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Pension Tsunami, Part 1: How we got here…

7 Aug

In the late 1990’s, Governor Gray Davis and other union-friendly legislators set up the current pension system, agreeing to “defined benefits”.  Public employees had previously been given a “defined contribution” system. The difference being, with a “defined contribution” system, the employer agrees to pay a certain amount, with a “defined benefit” system, the employer agrees to provide specific benefits, no matter the cost.

About 2006 an “MOU” – memo of understanding – was approved by the sitting Chico City Council, with the recommendation of then-city manager Tom Lando, to “attach salaries to revenue increases but not decreases…”  Read that again – “but not decreases…”

Does that sound right to you?  Think about that – give them raises when we’re flush, but no “adjustments” when we’re bust, just lay people off and cut services. That’s been the pattern in Chico for 15 years now. After Lando floated that turd, his salary went from about $65,000 a year to over $150,000 within a couple of  years. His successor came in at $190,000/year.

Council handed out raises of 14%, 19%, 22%, until that memo was outed to the public and the taxpayers started to howl about it. But too late –  City of Chico salaries had progressed well over $100,000  for management and public safety, and other salaries were not far behind. Council approves automatic raises in the contracts so the salaries just keep going up. Even though former city manager Dave Burkland agreed to take a lesser salary than his predecessor, our current city manager now makes over $200,000/year. Add his benefits package and he is taking almost $300,000.

When the public found out about this scheme the city dumped that revenue-based raises mechanism, but came up with something better – “the employer paid member contribution.” That meant, the city not only paid a share of the employee’s benefits, but paid a portion – in some cases the entire portion – of the employee’s share as well.

This finally ended a couple of years ago, when, under intense criticism, those staffers – public safety and city management – agreed to pay their whole portion. And, hold onto your hats – about a year ago, these people even agreed to pay 3% of the “employer share.” 

Excuse me, my hat didn’t even jitter on that, because that makes the employee’s total share less than 10 percent. Anybody who has been a member of CalPERS for 15 years is a “classic member” and pays only 6%, plus that extra 3% – 9%, for a pension of 70 – 90 percent of their highest year’s salary is absolutely RIDICULOUS.

Meanwhile, the employer share has increased and increased, not to mention, the employer is making altogether separate payments toward the deficit, by way of the newly established “Pension Stabilization Trust.”

So, I imagine you saw this article in the paper recently.

Number of California public retirees in $100K Club skyrockets, but they’re just part of the burden on state pension system

This article gives a good historic overview of how the pension deficit has grown. I call it “rabbit math” – first they based the contributions on the employees’ salaries, and then they jacked up employee salaries.

I wonder how many other cities in California used Tom Lando’s ploy of attaching salaries to city revenue increases and then going on a development binge. When overdevelopment finally tanked the local market a few years later and revenues plunged, the salaries, benefits, and automatic raises, stayed in place. Salaries got higher no matter how revenues dipped for Chico. And the pensions and city contributions are based on the salaries. 

Getting dizzy yet? Maybe a little pissed off? Well this is where we’ll close and pick it up again tomorrow. 

 

Excessive taxation ruins the economy – time to act to reverse this trend

26 Jul

I saw Patrick Newman’s letter calling (jokingly I assume) for a limit on letters about President Trump. I had to laugh –  there have been letter writers, and probably requests made to the editor, to limit Newman’s letters. People have contacted the editors of both the ER and the N&R asking them to stop printing my letters. Some people only want to hear stuff they agree with, that’s nothing new. 

I have to agree with Newman’s assertion that people need to pay more attention to what’s going on locally. Not that federal matters are not important, but I feel a person can have more effect locally. And, as citizens become more powerful in local affairs, those localities become more powerful and have a bigger effect statewide, and eventually nationwide. 

I think excessive taxation is becoming a huge problem in Butte County, and the state of California, I wish more people would wake up and act. In the city of Sacramento, taxpayer groups who supported their sales tax Measure H quickly realized the funds weren’t being used as promised – too late, they’ve already approved the tax, and Mayor Darrell Steinberg has proposed even more taxes as a result. 

I think the root of excessive taxation is incompetent, insubordinate public employees who have fostered a negative and hostile environment for the rest of us. Their salaries and perks not only raise our taxes, but the salary imbalance makes a normal middle class lifestyle unaffordable for the rest of us.  These public salaries raise the price of everything from housing to groceries to healthcare. How can the family living on $43,000/year compete with public employees making in excess of $100,000/year? Especially when we are on the hook for their outrageous healthcare and pension packages.

Here’s an irony – most of us get by with catastrophic care, with huge co-pays, packages that won’t get us into a lot of hospitals. Hospitals and doctors can actually refuse our insurance.  Meanwhile we fund “defined benefit” health packages for public employees that guarantee them the best of care at top hospitals. 

What’s your retirement plan? Die? Well, as long as you live, you’ll be paying pensions of 70 -90% of $100,000+ public salaries. Our city manager, in his 50’s, is already making over $220,000 a year – do the math – if he retired tomorrow we’d be paying him $154,000/year, plus cost-of-living-adjustments, for the rest of his life. Unfortunately I’m afraid he has quite a few more years of self-service left in him, especially since he has what amounts to automatic annual pay raises based on a percentage of his salary. 

Currently more than 100 city employees receive salaries of $100 – 225,000/year. Another 25 make $90 – 99,000/year. These folks pay less than 10% of their pension cost, they want us to pay the rest in the form of a 1 cent sales tax increase. They say the money will be dedicated toward streets and safety, but even if they are sincere here, that just loosens up other money to be transferred into the Pension Stabilization Trust. And who can believe what they say when they promised to fix the streets with the trash tax but have instead transferred it into the General Fund? 

So we have a sales tax increase measure from the city of Chico and a parcel tax coming from the Chico Area Recreation District. Two regressive taxes aimed at the same population, neither agency having any concern for the economy.

Newman is right – get involved locally. There are a lot of meetings, scheduled at different times, at which you can not only learn more about how these agencies operate, but you can get into the conversation. Check out the schedules and agendas at these links:

http://www.chico.ca.us/government/minutes_agendas.asp

https://www.chicorec.com/board-meetings

 

So you thought we dumped the king in ’76?

1 Jul

Already July!  Fourth of July travelers are on the highway – I wonder if they noticed, the gas tax went up today. 

Something nobody seemed to get about SB 1 – the gas tax increase instituted by the state legislature in January 2018 – is that it allows the legislature to raise it at will, no input from the voters. 

Honey, that’s called TAXATION WITHOUT REPRESENTATION. 

It could get worse – in May, Assembly Constitutional Amendment 1 was ordered for a third reading, not yet scheduled.  ACA1 lowers the voter threshold for [the following italicized portions have been added to the original text] “Bonded indebtedness incurred by a city, county, or city and county city and county, or special district for the construction, reconstruction, rehabilitation, or replacement of public infrastructure or infrastructure, affordable housing, or permanent supportive housing for persons at risk of chronic homelessness, including persons with mental illness, or the acquisition or lease of real property for public infrastructure or infrastructure, affordable housing, or permanent supportive housing for persons at risk of chronic homelessness, including persons with mental illness, ”  from 2/3’s to 55 percent voter approval.  

Why? Because it was hard to get 2/3’s approval from the taxpayers. So they are changing the rule. What kind of crap is that? Should the legislature be able to just change the constitution without a vote of the people?

Furthermore, do you really think it’s okay for 55 people to tell the other 45 that they must pay a tax for programs they don’t want to support? I think that’s mob rule, and it’s divisive. A community should agree on stuff, not be subject to the loudest bullies in the group. 

Here’s the text of ACA 1

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200ACA1

The bar at the top of the page includes the history of the bill, current status (waiting for a third reading), and who voted how. So far it’s been through the Assembly Local Government Committee, and the Assembly Appropriations Committee. I don’t know where it goes next, but I’m watching this page. 

So, this week, when you are trying to enjoy various events, try to remember why we celebrate this holiday. Do some homework, learn something about the process by which they steal your money and ruin your community. 

I’ll tell you what my family did to start the week off right – we watched “Vice”, the 2018 movie about Dick Cheney. Sure, it’s silly and fantastic in places, but it tells, factually, how our government works, and why we have to be on top of our politicians. 

And then we watched the Nixon movie, “Dick,”  which is the best telling of the Watergate story I have ever seen.  I was 12 years old when the Watergate story broke in the newspapers, I remember that was the first time my parents didn’t know all the answers. People were stunned, because they knew nothing about how much power the president really had.  They thought we dumped the king back in ’76, but they were wrong.

Happy Independence Day Everybody!

 

 

Local media continues to spread the Big Lies – arm yourselves with the facts and fight back!

3 Jun

 

I was using the May 9 issue of the News and Review to wipe out the inside of a peanut butter jar (another time, another blog…) when I noticed an editorial I hadn’t read. It was offensive to see that these “journalists” are still pumping the city’s bullshit about being overwhelmed by the Camp Fire evacuees. That is one of the Big Lies they are using to get a sales tax increase, and I’m sick of hearing it from both the print and tv media. We have no journalism in Chico. 

So I wrote a letter about it!

(“Chico needs a lifeline” 5/9/19)  Chico has not grown by 20 percent in the wake of the camp fire. Like I said in my last letter, the figures the city is using to support the assumption that Camp Fire evacuees are placing a strain on city services are all estimates..  Go out at rush hour – the traffic impacts we suffered in the weeks immediately following the fire were temporary. Today there are over 200 houses for sale within the city. Housing prices spiked remarkably immediately following the fire because desperate buyers were very competitive, but prices are now back to 2017 levels.

The city’s financial problem is the pension liability.  Ask public employees to pay more of their own pensions. For example, the city manager gets  over $225,000 in salary, over  $80,000 in benefits, and 70% of his highest year’s salary in pension at age 55.  He pays 11% of his salary toward that pension.   The taxpayers are asked to pick up the rest of his tab, including an IRC 457. If he is sincere about “living within our means” he needs to pay more of his own pension – new hires pay 50 %, why are “classic” employees   still paying so little?

Join the conversation at chicotaxpayers.com

Juanita Sumner, Chico

I wish some of you would write – I know there are those of you out there who think they can’t write letters. All you have to do is arm yourselves with the facts, the letter will write itself. 

Read Mark Orme’s contract here:

http://www.chico.ca.us/human_resources_and_risk_management/documents/OrmeEmploymentAgreement10-2017.pdf

See his salary and benefits break down here:

https://publicpay.ca.gov/Reports/Cities/City.aspx?entityid=79&year=2017

Have some fun – search the words “pension,” “liability,” and “deficit” in the budget and see how much money they pour into the pensions every year:

http://www.chico.ca.us/finance/documents/2018-19CityAnnualFINALBudget.pdf

Speak up! Maybe we can stop this tax measure before they spend any more TAXPAYER money on it.

The pension deficit is the difference between what public employees expect to get and what they are willing to pay into it

5 Apr

Well, anybody who saw my last post and then saw my letter in the News and Review can see that I had to edit dramatically to get my letter in.  When I sent my original letter to the address I’ve used for years, it was sent back, rejected for size? And I was told to use the form letter mechanism on the N&R website, which only allows 150 words. Snip, snip, snip – I still got my point across, and it was a good exercise. 

Write those letters folks! When do I find the time? When I’m so pissed off I can’t sleep. Writing letters to the editor will save your teeth, believe me!

I sent the following letter to the Enterprise Record two days ago, watch for it, and write your letters too. Just yesterday Dan Walters ran a column about the spending of taxpayer money to pass revenue measures that will only end up being squandered on the pension deficit –

https://www.sacbee.com/opinion/op-ed/article228799774.html

so people are thinking about this subject. Write now!

And don’t just write to the papers, forward to the city manager mark.orme@chicoca.gov and CARD general manager Ann Willmann annw@chicorec.com

Chico Area Recreation District board and staff have spent over $100,000 on consultants to help them pass a revenue measure  but have yet to show the taxpayers that they can be trusted with money.

In 2014, CARD staff reported a pension deficit of $1,700,721 .  Only five years later, that deficit has ballooned to $2,800,000, despite nearly $1,000,000 in “side fund payoffs”.  

CARD staff announced they have “set aside” another $1,700,000 for payment toward the  deficit, having admitted they have deferred maintenance to various facilities for years, including Shapiro Pool, which was closed permanently last year.

CARD only started asking employees to pay toward their own pensions in 2013, but management staffers pay 6% or less, with the general manager paying only 2 percent of an $108,500 salary.

CARD staff describe the pension/unfunded liability as “What we owe to CalPERS because of the difference in their guesses.”

Wrong.  The pension deficit is the difference between what employees expect to get (70 percent of their highest year’s salary at age 55) and what they want to pay for it (less than 10 percent of their salary). For example, the general manager pays $2170/year toward a pension of  more than $75,000.  That is not sustainable.

CARD staff have used taxpayer revenues to enrich themselves while ignoring their mission. Now they tell us we need to pass a revenue measure, or they will further defer maintenance, close facilities, and cut programs. At the same time offering a grandiose new sports facility south of town? Let the board of directors know how you feel about that, at annw@chicorec.com

 

Book In Common: PLUNDER! How Public Employees are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation, by Steven Greenhut.

25 Jan

I’d been waiting over a week for a book I’d ordered online that should have been delivered within a couple of days. I kept checking my PO box, by this past Monday, I worried it had got lost. Yesterday it finally arrived – well, I got it yesterday. I’m guessing it arrived at Chico post office about a week ago.

It was too big for my PO box, I know the routine – they put a key in your box that goes with one of the big boxes in front of the annex. I retrieved the package from the big box and immediately noticed – a postal worker had scrawled a box number in big black letters across the front of the package, unfortunately, it wasn’t my box number. My correct box number was listed in the address box on the front of the package, neat and tidy.  Postal worker transposed the numbers, in big black writing, so the key went to somebody else’s box.

Here’s where human decency comes in. Somebody else got my package, saw it wasn’t for them, and put it back in the stream. They may even be the same person who wrote the correct number above the transposed number. 

When this happened at my house, my neighbors got my packages. Both packages were clearly marked with the correct address, but mail man delivered them to my neighbors. Neither neighbor bothered to return the package to my clearly marked box on the street, both opened the packages, even though they were addressed to someone else. We got the packages back because my husband went door-to-door. 

Neither neighbor apologized for opening our packages, we let it go and stopped having stuff shipped to our home. 

Of course Christmas is a horrible time to get or send packages, we all know that. But I order a lot of household goods from an online seller in Vermont, and I had to have some stuff delivered in the first weeks of December. Right in the middle of the flood of evacuees driven out by the Camp Fire. But my package had a tracking number, I watched it move slowly across the US, and then I saw it had been delivered to Chico Post Office on Vallombrosa. But it wasn’t in my PO box, I kept waiting. Finally I went in very early one morning to ask for it. The man who called me up to the counter wouldn’t take the tracking number I’d written down, or look at the message on my phone that said the package had been delivered. He turned and disappeared into the back – which was a mess of packages laying all over the floor – and when he came back 15 minutes later he said there was no package. 

I looked him in the eye and shoved the tracking number at him and said real nice but firm, “please check the tracking number.”

He was huffy but he took the slip of paper. This time he was gone for 10 minutes, but by Gumm, he brought me my package. I wanted to give him a piece of my mind but the line behind me was starting to go out the door, so I said Thank You! with a big shit-eating grin and got the hell out. 

My family has received Christmas packages that have been ripped open, stolen from, and taped back together, so I  guess I was lucky to get my package intact.

Now the book, mis-marked by a post office employee. I’m getting sick and tired of the level of service we get from public workers. We bought a house in Paradise in exchange for an old rental we sold in Chico. My son was living in it at the time of the fire, luckily he had gone to work before the fire had hit town, and was safe. I’m thankful for that, but dealing with the county in the aftermath hasn’t been the least of our worries.

We were quick to send in our ROE – Right of Entry – so the county could get going with the clean-up. I understand the clean-up will take a long time, but when we didn’t hear anything about our ROE, I e-mailed them asking if it had been received. A fellow named Matt called my husband a few days later in response to the e-mail, saying we needed to submit a new insurance declaration from our policy, the old one we sent had expired when our policy turned over recently. They knew that for over a month, but didn’t contact us until we inquired about it. Is that going on all over Paradise?

And then yesterday we received a packet, sent in a custom “Butte Recovers” envelope, with  custom stationery inside, a letter telling us how important it was to complete the ROE form. They had included the entire form, over half a dozen pages. The letter was not addressed to us, it was a form letter, so I’m guessing they sent one to each and every address that had burned in the fire. 

How much did that cost? At 50 cents a letter? I’m guessing at least a few thousand bucks. Not to mention the custom printed stationery. How about $taff time, folding all those papers and shoving them in those envelopes, then running them through the stamp machine?

Here’s the irony I’ll leave you with – the book I ordered – PLUNDER! How Public Employees are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation, by Steven Greenhut.

Think the post office workers knew what was in my package? 

I’ll describe Greenhut as a government watchdog, journalist, and public advocate. His articles have appeared in papers like the Orange County Register, LA Times, San Diego Union Tribune. This book was written in 2009 – before I started blogging about what’s going on in Chico, before I ever even heard of the pensions. So, it’s history for me, finding out exactly how public employees garnered their power and position. 

I’m calling this our BOOK IN COMMON, if you’d like to get a  copy, I bought mine used for 99 cents, cost $3.99 to ship. It’s in great condition, and so far I’ve enjoyed reading the forwards by Congressman Tom McClintock and Mark Bucher, who co-authored a late-nineties attempt at requiring unions to “at least ask members before using their money for politics…”

So come on along, learn some recent history, maybe find out what needs to be done to turn back the tide of entitlement that is drowning our state.

Don’t be fooled – City of Chico’s proposed tax measure is all about the pensions

21 Jan

The city of Chico is ramping up their tax increase campaign, with city staffers soliciting the news paper for stories about funding shortages, and lately, using the Camp Fire as an excuse to seek a revenue measure.

https://www.chicoer.com/2019/01/15/theres-been-more-traffic-in-chico-since-the-camp-fire-and-thats-not-changing-anytime-soon/

No mention of the dramatic uptick in home sales and how the outrageous price increases will affect property tax valuations. No mention of the effect that 29,000 people swooping down on your retail sector is going to have on sales tax revenues. No mention of what full capacity motels will contribute in “Transient Occupancy” or “bed tax”. Property, sales, and TOT are three of the four biggest revenues our city receives. The fourth is Utility Tax, and that’s going up with increases in PG&E rates. It’s a win-win all the way around for City of Chico, but they cry poormouth and want a revenue measure.

Stand up people, and let them know what you think of this attempt to embezzle more taxpayer money into their own pockets. I sent the following letter to the Enterprise Record this morning. 

City staff says traffic congestion and accidents are up in Chico and asks more money for road improvements, police and fire staffing. Despite an unprecedented increase in property tax valuations, sales tax receipts and TOT due  to Camp Fire evacuees, council has directed staff to look into putting a revenue measure on an upcoming ballot.

Dan Walters opines most local revenue measures are “all about the pensions.” I agree. The mayor of Capitola admitted, “ if we put a measure across for pensions it would be doomed for failure immediately”, so their November ballot measure read “to help fund youth programs, protect parks, beaches and open space, and support local businesses.”

Pension liability is the difference between what is paid into the California Public Employee Retirement System, and what employees expect to get in retirement. City of Chico employees pay less than 10 percent of their pension cost, while the taxpayers pay roughly 30 percent. That leaves the city an unfunded liability of over $129 million.

In 2018 city staff made a $7,598,561 annual payment toward their pension liability. Part of that money is allocated from each department fund, based on total department compensation. The rest of the annual payment is allocated from the General Fund.  Council approved allocations are how they transfer money from one fund to another in order to avoid spending restrictions – like spending public safety or road funding on their unfunded pension liability.

Despite any promises to the contrary,  the city’s proposed revenue measure is all about the pensions.

Juanita Sumner, Chico