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Coolidge’s tax increase proposals are the grist they need for their pension obligation bond. Chico cost of living will increase while quality of living will decrease.

28 Feb

This Tuesday Chico City council has an over-full agenda. I notice a lot of the remarks on Engaged Chico question the timing of some of the items, with meetings closed to the public. It seems like they’ve packed the agenda with stupid crap like a Downtown card room, after promising us they’d only discuss “essential business” during the shutdown. 

Nichole Nava sums it up, “This topic and a couple of others should be tabled until the E[xecutive] O[rder] has ended and FULL public participation resumes. Continuing to place items such as this one on the agenda while still under the PHE is not the responsible course of action.”

Hidden deep in this mystery meat agenda are two tax proposals from Andrew Coolidge. Coolidge is proposing not only a sales tax increase for “police and fire,” but a bond for “road improvements.” I feel this agenda has been packed for a reason – they want to distract us from the tax increase proposals they are trying to run under the wire. 

If you read the financial reports attached at the end of the agenda, you see that the city is collecting more revenues every year, and paying more toward the UAL every year. This year they paid out $11.4 million, just in “catch-up” payments, That doesn’t include the regular payroll payments they allocate out of each department budget. But Coolidge wants these measures to guarantee the POB that comes up later in the agenda. All the while the UAL is growing out of control because council has failed to control employee costs.

Hidden even more deeply in the casserole – Item 5.12 – is a request from City Manager Mark Orme (“Staff”) to move forward the Pension Obligation validation process. 

 “Staff is requesting approval to continue exploring the CalPERS Unfunded Accrued Liability (UAL)…”

Well, that’s interesting – “staff is requesting approval…” Meaning, Mark Orme. Orme knows they need that POB before CalPERS ups the ante again. And, he knows they need the sales tax increase and a bond to cover the payments on the POB. This is a desperate scheme, and we’re the ones who will be left holding the bag for this bond. If we don’t approve the sales tax increase and Coolidge’s bond, the POB payments will bottom out our budget. But even if we do approve those new taxes, we will not get street/road repairs, we will not see more police, but the cops and the rest of the employees will be guaranteed their overgenerous pensions. 

Right now the city is bargaining with the Chico Police Officers Association for a new contract. Instead of asking them to pay more toward their generous pensions and benefits, council is turning the stick on the rest of us. The public safety groups – CPOA and the International Firefighters – only pay 15% toward pensions of 90% of salaries exceeding $100,000/year. That’s ridiculous – $15 for every $100 they expect to collect for sitting on their asses in retirement. But here’s the funny thing – they also pay more than any other bargaining group. Management, with the highest salaries, pay the least – 9%. They expect us to pay their salaries now, and then pay them again, with Cost of Living Increase!  

If you haven’t already commented on Engaged Chico

https://chico-ca.granicusideas.com/meetings/354-2-slash-16-slash-21-city-council-meeting-continued-to-march-2-2020/agenda_items/6036bf36f2b6700d2c00a1ad-5-dot-12-pension-obligation-bonds-this-item-added-t

please do. This bond will tank our budget. The sales tax increase and (yet another!) bond on our homes will raise the cost of living in Chico even further, just in case things are expensive enough for you already. 

They raised the cost of our trash service 19% – have you seen any improvement in the street in front of your house? Coolidge is bullshitting us again, just say NO. 

Waste Management has raised rates 19% over the past year – why isn’t that money being spent on the street in front of your house?

14 Jan

Every three months I open my garbage bill and get pissed off. 

First of all, it took me the first 5 years to get Waste Management to stop charging me for the yard waste bin. In the very beginning of this forced deal, I told them I wanted to opt out of the $6+ charge for a yard waste bin that I don’t need. They agreed, but I kept seeing the charge on the bill. Rather than beating my head against the wall trying to contact them via their website or phone, I just scribbled a correction on the bill and made the check out for the correct amount. For five years. That finally worked, and as of January, 2020, they finally got it right, I stopped seeing that charge. 

But I also noticed, they were raising the rates slowly but surely, every bill seemed different. So when I sat down to pay my January 2021 bill, I dug out the January 2020 bill, and yes, rates are up. A 32 gal trash bin has gone from $52.89/quarter to $62.79/quarter, just over the past year. That’s an increase of 19%. 

Which led me to  do more math. I looked at my old Recology bills. We had Recology for 10 years, and they NEVER raised their rates. In fact, they had a fuel surcharge that fluctuated with the price of gas – meaning, it actually went down occasionally. Their average charge per quarter was about $82, for a 96 gallon trash bin, or about $27/month. Now I pay $20+ for a 32 gallon bin? 

In fact, my total bill, for a 32 gal and a 64 gal, is $134/quarter, or $45/month. Pay attention – I used to get a 96 gal bin for $27/month, now I pay $45/month for two bins totaling same. That is a 60% increase.

I’ve been talking about the franchise fee the city gets from the haulers – as of fiscal year June 2020,  $1,980,313. That’s almost $2 million dollars, of YOUR MONEY. You paid that in extra fees. For what? Well, I don’t think I’m the only one who remembers staff and council telling us the money would go to  fix our neighborhood streets. Former City Manager Brian Nakamura told us “too many” trash trucks were destroying our streets, and that he felt they should pay for that.  He led us to believe the money would be dedicated to the streets, and council members, including Andrew Coolidge, sat by and let him do it.

The first year the money was used on the section of Cohasset Road leading to the airport. Every year since, it’s been dumped into the General Fund, where it is used at the whim of council. Can you imagine what $1,980,313 would look like on the street in front of your house? Or maybe give Vallombrosa more than a patch job? Maybe upgrade the streets around the college beyond Third World Country? 

You know, the city also gave Waste Management a contract to empty the trash cans in the park, so they run those behemoths around the park roads once a week – a job that used to be done by a city employee with a pick-up truck. So maybe council should use some of that franchise money to fix South Park Drive before it falls into the creek. Ya think? 

Let’s write to council and tell them that Waste Hauler Franchise Fee needs to be spent on neighborhood streets. Let’s start with our new mayor, Andrew Coolidge – that’s andrew.coolidge@chicoca.gov

While you’re at it, tell him what he can do with his “roads bond” and his sales tax increase.

Shasta County opens meetings – when will our “conservative majority” reopen council meetings? After they’ve already implemented the POB?

11 Jan

Almost a month ago, on December 13, I contacted my Chico city council representative Kasey Reynolds to ask her about the progress in removing transient camps in public spaces around town. We’d been having a conversation about the situation, and I forwarded her a conversation between Rob Berry and Chico PD officer Scott Zuchin regarding the DA’s unwillingness to prosecute City of Chico Municipal Code violations.

She responded, same day, “I will take a look at it for sure. However our City Attorney was meeting with the County and DA on Friday to talk about our newly passed resolution and the prosecution/enforcing aspect of it. I have not talked to the Atty since the meeting so not sure the outcome.  I’ll find out and let you know.”

I waited until the 22nd, then, realizing it was nearly Christmas, I wrote her again. I asked about the Shelter Crisis Designation, asking “1) if that’s still in effect, 2) if we are still receiving a grant for that designation, and 3) if so, where does the money go (into the General Fund?). I’ll add, 4) do we still get a grant for consolidating services at the fair grounds?” 

I also reminded her that she had previously promised to get back to me regarding the conversation our city attorney had with the county DA. 

As of today, 1/11/21, I have had no response from Reynolds. I know she’s busy – you realize, candy and ice cream are considered an “essential business”, so her shop is open.  

https://www.facebook.com/ShubertsIceCreamChicoCA/

We’re open and ready to scoop your favorite flavors and pack your favorite candies! Stop by the shop until 10:00pm to pick up your favorite sweet treat and see all the new renovations 🎉🍨🍫  We will now be open regular hours, Monday through Friday 10am-10pm, Saturday & Sunday 11am-10pm

Well, isn’t that just nice!

But the same woman thinks it’s okay for council chambers to be CLOSED TO THE PUBLIC? You can run out and grab yourself a SCOOP OF DIABETES, but forget about participating in your local government, especially when they are discussing a tax measure that does not require voter approval. 

So, instead of trying to contact my “representative” again, I wrote a letter to the newspaper. Hope you will do same.

On January 5, while Chico City Council prepared for another closed meeting, Shasta County Supervisors Les Baugh and Pat Jones opened their meeting to the public. Residents were invited inside to redress their grievances, no mask required.

Meanwhile, Chico City Council and Staff continue to hold the public out while they discuss their Pension Obligation Bond. It’s hard to believe we have a “conservative” majority on our council – 5 people voting unanimously to raise taxes? Without voter approval?

That’s right, the consultant reports this bond requires no voter approval. This bond, he explained, requires only “judicial validation”, a purely administrative process. In fact, the consultant assured council, “they all get approved, it’s just a matter of time.”

Staff reports the UAL has grown 43% over 5 years, even while making bigger payments toward the deficit every year, this year over $11 million. Staff blames poor CalPERS investment returns, but the real reason is drastically unrealistic employee shares,  just 9 – 15%, for pensions of 70 – 90% of salary. The situation is exacerbated by incredibly generous salaries, including three new hires in the last year at salaries over $100,000. 

The payments for both CalPERS and the bond service will be appropriated by percentage from all city funds. But POB revenues are restricted to paying the UAL, because, as finance director Scott Dowell has said, “otherwise we’d be tempted to spend it on needed things…”  He means, infrastructure maintenance and public safety – the needs of the citizens.

Employee demands have officially superseded the rights and needs of the public.

Juanita Sumner, Chico CA

 

 

Staff trying to get their pensions bond under the wire by end of January

31 Dec

Next Tuesday city council will hear a presentation on a Pension Obligation Bond. They are trying to slide it under the wire as “restructuring debt,” which is really deceptive – they don’t mention the part where they take on millions in NEW DEBT.  This is really dirty and sneaky, and you need to let your council members know, you know what they’re up to. You can contact them directly through the clerk’s office – debbie.presson@chicoca.gov – or you can go to Chico Engaged. I’d recommend both.

Here’s the link to the agenda:

https://chico-ca.granicusideas.com/meetings/351-1-slash-5-slash-21-city-council-meeting/agenda_items

And here’s the POB presentation:

https://chico-ca.granicusideas.com/meetings/351-1-slash-5-slash-21-city-council-meeting/agenda_items/5fe748e0f395e716e400a434-5-dot-1-calpers-pension-costs-and-ual-restructuring-p

I also wrote a letter to the editor. Staff is trying to  get this thing done within the next two meetings, let’s stop it in it’s  tracks. 

Also, get a load of Coolidge’s request for a “streets bond”! 

https://chico-ca.granicusideas.com/meetings/351-1-slash-5-slash-21-city-council-meeting/agenda_items/5fe748e1f395e716e400a439-5-dot-6-mayor-coolidge-request-bond-for-improvement

Here’s my letter about the POB:

January 5, Chico City Council will consider Pension Obligation Bonds. Staff calls it “restructuring pension debt/Unfunded Actuarial Liability”, but it’s really millions in new debt. A new twist on the old Shell Game, Staff will invest borrowed money in the stock market, hoping to make enough to pay both the pension debt and the new debt. If their investments fail,  the taxpayers will be forced to pay not only the pension debt but the new bond debt, at the expense of city infrastructure and basic services.

Over the last couple of years,  surveys, letters to the editor, and comments on social media have demonstrated two main concerns: lack of law and order, and lack of maintenance to public infrastructure.  While Staff has claimed they don’t have enough money for either, they’ve continued to appropriate more money each year from city departments into the Pension Stabilization Trust – this year, $11.4 million, roughly 20% of tax revenue.  

Furthermore, even with 10’s of millions a year paid through payroll and the PST, the UAL has still grown, up from $126,000,000 only a few years ago to $146,000,000. Staff has recently revealed another $140,000,000  interest. This is the result of insufficient  contributions from employees, and poor returns from CalPERS investments. 

The Government Finance Officers Association says POBs are dangerous without a plan to manage pension costs. Instead, our city has increased pension costs through new hires and overly-generous salaries, without demanding more from Staff. 

The GFOA also determined POBs were the cause of bankruptcy in San Bernardino and Stockton. 

Juanita Sumner, Chico CA

 

David Crane: “POBs are meritless products deliberately misnamed by bankers in search of fees. Just say no.”

7 Dec

Thank Dave for sending me this “5 minute read” on Pension Obligation Bonds from David Crane. It’s certainly worth more discussion.

https://davidgcrane.medium.com/pobs-bankers-as-pushers-f0963bf853b8

David Crane

David Crane

LecturerLecturer in Public Policy

About

David Crane is a lecturer in Public Policy at Stanford University and president of Govern for California. From 2004-2010 he served as a special adviser to Governor Arnold Schwarzenegger and from 1979-2003 he was a partner at Babcock & Brown, a financial services company. Crane also serves on the board of the Goldman School of Public Policy at the University of California and formerly served on the University of California Board of Regents and as a director of the California State Teachers Retirement System, Environmental Defense Fund, and the Volcker-Ravitch Task Force on the State Budget Crisis.

While I have no formal background in finance, I think it’s obvious that POB’s are a scam that is only going to benefit pensioners and bond holders. But maybe people would rather hear it from a guy with many degrees and respectable credentials. Crane puts it very simply, “Pension Obligation Bonds (POBs) do NOT reduce pension obligations.”

“POBs would be a truthful title if the bonds actually reduced pension obligations. But they don’t. All they do is increase pension assets, which produces an accounting benefit (more assets — the same liabilities = a lower unfunded liability). Economically, a POB is no more than a “carry trade,” which is borrowing at a low rate to bet on hopefully-higher-yielding assets (e.g. stocks, private equity, hedge funds, etc). Not surprisingly, Wall Street also sells and manages those products.”

And here’s an important point – these bonds are SOLD to public agencies by bond managers, people who make a lot of money selling and managing these bonds. Read on. 

“When the smoke clears, a POB issuer has (i) the same pension obligations it had before, (ii) more debt, (iii) paid investment banking fees, and (iv) gambled the proceeds on products that beget even more fees for bankers.”

That seems pretty clear to me, even a housewife can see what’s going on here. You must wonder, are there kickbacks to city staffers? 

Crane concludes, “POBs are meritless products deliberately misnamed by bankers in search of fees. Just say no.”

That’s right, say it loud, and say it now. Besides sending emails to your newly elected “fiscally conservative” council, you can comment in the consent agenda at Chico Engaged:

https://chico-ca.granicusideas.com/meetings/349-12-slash-1-slash-20-postponed-to-12-slash-8-slash-20-city-council-meeting/agenda_items/5fbdb04ff395e7fe1d013e64-2-consent-agenda-all-matters-listed-under-the

And, Mike Wolcott is looking for “Pro vs Con” writers to argue issues like this – you can reach him at mwolcott@chicoer.com

While our town struggles with financial insolvency and sagging infrastructure, the staffers responsible skip off to another town, at a higher salary, with their pensions intact

3 Dec

A few points I’d like to make clear about POBs:

  1. amount to millions in new debt, with interest
  2. success dependent on the stock market, just like CalPERS investments
  3. don’t need voter approval but the voters/taxpayers will be on the hook for the payment
  4. POBs are guaranteed – that means, the payments come out of the General Fund at the expense of infrastructure and services
  5. without true pension reform POBs will lead to insolvency and bankruptcy – as was the case in Stockton and San Bernardino

Here’s a shocking article about San Bernardino, 

San Bernardino deficits grow after bankruptcy

What I get from this article, is that the police unions are the biggest threat to financial solvency facing California cities. They demand higher salaries and refuse to pay a sustainable share of their pensions costs. Instead of asking for concessions from the highest paid public employees in the state, “Stockton said from the outset pensions are necessary to be competitive in the job market, particularly for police.”  Vallejo backed down from pension reform after being threatened by CalPERS. 

Chico City Council has done same. When I asked my district rep Kasey Reynolds why such a high salary for the new police chief (higher than the departing chief), she responded, “ I just looked at other communities that are like size and their Chiefs are 20-40k higher.”  I sent her the publicpay.gov records for Chico and Sacramento – yeah, Sacramento salaries are a little higher, but city of Chico pays more of the pensions. If we are going to continue to offer these crazy salaries, Chico cops need to pay more toward their pensions. I never got any response from Reynolds.  They hired the chief above the old salary and just recently approved a new contract for CPOA without asking any concessions. 

So, letter writer Steve Wolfe is correct – our elected officials are complicit with our city employees in driving our town into the financial abyss. He’s right again when he predicts the city will pursue a new revenue scheme.  A POB would be just the vehicle to take us down! Here’s my response. 

Steve Wolfe is right – the city is seeking a new revenue measure. At the Finance Committee meeting September 23, a consultant was asked to pitch Pension Obligation Bonds to the full Chico City council. Staff said the bond could be implemented as early as January 2021 because POBs don’t require voter approval. 

POBs are a way of borrowing money to pay bills, while hoping to re-invest the borrowed money, producing a profit used not only to service the bond but to pay off the pension liability. If this outright gamble doesn’t work out, the taxpayers are on the hook not only for the unfunded pension liability, but the additional bond debt. POBs put Stockton and San Bernardino into bankruptcy.

This bond will not appear on your property taxes, it appears in the form of sagging infrastructure and service cuts – these bonds are guaranteed, bond holders take priority over our streets, our parks, our sewers and even public safety needs. 

Instead of taking on new debt, we must reduce the long-term cost of public pensions for future employees. That’s not happening.  With emergency powers, the city manager hired three new positions this year at $100,000+ salaries. New hires are paid more than predecessors.  There’s no accountability for these decisions.  While our town struggles with financial insolvency and sagging infrastructure, the staffers responsible skip off to another town, at a higher salary, with their pensions intact. 

Contact your new, “fiscally conservative” council super majority, and tell them what you think. 

 

 

 

 

 

 

 

 

Good question Bob: Why do we need to replace Constantin with anyone?

14 Nov

One last word on the departure of Chris Constantin – from a comment Bob left the other day:

Why do we need to replace Constantin with anyone? The truth is the City is over its head in debt and we can’t afford a replacement.

Besides, why should we continue to pay hundreds of thousands of dollars every year for a bureaucrat who does nothing but scheme how to raise our taxes and get us deeper in debt with things like POBs while letting our streets and everything else fall apart.

Wow, good question Bob! So I wrote a letter to the ER about it.

When departing Chico administrator Chris Constantin was hired in 2013, he spoke to the Tea Party. He said our previous finance director was “Loosey Goosey”, bragging about his qualifications to “straighten out the mess” she’d left. He told us, once he fixed things, “you can hire someone cheaper, with less initials behind their name.”

Seven years later, I see a bigger mess. Constantin himself has told us, staff deferred maintenance on streets and other infrastructure while they continued to make bigger payments toward their pension liability (UAL) – this year $11,000,000. But the UAL continues to increase –  this year, the city manager created three new management positions with $100,000+ salaries.

When Brian Nakamura was hired, he went on a firing spree, gutting lower level staffers and bringing his own friends in for management positions – Mark Orme and then Constantin. Since then the assistant manager’s salary has gone from $142,652 to over $189,000/year. Orme and Constantin have also garnered themselves 457 Plans worth an additional $20,000/year each.

From a 2018 report to the California League of Cities: “City pension costs will dramatically increase to unsustainable levels.” Their first suggestion – make more aggressive payments to CalPERS. Meanwhile, “Change service delivery methods and levels of certain public services.” Meaning, squeeze the taxpayers for more money.

Top heavy management and perpetual demands for higher salaries and more benefits has our city upside-down. Constantin’s position should be eliminated, along with other unnecessary management positions, so we can hire the lower-paid workers we need to get this town “straightened out.” 

Juanita Sumner, Chico CA

Chico since Nakamura, Orme and Constantin – do you feel “healed”? Or “heeled”?

12 Nov

Chico disaster timeline – rough montage of the last 8 years of city management, or, mismanagement?

Sept 2012 – Nakamura hired from Hemet – Hemet was shocked, said Nakamura had not told them he was looking for another job

Jan 15 2013 – Asst City Manager John Rucker’s “sudden departure” https://www.newsreview.com/chico/content/sudden-departure/8827217/

Mar 7 2013 – Nakamura hires his former asst mgr from Hemet Mark Orme – from the above article – “This week the Chico Enterprise-Record reported the story and also published in its classified section an ad for the position. The ad says the salary offered for assistant manager is $142,652 per year with the potential to reach $172,382 based on performance. The ad refers to the city website for more information.”

[EDITOR’S NOTE: 7 years later, as of his resignation, Constantin was making $189,000+ as Asst City Mgr. Let’s see what council intends to pay his replacement]

Mar-Apr ? 2013 – Jennifer Hennessy resigns as finance director – “As the city’s finances worsened, Hennessy was often the target of sharp criticism from some council members and agenda-driven citizens. ” CN&R article link below

April 16 2013 – Nakamura hires former Hemet employee Chris Constantin from an auditor position in San Diego “

“In an interview prior to the council meeting, the 37-year-old Constantin talked about his decision and the controversies he is escaping in San Diego, where he’s served as assistant auditor since 2010.”

https://www.newsreview.com/chico/content/money-man/9619285/

“I made a three-year commitment in San Diego that was up in February,” he said. “At about that point I wasn’t really happy because I wasn’t feeling appreciated.”

[EDITOR’S NOTE: Read the N&R article – Constantin left San Diego with a shit storm at his heels.]

May 28, 2014 – Nakamura leaves https://www.newsreview.com/chico/content/so-long-nakamura/13622217/

““It caught us a little bit off guard,” said Mayor Scott Gruendl, who received Nakamura’s resignation letter last Wednesday (May 28) during a breakfast meeting.”

“When Nakamura arrived in September 2012, the city was in a bad place financially and it was his job to fix it. About six months into his time in Chico, Nakamura laid out his three-part plan to Gruendl. Part one was to identify the problems. Part two was to put a team in place to remedy those problems. Part three was to step back and allow the town to heal.

“He pulled the covers back on stuff, and also came up with responses on how to deal with it,” Gruendl said. “That meant a lot of layoffs, unfortunately. What was devastating for a lot of people is how many people we had to let go. Each time, it was more seasoned and experienced people, and it got harder. There was no good way to reconcile that.”

“He’s the lightning rod for the hard decisions that were made—the significant number of layoffs that we did, the collapse of 11 departments into five, the actual moving out of key management people who, for no better explanation, blatantly fucked up,” Gruendl said. “We had people who had good intentions but really didn’t know what they were doing. Brian dealt with it.”

“But the drastic reorganization of city departments has certainly left some with a bad taste in their mouths. Layoffs included many employees who had dedicated years—decades, even—to the organization, and key positions were eliminated, leaving things like the city’s trees untended.”

June 3 2014 – Orme appointed interim city manager

Same article – “Looking forward, Mark Orme—who was promoted from assistant to interim city manager at the City Council meeting Tuesday (June 3)—said he’s excited to work with Chico to begin the healing process.

“There’s been a lot of pain and heartache. That takes time to heal,” Orme said. “There are also external challenges. There’s been a lot of impact on the community financially as it relates to community organizations and a lot of the norms Chico was used to.”

[EDITORS NOTE: “the norms Chico was used to…” What the hell did he mean by that? If you lived here before 2013, let me ask – do you feel “healed”, or “heeled”?

SURPRISE! Assistant City Manager Chris Constantin seeking a manager position in San Dimas CA – $220,000/year!

8 Nov

Dear Chris Constantin,

So you are off to San Dimas? I heard it through the Grapevine. (ha ha, get it? Through the Grapevine? Old trucker joke)

It seems like just yesterday you bragged to a Tea Party gathering about all he “initials” after your name. You bragged about the consulting positions you held with agencies all over the state. You told the assemblage that our town was in a terrible financial shape, because our former Finance Director was “Loosey Goosey”. But you bragged about your credentials and promised that you would fix everything, adding, “then you’ll be able to hire somebody cheaper, with fewer initials behind their name…”

Wow, looking around myself, I don’t see that. I see our town is a bigger mess than it was when you got here, while you’ve done very nicely for yourself. You’ve garnered almost $200,000/year in salary and about a $50,000 package. You paid little to nothing for not only a 70% pension but a $20,000/year 457 Plan (special 401K for public workers). Now you’ve used Chico to step along to an “Annual salary of $220,000” as city manager in a rich Southern California town.

I realize you’ve paid the price. I remember when you bragged and bragged about your gorgeous young wife, showing her off around town like a trick pony. Then you left her at home to pop out kids like a popcorn machine.   When you told me about your first child, I told you, “Quit your job, or you’ll miss the best years of your life.”  You should have listened to me Bud. Instead you made an ass of yourself at the podium, whining like a bitch about our town causing your divorce?

That’s on you! Jesus Christ Chris, look what YOU’VE done to our town! 

Good Bye, and Good Riddance Chris Constantin, and please, don’t let the screen door hit you on your ass on your way to San Dimas. It’s already had enough abuse.  

To the people of San Dimas – GOOD FUCKING LUCK with this guy. Here’s what you can depend on – your town is about to get more expensive!

Juanita Sumner

FROM THE SAN DIMAS CITY COUNCIL AGENDA FOR THIS TUESDAY

CITY COUNCIL MEETING AGENDA
TUESDAY NOVEMBER 10th, 2020 7:00 P. M.
SAN DIMAS COUNCIL CHAMBER
245 EAST BONITA AVENUE

a. Consideration of Appointment of Chris Constantin as City Manager, with a start date of January 4, 2021, and approval of City Manager Employment Agreement

RESOLUTION 2020-61, A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SAN DIMAS, COUNTY OF LOS ANGELES, APPOINTING CHRIS
CONSTANTIN AS CITY MANAGER AND APPROVING A CITY MANAGER
EMPLOYMENT AGREEMENT
RECOMMENDATION: Adopt Resolution 2020-62, Appointing Chris Constantin as
City Manager and Approving the City Manager Employment Agreement.

Who will pay the unfunded liability? Taxpayers living on a median income of $43,000/year, or well-paid, well-heeled, entitled public employees making over $100,000/year?

5 Nov

It’s been said, the campaign begins the day after an election.  I like to hit the ground running. Here’s a letter I just sent to the ER. 

Butte County, like the city of Chico, is considering a Pension Obligation Bond.

POBs are a financing scheme that allows state and local governments to get the taxpayers to pay unfunded pension liabilities by issuing a bond guaranteed by tax revenues. Like CalPERS, POB proponents claim investments will pay for both the bond and the retirement fund. According to Oregon PERS manager Mike Cleary, “Some people call this arbitrage, but it’s not, it’s really an investment gamble.”

In fact, in 2013, Stockton and San Bernardino went bankrupt. According to the court, “Generous pensions awkwardly propped up with ill-timed POBs contributed to both debacles.”

In recent years, returns on POBs have often fallen below the interest rate paid by agencies to borrow the money, digging the liability hole even deeper. Nonetheless, they remain popular because they are instant money without voter approval.

Chico’s Unfunded Pension Liability has grown enormously over the past year – from $123,000,000 to $140,000,000, with another $146,000,000 interest – because of unrealistic employee contributions. Chico employees pay, at most, 15% for pensions that run from 70 – 90% percent of hundred-thousand-plus salaries. Meanwhile, taxpayers not only contribute a payroll share, but the annual “catch-up” payments come at the expense of city services – this year $11,000,000.

Who will pay the unfunded liability? Taxpayers living on a median income of $43,000/year, or well-paid, well-heeled, entitled public employees making over $100,000/year?

Let your elected representative know what you think of this scheme to leave the taxpayers holding the Pension Deficit Bag.

Juanita Sumner, Chico