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Chico is in trouble – and here’s why

21 May

Bob sent a link to an article from Forbes – Why California is in Trouble”  It’s a good read. If you can’t make the link below work, just google the author, Adam Andrzejewski, or “Forbes, Why California is in Trouble” (Thanks Donna!)

https://www.forbes.com/sites/adamandrzejewski/2020/05/19/why-california-is-in-trouble–340000-public-employees-with-100000-paychecks-cost-taxpayers-45-billion/#12f7e2955fb8

The author, Adam Andrzejewski (Angie-eff-ski) is the CEO & Founder of OpenTheBooks.com – one of the largest private databases of government spending in the world. Andrzejewski documents salaries all over the US, and tells us, there are 340,000 public employees in California making over $100,000. 

“Our auditors at OpentheBooks.com found truck drivers in San Francisco making $159,000 per year; lifeguards in LA County costing taxpayers $365,000; nurses at UCSF making up to $501,000; the UCLA athletic director earning $1.8 million; and 1,420 city employees out-earning all 50 state governors ($202,000).”

Lifeguards costing $365,000/year? You say, that’s nuts?  No, it’s not. LA has miles of public beaches. Just think what would happen if CARD ran LA beaches – yeah, lifeguards would make $365,000/year. That’s what happens when nobody is watching the purse strings, except the thieves.

Right now this man, beaming like a ghoul, is running our town. Did you vote for him? 

Chico City Manager (High Dollar Whore) Mark Orme at the CARD Center following the State of the City forum in January. Photo by Ashiah Scharaga

No, he was hired by the pack of ninnies we know as “Chico City Council.”  We had nothing to say about his hire, and we have nothing to say about his salary – now $207,000, plus a $56,000 benefits package. We pay that, he pays another $24,000/year, and gets 70% of his highest year’s salary for the rest of his life. 

While Orme boasts that he has not had a raise for several years now, he certainly managed to negotiate himself a second pension – a 457 plan, which is a special kind of 401K for public workers. Orme wormed the city into paying $10,000 a year into that fund, PLUS 4.5% of his salary. In addition to the money paid toward his CalPERS pension and health benefits. 

That is why not only Chico is in trouble, but our entire state is in horrible financial straits – over generous salaries, and a crazy retirement scheme.  CalPERS clients are paying less than half the cost of these pensions, with employees contributing little or nothing, but expecting to get 70% of their ridiculous salaries, with COLA, for the rest of their lives. 

Ex Chico City Manager Tom Lando, for example, retired at about $134,000/year, but now makes about $155,000 – IN RETIREMENT. That’s the “cost of living adjustment” .  He also gets himself hired for various interim positions – like city manager of Oroville – and those salaries add to his pension. That’s why Lando was the first one to raise the notion of a sales tax increase for Chico, and used his own money to pay for a survey to push it. He also donated $6,000 to the Yes on Measure A campaign for CARD’s parcel tax. Lando knows better than anybody that CalPERS must be funded, or he’s out $155,000/year and counting. 

Essentially, CalPERS has led the taxpayers to a room full of straw and is demanding we make enough gold to keep our public workers like a pack of high-dollar whores for the rest of their lives. 

Right now, the city of Chico is working behind closed doors, using ConVID to keep us out of the tax measure conversation. They’re spending taxpayer money on consultants to write the measure and strategize the campaign, just like CARD. 

Don’t be discouraged by the remote meetings. I won’t recommend Chico Engaged, I’ll say, write to council members directly, and tell them we resent them spending taxpayer money on a sales tax increase when they’ve done nothing to reform the pensions and contracts. 

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@chicoca.gov

 

A tax measure would be spit on the Chico griddle – we need TRUE PENSION REFORM

11 May

I’ve been busy with a lot of stuff, but like I promised, I wrote a letter to the ER about Robert Koyasaki’s “Pension Time Bomb” series. I’m embarrassed –  I mis-spelled Siedle through the entire post, I have to go back and fix that, sorry. But I think I got a good letter out of it – you tell me.

Cities across America, like Chico, are unable to provide basic services because all the money is going to pay for pensions. No matter how much money the taxpayers pour into this system, pension expense will continue to outstrip revenues.

Salaries are excessive. Chico city management positions pay four to five times the median income.  

The city pays too little, with employees contributing even less. Until the Public Employee Pension Reform Act of 2013,  management employees paid nothing toward their pensions. Now they pay between 10 and 15% of total cost, the total payment being 20 – 30%. 

Pension deficit  is created by agencies and employees that don’t pay enough on payroll. The excess becomes the Unfunded Actuarial Liability. Employees contribute nothing toward the UAL, which is over 65% of total employee cost. The California Rule mandates that the pension deficit must be paid ahead of everything else.  For example, our finance director says we have no money to fix streets, but in July he will make the annual $9 million (and growing) payment toward the UAL.

A tax measure would be spit on the griddle in this situation.  Here are my suggestions:

  1. Negotiate lower salaries for management, or hire somebody else
  2. Get all new employees off CalPERS, switch to 401Ks
  3. Pay more in payroll, which would mean, ALL employees would have to pay more, even based on their current shares.
  4. Pre-PEPRA employees should have to pay toward the UAL, or “catch up” payments – they should pay the same shares they pay toward the payroll portion.

Juanita Sumner, Chico CA

 

No matter how much the taxpayers dump into the pension system, it will fail and drag our economy down with it, unless we take immediate steps toward true reform

6 May

Listening to Robert Koyasaki’s Pension Time Bomb radio show made me so mad I had to take a break. But I finally finished the discussion between Koyasaki, a real estate investor, economist Edward Seidle, and Phoenix Arizona city council member Sal DiCiccio.

https://chicotaxpayers.com/2020/04/30/if-you-see-more-revenues-coming-in-to-your-city-and-you-keep-wondering-why-your-roads-are-looking-like-crap-and-you-believe-youre-not-getting-the-type-of-services-you-should-be-getting-its/

DiCiccio explained that cities across America are unable to provide basic services because staffers are pouring all the taxpayers’ money into their own pensions. Because of excessive salaries, ridiculously low contribution rates, and horrific mismanagement of pension funds, the pension deficit, or Unfunded Accrued Liablity, ” will continue to climb. No matter how much money the taxpayers pour into this system, pension expense will continue to outstrip revenues.

First of all salaries excessive – our city manager, for example, at $207,000/year in salary, makes almost 5 times the median income in our area. Many economics experts, including Seidle, have said that if the salaries were more rational, the pension system would work.

Second, agencies pay too little, with employees contributing almost nothing. In fact, until Orme started paying in a few years ago, he was paying NOTHING. His predecessors, like Tom Lando, Greg Jones, Dave Burkland, and Brian Nakamura, paid nothing. Lando is now getting over $155,000/year in pension, plus COLA, having made absolutely no contribution for his entire career.

These agencies have used CalPERS like a credit card, and now they want us to pay.  First of all, the agency doesn’t pay enough in total.  As of now, the city of Chico is paying, depending on the employee group, between 20 and 30% of total payroll cost, with employees, also depending on bargaining group, paying between 9.75 and 15%. Finance mangler Scott Dowell said in his power point presentation that “City of Chico employees are paying, or are nearly paying, HALF of the CalPERS pension costs.” That is one of the Big Lies. See, he forgets to mention, the Unfunded Actuarial Liablity, or “pension deficit”, which is over 65% of total cost, and the taxpayers pick up that whole tab, with interest.

That UAL is created by agencies that don’t pay enough on payroll, and don’t require enough of their employees. The money they don’t demand becomes the pension deficit, and then the employees are off the hook to pay it. They contribute NOTHING toward the pension deficit, or UAL, payments, the  taxpayers are stuck with the whole turd. 

And then there’s mismanagement of funds. CalPERS is our pension system. They have been criticized for promising too high a return from the stock market, especially since they make horrible investments. They tell their member agencies they only have to pay so much, and then when their investments tank, they come banging on the door for more.

DiCiccio and Seidle explain that no agency requires any member of their pension boards to have any financial credentials or education – the boards are made up of union members. These people are completely dependent on Wall Street money managers.

DiCiccio says, “The wall street money managers are screwing everybody,” from the taxpayers to the employees. He gives an example, which is verified by Seidle – one Phoenix employee group paid $40 million to their money manager for a $4 million return on their investments. Seidle adds, “In the last 10 years the fees have grown exponentially because they are doing high cost high risk investments, which have much higher fees.” And there he also mentions the high risk investments – in one case, CalPERS board members were caught buying bad stocks off of friends.

https://www.breitbart.com/local/2016/06/03/former-calpers-ceo-sentenced-4-years-taking-huge-bribes/

So, what can we do? Unfortunately, we can’t just stop paying our taxes, that’s not going to go anywhere. Also unfortunate – most states, including California, have passed legislation that protects the pensions of those members hired before 2013. “The California Rule,” passed by the state legislature behind closed doors, says, in fact – we must pay the pensions before we pay for anything else.

Last night, watching Chico City Council’s latest remote meeting, I saw it right in front of my eyes. It was in the report Dowell made to council at last night’s remote meeting. He showed council that list of services that $taff plans to cut. One cut that was taken off the list since he made the same presentation at last week’s Finance Committee meeting was deferring payment of the annual Unfunded Actuarial Liability. That is an annual payment, the penalty for missing it would be about $355,000 in late fees. But last night Dowell said there was plenty of money to make that payment  in the General Fund – $9 million. That’s just this years payment, up about $1 million from the payment I saw in last year’s budget.

Dowell, Orme, Constantin and the Public Works staff have acknowledged for about 5 years now that they have not been funding street maintenance or repairs, but they’ve never missed a UAL payment. If that’s not Mutiny folks, I don’t know what to do with my yardarm.

So here are my solutions to this mess:

  1. Get all new employees off CalPERS and give them 401Ks
  2. The city of Chico needs to pay more in payroll, which would mean, all pre-PEPRA employees would have to pay more, despite their ridiculous shares.
  3. Pre-PEPRA employees should have to pay toward the “catch-up payments” or “UAL” – they should pay at least the same shares they pay toward the payroll portion.
  4. Retired employees making more than $(??,???) per year in pension should have to contribute or lose benefits.

Let me know what you think.

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

6 May

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! 

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

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

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.

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. 

 

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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

 

 

 

 

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!

 

 

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