administrators, they don’t go out on the streets with the “crisis teams”. Some of them don’t even work in Butte County, they are more like consultants.

So, you can see part of the reason for the revolving door at the jail. And why Chico PD has a policy to “counsel and move them along” even if they are sitting there with a needle hanging out of their arm. We have hardcore drug addicts and really, really seriously mentally ill people living in our parks, local motels, shelters, and they are not getting any help from the public sector. The only people interested in “helping” them are people like Shawn Nowlin.

Send a link of this post to Kami Denlay Klingbeil. If she really wants to do something about this mess, she needs to start needling the county for further audit of their BCBH budget.

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Orme needs to go out the door with his Shelter Crisis Designation

10 Apr

 

While the Facebook groups are all a-twitter about an “action” council took at this past Tuesday meeting, the Shelter Crisis Designation has NOT been rescinded. From Action News out of Redding:

https://www.actionnewsnow.com/content/news/City-officials-clear-up-confusion-over-shelter-crisis-declaration-in-Chico-574174441.html

“A city council declaration is creating some confusion about the state of Chico’s homeless problem.

Chico city officials say that the action taken by council during Tuesday’s meeting did not officially rescind the shelter crisis declaration.

‘There would have to be a vehicle that came back to the city council in the same form as what actually put it in place, and that’s a resolution,’ said Chico city manager, Mark Orme.

Orme says council would have to adopt that resolution to get rid of the 2018 crisis declaration.“

According to this article, the SCD was set to expire in June anyway. So why do they have to adopt a resolution, why can’t they just refuse to renew it? And, will they have to give back any/all of the money? When the liberals got Andrew Coolidge to sign on to this mess in 2018, city Staff received almost $5 million.

Kami Denlay (married name Klingbeil) seems very confused in her comments to Ch 7.

“When asked about the potential financial impacts ending the declaration could cause, Denlay says, ‘That’s part of the tricky part with all of this, is we’ve been asking for a long time for really detailed funding, because it’s complicated to see what streams come into the county, what comes from the state, the feds, what are the requirements for all of the funding, and every funding stream has totally different requirements, some may be tied to the declaration in part, some might be solely tied to the declaration, some may not be at all. And we get to see that because it’s complicated and we’ve never gotten a straight answer, we’re going to get straight answers now,’ said Denlay.“

I knew she didn’t understand half of what goes on Downtown, I don’t think any of them have a rat’s ass of an idea what they are doing. They allow themselves to be led by Orme. Denlay Klingbeil claims, “we’ve never gotten a straight answer …”

Straight answer from whom? City Manager Mark Orme and his staff brought forward this proposal in the first place. Is Denlay Klingbeil accusing Orme of not giving council straight answers?

I’ve been asking my district rep Kasey Reynolds about the SCD for months, but I have never got a straight answer. When I actually phoned her at her business, Shuberts, I was shocked that she wanted to talk while she was at work. I was also shocked at the angry rant she went into, expressing how much “hate” (her word) she has for the various programs like Project Room Key. She went on and on about that. But she would not answer my questions about funding. She also told me she was waiting for information from the city attorney, and that she’d get back to me about that. End of conversation. I’ve emailed her several times since then, asking for those answers, but she has never responded. If I ever talk to her on the phone again, I’ll be sure to record the conversation. Reynolds was like a flaming bat out of hell, she went all over the place, but no answers.

So I’ll be interested in how this conversation plays out. Here’s what I’d like to see – Mark Orme being handed his hat.

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Letter to the Editor: The pension deficit burden needs to be borne by the employees who created it through unrealistic contributions, not the taxpayers

8 Apr

We here in Chico have a big decision to make and we need to make it quick, before it’s made for us by a group of individuals who stand to gain substantially at our expense. If council approves the Pension Obligation Bond, it’s over Folks, we pay for the outrageous pensions at the expense of public infrastructure and services.

Four of our seven-member council are either public pensioners or married to public pensioners. All of their campaigns have been heavily influenced by public employee unions, who are the biggest contributors in every election. these PACs are allowed higher contributions limits than the average voter, and they can make contributions on their own and to other like-minded PACs.

I don’t believe people with such obvious conflict of interest should be allowed to make this kind of decision unfettered. At the very least, they should have to declare their personal interest in furthering the POB and continuing to prop up CalPERS, an agency they all know has put us in horrible debt through mismanagement. At the last finance committee meeting, both Sean Morgan and Andrew Coolidge acknowledged that CalPERS continues to make bad investments. So why won’t they ask employees to make more reasonable contributions? And why don’t they make any effort to get out of CalPERS and ask new employees to take a Defined Contribution Pension Plan?

The pension deficit is a burden that should be borne by employees who created it through unrealistic contributions, not the taxpayers.

Juanita Sumner, Chico

Time for “Truth in Accounting”

8 Apr

I’ve noticed lately this blog is getting alot of traffic from a really interesting website called “Truth in Accounting”:

https://www.truthinaccounting.org/

This website is operated by a well-credentialed group of individuals, out of Chicago – a city with big pension problems. It is a really good source of information about pension systems nationwide, including the federal government systems, which have driven our national debt for years. Didn’t you ever wonder how this nation could end up with such astronomical debt?

They are featuring the post I made the other day about the city of Irvine, California, and Defined Contribution Pension Plans. So, I must be onto something, these people are all financial big-shots. I don’t think they’d run it if I were shooting blanks at the moon.

We here in Chico, and all over California, have a big decision to make and we need to make it quick, before it’s made for us by a group of individuals who stand to gain substantially at our expense. If council approves the Pension Obligation Bond, it’s over Folks, we pay for these outrageous pensions. Why would Staffers who make enormous salaries care about our hardships – they want the fucking money.

Do you know how many members of council are either public pensioners or are married to pensioners? Andrew Coolidge’s wife teaches at Chico State. Sean Morgan is also employed by Chico State, as is Alex Brown. Kami Denlay (married name, Klingbeil) is married to a public safety worker.

And then there are the contributions from public employee unions – Deepika Tandon in the latest election and Kasey Reynolds in 2018 both received their biggest contributions from the unions. I’m not sure about Huber, but he’s already expressed his desire to add more taxes to your bills with as little public participation as possible.

I don’t believe people with such obvious conflict of interest should be allowed to make these kind of decisions. At the very least, they should have to declare their personal interest in furthering the POB and continuing to prop up CalPERS, an agency they all know has put us in horrible debt through mismanagement. At the last finance committee meeting, both Sean Morgan and Andrew Coolidge acknowledged that CalPERS continues to make bad investments. So you have to ask yourself why they won’t ask employees to come to the table with more reasonable contributions. And why they don’t make any effort to get out of CalPERS and ask new employees to take a Defined Contribution Pension Plan.

The main reason is that the voters don’t make it a very important issue. That’s probably because most people have no idea what’s going on. You can blame COVID, but I’d say, the public is very poorly educated as it is, and Staff does everything they can to obfuscate the issue. I’d bet my last $5 that most council members barely understand what they are doing, they are following Mark Orme into the swamp. As long as they have their fingers in each other’s belt loops, they will make it out okay.

But Chico is sinking, look around yourself. And then look at the city budget, millions of dollars that should be spent on streets and other infrastructure going to the Unfunded Actuarial Liability – their obscure term for the pension deficit. And then look at your property tax bill – if you’re a renter, ask your landlord about it.

I think there’s a letter to the editor here, I’ll have to work on it. You too.

It’s time for The Discussion: Who will pay for the pensions?

6 Apr

Last time we discussed a Defined Contribution Pension Plan offered by the city of Irvine California. The city of Chico uses a Defined Benefits Pension Plan. What’s the difference? Plenty. Here’s a good read from Investopedia:

https://www.investopedia.com/ask/answers/032415/how-does-defined-benefit-pension-plan-differ-defined-contribution-plan.asp

The operative words here are “Benefits” and “Contribution”. Defined benefits means, whether or not business is good, the employee gets the pension they were promised. ” Defined-benefit plans provide eligible employees guaranteed income for life when they retire. Employers guarantee a specific retirement benefit amount for each participant that is based on factors such as the employee’s salary and years of service. “

In California, the state retirement systems made “guarantees” they couldn’t keep – 70 – 90% of highest years’ pay with minimal to no contribution from the employee. ” Employees are not expected to contribute to the plan, and they do not have individual accounts. Their right is not to an account, but to a stream of payments.”

In the beginning, CalPERS even told employers they didn’t have to contribute much of anything – CalPERS said they would make wise investments, and that would pay for these crazy pensions. That didn’t work out, so the employers – cities, counties, and public agencies all over the state – are on the hook for the pensions. And they are turning to the taxpayers like Mack the Knife. See, the contribution was never defined in this plan, so it’s whatever CalPERS demands. Like a junky on the street corner, they want it NOW!

On the other hand, the most common kind of Defined Contribution Pension Plan is a 401K. “Defined-contribution plans are funded primarily by the employee. But many employers make matching contributions to a certain amount .”

In Irvine, the city put up a little over 12% of salary. The employee is allowed to contribute whatever they want, and to control the investments. An interesting notation in that agreement is that the employee must wait 5 years before they are “100% vested” in the plan, meaning, they don’t get a full pension until they’ve proven to be a good and loyal employee.

And a DCPP is less risk for the employer. “As the employer has no obligation toward the account’s performance after the funds are deposited, these plans require little work, are low risk to the employer, and cost less to administer. The employee is responsible for making the contributions and choosing investments offered by the plan. Contributions are typically invested in select mutual funds, which contain a basket of stocks or securities, and money market funds, but the investment menu can also include annuities and individual stocks.“

Both set-ups are risky for the employee. If CalPERS fails, and that’s looking more likely all the time, pensioners GET NOTHING. With a DCPP, the employee makes their own investments, if they aren’t market savvy, they stand to lose there too. But, given CalPERS’ track record, I can see where an employee would be wise to opt for a DCPP.

Why hasn’t the city of Chico (or the county of Butte, or any of the local gov agencies…) offered a DCPP? I think that’s a no brainer. The DBPP is more lucrative, as long as they can keep propping up the failing CalPERS. The most popular form of prop these days is the Pension Obligation Bond.

It’s time for The Discussion about who will pay for these outrageous pensions. Will the employees step up to the plate and do the right thing, or will council allow Staff to force the taxpayers to the wheel with new debt and higher taxes?

Next time, on This Old Lady and the POBs!

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While Mark Orme claims we can’t get out of CalPERS, Irvine California has switched to a Defined Contributions Plan and cut their UAL by 23% in 4 years

4 Apr

This Tuesday, city council will be looking at a number of “MOU’s” – Memos of Understanding – with various employee bargaining groups. I haven’t had time to read them, but I would be surprised if there’s any discussion of employees paying more of their pension and benefits costs.

When Dave Howell brought that option up at last month’s Finance Committee meeting, Mark Orme blurted out “we want pension reform, we’ve lobbied for it, we’ve met with Marcie, the CEO of PERS…” But no further discussion. I doubt we’ll ever be privvy to these conversations, and haven’t the faintest notion what Orme means by “reform”. What stuck out to me was that he knows the CEO of CalPERS by first name.

Marcie Frost, the current CalPERS CEO, has come under fire for allegations that she made false educational claims on her application for the job. But that didn’t stop the board from giving her a salary of $330,720 for the 2019 fiscal year and a 26.7% bonus of $84,873 in 2018. These people, including Orme, who makes a base salary of $207,000/year, are so out of touch with the people they are supposed to serve, I think Orme may really believe he’s doing his best, and that he fully deserves to get 70% of that salary in retirement, having paid less than 10% of the total cost.

But he’s not doing his best. The city manager of Irvine California is doing a lot better. While other cities are considering the high stakes game of Pension Obligation Bonds, Irvine is breaking away from the pack, and saving a ton of taxpayer money without throwing the taxpayers in front of the train.

https://www.ocregister.com/2020/11/15/as-public-pension-costs-soar-some-southern-california-agencies-turn-to-controversial-borrowing-to-fill-deep-holes/

The authors examine the current abyss of debt that most California cities are now facing over false promises made by CalPERS back in the 1990’s. According to Stanford University’s Pension Tracker, there are two different “lenses” through which we can look at this situation.

  • The rosier one, used by California officials, assumes that investments will earn returns of about 7%. That puts unfunded liabilities at $352.5 billion statewide, or the equivalent of $27,187 per household.
  • The darker one, used by Stanford’s Joe Nation, a former Democratic state assemblyman and professor of public policy, assumes the much lower return rate of 3.25%. That pegs unfunded liabilities at nearly $1.1 trillion, or $81,634 per household.

In my opinion, scenario No. 1 is a flat out lie, the dark reality has set in, CalPERS hasn’t made their projected returns for years and years. “While the giant retirement system plans on a 7% return on its investments, it returned just 4.7% this year. ” But public agencies all over California have continued to wear their rose-colored glasses while they have handed out ridiculously over-generous salaries and benefits packages without requiring employees to step up with realistic contributions. That, says the author, has created a hole.

“If that hole isn’t filled up with meatier earnings and heftier contributions from public agencies and their workers, taxpayers will be called upon to fill it directly. Some argue that’s already happening. In 2020, there were at least 99 local sales tax measures on the ballot in California. None of them said, ‘We need more money, in part, to pay for spiking public pension costs,’ but they did say things like ‘for municipal services, including emergency response, public safety, clean drinking water, local businesses, street repair, after-school, youth, disabled and senior programs, and addressing homelessness’ and ‘for general city services.’”

Yes, while they didn’t exactly lie, they worded these measures in such a way as to leave the revenues open for general spending, and that means, siphoned into the pensions. POB’s have to be secured with a new revenue stream, and the consultant who came before the Finance Committee said sales tax measures are the easiest and most common way to do that.

For a change, I noticed, those measures did not do as well as they have in past. A good number of them failed, including sales tax measures in Tehama and Shasta Counties. The voters have started to figure out this trend, which I believe is why so many agencies are turning to Pension Obligation Bonds. POB’s don’t have to go on the ballot.

Our council members have all drank Mark Orme’s Kool Aid, they are telling us they’ve done all they can to rein in the pensions. No, they haven’t. First of all, they are doing nothing to control employee costs. Second, they will not ask employees to pay higher contributions. Orme created three new management positions last year, and council has rubber-stamped every new contract that comes in front of them without asking for more realistic contribution from employees, even when doling out raises.

But not every town in California is going along with the scam. While Mark Orme (and Ann Willmann over at Chico Area Rec Dist) says we can’t get out of CalPERS, Irvine started offering an alternative as early as 2003. This article explains how they’ve reduced their UAL 23% over the past four years without issuing Pension Obligation Bonds.

“Irvine continues its streak as the healthiest large city in America when examined through the lens of long-term fiscal soundness, according to Chicago-based watchdog group Truth in Accounting. It has curtailed spending, frozen vacancies and asked its vendors and contractors for price reductions — and most of them actually said yes, said Marianna Marysheva, Irvine’s interim city manager.

“The city has managed to shrink unfunded liabilities by 23% over four years, making millions of dollars in additional payments annually.”

Part of the savings was getting employees to volunteer to drop out of CalPERS and participate in the city’s Defined Contribution Pension Plan (DCPP). Read this, from the city of Irvine HR page:

 https://legacy.cityofirvine.org/civica/filebank/blobdload.asp?BlobID=18082

The provisions of this Section 2.1 shall apply to employees, as
of June 30. 2003. who elected to decline the CalPERS benefits.

  1. The City shall invest an amount equal to 12.448% of each
    employee’s base salary in the City of Irvine Defined Contribution
    Pension Plan (DCPP). Employees shall become fifty percent (50%)
    vested in such plan upon completion of the probationary period.
    Thereafter, such vested interest shall increase at the rate of five
    percent (5%) for every Plan Year in which the employee completes
    one-thousand (1000) hours of service. Once the employee has
    completed five (5) years of service, he/she shall become 100%
    vested in the retirement plan.
  2. The City will deduct an amount equal to 6.552% of each employee’s
    base salary to invest in the City of Irvine DCPP
    this payroll deduction shall be mandatory fo
    elected to remain in the City of Irvine DCPP.
  3. All employees who elected to remain in the City of Irvine DCPP shall
    not be entitled to any CalPERS benefits, past, present, or future, as
    provided under Section 2.1.B of this Resolution. Employees, who

elected to remain in the City of Irvine DCPP, shall continue
participation until the employee terminates his/her employment from
the City for any reason.

  1. The City will utilize retirement plan forfeiture funds to offset the City
    of Irvine DCPP administration and management costs.

In my next post, we’ll look at the difference between DCPP’s and “Defined Benefit Plans”, but I bet you could figure it out. Next time on This Old Lady and the POBs.

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