Archive | April, 2021

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.

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.

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!

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.

Coolidge admits the sales tax increase revenues would go toward the bond payments – “then it would fall away and it would just include public safety…”

1 Apr

Back to the March 24 Finance Committee meeting. I’ve already hashed over the Business/Residential Residential Tax conversation, the next item on the agenda was a discussion of the proposed sales tax increase and “road bond” measures.

Andrew Coolidge, mayor and FC chair, opened the meeting with comments about “the struggles of 2019“. What struggles? Did your house burn down Mr. Mayor? Did your town burn down? No, actually, the city of Chico rode out the Camp Fire with more than $20 million in surplus revenues by July 2020, mostly sales tax. Staff received “back fill” from the state for all “lost” tax revenues. And, the demand for housing went through the roof – according to the finance report at the end of the meeting, property values in Chico went up 5% more than the rest of the county in 2020. Currently home prices in Chico are up 8%. This windfall has resulted in more revenues from not only property taxes but an increase in RDA revenues.

But remember, Coolidge was setting the scene for not one but TWO revenue measures. Can’t tell people the real truth – revenues in the city have been more than staff predicted every year since the Camp Fire. The real reason Staff wants these tax measures is to secure the Pension Obligation Bond they are quickly implementing behind closed doors.

In fact, Services Director Scott Dowell informed the committee that any bonds, whether Pension Obligation Bonds or “road” bonds, would “have to have a revenue stream attached to pay for those bonds“.

Coolidge referred to the sales tax increase measure, commenting, “then it would fall away and it would just include public safety…” .

Yes, they intend to use the sales tax measure, which they’ve sold as a “special tax for cops and fire”, to secure the POB. The city is broke, where else we gonna get the money to make those bond payments, but a sales tax increase? The consultant who presented the POB said that most jurisdictions that implemented POB’s had to raise sales tax to cover it.

Coolidge would like us to believe there would be something left over for “cops and fire”, whatever that means, but let’s face it – with a $147 million pension deficit, and another $150 million interest owed on that deficit, there’s not EVER going to be anything left of the sales tax revenues. In fact, I’ll tell you what – they’ll take the bond money from the “road bond” too – there’s nothing to stop them from transferring those funds into the General Fund.

Well, I’ve had an incredibly hard time posting this. No, I don’t have the greatest internet, as observed by Sean Morgan during the meeting. I’ll leave it here – you got the point.