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The city has $9 million to pay their Pension Deficit, but cut street maintenance and divert the trash tax money to the General Fund

Another fucking remote meeting. Within minutes after the meeting started, I had to contact the clerk to tell her – no sound on the microphone, we couldn’t make heads or tails what Finance Director Scott Dowell was saying. We were using my husband’s phone to stream the meeting on our tv – sorry, we’re not public workers, we don’t get free devices or IT help. I had the tv turned up to the key of G, when the clerk swished in and turned up the volume on Dowell’s microphone – Dowell is an idiot – and whoa Nelly, the volume jump almost knocked me out of my chair.

I know I can watch these meetings later, on video, but I do want to watch it live and participate if possible. It’s pretty onerous. I have to have one device to stream the meeting, and turn on my tablet to make comments, and with our cheap internet plan, everything slows down to a crawl. The meeting keeps refreshing, it’s hard to listen to that. Trying to comment takes forever. I couldn’t sign in to Chico Engaged on my tablet, I think I need my laptop to do that – another device? And, while I’m messing with the devices, the meeting is going on, and I’m missing it.

Sitting in the chambers, I just have my notepad in front of me, and I can jot stuff down while still paying attention. Having to use two devices to watch the fucking meeting SUCKS.

I made it through Dowell’s finance report – having seen it once in a Finance Committee remote meeting, I had to see what he would present to council. It’s always worth paying attention to this guy. He’s trying to explain why we are ahead of budget but are still short by millions. Last night he referred to the Camp Fire as a “wind fall”. Oh yeah folks, city of Chico made so much money, mostly in sales tax, during the months after the Camp Fire, that it screwed up projections for this year. Yes, they over project, and when they don’t get the revenues they projected, they CALL IT A LOSS.

Would you believe, they hired a consultant to help the finance director make these projections, and they’re still whack? They didn’t realize, the Camp Fire was an anomaly? The town next door doesn’t burn down every day – when has that ever happened to you? But yeah, you have a disaster that destroys a vibrant retail district near your town, you have all these refugees with no where else to live, no where else to shop, no where else… and your city manager tells anybody who will listen (council and the press) that these refugees are COSTING YOU MONEY? And then he expresses surprise a year later when it turns out, they SPENT MONEY IN YOUR TOWN? And raised revenues by about $8 million over the previous year?

Our city manager is an ass. He’s been trying to tell us we’re broke for years now, telling us we need to pass a sales tax increase to pay down OUR? bills. But listen, there’s more.

Dowell has been presenting a “plan” to deal with our impending bankruptcy – he’s divided actions into 3 phases – I presented that here:

https://chicotaxpayers.com/2020/04/26/staff-says-revenues-are-over-budget-but-still-recommends-massive-cuts-to-services-in-face-of-convid-panic-attack/

Dowell presented a different list last night, all out of order. Look at the list I posted, because Phase 1 is already complete. City management has cut capital works projects some time ago. I sat in a meeting almost 5 years ago at which they said they had NO MONEY for street repairs, and they were taking projects OFF the list because they had no money. Dowell spoke a lot last night about 11 positions that were just eliminated – all part time, hourly workers, including interns. He and Orme are constantly threatening more cuts.

But another suggestion that was on that list for the Finance Committee presentation was to defer “catch up” payments on the pensions. Dowell said that would cost the city about $350,000 in interest. Last night he said they didn’t need to do that – so he’s going to go ahead and make that $9 million payment toward $taff’s “Unfunded Actuarial Liability” – that’s the pension deficit.

Yeah, they cut street maintenance and repairs, but are putting $9 million of the taxpayers’ money into their own pockets. Great.

Later I want to present the rest of that “Pension Time Bomb” conversation, as well as my solutions to the city’s pension problem. Stay tuned!

Comments 6 Comments
Categories 100K pension club, Chico pension deficit, Chico revenue measure, Chico sales tax increase

If you see more revenues coming in to your city, and you keep wondering why your roads are looking like crap, and you believe you’re not getting the type of services you should be getting, it’s the pensions

30 Apr

Thanks Dave, for sending me the link to this ongoing discussion about the Pension Time Bomb.

Robert Kiyosaki, entrepreneur, author, and radio show host, just published his latest book (co-author Ed Siedle) in January, “Who Stole My Pension? How You Can Stop the Looting” .

In this five radio part series, he speaks with his co-author, Ed Siedle, and his local city council member Sal DiCiccio (Phoenix, AR) how public pensions are ruining our economy.

Kiyosaki states what should be obvious, “This pension thing is very suppressed, people don’t know much about it. If you think COVID is big, the pension failure will be bigger.”

Yes, we’re being misled as to the enormity of the problem by public $taffers that put their own interests first. Chico City Manager Mark Orme and his Ass City Mangler Chris Constantin, along with “Services Director” Scott Dowell, have walked a tight rope – they tell us we need more revenues but they won’t say why. Even when they tell us that revenues have been ahead of budget, they keep saying we don’t have enough money to maintain infrastructure. If you pay attention, you see what Kiyosaki and his guests are saying – the city gets more revenue every year, but it’s just never enough.

Phoenix AR council member Sal DiCiccio says it very plainly. “If you see more revenues coming in to your city, and you keep wondering why your roads are looking like crap, and you believe you’re not getting the type of services you should be getting, it’s the pensions. Every city and state is on the same plan. Phoenix is a growing economy but we still have crappy roads because more and more money is being sucked into government pensions.”

Regardless of whether you live in a “right to work state“, DiCiccio explains, the unions elect all the politicians, putting millions into elections every year. In Chico the biggest donors are the Chico Police Officers Association and the Service Employees International Union – SEIU was the biggest single contributor to CARD’s ill-fated Measure A, and CPOA president Jim Parrott ran the campaign pac.

DiCiccio says “We’re becoming a pension machine, and they’re making the cities unliveable.” Next time we’ll talk about why. And get ready for the next installment in Kiyosaki’s series – “Kentucky Fried Pensions.” You can see more at his website,

https://www.richdad.com/radio

Comments 1 Comment
Categories 100K pension club, Airport tax, CalPERS, CARD parcel tax March 2020, Chico pension deficit, Chico sales tax increase, Pension Time Bomb, public employee contracts, public employee unions, revenue measures Chico CA, Uncategorized

Staff says revenues are “over budget” but still recommends massive cuts to services in face of COnVID panic attack

26 Apr

The Finance Committee met Wednesday (4/22/20) under cover of COnVID, with no public present, and a questionable comment system. Luckily, the reports are available so we can see what they’re up to, even if we were not able to comment at the time. These issues still have to come to a council meeting, so why not talk about them now and send our comments directly to the councilors before their next clandestine meeting?

Finance Director Scott Dowell gave his usual presentation, and while he said repeatedly that city revenues have been “over budget,” he still warned that the COnVID panic was going to set us back. So, city management has already been making cuts. Dowell presented the order of the cut-backs to the Finance Committee last Wednesday (4/22/20). They’ve already begun Phase 1 – in fact, as you may know, for example, there hasn’t been a capital project in Chico for over a year now, since they gutted the streets fund to pay their pensions.

FYI – the improvements being made along Hwy 32 are being done by CalTRANS.

Phase 1
Delay new capital or one-time expenditures for 6 months until 1/1/2021. CUT SERVICES DONE
Delay General Fund transfers to emergency reserves and replacement funds. DONE
Delay or eliminate new recruitments. DONE
Defer CalPERS UAL payment in July and pay monthly. Will cost $328,661 in interest.
Delay or Remove General Fund transfers to Private Development Funds for 1 year. CUT SERVICES DONE
Close City Hall Operations One Day or More per Week (Utility Savings). DONE
Furloughs (continued health benefits). CUT SERVICES WHILE STILL PAYING DONE
Hiring Freeze.
Utilize Section 115 Pension Stabilization Trust.
Grant Opportunities. DONE

Note that almost everything they’ve done on this list results in a direct cut in services. But, they are still making payments on their Unfunded Accrued Pension Liability, threatening a loss of $328,661 per year in interest penalties if they don’t. They just raised development fees, so we’ll see what happens with the Development Fund. And, while they say they’re delaying recruitment, they just hired two new positions, including a Public Information Officer – why would we need a PIO at a time like this?

And there’s the Pension Stabilization Trust – they’ve been siphoning millions out of other funds, into that trust, to be saved for paying down the pensions. Will they use it? Of course, that fund is restricted to paying their pensions.

I think this illustrates what I’ve always said – the first thing they cut is services, which is the whole point of having a city. Look at the street in front of your house – unless you live in a new subdivision, you haven’t seen road crews in your neighborhood for years. Unless they were shoveling slobbers into pot holes. (Slobbers are the left over asphalt or cement from a job, they have to get rid of it, or it will dry rock hard in their truck, so they go through an old neighborhood on the way back to the yard and empty their truck into potholes. These patches last a week at best, and will get all over your car if you drive through when they are still wet).

And get ready, cause they will continue to cut services, cut services, cut services, until we agree to pay their sales tax increase.

Phase 2
Initiate Financial Emergency Budget Policy. CUT SERVICES
Suspend Minimum Staffing limits. CUT SERVICES
Negotiate temporary salary reductions. Why isn’t this number 1? And why not permanent? Why not negotiate higher shares?
Institute Department-wide reductions (utilize plan revised plan from Sept 2018). CUT SERVICES
Layoffs. CUT SERVICES

Phase 3
Discontinue Waste Hauler Franchise fees to Roads. CUT SERVICES – DONE (they’ve already deferred these fees from the roads for 2 years)
Freeze Existing Capital Projects. CUT SERVICES
Discontinue funding for Arts Commission projects. REALLY A NO-BRAINER, WHY WASN’T THIS IN PHASE 1?

I’m sure you have your own questions – put them in an email, and send them to council.

ann.schwab@chicoca.gov

alex.brown@chicoca.gov

sean.morgan@chicoca.gov

kasey.reynolds@chicoca.gov

scott.huber@chicoca.gov

karl.ory@chicoca.gov

randall.stone@chico.gov

Comments 3 Comments
Categories Chico pension deficit, Chico revenue measure, Chico sales tax increase, Uncategorized

Ed Ring: Post-Coronavirus Pension Reform Checklist

4 Apr

Dave sent this article from California Globe

https://californiaglobe.com/section-2/post-coronapocalypse-pension-reform-checklist-for-california/

Ed Ring explains in his article, “Post-Coronapocalypse” that CalPERS was already faltering before the CVBS, and will most certainly be demanding more from their member agencies in the wake of recent market downturns. Even with the market on the up now, the recent crashes sent the already teetering CalPERS fund further into the dumps.

Ring explains “catch up” payments. “The most important distinction one should make when reviewing the above data is the difference between the “normal” and the “catch-up” payments. The so-called “normal contribution” is the amount the employer has to contribute each year to maintain an already fully funded pension system. The “catch-up” or “unfunded contribution” is the additional amount necessary to pay down the unfunded liability of an underfunded pension system.”

This CalPERS tidal wave could take out smaller towns like Chico. Staff wants the taxpayers to chain up and start working to pay their special entitlements by way of a sales tax increase. Or, we could get out of CalPERS and offer 401Ks.

City management doesn’t want to lose their CalPERS benefits, but they’ve already worked 457 Plans into their contracts, that’s a special 401K for public workers. It seems pretty clear to me that they are only looking out for themselves.

Ring offers suggestions for pension reform, starting by withholding more from employees’ paychecks. But, CalPERS supporters cite The California Rule, saying we have to pay their pensions no matter what. That’s the next conversation.

Comments 2 Comments
Categories 100K pension club, Chico pension deficit, Chico revenue measure, Chico sales tax increase

Pension deficit, unfunded accrued liability, whatever you want to call it – by any other name, a turd will still stink

31 Mar

Today I posted a piece sent in by a reader –

https://chicotaxpayers.com/2020/03/31/will-states-use-covid-19-funds-to-bail-out-pensions/

It’s a good article because it touches on issues related to the pension deficit. I’m afraid a lot of people aren’t worried about the pension deficit because they don’t really understand what it is or what it’s doing to our economy. So let’s dive in.

What is the pension deficit? It’s the difference between what public employees have paid into their pensions and what they expect to get in retirement. In California that difference is well into the negative.

In the late 1990’s, our state retirement agency cut a deal with other state agencies, promising they would fund pensions of 70 – 90% of highest years’ salary with stock market investments, allowing local agencies to negotiate unrealistically low employer and employee shares with the unions. Many agencies negotiated contracts in which the employer would pay the entire employee share. This resulted in very low contributions from employers/employees.

At the same time, many agencies also raised salaries markedly – in Chico, during the early 2000’s, the city doled out raises of 14%, 19%, 22%, for several years running. City manager Tom Lando’s salary, for example, went from about $65,000/year to about $135,000 in just the last few years before he retired. His successor came in at $190,000 and retired in less than a year. The next city manager agreed to work for a paltry $180,000, but his successor, Brian Nakamura, got over $200,000/year, also leaving in less than a year. Nakamura’s successor Mark Orme agreed to an initial $180,000, but now makes over $220,000 with “extra pay”.

Orme will argue that he’s taken pay cuts – no, he just hasn’t been given a raise in salary for a few years. He will also tell you he’s paying more of his pension – so fucking what? Orme went from having the entire tab picked up by the taxpayers to paying less than 15% of his pension cost out of his own pocket. The taxpayers pick up most of the other 85%, with minimal contributions from CalPERS questionable stock investments.

The low contribution rates coupled with the irrational salary increases put Chico in deep doo doo. In 2013, Chico employees’ pension deficit was about $168,000,000. When Chico came close to bankruptcy back in 2012, local conservatives pointed the finger at a liberal majority on council, accusing them of bad spending habits, but nobody wanted to talk about exactly what the debt was made up of. The UAL – unfunded accrued liability – is our single biggest debt, far overshadowing any other debt the city is carrying right now.

This is a national problem. Today, the national pension debit is over $122 trillion. Put that in relation to your life. If you own a home, a car, really nice clothes, even an extensive collection of Hummel figurines, you are probably not even worth a million. Well, one trillion is 1,000 times 1 billion. 1 billion itself is 1,000 times 1 million.

Here’s how I put it into perspective – within my lifetime, Jed Clampett was a millionaire, and that was a really big deal.

Who should pay the UAL? That’s next time, when we take up the subject of “pension protection clauses,” or, The California Rule.

Tags: CalPERS bailout, coronavirus pension bailout, pension deficit, unfunded accrued liability

Comments 4 Comments
Categories 100K pension club, Chico pension deficit, Chico revenue measure, Chico sales tax increase, Pension Time Bomb, The Pension Deficit Bag

Time to tell council you will not support a tax measure

27 Mar

Okay folks, the ramen shelves are fully stocked, please limit yourself to one case per person…

This coronavirus thing didn’t really hit me until about a week ago when we went to Winco and the ramen shelves were completely barren. I almost had a stroke. It’s one of my favorite snack foods, it’s so versatile.

So when we went out early this morning on a hunt/gather mission, I braced myself for disappointment. When I saw the shelves were all restocked again, I had to restrain myself from skipping across the aisle like a goon, shouting OH MY GOD HONEY THERE’S RAMEN!”

I’ll tell you what’s really funny – when I went last week, they had tons of beef ramen. Screw that, I like chicken. Apparently I am not alone.

Yeah there was a limit posted – in fact, I saw little signs throughout the store, asking people to limit themselves to however many of each item, even soap and tooth paste.

When we rounded the corner into the paper products area, we saw the shelves were still pretty sparse – like the stands at a late season Giants game – but Holy Shit! There was TP! Again, I had to restrain myself – I have plenty of TP at home, and I’m guessing the supply chain is going to come around pretty soon, but my palms itched to grab a 4 pack. Then we remember – our son was down to half a roll – so we grabbed one and scurried toward the check out.

When we got to my son’s apartment, I wanted to say, “Okay, your friends get THREE SHEETS, that’s IT!” but I, again, restrained myself.

At least Winco is not raising prices, that I can see. In my experience, whenever prices go up during a panic like this, they don’t really go down again. Like Cal Water rates during the DROUGHT! panic, and housing prices after the Camp Fire.

So yeah, we’ve been hit again and again. Enterprise Record editor Mike Wolcott (and I’m trying to be nice to the poor guy, cause every time I write how I feel about his paper some schmuck sends him a screen shot of my blog) wrote the other day that this is a bad time for the city to put a sales tax measure on the ballot.

“The Chico City Council has been leaning towards putting a sales tax hike on the November ballot. We’d suggest they hit the pause button.

That’s because of the coronavirus. The economic effects of businesses closing and people losing their jobs are rippling though the nation, although the ripples are more like a tsunami. Economic experts say we’re already in a recession, one that could last well into 2021.

In this environment, the likelihood that voters would approve another shot to their wallet is dropping rapidly.”

While that is reassuring for now, it sounds like Wolcott would support a tax if the economy were in better shape. The problem being, the economy rises and falls. When it’s high, the sky is the limit, spend-spend-spend! When it’s down, overspending comes home to roost. We’ve gone from BOOM to BUST but every cycle brings city finances closer to the bone. The cycle has to end – the city has got to change the overspending before I would even consider any revenue measure.

I don’t know if the city will listen to Wolcott. See, it has nothing to do with coronavirus. Chico is already in a bottomless pit of debt, funds in the negative, and still CalPERS at the door, demanding more and more. Staff doesn’t want this tax to fix the streets or sewers or the park, they want it to make the annual payments on their unfunded pension liability.

What do we have to lose if we don’t pass a tax? You mean, what do Mark Orme and Chris Constantin have to lose if we don’t pass a tax measure. They stand to lose their pensions – 70% of salaries over and approaching $200,000/year. That kind of money is like cocaine, you get used to it, you get dependent on it, you way overspend and your lifestyle becomes very high maintenance. And you get desperate to keep it.

Like a cokehead starved for his candy, they’ll threaten us. No more street maintenance! Close Upper Bidwell Park! Higher sewer fees! Higher Crime!

If you have lived in Chico for more than 10 years, you have seen the cycle of promises and threats, every two years with elections. But if you look at the budgets, you see – revenues increase, even if just a little, every year, year after year. Gee, this year they found an extra $3,050,000 laying around the office.

The only “loss” comes from the salaries and benefits – contrary to their claims, noooo-body at the city of Chico has taken any cut in pay. The only employees who have sacrificed are the ones who were summarily fired after Brian Nakamura and Mark Orme took over city management. Those firings did not result in any savings, because Orme and his management staff quickly ate any gains. While Orme can boast that he has not taken a salary increase for the last couple of years, he doesn’t mention his Fund 457 – a special 401K for public employees, into which the city puts a flat $9,000/year plus a percentage of his salary. If that’s not a raise, I don’t know what to call it. “Compensation” is “compensation,” and Mark Orme, at $212,000/year, plus “extra pay”, plus his 457, plus his pension and benefits package, is very generously compensated. He is a pig that could afford to give back a few pounds of bacon.

Now Orme hides behind coronavirus, suspending the rules. Judging from that “special” meeting the other night, he means alllll the rules! I’m no lawyer, but I’d say the Brown Act took a good flummoxing the other night. As long as this “state of emergency” lasts, they will use the opportunity to advance the sales tax measure as far as they can without any public oversight.

But, the website is still up, the agendas, reports and budgets for the last 5 or 6 years are all there for you to study. Look at the pattern of misspending and poor decisions, and look at the appropriations from funds that don’t even have any money into the Pension Stabilization Trust.

And you can still email your council and tell them to stop spending taxpayer money on their tax measure, because you not only won’t support it, you will work actively to defeat it.

You can send those to debbie.presson@chicoca.gov

Comments 8 Comments
Categories Chico pension deficit, Chico revenue measure, Chico sales tax increase

A budget surplus generated by the Camp Fire influx should go toward the roads – instead $taff wants to put it in the Pension Stabilization Trust and “Homeless Solutions”

15 Mar

As you may know, the city of Chico has cancelled the March 17 meeting because of coronavirus. The agenda was full of contention, and they expected a big turnout, so heeding the governor’s recommendation against gatherings of over 250 people, they postponed the meeting until the first week of April.

They were scheduled to discuss overturning both “sit-and-lie” and the “crimes against property” ordinance, but the item that caught my eye was the extra $3,050,000 they found in the budget and what $taff wants to do with it.

Here’s the agenda they posted for March 17 before they cancelled.

http://chico-ca.granicus.com/GeneratedAgendaViewer.php?view_id=2&event_id=332

To make a long story short, after pointing a dirty finger at the Camp Fire refugees, blaming them for “overwhelming” the streets and sewers, and using them pretty blatantly as an excuse for a sales tax increase, the city of Chico actually PROFITED FROM THE CAMP FIRE. To the tune of an extra $3 million+.

I believe this money should go into the streets fund, since city mangler Orme and public works director Erik Gustafson have claimed the refugees caused massive damage to our streets. They’ve already decided to raise sewer fees. $3 million would be a nice chunk for the road fund. And, $taff has admitted deferring maintenance while taking money from the road fund to transfer into the Pension Stabilization Trust, so I believe it would be a good use of one-time money to pay that back. Instead $taff has come up with their own wish list:

Grant Match for AIP Grant (Runway) $1,405,000
Community Choice Aggregation Loan $350,000
BMX Relocation Project $100,000
Redistricting Demographer $ 30,000
Fire Station #1 Remodel $250,000
Pension Stabilization Trust $400,000
Homeless Solutions Project $515,000

Every item on this list concerns me.

First, I think it’s foolish to spend one-time money on the airport, the airport should provide it’s own steady stream of revenue. That hasn’t happened for years, and using one-time money to prop up airline service is a mistake. Sure, they need to fix the runway, that is what lost them the contract for serving the fire planes. That money should have come out of the airport budget years ago, instead they constantly raided it to pay salaries, benefits, and the pension liability. If you don’t believe me, pull Mark Sorensen over at a stoplight and ask him.

Same for Community Choice Aggregation – Mark Orme’s Music Man pitch for the city to buy electricity and re-sell it to residents, using PG&E infrastructure. This scheme will never pencil out for the ratepayers, but will be a new and steady revenue stream for the city. Using one time money to jump start a scam like this is just the beginning.

As for the BMX relocation – they should have to pay for that out of the annual $4 million they receive for “consolidating” transient services on the site formerly leased to the group that built the BMX track.

I haven’t read the report on the fire station “remodel” but that money should come out of the public safety fund, which eats about half the city budget.

The last two items I find completely insulting.

$515,000, taken from people burned out of their homes and still on the lamb, for something as vague and amorphous as “Homeless Solutions Project”? Those people, including my son, had to find their own solutions, but now they are expected to pay for the warming tents and other “solutions” to keep the junkies happy? GFY City of Chico.

But most outrageous is that $taff must get their thumb in the pie – $400,000 for the Pension Stabilization Trust. Scott Dowell, Mark Orme and Chris Constantin like to brag about their “aggressive payments” toward THEIR pension deficit with OUR money. Meanwhile, they pay very little out of their own pocket toward their own benefits, and this has created the “unfunded pension liability” in the first place.

Last year I asked Scott Dowell about the “shares”. Employees are divided into groups that pay different shares. Two main groups – “safety” (cops and fire) and “miscellaneous” (everybody else) are divided into sub groups “classic” and “PEPRA”. “Classic” means, hired before 2013, when the Public Employee Pension Reform Act went on the books. This law requires employees hired after 2013 to pay 50 percent of employer cost for their pensions.

I didn’t get that, I thought the law meant employees would pay 50% of total cost. Silly me! It means they pay 50% of what the agency they work for has agreed to pay CalPERS. That varies with agency – for example, CARD only pays 14% total. The city pays more, but still not enough.

Notice management (Orme, Constantin, and Dowell) pay the second lowest contribution, even though they brag about picking up 3% of the employer contribution.

Group Employer Cost Employee Cost*

Miscellaneous Classic 10.235% 11% Total: 21.235% (leaving roughly 79% for the taxpayers)

PEPRA 10.235% 9.75% Total: 19.985% (leaving roughly 80% for the taxpayers)

Safety Classic 18.843% 12% Total: 30.843% (leaving roughly 70% for the taxpayers)

PEPRA 18.843% 15%** Total: 33.843% (leaving roughly 66% for the taxpayers)

*Includes 3% cost sharing of employer cost. Note CPSA employees pay 6% of employer cost.

**CPOA PEPRA pay 15%; IAFF PEPRA have ratified an agreement to pay 12%.

City of Chico employees are paying, or are nearly paying, HALF of the CalPERS pension costs.

So, the city pays different shares and totals than CARD, and even by group. And while they pay more than CARD, the highest total is only 33.843% of cost. That leaves the rest for the taxpayers. I know, they claim they will make it up on the stock market – but they keep lowering their anticipated returns, and demanding more and more from the various agencies (taxpayers).

I was unsure about how it works in $$$$, so I asked Scott Dowell for the figures on an employee making about $220,000/year (obviously a “classic” or management employee). Here’s what his staffer sent me:

A Miscellaneous Classic Employee earning a base salary of $220,000 has a PERS contribution of:

Employer: $22,517 (10.235%)

Employee: $24,200 (11.000%)

Total: $46,717 (21.235%)

An employee retiring with a salary of $220,000/year would get a base pension of $154,000. With cost of living increase, it will go up every year, adding to the liability. For example, ex city manger Tom Lando got a base pension of about $135,000 when he retired almost 15 years ago. Today,with COLA, he is taking almost $155,000/year. Just in pension, he also gets healthcare and other perks that we pay for.

Here’s a stumper – sit down and hold onto your seat – Lando never paid anything toward his pension. At that time, the city paid the “employer paid member contribution,” meaning, we paid Lando’s entire share. That scam went on until the taxpayers figured it out, and only now are employees beginning to pay anything. Any reform would have been something, but it’s not enough. It’s not true reform.

True reform would be dissolving CalPERS and hiring new employees who will pay their own pension costs. An agency contribution should be warranted by years of service and dedication, not a given. And, since CalPERS is 64% funded at this point, retirees will get over 50% of their anticipated pensions, which are based on some pretty generous, even outrageous salaries in the first place.

Don’t be afraid to speak up, don’t be intimidated by union members telling us we’re ripping them off – BULLSHIT! Time to press for TRUE PENSION REFORM!

Tags: Chris Constantin City of Chico Ca, city of Chico budget surplus, Mark Orme Chico Ca, Scott Dowell City of Chico CA

Comments 5 Comments
Categories 100K pension club, Chico pension deficit, Chico revenue measure, Chico sales tax increase, Uncategorized

Coronavirus hysteria coming to a store near you!

14 Mar

Today I am 60 years old. I remember very well being a young child and wondering if I could make it that long, and whaddya know, here I am. Coronavirus be damned!

I woke up to the wind, howling and shrieking around the corners of our tiny house, the eaves rumbling a little, the patio chairs scooting across the back porch. As soon as I sat down here with my coffee I heard the scattered, then heavy drops on the old tin roof. Good! Wash away all that glowing green pollen that’s been playing hell with our sinuses!

The media fixates on coronavirus – meanwhile, this has been one of the most pollinated years I remember. So far we’ve suffered the nut trees, now the oaks. Watch out, the worst ones – pine and privet – are still ahead. They say a mask won’t protect you from coronavirus but I’ll tell you – it will keep microscopic granules of living plant material from attaching themselves to your soft, moist internal tissues, digging in with tiny anchors, and causing you all kinds of respiratory distress. Yet another good reason to wash your hands, as well as your face and hair, before you go to bed.

But the talk of every town these days is coronavirus. My son called from Portland the other night to report hours long lines at the Winco, and NO TOILET PAPER. Shelves empty. Wow, as a neighbor of mine observed, we’ve hit bottom when you can’t find a roll of toilet paper on the shelves. What the hell is wrong with people?

The flu killed over 80,000 Americans in 2018. Did your kid’s school close? Did the airports shut down? Did the stores run out of vital supplies? Here’s an interesting story from MSNBC

https://www.cnbc.com/2020/02/03/the-flu-has-already-killed-10000-across-us-as-world-frets-over-coronavirus.html

“While the new coronavirus ravages much of China and world leaders rush to close their borders to protect citizens from the outbreak, the flu has quietly killed 10,000 in the U.S. so far this influenza season.”

The latest report I could find this morning says coronavirus has killed about 4,000, world wide. While I’m sorry for those victims and their families, I am also sorry for the 250,000 Americans reported to have died from medical errors last year.

Here’s what we need to learn from coronavirus:

wash your hands regularly, and wash them well. Use warm water and gentle soap, and scrub between your fingers. Keep your fingernails short and scrub them good. It’s not just coronavirus, you know better. When a surgeon neglected to wash his hands well before he operated on my friend’s knee, my friend got an e-coli infection. That was explained very clearly in the letter he got from the hospital.
keep your house neat and clean and well supplied. Keep the basic necessities, like pain/fever relievers, antiseptics like alcohol, and simple groceries on hand. Always have nonperishable food in your pantry. I recommend that miso soup powder that comes in packets. When my entire family had the flu years back, we were so weak it was about the only thing we were strong enough to prepare. We also try to keep at least a case of bottled water in the pantry. And, my family always laughed at me for hoarding toilet paper – well, nobody’s laughing now!
find a good health care provider – I know, that’s not as easy as it sounds. But don’t wait until you get sick to figure out where you might go for help. Waiting until you are falling down sick and trying to go to Immediate Care, or worse, the ER, is not a good route.

Something I already knew before coronavirus is our healthcare system is in trouble. When my family finally signed up for California Covered, our insurance agent told us there were very few doctors in Chico who would accept our Silver 94 policy, and most of them are booked up with patients.

Another thing I already knew is there’s no real journalism in America anymore, just propaganda. What I see now is a united attempt by a huge segment of the media to create hysteria in the public and lay the whole blame on Trump. For what? Wake up people, you are being led by the nose. This article in the ER illustrates how ridiculous it’s gotten – the city of Chico leads the hysterical charge by cancelling public meetings. Chico Velo wades in by cancelling the Wildflower.

Virus’ economic impact in Chico certain but undefined

“As of Friday afternoon, there have been no confirmed cases of COVID-19 in Butte County.”

What remains to be seen, is how city manager Mark Orme will twist this non-emergency into a campaign for his sales tax increase.

Tags: coronavirus, flu season

Comments 10 Comments
Categories Chico pension deficit, Chico revenue measure, Chico sales tax increase

“Fungibility” – moving peas under walnut shells

14 Dec

My husband constantly reminds me that the new revenues brought in by tax increases just free up existing funds to be spent on pensions and benefits. Dan Walters has a word for this deception – “fungibility” – “If a city’s voters can be persuaded to raise their taxes for parks and recreation, for example, it effectively frees up more money to pay its pension bills without acknowledging that motive.”

Walters calls this a bait-and-switch approach to getting voters to raise taxes on themselves – they offer you a carrot – oh yeah, ice rink – to take your eyes off their pension deficit. The city of Chico, for example, has been taking money out of various funds and placing it in the General Fund, from which they can transfer it anywhere they want. And they’ve established TWO pension “trust” funds – “CalPERS Unfunded Liability Reserve Fund (903) and the Pension Stabilization Trust (904).

From budget policies 2019-20

“CalPERS Unfunded Liability Reserve Fund (903)
Fund 903 has been established to accumulate funds for the annual payment of the CalPERS unfunded liability payment for the City. The targeted reserve amount is equal to the estimated unfunded liability payment for the subsequent year due to CalPERS. In accordance with GASB 54, this fund balance is committed.”

“Beginning in FY2017-18, each department will set aside a set percentage of payroll costs to fund the annual payment of the CalPERS unfunded liability. A target reserve of 10% of the annual unfunded liability expenditure will be retained in the fund.”

From 2019-20 draft budget – page FS 75, Attachment A, Fund Summaries CALPERS UNFUNDED LIABILITY RSV FUND

In fiscal year 2017-18 they moved $7,323,978 into the Unfunded Liability Reserve Fund – $3.9 million from the miscellaneous employees payroll, and $3.2 million from public safety funds. In 2018-19 they took $8,358,417. The city manager’s recommendation for 2019-20 is $9,615,778.

The Pension Stabilization Trust is a separate fund – The City Council established a Pension Stabilization Trust under Internal Revenue Code
Section 115 on June 19, 2018. The irrevocable trust is restricted for use to pay future CalPERS retirement contributions. The investment model strategy for the Trust is conservative. A conservative investment model is defined as a strategy that does not exceed an investment allocation over 20% in equity securities with the remainder investment allocation in fixed income securities. The model strategy may only be modified by the City Manager with City Council approval.

Fund 904 – Pension Stabilization Trust shall account for the financial activity of the Trust. Trust accounting will be provided at least quarterly as part of the monthly monitoring reports provided to City Council.

Correct me if I’m wrong, but what I see is not only a fund through which they take from other funds to pay down their deficit, but another, separate fund that also takes money from other funds – to be invested on behalf of the pensioneers.

Here’s something scary I ran across in the budget policy documents – the city manager can approve up to $100,000 transfers without council approval.

Transfers Between Council Approved Capital Projects (Different Years – Rescheduling Projects) – Projects are approved over a ten-year period by Council. Each budgeted project has been appropriated an amount that may include funding from multiple City Funds. Appropriation transfers between capital projects scheduled in different years requires approval of the City Manager and City Council based the following authorization amounts:

• Up to $100,000 – City Manager;
• Over $100,000 – City Manager and City Council

Now, ask yourself Pollyanna – why are the road, sewer and park funds bottomed out?

Because, as Walters reports, pension costs, especially for public safety employees, “are rising especially fast. They now average about 50% of payroll and are projected in the new report to top 55% by the mid-2020s. A few cities are already nearing or reaching 100%.” And, city management, as you see above, is allowed to dip into funds as they wish, transferring the garbage tax money from the Road Fund to the General Fund last year, as noted in the budget. From the General Fund they can transfer as much as they want into the Unfunded Liability Reserve or the Pension Stabilization Trust, as long as it’s in increments less than $100,000.

When Brian Nakamura came on as City Manager in 2012, he reported two deficit figures – one about $168,000,000, the other around $194,000,000. I think the first figure was the pension deficit figure, and the second was the total deficit for pensions AND benefits. Today the city finance manglers report a total deficit of around $130,000,000. How do you think they paid that down so fast?

Here’s Walters on the subject:

Dan Walters: It’s a bait and switch on the state’s public pensions

Local officials, particularly those in California’s 400-plus cities, have been complaining loudly in recent years about pension costs, raising the specter of insolvency if they continue their rapid increase.

Last year, the League of California Cities issued a report declaring that “pension costs will dramatically increase to unsustainable levels.”

The California Public Employees Retirement System (CalPERS) confirms that projection in a new report.

The report reveals that mandatory “employer contributions,” including those from the state and school districts, as well as local governments, rose from $12 billion in 2016-17 to $20 billion a year later.

It also warns that the payments will continue to rise well into the next decade as the giant trust fund tries to recover from dramatic investment losses in the Great Recession, adjusts to lower earnings projections and handles a surge of baby boomer generation retirees claiming benefits.

“The greatest risk to the system continues to be the ability of employers to make their required contributions,” the new report declares, adding, “It is difficult to assess just how much strain current contribution levels are putting on employers. However, evidence such as collections activities, requests for extensions to amortization schedules and information regarding termination procedures indicate that some public agencies are under significant strain.”

Pension costs for “safety employees,” police officers and firefighters mostly, are rising especially fast. They now average about 50% of payroll and are projected in the new report to top 55% by the mid-2020s. A few cities are already nearing or reaching 100%.

However, as much as they complain about CalPERS forever dunning them, California’s local officials are largely unwilling to directly ask their voters for more taxes to pay pension bills.

Hundreds of local tax increase measures were placed on the ballot last year and hundreds more are likely to be proposed next year, but almost universally they are billed as improving popular local services, such as “public safety” or parks.

It’s where the concept of “fungibility” kicks in. If a city’s voters can be persuaded to raise their taxes for parks and recreation, for example, it effectively frees up more money to pay its pension bills without acknowledging that motive.

We saw a wonderful example of fungibility last year in Sacramento, where voters were persuaded to raise local sales taxes on the promise of civic improvements by an amount that closely matched increases in the city’s obligations to CalPERS.

We may be seeing another in Oakland next year.

The Oakland City Council is placing a “parcel tax” — a form of property tax — on the March ballot to improve parks, recreational and homeless services and stormwater drainage. The tax, $148 annually per real estate parcel, would generate an estimated $20 million a year.

As it happens, however, the most recent CalPERS report on Oakland’s pension obligations reveals that they will increase from $194 million in 2020-21 to $226 million by 2025-26, which would more than consume the revenue from the parcel tax.

So why don’t city officials just own up and publicly acknowledge that pension costs are driving their budgets into red ink and ask voters for more tax money to cover them?

They — and the unions that finance tax increase campaigns — clearly fear that being candid would backfire. If voters knew they would be paying more taxes to support pension benefits for city workers that are probably much better than they have themselves, they might refuse to go along.

Bait and switch is more politically expedient.

Tags: Bob Malowney Chico Area Recreation District, Tom Lando Chico Area Recreation District

Comments 6 Comments
Categories CARD Measure A March 2020, CARD parcel tax March 2020, Chico pension deficit, Chico revenue measure, Chico sales tax increase, Uncategorized

The Homeless Industrial Complex is a failure – how many people will die on Chico streets this winter despite all the money shoveled into the system?

30 Nov

The headlines were conflicting this week in Chico – Black Friday shopping, Thanksgiving fun run, community meals, city setting up a “warming tent”, and a woman found dead along Lindo Channel.

Knowing how extensive our “homeless” services are here, I have to wonder – how does this happen?

The city and county continue to bumble the whole operation. We have services, plenty of them, but they are not coordinated, often compete for funding, and work toward their own instead of the public’s best interests. For example, Tom Tenorio gets a very generous salary out of the Esplanade House, even taking one of the apartments intended for housing a family to supplement his office. I’m reminded of a scene from Doctor Zhivago: “All this office, for just one fat-cat bureaucrat!“

There’s alot of competing for funds and in-fighting in the Homeless Industrial Complex. They fight over money like crows fighting over road kill. When Stairways manager Mike Madeiros made a decision not to accept a grant because it would mean allowing transgender individuals into his shelter, Tenorio went on the warpath, complaining that they would lose that grant because Madeiros had refused it. Wow, that was an eye opener about the way these “non profits” are operated – too bad so few taxpayers were paying attention.

We also have disagreements over who will be served. Madeiros was uncomfortable with allowing transgender or women in his all male shelter, worried about conflicts. Some shelters will not accept inebriated people, so CHAT (Chico Housing Action Team) has had set up “low barrier” shelters in houses around town. The city offers a warming tent, set up this weekend, that is supposed to be open to anyone who is cold. So far these tents have served less than 20 people a night, including city officials and staffers.

And now Chico Housing Action Team wants to install “elderly” transients in Tough Sheds in a field along the freeway.

All these programs are competing for money. And, as of this weekend, they are failing in their mission to get people off the street.

In Chico we have many “low-income” subsidized housing projects. I just found out a huge old apartment building around the corner from one of my rentals is owned by HUD. We have newer stuff, like Jarvis Gardens in south Chico, and 1200 Park Avenue, both built to house low-income seniors. These are public projects, paid for with tax dollars.

But again, there is a lack of coordination. The Camp Fire is a good example of how these agencies have failed – here we had truly needy people, a natural disaster, and we couldn’t house them? But we spend millions a year on programs set up for drug addicts and criminals?

CHAT proposes little sheds built on an empty lot along the freeway. These people are duplicitous. They already run low-barrier shelters in homes spread out across Chico, no noticing of the neighbors – CHAT knows they need to keep this project a secret. They have nothing to crow about – no list of names of people permanently taken off the street into stable housing. No success stories. And every year, several people die out on the street, regardless of all their feel-good fascism.

Now they want to build a project with city support – they’ve already racked up a pile of $taff Time with their demands. They want to be let out of the regular building process, sub code, no environmental review, NO FEES. And they are not being honest about how much it will cost to provide sanitary infrastructure. They first said there would be a common bathroom – now they show us plumbed sheds with toilets? Those will all have to be hooked up to sewer, which is not available on the property. There isn’t even water or electricity on the lot.

But when my family bought a crapped out old house, the city and county, the school district, CARD – they all wanted to get their thumb in our pie, with all kinds of fees and constant inspections. The code enforcement officer, without so much as a smile, told us we had to put more Dap on the toilet because we had male children. She demanded a ladder to climb up on our roof. She told us we had to tear down an old building on the property before we could get clearance on the house. And then she told us the tear down required yet another permit.

This is how taxpayers get treated.

The city of Chico is a mess. Our finances are in the red, we have constant threats of bankruptcy, although, you will only hear about these problems in Chris Constantin’s pitch for a sales tax increase. Constantin and Orme are walking a fine line – trying to tell us what a mess our city is in without taking any blame for that mess. For years they’ve mismanaged our money, putting most of it into their salaries, pensions and benefits, admittedly deferring maintenance on city infrastructure all the while. Management salaries are at an all time high, and Constantin admitted recently we spend more on cops than other California cities our size.

The transient problem is just another part of the mismanagement. They allow these bums to trash our parks and creeks, predate on our neighborhoods, and spread drugs to our kids because they are a revenue source. When the city council signed the Shelter Crisis Designation, they got an annual grant worth over $4 million. They got another $4 million for handing part of the county fairgrounds over to the Jesus Center. That’s an annual grant, and it will go up. And they don’t have to spend it on the “homeless”, it just goes right into the General Fund.

Just like the proposed sales tax increase.

So, we need to ask ourselves – why would we hand a tax increase to Mark Orme and Chris Constantin? They stand over this whole mess, it’s their recommendations that council follows, dumb and blind. The best argument against this sales tax increase is our current management, and how they have mismanaged millions already.

Tags: Alex Brown Vice Mayor Chico CA, Chris Constantin City of Chico Ca, Mark Orme Chico City Manager, Randall Stone Mayor of Chico CA

Comments 2 Comments
Categories 100K pension club, Chico pension deficit, Chico sales tax increase, Chico transient problem,

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