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CARD needs to fire Miss Management

24 May

Meanwhile, back at the hen house…

A little over 2 months since the COVID shut-down began, less than 6 months into the year, and CARD has a $440,000 deficit?

According to Enterprise Record reporter Laura Urseny, “Unable to collect revenue from halted programming and hall rentals, the Chico Area Recreation and Park District is looking at ways to cut expenses, including the possible abandonment of Shapiro Pool. It faces a $440,000 deficit in its preliminary 2020-21 budget.”

Looking at their 2019-20 budget,

https://www.chicorec.com/district-budget

I see that program fees and facility rentals brought in about $4.3 million last year – wow, that’s about $338,000/month. But that’s divided over 12 months – they make most of their money between May and September, with weddings and kids’ camps. Urseny also reports, “On the good news side, however, the CARD office at 545 Vallombrosa Ave. opened to the public Friday, and youth summer camps are on the horizon.

So let’s remember, like the figure the city has thrown out – these “losses” are projected. They don’t know what they would have made, who could know that. Let’s see CARD’s totals from the same period last year, and then we’ll talk.

Here’s one of the real sources of CARD’s money problems – Miss Management. She is a silly gal. For some reason, she’s been spending $11,000 to fill and maintain a swimming pool that has not been open to the public for swimming since 2016. “CARD has leased Shapiro Pool from the Chico Unified School District for decades, but over the past few years shut it to the public because of the expensive and public health risk of the old equipment, which it can’t afford to replace. It cost CARD about $11,000 a year in supplies and 300 staff hours, with only one event — a dog splash gathering — all year.”

First they deferred maintenance on that pool for years, allowing it to sink into sub-code condition, Willmann admitted that several times over the course of the Measure A campaign. It’s also in the budget – look – they spend millions on their own salaries and pensions but only about a $2.5 million on “maintenance and supplies”, roughly half million of that is utility bills. Meanwhile, last year, they spent $1.7 million (see 2018-19 budget) on their Unfunded Actuarial Liability, or Pension Deficit.

Willmann would also have us believe that “programming and rental fees are the majority revenue source for the special district…”  That is not true. Again, look at the budget. While program fees and rentals brought in $4.3 million, TAXES brought in over $4.5 million, especially when you add in Park Impact Fees (payed by developers and added to the price of a house)  and Neighborhood Assessments (paid by residents in newer subdivisions) – over $200,000/year. 

Willmann persists in denying that RDA pass through comes from taxes. Wrap your head around this – RDA pass through money is generated from bonds that are guaranteed with the 2% annual increase in property taxes. That money is borrowed at a rate of $2 interest for every $1 spent. Taxpayers are on the hook to pay it – how is that not a tax Ann? She wanted to put us another $30 million in bond debt with Measure A – that’s Miss Management popping up her potato head again.

Another persistent lie Willmann keeps spreading is that ” Property tax is the next largest income source, which could also be down.” Two lies in one, really. As I just explained, property tax is their Number 1 source of income, not their “next largest“. Furthermore, it’s hardly going down. Again, look at the budget, it’s right there, up every year, even given the losses from Paradise (that’s another conversation). In fact, CARD’s total revenues increase by at least a million a year. Given the current building boom, it will continue to go up more and more each year.

Here’s their real problem: as the revenues go up a million or so a year, payroll costs also go up a million or so a year. And, they seem to outstrip revenues by about a million a year.  This year’s budget shows a $166,000 increase in pension payroll payments. Part of that was Willmann’s recent salary increase.

And here’s another reason CARD is in decline – every time they sense a dip in revenues, they cut workers instead of management.  Ann Willmann took a raise this year, and every year she’s been General Manager. She now makes over $127,000/year, and pays only 8% of her benefits costs. But here she says, again, they will cut workers if they don’t get their money.

“’Everything’s on the table,’ she said, in reference to pay cuts, fee increases and layoffs.”

Everything?  Will she take a pay cut? Offer to pay more than 8% toward 70% of her $127,000/year salary for the rest of her life?

“The preliminary 2020-21 budget presented Thursday showed total revenue of $8,890,128 — down about $34,000 from the previous year. It also shows operating expenses at $9,329,919, with a projected net income loss of $444,291…”

Hmmm, “operating expenses” (about 2/3’s payroll) are up by just about exactly the amount projected to be lost? It’s like walking into the kitchen, and finding somebody with one hand in the cookie jar and the other hand in their mouth, and having them tell you that you need to better stock your cookie jar. 

But, Miss Management stands firm over her own best interests, throwing the taxpayers under the bus with this threat, “The preliminary budget includes a conservative estimate and will require difficult decisions that will affect program offerings and operations in the future.”

READ THE STORY HERE:
By  | lurseny@chicoer.com | Chico Enterprise-Record

CHICO — Unable to collect revenue from halted programming and hall rentals, the Chico Area Recreation and Park District is looking at ways to cut expenses, including the possible abandonment of Shapiro Pool. It faces a $440,000 deficit in its preliminary 2020-21 budget.On the good news side, however, the CARD office at 545 Vallombrosa Ave. opened to the public Friday, and youth summer camps are on the horizon.

CARD has leased Shapiro Pool from the Chico Unified School District for decades, but over the past few years shut it to the public because of the expensive and public health risk of the old equipment, which it can’t afford to replace. It cost CARD about $11,000 a year in supplies and 300 staff hours, with only one event — a dog splash gathering — all year.

At Thursday’s board virtual meeting, General Manager Ann Willmann asked the board for preference, which was unanimously for “giving it back to the school district.” The matter will come back to the board at the next meeting — June 18 — giving the public a chance to weigh in on the pool, along with the preliminary 2020-21 budget.Because programming and rental fees are the majority revenue source for the special district, without the usual spring recreation selections and halls being closed because of coronavirus, the district is down in revenue. Property tax is the next largest income source, which could also be down.

“We had zero programming in April and May, and afterschool programs bring in about $150,000 a month. There’s expenses there too.

“We’ve definitely had a loss of revenue,” Willmann said Friday.

The board Thursday approved a preliminary budget required by law that shows a roughly $440,000 deficit, but chair Tom Lando said what guides the district will look nothing like the preliminary budget. Willmann noted Friday that CARD needs a balanced budget, and will be looking at a combination of strategies.

“Everything’s on the table,” she said, in reference to pay cuts, fee increases and layoffs.”

The preliminary 2020-21 budget presented Thursday showed total revenue of $8,890,128 — down about $34,000 from the previous year. It also shows operating expenses at $9,329,919, with a projected net income loss of $444,291.

It’s hard to guess the revenue and expenditures, said Willmann, because changes occur daily. Resources like parks and activities fields have to be kept up, even though unused. Some part-time staff has been brought back to help with that, but partial staff related to programming have been let go. Some maintenance projects are being delayed.

The sooner the county re-opening occurs, the sooner revenue from programs and facility rentals can come to CARD. But the reopening schedule is still fluid, so predictions are difficult.

Willmann told the board in a written statement that, “The preliminary budget includes a conservative estimate and will require difficult decisions that will affect program offerings and operations in the future.”

Willmann told the board that online registration was ready once the county health officials gave the go-ahead to reopen, and the traditional youth summer camps were on tap. In addition, pickleball courts and the Humboldt Skate Park are operating, and bathrooms at CARD parks were open.

“The current phased reopening will affect classes, youth and adult sport leagues, aquatics, senior programming and special events,” she wrote in her budget report.

With large money-making gatherings — like large weddings or parties — not likely in the immediate future, CARD plans a limited reopening of rental halls, along with rentals of picnic areas and sports field once the county signals.

However, the district will move forward with Chico Rotary sponsored Centennial Park on Ceres Avenue, estimated at $1.5 million. CARD plans to tap the city pool of park-development fees to cover development, but the project is also financially supported by the Rotary club in honor of its 100th year.

Her budget report indicated the district has a restricted reserve of $1.2 million for emergency operation, and Willmann encouraged that amount to be increased to $1,800,000 over time.

A public hearing on the budget, which can be seen online www.chicorec.com or in the CARD office, is planned for June 18, with final adoption of the budget on July 16.

These public agencies need to clean house before we should even consider revenue measures

15 Apr

Oh for cripe’s sake, another letter from the Measure A people. Like a friend of mine has observed, they are still really mad they didn’t get this measure past the voters. I was hoping they’d just stomp their foot and disappear through the floor, but you can bet they’ll be back in 2022.

Letter: Reflecting on the failure of Measure A

By  |

Great and timely article in the Sunday, April 5 Enterprise Record regarding “No Sports.” For those of us who sports and athletics is such a large part of our lives it is hard to not get our daily “Sports Fix.” We know professional, collegiate, high school and other amateur sports will resume as we recover from this COVID-19 Virus. Our hearts go out to those directly infected with the virus and all of us indirectly affected by staying home and not participating in work or athletic activities. It is a good time to reflect on why Measure A failed and how to move our local recreation and sports programs forward.

In the beginning I was in favor of Measure A. Over the course of the campaign I changed my opinion that the measure would fulfill our facility and program needs. There are too many reasons to cite in 250 words for the failure. No sunset and a CPI were two along with few specifics on what facilities were needed and would be provided by the parcel tax if passed. CARD ignored half of the electorate when they planned the measure.

We need to analyze what facilities are really needed and what programs need to be re-energized and focused on. The October 2018 facilities assessment study should have done this but did not. It was an overall marketing study of the amateur sports market with two of the three proposals being private/public partnerships with no explanation by CARD.

— Terry Cleland, Chico

Cleland is right about the the “no sunset” and annual increase with the Consumer Price Index – the measure was bad. He is also right about the lack of specifics – the measure promised nothing, except more revenues for CARD to spend as they pleased.

But he left out the bond measure – General Manager Ann Willmann admitted several times that the parcel tax proceeds were not nearly enough to pay for any of the over-the-rainbow projects mentioned in the Measure A campaign. Willmann said they would use the parcel tax proceeds to secure a $30-something-million bond, the debt service for which would have cost $2 million a year while only providing $1 million for projects. A million dollars a year? Let me put that into perspective – several years ago, the city of Chico spent a million dollars “upgrading” the public restroom at One Mile. Get it? 

Cleland also neglected to mention the pension deficit, or the fact that a simple majority measure goes into the General Fund, to be spent at the pleasure of the board and staff. He wouldn’t admit – the salaries and pensions at CARD are not sustainable, that they have bottomed out the General Fund to pay down the deficit created by their employees’ unrealistic and unreasonable “shares”. Willmann admitted many times they had deferred maintenance while paying their pensions.  

I feel Cleland is trying to nudge the conversation away from the fact that CARD is poorly managed and is not fulfilling their mission statement. 

Cleland attended CARD General Manager Ann Willmann’s “informational” propaganda sessions. He heard her tell the group that CARD is without debt, and he sat right behind Dave Howell as he corrected Willmann. Howell quoted the latest figure on CARD’s Unfunded Pension Liability as $2.7 million, because that was the figure Willmann had recently given the Enterprise Record. She admitted to him and the rest of us that it is actually over $3 million. How does it grow so fast? Because, only 5 years ago, agency management was paying NOTHING toward their own pensions. CARD was paying, in total, less than 10% of the cost. These agencies have put off paying the pensions, because they expect the taxpayers to foot it. 

As of 2017 Willmann was only paying 2.5% of the cost of her pension, with an annual salary increase, that’s why CARD’s deficit is growing so quickly. As of 2019, she was paying 8%, with another salary increase, up to $127,000/year. 

If you want to see the consequences of this kind of pyramid scheme, read the latest CalPERS “actuarial valuation report” for CARD.

https://www.calpers.ca.gov/page/employers/actuarial-services/employer-contributions/public-agency-actuarial-valuation-reports

Just type “Chico Area Recreation District” into the search engine.

Look at what CalPERs will expect CARD to pay in “catch up” payments within the next few years – and then remember, the taxpayers pay ALL OF IT, in addition to half the payroll contribution. 

And here’s another lie Willmann floated to the public during her little propaganda blitz – she said that CARD has no control over the shares or amounts they pay to CalPERS. “this needs to be handled at the CalPERS level and the legislative level…” she lied. 

Here’s two holes in that lie – 

  1. If it’s out of the agency’s hands what they pay to CalPERS, why are the city of Chico and CARD’s payments so radically different? CARD pays 14%, while the city of Chico pays 21 – 31%.  You can see the city even negotiates different payments for different employee groups, as well as very different shares per employee group. 
  2. According to the report linked above, “The employer contributions in this report do not reflect any cost sharing arrangements you may have with your employees.”  There’s the truth – Willmann told the public at those sessions that the board doesn’t have any control over the shares. Liar. 

Okay, here’s where it gets even murkier – Willmann claimed in those sessions that her 8% was more than half of the agency’s cost – she bragged about that repeatedly.   But, when I asked her, in front of the rest of the group, why the city and CARD pay totally different percentages, she would not answer me in the meeting, saying she needed to check her figures. No, it was because she didn’t want to tell the others the truth – her 8% is not MORE THAN half of what the agency pays, it’s not even half.  She admitted to me via email later, the agency pays 17%.   “ The Total Normal Cost is then split in to the Employee Contribution Rate and the Employer Normal Cost Rate. I was incorrect regarding our Total Normal Cost, it is currently 17.127% for our classic members not 14%.”

Why did she tell everybody else CARD only pays 14%? Obviously, Willmann knows the truth, she knows she pays less than half, but misleads the public, because it’s in her best interest to do so. 

 And, here’s the real pig sticker – the taxpayers not only pay over half the payroll portion, but make the entire “catch up” payments on the resulting Unfunded Accrued Liability. 

So, in answer to Mr. Cleland, I’ll say, before I would even consider a revenue measure for this sad little agency, I would demand the following (and this is just for starters) :

  1. new general manager 
  2. Tom Lando off the board
  3. ratify a new agreement with employees that they work toward paying more of the agency’s payroll costs (a LOT more)
  4. ratify a new agreement with employees that they will pay the same “share” toward the “unfunded liability”, or “catch up” payments

Meanwhile, we do need to poke our legislators to dump the California Rule, and to start dissolving CalPERS and working toward a more sustainable pension system for our certainly needed but much overcompensated public employees. 

Next time we’ll apply the same argument to the City of Chico, who may not be discussing their one cent sales tax increase measure in front of the public right now, but I assure you they are planning to put it on the 2020 ballot. You can find the same actuarial report for the city at the website I linked above, just punch in City of Chico. 

Click to access chico-area-recreation-and-park-district-miscellaneous-2018.pdf

Click to access chico-area-recreation-and-park-district-miscellaneous-2018.pdf

Click to access chico-area-recreation-and-park-district-miscellaneous-2018.pdf

Click to access chico-area-recreation-and-park-district-miscellaneous-2018.pdf

Measure A omissions, half-truths and falsehoods

29 Feb

Here’s a post from Chico Taxes

https://chicotaxeshome.wordpress.com/2020/02/29/measure-a-omissions-half-truths-and-falsehoods/

Measure A Omissions, Half-Truths and Falsehoods

If Measure A passes CARD will take on $36 million in new debt and two of
every three dollars of the new tax will be spent on debt service. CARD
failed to mention this in the ballot measure. Don’t voters have a right
to know this before they vote themselves a permanent tax that increases
every year?

In his pro-Measure A argument in the Chico ER police officer Jim Parrott
tells us the state, not CARD, created the unfunded liabilities. This is
not only untrue, it’s absurd and it’s particularly disturbing coming
from someone sworn to uphold the law and tell the truth. It wasn’t the
State of California or CalPERS that approved the contracts that resulted
in the unfunded liabilities. It was CARD’s board. And to this day the
Chico ER has not set the record straight on Parrott’s untrue statement.

Moreover, one of CARD’s board members who put up $6,000 to pass Measure
A receives a six figure pension from CalPERS and has every incentive to
insure money that CARD should spend on maintenance, programs and new
facilities continues to get diverted to CalPERS so CalPERS stays afloat.
There ought to be a law that prevents such a conflict of interest.

Despite what CARD and its supporters state there is no guarantee how the
money is spent. In the ballot measure no amount is dedicated to any
project and CARD uses conditional words such as unless and intends.

It would be foolish for voters to approve a measure backed by over
$60,0000 from special interests that would result in a regressive,
permanent, perpetually increasing new tax and tens of millions in new
debt from a governmental agency whose leaders and supporters do not tell
voters the truth. And it’s shameful the local media does not set the
record straight.

The Big Lie: none of the A advocates will talk about the $36 million bond

29 Feb

Here’s an interesting “yes on A” letter. This letter was written by one of the people behind “Yes on A”, local realtor and investor Bill Brouhard. 

For me and my family, Measure A boils down to some very simple truths.

If Measure A passes, Chico’s parks and recreation get way better.

If Measure A fails, Chico’s parks and recreation deteriorate.

If Measure A passes, I’ll be paying $85 a year, that’s less than 25 cents a day.

A gumball costs 25 cents.

If Measure A passes, all those gumballs add up to roughly $3 million per year, 100% of which by law must be spent on local parks and recreational facilities.  CARD has a list of those projects on their website.

When a gumball a day can make and help keep Chico a better place, seems like a thing we all can and should support.  Let’s do the right thing this time. YES on Measure A.

— Bill Brouhard, Chico

First of all, I find this argument insulting – he’s calling our concerns cheap and petty. A gumball a  day? No mention of the $36 million dollar bond, or the $2 million a year in debt service.

He’s also threatening us.

“If Measure A passes, Chico’s parks and recreation get way better.

If Measure A fails, Chico’s parks and recreation deteriorate.”

Sounds like a bully – give us the money or the parks die!

But you know the most interesting thing about Bill Brouhard is, he’s a realtor.

Chico State graduate and resident since 1979, Bill Brouhard has been involved in the planning, entitlement and development of many of Butte County’s largest mixed use residential, office and industrial real estate projects.

Brouhard is also with Every Body Healthy Body. They are the folks who pitched CARD and the city for a gi-NOR-mous sports facility to be located south of town.

He also represents a property owner who is having trouble selling his land because it has all these environmental restrictions on it. When Brouhard came to a CARD meeting a couple of years ago, he was trying to get CARD to buy that land to build the facility. 

https://chicotaxpayers.com/2016/08/19/dolan-accuses-card-of-brown-act-violation-aquatics-group-wants-nance-canyon-taken-off-protection-list-so-they-can-locate-their-mega-center-there/

Folks,  Brouhard doesn’t care about Chico or our future, he just wants to sell his client’s doomed property. 

A gumball a day, my ass. I’m sure Blowhard is expecting to get a lot more out of it than a gumball a day. 

Gee, all the sudden the ER can’t squeeze in more than 3 or 4 letters a day? What’s the matter Mike – too many NO on A letters?

24 Feb

I think it’s weird that a few weeks ago the ER was running as many as 10 letters a day, but now that’s dropped off to three or four. I happen to know there are letters in the queue – a few of my friends have told me they sent “no on A” letters before the February 21 cut-off, and they just haven’t appeared. 

Of course you know – ER front man Mike Wolcott has endorsed Measure A. 

Of course, Wolcott recruited our friend Dave Howell to write a “con” piece so he could give Jim Parrott another shot at a “pro” piece. I don’t know how many of you noticed – Wolcott listed Dave as “Dave Smith”, Dave had to correct him. By the time Wolcott put the right name on the piece it was buried. That might not sound like more than an innocent mistake (like Karl Ory putting his hand in Nichole Nava’s face?), but it means anybody who googled the name would not find any of Dave Howell’s previous letters or his new “Chico Taxes” website.

https://chicotaxes.home.blog/

Excuse me  for thinking Mr. Wolcott would ever do anything like that on purpose, I’ll just go on thinking he’s an incompetent ass.

Frankly, this measure was written deceptively, and presented falsely by the ER. The proponents aren’t telling us that CARD intends to invest the proceeds in a $36 million bond, and that the funds can be spent at the poor discretion of the CARD board. This election has been dirty.

But Saturday I attended a gathering of Chico Republican Women Federated. Many indicated to me that they had already voted NO on A. Others indicated to me that they had friends who were waffling. I told them to look at CARD’s budget, it’s all there – millions of dollars going to CalPERS on their unfunded pension liability, while district facilities sank into disrepair. I think the group was just as shocked as I am about how little public employees pay toward very generous benefits.  

I wish more people were as involved as this group. We listened to local candidates, had a great chat with GOP Vice Chair Peter Kuo, and I  got to meet new, young, dedicated members. It’s good to see a group that’s on top of local issues and engaging new people all the time.

It’s encouraging to see young people who are willing to work hard to make a difference.  The future looks brighter today. 

NO on A: these letter writers made my day

18 Feb

The other day I noticed THREE YES on A letters in the Enterprise Record. You know what – I didn’t even bother to read them, the titles said it all. One person cited the $85/year base as “tiny”. When the YES people rebutted my Arguments Against in the ballot guide, they said MY arguments were misleading. Hah!

I find the letters written by the NO crowd to be a lot more interesting. Here’s one I like – short, sweet, and to the point.

Back in 1998 the voters of Chico approved Measure A, which at that time was to build a new high school. Well 22 years later we are still paying for that and the new high school was never built.

That is the problem with these things, once we give them the money they don’t have to fulfill the promises they made. CARD has a history of irresponsibility spending our money. Why trust them with more money?  No on Measure A.

— Jim Matthews, Chico

Yeah, thanks for bringing up School Bond Measure A Jim, people should still be pissed about that. That was a classic bait-and-switch.  I hope the voters remember that when the district brings their next bond around – I’m predicting they will put a measure on the 2022 ballot, we’ll see.

Now here’s another short one, but not so sweet – this guy thinks we should all have to pay for his pickle ball courts.

We need more recreational facilities and more pickleball courts.

— Ted Bryson, Chico

Pay for your own pickle ball courts Ted! The following letter-writer brings up a point I have not had time to address – CARD is subsidized by the taxpayers to keep their fees down. I think it’s way past time they update their user fees to be more in line with local businesses who don’t get bailed out by the taxpayers for making poor business decisions. Read what this next writer has to say.

There’s a lot of talk about Measure A.  I have heard statements such as “this is a unique opportunity,” “we need to pay it forward for future generations,” “it costs less than $10 a month.”  I challenge every voter, parent and grandparent to think about these statements.

Measure A is a continuous parcel tax on your property that has no end date. It continuously increases every year, billed on your property tax bill, tied to the Consumer Price Index. This is a tax, folks, that has no oversight or auditing mechanism. There is no budgeting for a tax increase that you have no control over, but are required to pay.

This tax will leave a huge debt and burden to our children and grandchildren.  If they are lucky enough to buy a piece of property, how much do you think your $85 tax will be for them?   Do you think they will thank you for leaving them a huge tax liability?

If CARD needs more money, let people that use the facilities pay for it. Isn’t that reasonable. Pay for what you use.

Please join me in voting no on measure A, so our future generations will not be burdened.

— Lorna Andreatta, Chico

Lastly, here’s a kick-ass letter from Ray Schimmel. I’ll never forget Ray Schimmel, because he spoke at a CPUC water rate increase hearing back in 2013, and told us all about “defined benefits”, which are the basis of our problem. He also grew up in Chico, raised his kids in Chico and Durham, and supported our kids’ rec teams when CARD would not include our league in plans for DeGarmo Park. We had to rent an old warehouse and build our own facility with our own money. It was a great experience, but I have never forgot how CARD turned us away, while giving special favors to their friends who wanted pickle ball and  bocce courts.  

Here Ray takes them on for closing Shapiro Pool – I know he speaks for a lot of people.

I was 11 years old in 1956 when, a hundred yards from my home, the new neighborhood Shapiro Pool opened its doors to me and a huge crowed of ecstatic kids. It was a wonderful facility with changing rooms, showers, two diving boards and organized programs. It’s where I learned that water polo was the name of an activity which allowed your opponents to drown you.

My home was in our family for 60 years and is still in great condition because it was always well maintained but Shapiro pool was closed in 2016. Why? CARD’s consultant,  in 2015, said it had been long neglected.  What?

From a young age I had reasons to appreciate our parks and places like Shapiro Pool, but I am dead set against Measure A, the parcel tax CARD is trying to cram down our throats. Why? In part because it has no sunset provision (never ends) and it is tied to the CPI (probable yearly cost increases).  In addition CARD has not been honest with us about why they really want this measure to pass. That beautiful mailer they recently sent out promoting the parcel tax said nothing about existing unfunded and unsustainable  pension obligations. And yet they continue to promote a grandiose “aquatics center” while history shows they stood by and allowed Shapiro Pool to die.

Simply put CARD does not to deserve to see this parcel tax approved.  Please vote no on Measure A, it stinks,stinks, stinks!

Raymond Lee Schimmel, Chico

A conversation that needs to be had before November – WHO will pay the pension deficit?

14 Feb

Here’s a NO on A letter that merits further discussion – this is a conversation that needs to be had. 

Before we hand CARD $3 million a year with Measure A, here’s why we’re smarter not to. First, we have a massive pension debt and no solution yet. I’m willing to vote higher city taxes this fall to help with that, but not to launch CARD on a spending spree for new toys – the main one being an aquatic center we didn’t all want. But about $3 million a year in new money should get that done in a few years, so why a permanent parcel tax? And why is CARD putting the money into a $36 million bond? Bonds mean one hell of a spending spree ahead, and losing a third or more of the money on interest payments. It’s kind of like how we’re funding pensions, except CalPERS and the unions never mentioned how much we’re about to lose by the state and them not paying it up front like we were told. Tricky thing dissembling.

There’s one more problem. The reason we don’t already have an aquatic center is that the city council wouldn’t buy CARD one. Council members have to think when it comes to what city agencies want and what our taxes can cover. If Measure A fails that will keep happening. I like that. We don’t even know what all the toys are CARD will start throwing money at once nobody can get in its way anymore. CARD will be a pretty hefty sow by the time it shows up at city council overextended again.

— David P. Smith, Chico

 

A line that I find very disturbing is, “I’m willing to vote higher city taxes this fall…”

 

Why the hell would you do that, Dave?  

And then he says, “It’s kind of like how we’re funding pensions, except CalPERS and the unions never mentioned how much we’re about to lose by the state and them not paying it up front like we were told.”   He assumes we all know how the pensions are funded, and what he means by “how much we’re about to lose by the state…”  I don’t think very many people really understand how we fund the pensions. Nor do I believe the average voter/taxpayers is aware how much CalPERS has lost in the stock market through bad investments. But the part that really interests me is “them not paying it up front like we were told.”

Thanks Dave, cause this is the conversation that needs to be had. 

First of all, the pensions are funded through payments made by the public agency and supplemented with stock market investments. Unfortunately, CalPERS made big, stupid promises, saying they could fund more than 50% of the pensions through investments. They amassed a lot of assets – a high rise building in NYC? – and began building a portfolio, promising a 7% return. 

But,  CalPERS investments have never held up to their promises because they continue to make bad investments. They have been lucky to get 3%. So, their investments end up costing money.  Some of these investments have been made inappropriately.  In fact, in 2015, “a federal grand jury indicted two former top officials on fraud, conspiracy and obstruction charges.”

https://www.cnetscandal.com/2015/11/ex-calpers-official-villalobos-commits.html

A CalPERS executive and a board member were found to have been taking bribes to buy poorly performing stocks. 

“Villalobos, collected tens of millions of dollars from Wall Street firms for steering CalPERS business their way.”

“At the center of the investigation was the role of placement agents, the middlemen or intermediaries hired by private equity firms and other financial institutions to win CalPERS business. The investigation came during a rough financial stretch for CalPERS. Its investment portfolio value had plummeted nearly $100 billion, to $169 billion, during the recession.”

Guilty as hell, Villalobos committed suicide before he could be sentenced. His partner was convicted and went to prison.  Since then, CalPERS claims to have cleaned up their act, but their portfolio continues to do badly. So they hired an “assassin” – a guy who comes in and cleans up the mess.

https://www.marketwatch.com/story/nothing-is-sacred-for-new-calpers-pension-leader-2019-12-11

In his first week, Mr. Meng surprised staffers by introducing himself to employees from the most junior to senior level. Over the next few months, he was taken aback by how little some staffers knew about the fund’s investments, a person familiar with the matter said. Mr. Meng concluded some lacked information he thought needed to be routinely monitored.

So there’s corruption and incompetence here, not surprising. What would surprise me is to hear that some management was fired, possibly even investigated. What would surprise me even more would be CalPERS actually making money instead of pouring it down the toilet. 

Unfortunately, CalPERS corruption and incompetence only add up to half the conversation.  

Here’s the conversation that still needs to be had.  Who should pay the deficit?

Right now, the taxpayers are picking up not only the monthly payroll amounts, but the semi-annual deficit payments as well. Here’s how that pencils out – I’ll use CARD as an example.

The agency pays 14% of the cost of it’s management pensions. The employees pay 5.5 to 8% of the 14%.  It works like this:  for a $100,000/year salary,  the agency pays (100,000 x .14) $14,000/year, total. This is a management salary, management pays 8%, so that employee would pay (14,000 x .08) $1,120/year. For a pension of 70%, or $70,000/year. That base figure goes up with cost of living increases, based on the Consumer Price Index. 

The agency only pays 14%, the other 86% is the deficit. As their stock market returns continue to disappoint, CalPERS demands more money. That money has been taken from CARD’s General Fund, by way of a “Pension Stabilization Trust”. Money that would have been better spent maintaining district facilities. 

Meanwhile, CARD employees continue to receive above market salaries and pay pennies on the dollar for very generous pension packages.

CARD General Manager Ann Willmann told us at her “informational meetings” that she has personally met with CalPERS officials and “begged” them to change the employee shares. Really? She should be talking to the board, because that’s who negotiates the salaries and the shares. City of Chico pays different shares than CARD, so these contracts are obviously negotiated in house.

What can we do?  The problem we need to solve is, the public is left out of the negotiations. We have no real representation – not in Chico, where too many pensioneers are on our council and various boards. For example, of the five members of the CARD board, two are public pensioneers – Tom Lando, former city of Chico manager, and Tom Nickell, former CHP officer.

I believe these people have a conflict of interest between their own benefit and the public benefit. I think it behooves them to keep approving the salary increases, because that means the agency pays more into the pension fund.  It is obviously in their best interest to keep making the deficit or “side fund” payments, or CalPERS would have gone bankrupt by now and they would be out their nice pensions. In fact, Lando is one of the top five pensioneers in Butte County, having retired at about $134,000/year, with COLA, he’s now getting over $155,000 in annual pension payments.  I’m not sure about Nickell, but I sincerely believe Lando is pressing this tax measure not for CARD, but for CalPERS. He has put $6,000 of his own money into Measure A – you have to spend money to make money, folks.

I also think Lando has been on the CARD board long enough, and needs to step down when his term is up in November. That’s not likely.

Here’s my solution.  I am hoping some competent and honest candidates come forward for CARD board in November. I think a good candidate would  be a local business person who has experience with CARD. Somebody who doesn’t have financial gain to be made. Somebody who understands finance on a basic level. Somebody who has a long stake in the community, whether business or family. And, somebody who has the support of their family, because there are some minor inconveniences involved, like monthly meetings, “special” meetings, and excursions to various district facilities.

I don’t think that’s a complete list, and I didn’t mean to leave anybody out.  I would say, if you are interested in  filling a position like  this, the first thing you’d want to do is attend meetings. Familiarize yourself with the website, and be sure to contact staff with any questions. Read agendas and reports. Read the minutes of past meetings. Read the budgets, not just the most recent, but past budgets to compare. That’s all on the website. I can also give you information I’ve got from staff that’s not on the website, feel free to ask. 

CARD board is doable. It’s not an expensive election, the meetings are short. And, if you are interested in getting involved, CARD is a good start. THINK ABOUT IT!