I had a question from BC a few weeks ago –
I have said it before, and I will say it again: When it comes to municipal finance in California, There’s the cost of pensions, and there’s everything else.
What is the size of chico’s unfunded liability today? A couple of years ago it was more than 100 million dollars. Do I have that right, I’m not trying to be inflammatory?
I don’t think questions are inflammatory, and hey, you’re not that far off! But I didn’t want to bother staff with this question – you only get so many before they cut you off. They act like they pay for their own time! So, I googled it – “city of chico ca current pension liability 2024″
Here’s what I got –
This is the annual report from CalPERS about how much money the city owes for un-supported city wages and benefits. Yes, unsupported – meaning, these positions are not fully funded. The city essentially borrows the money from CalPERS, at incredible rates. CalPERS said they could pay alot of the cost with stock market investments. That hasn’t worked out very well over the past 20 or so years, leaving CalPERS, along with all its “members”, in a heap of shit.
The city has gone along, like many CalPERS members, making the smallest possible payments. The employees pay a tiny fraction of the cost, while the city pays a little bit more – leaving a huge deficit, known as the Unfunded Actuarial Liability. You can look those words up in a dictionary – it means, the city actually didn’t have the money to promise these outrageous salaries and benefits, but they promised them anyway, and now the city is actually liable for the money.
Here’s the best answer I could get for BC – In 2021, the pension deficit was $64,293,003. In 2022, which is the most recent figure given in the report, it was $92,247,723. That’s over $28,000,000 more in a year.
The question is, who is going to pay it now? The city gave us a new tax, Measure H. They claim it’s brought in about $24 million, with which they said they would make all these wonderful road improvements. Instead they’ve budgeted an $18 million payment toward the pension liability. Whoa-ho-ho Nelly! By 2024 it’s projected to be about $25 million.
The payments they’re making are tanking our budget, but they don’t amount to spit on the CalPERS griddle. The problem is, let’s face it – employees need to pay more. Alot more. And Council needs to stop approving new hires – duplicate management positions, a consultant actually told them they are “management top-heavy”. How many $200,000/year management positions does it take to fill a pothole? Look at the staff salaries – I count at least three people in Public Works at over $200,000 in total compensation. Sorensen just created a new management position for Brendan Ottoboni last year.
Instead of asking employees to contribute a rational share, or downsizing management, Council has approved spending another $100,000 trying to save Measure H, which is under threat by the voter-initiated Taxpayer Protection Act. The TPA will overturn Measure H, because the city slid it under the door with less than 53% approval by the voters. The TPA will require 2/3’s approval of all local tax measures. So Mark Sorensen has led City Council to approve an initial $100,000 (we’ll see how many additional “allocations” they make over the next six months) to get that turkey back on the ballot with the required changes, just in case the TPA passes. It will require 2/3’s approval from Chico voters. Last time it got about 52.8%.
So hey BC, they’ve scheduled a “special” Finance Committee meeting for this Wednesday at 8:30am, go in there and ask some questions.
Chico Taxpayers Association 
Thank you for the information. This situation is outrageous. Randall Stone warned about it years ago. Looks like a pending disaster.
$280,000,000 or $280,000 this year typo?
Thanks I did that typo on purpose just to see who is paying attention. Yes, it’s MILLION. Coffee’s on me.
To finish your other comment, “pending shitstorm”, and all I got is a tennis racket.
May if you said it on a billboard?
If you got the money honey I got the time…
Hey Juanita,
Very important info, but I think you need to fix the numbers. The correct figure is $28 million, not $280 million, like in the headline, or $280,000, like in the text!
Keep at it!
Dave
Thanks I already fixed it but I’m glad you people are paying attention, I never know.
Ha ha, that’s what I get for blogging on my husband’s phone while I’m mowing the weeds!
Sorry I found your comment in the spam folder – you might want to comment on a recent post instead of an old one. Or a comment on subject – you don’t have any thoughts about the pension deficit or how it got there? It’s the city’s biggest debt, probably same with both the school district and the county. In fact, the county instituted an illegal pension obligation bond back in the early 2000’s – should I take out a bank loan to get a lawyer and go after them? Maybe you got the dough for that kind of thing?
In answer, I’ll have to get my awesome staff on these issues! Just being facetious – why don’t you write a piece about the school bond or the county sales tax, and, as long as your facts are straight, I’ll post it. Nobody gets paid down here, btw. I love your demanding style – let’s see how far you get with the school board or the county supes. Let me know if you get any answers – don’t call me from the jail, I ain’t bailing you out.