9 Nov

Recent History: how soon Council would like us to forget their illegal attempt at a Pension Obligation Bond

A reader sent me this Action News Chico article from last April, thank you. This is fun to read, because it’s all turned out to be a pack of lies. Since this article was written, the city of Chico was threatened with a lawsuit from the Howard Jarvis Taxpayers Association, which forced them to drop their illegal Pension Obligation Bond. A bond is a tax, and it’s illegal to institute a new tax without the consent of the voters.

But no mention of that dilemma from the media – “At its meeting Monday, the council directed city staff to initiate a court validation process which is required in order for the city to issue pension obligation bonds in the future.” As if it’s perfectly okay.

https://www.google.com/amp/www.actionnewsnow.com/templates/AMP%3fcontentID=574295841

There are a lot of clues in this article. First of all, Sean Morgan points directly at the pension deficit as the city’s main problem. He also admits that CalPERS “has invested poorly” and they “need you to contribute more.” Who does he mean by “you,” is the question.

City of Chico exploring new options to cut the threat of possible bankruptcy

As pension debt grows, the city is looking at considering at least one pension bond. This could potentially help the city refinance its outstanding debt.Posted: Apr 27, 2021 5:56 PMUpdated: Apr 27, 2021 5:56 PMPosted By: Dani Masten 

CHICO, Calif. The City of Chico has been working with CalPERS, the pension government program for many years.

Councilmember Sean Morgan said he believes the program has invested poorly over the past year and now the city is feeling the consequences.

What they do when they do bad investing is they go back to the municipalities and say we don’t have enough money, we need you to contribute more,” said Morgan.

The city has $150 million of unfunded pension liability. This includes an increase of $51 million over seven years with payments at $9 million yearly, which could reach over $14 million by 2030.

“So we have $150 million of unfunded pension liability,” said Morgan. “That is how much the whole is. Now, we have to pay CalPERS 7%.”

There it is – we – no mention of raising the employee share. They raised the shares for public safety members last week, but only after giving them a raise bigger than their new shares.

Right now, the city said it is trying to get a bond to cover the pensions they have stacked up. If they are able to get the bond, the city claims it will be able to repair roads in Chico and Chico Fire will be able to hire more firefighters.

Enter Howard Jarvis Taxpayers Association with their Cease and Desist Order, which is not a legal binder in itself, as Rob Berry claims, but threat of a lawsuit if the city proceeded. The city wisely realized they couldn’t afford a lawsuit and pulled their request for court validation.

The following comments from Morgan are total BS. This guy is no financial wizard, it’s all over his head, but he tries to pretend he understands it.

“It takes that $150 million and you can re-finance that over here, issue a bond and pay somewhere between three and four and a half percent on it,” said Morgan.

What a huckster. He should try out for the next local production of “The Music Man”. He can’t guarantee the interest rate – have you watched the market lately? And he’s forgetting – the bond has to be paid back AHEAD OF EVERY OTHER EXPENSE BEFORE THE CITY. If the bond does poorly on the market (and why would Morgan think they can make better investments than CalPERS?), the city would have to dip into the General Fund to pay the service on the bond. The consultants said other cities had laid off public safety personnel when their investments tanked, and paid the service out of their General Fund and other city funds, like sewer and streets.

The next paragraph shows that the average voter is aware of the problems we’re facing, but easily fooled by council’s insinuation that the tax/bond money would go toward public services. And the press does nothing to inform them otherwise.

Some people in Chico were happy to hear the city is working to find a way to pay off its debt while still being able to care for the community.

“Yea, I think a bond would be helpful,” said Chico resident, Jeff Boone. “We got a lot of infrastructures that need help around here.”

“The roads in Chico need to be repaired because every time I go down a certain road it is all bumpy and messed up,” said Chico resident, Markus Boone.

And here Morgan tries to tell us, but not really, that the bond will “help the city with it’s cash flow to help fix the roads…” What is that? Sounds pretty non-commital to me, just like they told us they’d use the Garbage Tax proceeds to “fix the roads…” That’s their bullshit mantra, “we’ll fix the roads...”

Morgan said this bond will help the city with its cash flow to help fix roads in Chico shortterm.

And the rest is history.

At its meeting Monday, the council directed city staff to initiate a court validation process which is required in order for the city to issue pension obligation bonds in the future.

Directed Staff to take an illegal action toward stealing money from the taxpayers to feather the nests of people who make 3, 4, 5 times the median income.

Hey, you want to hear something even funnier – stay tuned.

4 Responses to “”

  1. Scott Rushing November 9, 2021 at 11:31 am #

    You have nailed it, Juanita:
    1. Chico does not need more police officers…the city needs better police officers.
    2. The city should hire firefighters when the history of fire danger is all around
    3. Does Sean Morgan own Chico? Is the city his private compound?
    4. The voters need to make it clear to the politicians that the city must keep expenses below income or they will be voted OUT.

    • Juanita Sumner November 9, 2021 at 4:21 pm #

      Thanks Scott,

      Yes I agree that we need “better” police officers, but you will have to define that in terms everybody will agree on! Good luck. At present, our council defines “better” as in “you get what you pay for”. Kasey Reynolds seems to think money is the honey with which we attract the appropriate candidates, but all we get is flies. I’ve dealt with members of Chico PD, and I see they are poorly educated and overwhelmed with their responsibility. Like a lot of frustrated workers, they resent the people they work for, and boy does it show. Two years of college is not enough, and they need to stop hiring old cops to be the teachers.

      I don’t think we need more firefighters, we need to put them on regular shifts like normal people. At present, they work two 24 hour shifts. They get 8 guaranteed hours of overtime in those two days, whether they are sleeping, going grocery shopping, playing video games, whatever. Who gets to work two days a week and get credit for 40 hours, plus 8 hours of overtime? The guy who mans the airport station is the highest paid employee in the city, and all he does is sit on his ass waiting for a plane to crash. I don’t know if you’ve seen the fire department logs, but I think you’d be shocked as I was. Most of their calls are for chasing ambulances, for which the city is not reimbursed. My insurance agent told me most Chico fires are contained to the kitchen, put out by the homeowner. Chico is not Paradise. Any fire danger in Chico is the result of neglect and lack of maintenance on the part of the City of Chico and PG&E.

      Yeah, Morgan’s an ass, but I don’t want to pay for a recall. I want to get a viable candidate for 2024 who will discuss the salaries and employee contributions. The voters need to do their homework in the coming years.

      • Scott Rushing November 9, 2021 at 11:03 pm #

        Hi Juanita: Yes, it is impossible to define “better” …just like the word “reasonable” …but I wanted to keep my POV* murky *about the quality of CPD’s officers. The point is that* quality not quantity* must be considered, *especially by taxpayers*. Unfortunately, I am biased against CPD for many reasons. I have spent hundreds of hours watching videos of CPD officers killing my son and related interviews plus being present at their depositions and the trial of *CPD Sergeant Ruppel strangling of Michael Rowley *case, which I attended from beginning to end. I have learned a lot about CPD, BCSO, Armed Guards, and cops in general *and it is frightening*.

        We are speaking of two different problems of course but I have spoken with law enforcement professionals and cops about the killings in Butte County. The overarching theme is that the officers are basically *bottom-of-the-barrel* people looking for a job and desirous of using firearms. They* “get off”* on the gun, uniform, badge, power, and so forth. Your POV is that they are too expensive for the taxpayer and *you are right.* Just read the police logs. Cops generally do nothing to stop crime in progress…they investigate crimes *after the fact.* Chico wants a big force so Madden and Orme can demand bigger salaries and the council can look tough on crime. The police union runs the city. This is everywhere, not just Chico. The cost of looking tough on crime is busting the budget.

        I also agree about firefighters. It is a sweet job. That is why hundreds of applicants show up when there are two or three openings. Contrast that with the fact the cities are begging for police applicants and Chico is paying bonuses for lateral transfers. You are right in saying the firefighters get paid to sleep and generally chase ambulances which, I agree, is NUTS. I am biased about firefighters because my dad was a chief and died from injuries sustained fighting a house fire. My dad did not make the big money or get a big payoff. When he died, my wife and I supported my mother financially until she died. I resent the big money firefighters get paid today and the sweet pensions. They are way overpaid today.

        I have watched every Chico City council meeting online, since 2013. I read the Chico papers every day. I now have friends in Chico due to my son being killed there and they spy for me. I feel like I live there *but I am glad I don’t. *

        There are a lot of battles to fight. *Thankfully most cities have a tax warrior like you* to expose the politicians and staffers who are taking advantage of the system for personal benefit.

        Best- Scott

        On Tue, Nov 9, 2021 at 4:21 PM Chico Taxpayers Association wrote:

        > Juanita Sumner commented: “Thanks Scott, Yes I agree that we need “better” > police officers, but you will have to define that in terms everybody will > agree on! Good luck. At present, our council defines “better” as in “you > get what you pay for”. Kasey Reynolds seems to think money” >

      • Juanita Sumner November 10, 2021 at 5:53 am #

        We have to get the unions and all the PAC’s out of our elections. Contributions need to be limited to $100/individual. As you might have noticed, the amount of money spent by candidates in city council and county supervisor elections has grown exponentially with the salaries.

        I’m angry too Scott, let’s try to channel our anger into the most powerful actions.

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