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City exploring pre-funding of pensions – do they ever do anything Downtown besides figure out ways to pay themselves?

16 May

Finance Committee meeting Wednesday, May 23, 2018 – 8:30 a.m. to 10:30 a.m.  Council Chamber Building, Conference Room 1

Committee members – Councilmembers Morgan (sean.morgan@chicoca.gov), Stone (randall.stone@chicoca.gov) and Chair Sorensen (mark.sorensen@chicoca.gov)

Next Wednesday the committee will hear reports regarding a fairly new scheme for skimming money off the taxpayers to fund employee pensions. Below is an article from Public Agency Retirement Services (another public retirement agency?) describing the benefits of this program. 

http://www.pars.org/2016/03/a-new-tool-for-pension-budgeting/

With our maturing public pension plans, we know that we should expect greater fluctuations in required contributions from year to year. And since we know big fluctuations are coming, our actuaries are warning employers to plan for it in order to ease the burden when big contribution increases do arrive. But how exactly does one do that? It’s not like big portions of your annual budget are discretionary spending.

If you’ve been in the position of sitting on extra cash, you will have quickly learned that there’s little you can do with that money to “prepare” your agency for fluctuating contribution requirements. If you give that extra money to CalPERS, CalPERS will apply it toward your unfunded liabilities, and it will probably make only a small dent in your annual required contributions due to their amortization rules. While paying down unfunded liabilities is always worthwhile, it won’t help you manage future year-to-year changes in required contributions. You could stash some cash in a rainy day fund, but that has its drawbacks as well. The good news is: we’ve got an answer for you. Duh, dah, dah, duh…. The Section 115 trust!

Here’s something funny – “ If you give that extra money to CalPERS, CalPERS will apply it toward your unfunded liabilities, and it will probably make only a small dent in your annual required contributions due to their amortization rules.”

Current city finance wizard Scott Dowell worked for Chico Area Rec Dist before he got the job with the city. He made those “small dent” payments toward their pension deficit – a “side fund payment” as he described it, of $400,000 in one year. That money could have gone toward badly needed repairs at Shapiro Pool – a consultant said the pool could have been brought up to code for less than $500,000 – but Dowell told me the agency saved a lot of money! by making that side fund payment instead. That’s like making interest only payments on your credit card.

This man gets paid almost $200,000/year, in salary alone, to make decisions like this. And when they’re bad decisions, well, gee, he just changes his MO!  And gets a raise and more for his benefits package.

So you have almost a week to write to the fellows on this committee – that’s Seanny, Randy, and Mark-e-Mark – and tell them what you think of Dowell’s little schemes to fund his own pension. 

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For every BOOM, there’s a BUST!

6 Apr

Have you got a postcard or letter lately, from some realtor, telling you they have a buyer for your house?

It’s not a scam – the realtors who have contacted me are people I recognize. They have buyers – three houses within sight of my window have sold within a week of being put on the market. 

“Team Cooper” tells me, “I am working with a client who’s ready to buy a home in your area. Your home appears to be just what they are seeking.”

Well, my home is not for sale, it hasn’t been on the market for over 10 years. I guess these gals could just be trolling for customers, but this isn’t usually how they go about it. They usually send simple postcards with their name, etc, just general advertising toward either sellers or buyers who might be looking for an agent. The letters I’m getting now seem more desperate. 

…we’ve been looking for a while…”

A week later we got a slick greeting card from a Jeffries Lydon agent, declaring in big red letters, “It’s A Sellers Market”

I’ve seen letters like this before. Back in the late 90’s, and again in the early 2000’s, the market just went wild. During the late 90’s, a friend of ours was actually out-bid on a house over on South Broadway.  She had put in an offer within a couple thousand of the asking price, with some provisions, and some young couple from the Bay Area came in offering more than asking price. My husband and I had bought and sold houses – paying way too much back in ’89, during another BOOM. But we’d never heard of anybody in Chico offering over asking price.

That boom was followed by a short bust, as I recall, and then in the early 2000’s the prices started to go through the roof. About 2003 my family noticed a house a few doors down from Chico library asking $303,000, and we laughed out loud. It was sold for asking price within a week.

That spike in housing prices precipitated a building boom that has had long reaching consequences for Chico.  Then city manager Tom Lando led the city on a permits binge to raise revenues. Then he floated a Memo of Understanding by council that attached “city salaries to revenue increases but not decreases…”   Lando’s own salary went from about $65,000 to over $130,000 over the next few years, along with all the salaries Downtown. 

And then town went BUST in a big way – another thing I’d never seen in my life – houses in foreclosure, not only in my neighborhood, but in surrounding towns. Driving through Red Bluff one morning on the way to a hockey tournament we drove through a neighborhood where almost every house had a foreclosure sign in it. 

Last year my family started recognizing the signs of a BOOM again, prices going up-up-up. We decided it was time to get rid of a big old rental we had that was starting to need all kinds of maintenance – for one thing, the roof we’d put on it when we bought it was approaching 20 years old. Utility prices have gotten outrageous, and it was hard to find a group of tenants that could afford to live in it anymore. 

The agents we approached were practically snapping at air.  The first woman spoke openly about the BOOM going on, opining it wouldn’t last through the Winter, before we had another BUST. But she was not very optimistic about our house – she was really disappointed when she found out it had been a rental, as if renters are pigs. We didn’t call her back.

The second woman wanted to ask way too much, she wanted staging, she wanted a laundry list of superficial improvements – for example, new knobs on every cabinet in the kitchen. We didn’t call her back.

We chose a guy who had sold a house near our own home in less than a week. He wanted to ask more than we had through prudent, but we went with him. It essentially sold at Open House, the buyers offering us full price and  asking nothing in return. 

That’s BOOM behavior.

So I was surprised when houses started to go for even  more, but I didn’t regret selling when we did for what we did.  I’ve learned to trust my gut, and my gut was telling me there was a BUST coming.

So now we start getting the letters. Back in the early 2000’s, we got the same letters regarding an old house we owned  over on South Broadway. We started getting more than a letter a week, from realtors as far away as Los Angeles, telling us they had investors who had money to buy multiple homes in Chico, and they were wondering if we were willing to sell. It was a good rental at that time, we had good tenants, so we just ignored the letters. 

By 2006 the market was running away. The house had become a liability – we weren’t getting good tenants anymore, we were getting 20-somethings who came right out and told us they wanted a “party house.” The neighborhood was  going that way, so we decided to put it on the market. 

We found it had turned into an investors market – that’s a real feeding frenzy. Buyers were looking for a rental neighborhood, and they didn’t seem to care what kind of tenants they would get. The first buyers we got were doctors who had an investment group. That fell through – they didn’t like the proximity to the neighbor’s house.  But, within a few days we had investors from Oregon. They offered us full asking price and the deal was done.

And then came the BUST. Three of my neighbors were foreclosed over a few months, including the house on which the assessor had based the new valuation for our house.  So, we still carry an inflated valuation, because the assessor used the new subdivision that was shoved into our street for a comp for our 70 year old crapper. Those houses had started at $600,000 plus, the front house selling for about $650,000. One after another person foreclosed out of that house – it’s most recently sold for about $400,000. 

That’s why they call it a BUST.

So, sorry to ramble, but I’m telling you – there’s a BUST coming, and it’s going to be a BIG BUST.

 

 

Council approves another $25,000 toward chambers remodel as Coolidge chuckles at complaints about street conditions

12 Mar

I’ve been seeing great letters to the Enterprise Record lately and decided to get back in the saddle. The media spin on the city chambers remodel really pissed me off – shills! So I wrote the following letter about the conversation I had with $taff regarding same – they just took another $25,000 for the project and council had the nerve to laugh about our complaints that they aren’t fixing roads.

Watch that here – jump ahead to Item 4.5 – and be sure to pay attention to comments made by Andrew Coolidge and laughter from other councilors at the end of Presson’s  report.

http://chico-ca.granicus.com/MediaPlayer.php?view_id=2&clip_id=721

Here’s Presson’s written report:

http://chico-ca.granicus.com/MetaViewer.php?view_id=2&clip_id=720&meta_id=58377

Remember, this money came out of the pockets of everybody who uses Comcast. Isn’t that a SCREAM!?!

On March 6 Chico City Council approved a Budget Modification and Supplemental Appropriation, transferring $25,000 in available PEG (Public Education and Government) funds to cover additional costs associated with the Council Chamber Technology upgrade. 

This project, a complete gutting of council chambers for replacement not only of “technology” but new seating, carpeting, paneling, etc, started late last year and has run over Staff’s original estimate of $343,287.67.       

 PEG fees are paid by Comcast customers as required by city ordinance 2368, passed by council in 2007,  a fee of one percent of  gross revenues added to our bills, in addition to the existing franchise fee also paid by Comcast  ratepayers.

According to Staff interpretation, PEG funding is restricted to  “equipment purchases, upgrades, or a capital project such as this current project…the city is responsible for ensuring the general public has access to the Public Access Channel…”  

The new seats, carpeting and wall paneling are included, according to clerk Debbie Presson, because “unexpected things came up …we didn’t even have a diagram of what was going on in there… once we started tearing into the wall…” 

Then council had a big laugh – the very idea that this money would be used to fix city streets had them all in titters. 

Yes, how funny – they passed an ordinance adding a fee to our Comcast bills, and now they spend it as they please. What next, a sales tax increase? 

Juanita Sumner, Chico CA

City consultant: “more people, more payroll, more allocations” – this is how city of Chico management siphons money from the road fund into their own wallets

1 Mar

Thursday March 8,  City of Chico finance mangler Scott Dowell will give a dog-and-pony presentation about how the city spends money. That ought to be a gas, but instead, I attended yesterday’s (2/28/18) Finance Committee meeting to hear a consultant explain the process of “cost allocation”.

Dowell is disingenuous – who does he really expect to show up on a Thursday at 10 am? Oh yeah, I’ll just ask my boss if I can come in early and take two hours off at lunch, everybody does that! 

You know, I might have had bosses who would go for that, but only once. And you wouldn’t be allowed to discuss it at the work place, that’s a pretty standard rule of getting along with fellow employees  – leave your politics in the parking lot. So, in this way, Dowell is very pointedly leaving out the working class who would have to support the sales tax increase he is going to be selling at his “workshop”.

But, when you have limited time, you use it wisely. Who wants to hear a spin from the Fox in Charge of the Henhouse, when you can listen to a visiting watch dog? That’s how I see consultant Chad Wolford, eversince 2015 when he told council they were spending too much money on “overhead” – administrative salaries and benefits.

https://chicotaxpayers.com/2017/12/21/no-kidding-our-city-is-headed-for-deep-doo-doo-2/

As the consultant describes it, cost allocation means, “central administration cost (also referred to as “overhead”) spread down to departments as operating costs.”  Just repeat that a few times, and remind yourself, “operating” means “actual work,” such as fixing the streets, or maintaining the sewer plant. 

Cost allocation is the process by which these ridiculous management salaries are cherry picked from all the departments. Makes it look legal and fair, but it’s really the same old system of moving peas under walnuts shells. Money is moved between restricted and non-restricted funds to pay for stuff that money was not originally earmarked for. 

What’s the use of restricting funds (to their original purpose, such as street maintenance) if you can just transfer them wherever you want to pay for whatever you want? This is the process by which administrators like Orme, Constantin and Dowell take grant money that was originally intended to fix streets and pad it into their wallets. 

The consultant is a nice man, he admitted to me, “this is a very complicated process.”  I replied, “No kidding!” That’s why  I had tagged him into the lobby of the building when he finished his presentation, I had to ask some additional questions. 

Well here’s something that he made pretty clear – the “changes”  (increases) in the allocations are based on staff and salary increases. “More people, more payroll, more allocations,” Wolford said. “Salaries and benefits have gone up, operating budgets are up…” 

So, I don’t think I’ll be bothered with Dowell’s dog and pony show Saturday – ‘scuse me, that’s Thursday March 8 – I already heard how the city of Chico spends it’s money. 

CalPERS nears insolvency – meanwhile city of Chico uses “cost allocation” to rationalize fund pilfering to pay pension costs

27 Feb

Thanks Dude, for this recent article regarding CalPERS insolvency. Former CalPERS board member and erstwhile gubernatorial candidate (2006?) Steve Westly has been speaking up about CalPERS growing pension deficit, warning the agency will collapse if it is not bailed out or “reformed.”

https://www.zerohedge.com/news/2018-02-24/former-calpers-board-members-shocking-admission-calpers-near-insolvency-it-needs

I don’t know what he means by “reform” – to me, this would mean, no more 70 – 90 percent of highest year’s salary at age 50 – 65, cut employer contributions to 10 percent (based on merit and years employed), and make the employees pay their own retirement package. 

Here’s an article from last year that chronicles this mess we’re in from the beginning.

http://www.latimes.com/projects/la-me-pension-crisis-davis-deal/

Of course now everybody is screaming for “reform” because they know the system is about to collapse and they won’t get their dough.  Most of these “reformers” mean, taxpayers pay more. That’s what the city of Chico is up to at tomorrow’s Finance Committee Meeting.

Chris Constantin first introduced the concept of “cost allocation” a couple of years ago. It is a process by which they transfer money out of the general fund to pay salaries, benefits and pensions for city employees. It’s very confusing, unless you are the consultant who is hired to explain it every year. That would be Chad Wolford. 

Two years ago, Wolford told us we were “spending too much money on overhead” – meaning, management salaries, and particularly, management pensions.

https://chicotaxpayers.com/2015/11/29/no-kidding-our-city-is-headed-for-deep-doo-doo/

In response, the city raised pension shares but made adjustments to ensure employees would not have to pay. Mark Orme and Chris Constantin accepted what amounts to 401K plans, which they report will not add to our pensions costs – wrong again Chris! They still got salary increases, and we will have to pay them that deferred compensation, it just routes CalPERS. To me, this is just greed. Look at their salaries:

http://www.chicoer.com/article/NA/20171002/NEWS/171009943

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

Orme demands over $200,000 in base salary, but expects us to believe he has our best interests at heart? 

Tomorrow, at an 8:30 am Finance Committee meeting, they will go about “allocating” their fancy lifestyles onto the backs of the taxpayers, taking money that should be providing street maintenance, sewer plant updates and other services for those of us who pay for them, and putting it toward their 70 – 90 percent (do the math on Orme’s salary) pensions. Read the report here:

http://www.ci.chico.ca.us/document_library/minutes_agendas/finance_committee/2-28-18FinanceCommitteeAgendaPacket.pdf

This is sneaky stealing, if you ask me. The taxpayers are never privvy to this stuff – wonder why they hold these meetings at 8:30 in the morning while you are rushing to work? 

 

The last thing we want is for “pension reform” to turn into “leave the taxpayers holding the bag”

12 Jan

 Dude sent me this article from Bloomberg:

https://www.bloomberg.com/news/articles/2018-01-10/california-s-brown-raises-prospect-of-pension-cuts-in-downturn

“[Jerry] Brown said he has a ‘hunch’ the courts would ‘modify’ the so-called California rule, which holds that benefits promised to public employees can’t be rolled back. The state’s Supreme Court is set to hear a case in which lower courts ruled that reductions to pensions are permissible if the payments remain ‘reasonable’ for workers.”

Before getting all his/her hopes up, the cagey  taxpayer would immediately ask, “so, what’s ‘reasonable’?”  And then, “who gets to decide what’s ‘reasonable’?” Remember, judges get pensions too.

As I was pondering that, I got next week’s council agenda from the clerk – I’m on the clerk’s notice list, which is just a matter of e-mailing debbie.presson@chicoca.gov and giving her your e-mail address. You can ask for notifications of any and all committee meetings too, stay on top of this stuff instead of bitching about it 10 years after.

Oh look – Reanette Fillmer is still advancing her discussion about city of Chico pensions! She asked council, months ago, to agendize a discussion of our employer [taxpayer] -paid benefits and how they compare to other cities in California.  

I’m not sure how helpful that would be, knowing that most of California is in trouble over pensions right now, but it’s damn sure interesting – see here:

http://chico-ca.granicus.com/MetaViewer.php?view_id=2&event_id=280&meta_id=57592

 

I have never seen this information before, I’ve only heard bits and snatches at meetings – the rest of my knowledge is based on “facts not in evidence” – making guesses from other stuff I hear and watching the expressions on their faces. The last figures I saw showed the city of Chico paying about 26 percent of the pensions – now look! 46 percent! To the employees’ same old 12 percent or less. 

That is how we got into this mess, and  so far, the city of Chico is just digging us deeper into it. 

I don’t know what Fillmer’s agenda is, but we all need to pay attention right now.  The last thing we want is for “pension reform” to turn into “leave the taxpayers holding the bag,” which is what the unions want.

And let council members know how you feel

sean.morgan@chicoca.gov

reanette.fillmer@chicoca.gov

mark.sorensen@chicoca.gov

ann.schwab@chicoca.gov

andrew.coolidge@chicoca.gov

karl.ory@chicoca.gov

randall.stone@chicoca.gov

While you’re at it, send them a couple of pictures of the street in front of your house.

 

 

 

 

 

Why do people ignore a problem until it’s too late to do much about it, then expect to complain? Trash deal has been in the works since 2012 – now people want to bitch about it?

5 Jan

I just got my new 2018 Waste Management bill for three months (32 gallons) of $59.70, up about 55 percent from previous bills of $38.55. I realize there is always a bit of inflation but 55 percent? By chance, did the city hire the negotiator from the Pentagon’s F35 program for the Waste Management contract?

I also read that pot was legal in California in 2018 but our City Council decided that a retail pot store was not appropriate for our fair city. How am I supposed to relieve the anxiety of opening my Waste Management garbage bill? I’m very unhappy with our City Council.

— Geoff Bartels, Chico

You know how I love to say “I told you so.”   

That’s not really true – it drives me nuts, trying to get people to pay attention to an issue when there’s still time to stop the bulldozers, but they give me that same old tired bullshit – I’m sorry, I have a life! Why don’t you get one Juanita?

But of course, later, they  get to whine and complain about it.

Somebody read one of my old posts on the subject yesterday, from 2014. At that time, Joe Matz of Recology was saying rates would triple, and the city was looking at requiring service for everybody. If you wanted to haul your own trash they wanted to inspect your vehicle, etc, which was tantamount to requiring a hauler’s permit.

When Juanita raised her scrawny little fist and said, “If you require service the city will have to provide a low-income subsidy…” 

To which the consultant answered, “She’s right.”  He smiled at me across the room. It wasn’t the consultant’s fault, he was very truthful about the whole thing.

OOO! The bulldozers had to stop and listen! You’ll notice, service is not required under this deal, and you can still take your trash to the dump without a hauler’s permit. Which means, neighbors/relatives/friends can still share cans to save money.

Just think if there was four more Juanitas.  Or at least four more people who went to these meetings and raised a scrawny little fist?

And here’s what I’ll  tell Geoff – read the Waste Management website – you can opt out of yard waste service and save almost $6 bucks a month. My family, who share service with our tenants, also opted for a smaller bin. Our son has moved away to college and our tenants don’t have much trash either – we realized we didn’t need that 96 gallon bin anymore.

Once I made those changes in our account, the rate is still about $5 more per month. No, I’m not happy about that. But I wish people who complain would educate themselves – the real problem at this point is the city wants to use the new revenue to pay down their pension deficit instead of fixing the streets like they said they would. That’s where we need to hit them, and hard.

In fact, public works director Brendon Ottoboni says the road/streets fund is tapped, and they are almost 10 years behind on necessary projects. When developer Bill Webb asked at a recent public meeting how a person could get their street on the projects list, Ottoboni again said there’s no money for fixing any more streets.

thumbnail_20171129_095754

This is the “pedestrian right-of-way” down my street. Every now and then I look in that pothole, make sure there isn’t an old lady or a jogger with a stroller stuck down in there…

Want to have some fun? Write to council member Randy Stone, who recently declared the deal was working cause we have less trucks on the streets.

randall.stone@Chicoca.gov

Really Randy? On Wednesday I have a Recology truck on my street, servicing the “commercial enterprise” known as the Evangelical Free Church. On Thursday my bins  are picked up by Waste Management. On Friday Waste Management picks up the bins on the street that intersects my street. So, I get a minimum of seven trucks a week running up and down the street in front of my house.

How about another picture.

thumbnail_20171129_095932

The asphalt is almost completely separated from the base here.

But here’s another funny fact – my street is not considered a  “feeder” by the city of Chico, because there is no new subdivision on my street, so my street will never be on the “projects” list – ask Ottoboni about that.

brendan.ottoboni@Chicoca.gov

Letters to the editor of a newspaper that reaches less than a third of local residents isn’t going to cut it. A few months ago council member Ann Schwab suggested a complaint line for garbage customers so they wouldn’t have to write to the mayor. Why not write to the mayor?  He approved this deal too.

sean.morgan@Chicoca.gov

Don’t forget the chief engineer – city mangler Mark Orme

mark.orme@Chicoca.gov

If you’re going to complain, make it count.