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Why, after two years of unprecedented budget surpluses, is the city of Chico still so far behind on infrastructure maintenance?

10 May

I got a really rude comment from a city employee named Jeremy Lazarus.

“You’re article is completely full of lies. As a City of Chico public works employee who struggles to feed my family, I take your words as an attack on myself and my children. You lie in every article you write concerning pension liability. You never have any receipts for your claims. FYI, I am also a conservative. You clearly have zero understanding of city operations and how they are funded. I’m open to a conversation but you owe me and my coworkers an apology for these attacks and pinning the public against us hard working fellow TAX PAYERS.“

Wow, there’s a mouthful. Receipts for my claims? All I could respond with was that I get my information from staff, from agenda reports, and from the budget, posted on the city website.

Thanks Bob, for your response to, “You lie in every article you write concerning pension liability.” Bob responds, “Every article? Well, the unfunded pension liability numbers from past discussions were taken straight out of the City’s CAFRs reports. Are you saying those numbers are lies?

“Taking all the name calling and emotions out of this, ask yourself one simple question. Can the taxpayers afford the pensions? Looking at the current unfunded liability and its current growth how can the answer be yes?“

Thanks for that rational take Bob, we need to keep our heads here. Mr. Lazarus is a new employee, and he’s not management, so it’s true, he doesn’t make the kind of salary the department heads are making, and he pays more of his pension costs (due to the “Pension Reform” act of 2013). But his argument that I’m a liar is irrational. I have to wonder if these people are being told by management to argue anybody who takes a dim view of the tax measure. No holds barred.

He says he’s “open to a conversation” – well, here’s a question for you Mr. Lazarus – how come there are people all over the incorporated city who have been waiting years to hook up to sewer? What’s the hold up? The city had an unprecedented surplus the last couple of years, due in part to Camp Fire relief and COVID emergency funding, not to mention sales tax revenues generated by both of those and other emergencies. How come the sewer lines are still not complete?

Becca reports, “We bought a house in North Chico 15 years ago. Through the whole process everyone made sure to point out that the house had been annexed into the city for services namely, sewer hook up. I probably don’t need to say anymore for you to know where I’m going with this. That’s correct. 15 years and I’m still sitting on a delapidated septic tank that I’ve invested in repairs what the hookup fees are. Here’s the fun part. City lines were put in all the way down a main street EXCEPT THE LAST 2 BLOCKS where it DEAD ENDS into another street that has lines in it as well. All plumbed except 2 blocks BETWEEN the two streets. When I called last year to get the what’s up, I was told I had to poll my neighbors, write up a request, submit it and wait. I was also informed it would take a while IF IT HAPPENED AT ALL as there were other “pressing” issues. So, there it is. Chico has not completed the leaching nitrates problem. The kicker for me as I understood the nitrate issue was take care of high nitrate areas first.“

That’s outrageous. I’ve heard other stories at meetings and from neighbors, including the shock and awe of the city’s hook-up fees. So, how come so many people around town, including Becca above, are still waiting for the trunk lines to be completed on their street?

The other point she brings up is leaching nitrates, a problem we have heard much about since the 1990s. Old septic tanks and sewer lines were blamed. The city got grant funding to hook up households to existing sewer lines, for FREE. That’s great, but really unfair to those households who didn’t have trunk lines on their street. Why didn’t the city also undertake a push to finish trunk lines? The more people hooked up the more monthly fees they collect from those new households. It shouldn’t cost more to service more people, it should bring in more revenues.

The sewer fund, like all the city funds, is tapped every year by a certain percentage to pay for the unfunded pension liability, pension deficit, Unfunded Actuarial Liability, whatever you want to call it. Look in the budget, available on the city website, and put those terms into the F-search. Search “pension stabilization trust”. You’ll see exactly how much money is taken from infrastructure and services to pay the pensions. I found out, they take 10% of the UAL from every department fund to put into the PST (Fund 904), and the Pension Liability Reserve Fund (903), which are used to make the annual “extra” payments to CalPERS.

The highest contribution any employee group makes toward the pensions is less than 30% – I got that in a spread sheet from Chico City Human Resources Dept. The taxpayers pay the rest, with CalPERS making one poor investments performance after another. And then we pay the entire “extra” payment, with interest. Somehow, despite increasing “extra payments,” City of Chico deficit just keeps going up, currently about $150 million. So we drive on sub-par streets and put up with nitrates in our ground water, we put up with violence in our streets and homes while our parks and public spaces are overrun with crime and garbage, but our deficit just keeps going up. The taxpayers have paid enough, it’s time to look at the employee contribution.

Not only would I propose that the employees pay more, I’d propose that they contribute the same percentage into the pension “extra” payment funds established by the city, the Pension Stabilization Trust and the CalPERS Unfunded Liability Reserve Fund.

But here’s something I’ve said for a long time, and I wish Mr. Lazarus would do his homework, cause I think he might agree with me here – we need to cut management, and make them pay more. We need fewer management and more workers.

What do you think Mr. Lazarus?

BC! You magnificent bastard! I read your comment, and you’ve hit that nail right on the head! We’ve got FLEAS!

7 May

Did you ever get so disgusted you just couldn’t move? Couldn’t act? Couldn’t even COMPLAIN? That’s how I’ve been feeling lately, I call it “blog stop”. It’s like being in front of a moving train in a stalled car. Should I get out and make a run for it? Or just keep cranking the key and mashing on the pedal? If that were really the situation, sure, I’d bail – I have good insurance. But I like my home in Chico, I like my friends, I have DNA at the cemetery, and we’ve invested a lot of money here.

I know, we’re all making tough decisions right now. Gotta keep a clear head, not a good idea to make important decisions in a panic.

For me, the focus is how the city spends money, and right now, most of the money is going into the pensions. Here’s what BC had to say about it:

As you know, it all comes back to employee pensions and benefits. Until those items come under control there will never be money for anything else.

Correct, as of now, the biggest debt the city has is the CalPERS liability. The city has established two funds that are dedicated toward this debt, the money can’t be spent on anything else. These funds are filled by allocating money from every other city fund, from the roads to the sewer. Isn’t that weird – the roads fund isn’t restricted, the sewer funds isn’t restricted, but the pension fund is restricted to one purpose? Paying the pensions. That should tell you exactly where the city’s priorities lay. Because “the city” isn’t made of citizens, it’s made of employees.

The outsourcing of city services such as sewer and water is just another symptom of the bigger problem. The service gets outsourced. You would think that the personnel who used to provide the service and their benefits and the costs would all be a net savings after the asset was sold. But the payroll never goes down, the expenses never go down and the taxpayers are left with an additional cost to pay in addition to their property taxes.

BC, you magnificent bastard – my apologies to your mother – but you have hit that nail, hit it hard! Right on the head! Like I’ve said before, they are double-ending us on these services. First they take our taxes on the ruse that they will do something for our benefit, and then they outsource those services to an agency we have to pay AGAIN! No, they don’t fire the employees when they sell the sewer, and we’re on the hook for their pension deficit anyway.

You can outsource legal services, you can outsource document services, you can outsource the fire and tDOWN,,, you can outsource almost every function that city government should provide and so the tax base coming in can be used for pensions and benefits while no services are provided.

Yep, there it is – they will sell the sewer, and take the money into their pension funds, and then we will have to pay Cal Water’s ever-increasing rates to flush our toilets.

We still have to pay the employees TO DO NOTHING. All they do Downtown is work toward funding their pensions, those embezzling bastards. It’s like having fleas.

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Chico Council plays Sophie’s Choice with city services in mailed survey; meanwhile, “CalPERS Unfunded Liability Reserve Fund” takes 10% of the UAL from every city fund

22 Apr

I’m thrilled to see some pushback against the city of Chico’s sales tax measure. For example, yesterday and today there were letters from names I haven’t seen in the letters section before, both calling the mailed “survey” into question. I’ve seen similar remarks, some of them very angry, on various social media sites, including Newsbreak.com

There has also been a city employee named Jeremy Lazarus, who has been trolling my posts and trying to deny that the city of Chico’s biggest debt is the pensions. He’s told me I don’t understand, and I should “get a clue”. Ironically, Transparent California reports that when Lazarus was hired by the city of Chico in 2019, he already had a personal pension debt of $24,305.22, created by his abysmally low employee contributions in Glenn County. The little trough skipper.

https://transparentcalifornia.com/salaries/2019/chico/jeremy-lazarus/

Hey, you think Lazarus and other city employees have been told to troll the social media sites to spread the hype? While I have no evidence of that locally, I can relate that my son, when employed by a West Coast city for a short internship, was told to engage people regarding any negative information he heard about his employer, and set them straight. So I know it happens, and I won’t be surprised when I find out City of Chico employees are told same about the tax measure.

One letter writer brought up a point that also troubled me – the survey lists services that are all important, that every city needs to supply, or why be in the business of being a city? They tell us to rank these services – that’s bullshit folks, they are trying to Sophie’s Choice our asses. In the 1979 novel, later made into a very popular movie with Meryl Streep, Sophie is told she must choose between her two small children, one or the other, and that the one she doesn’t choose will be summarily executed.

The city’s survey says we must choose between essential services – “Public Safety, Addressing Homelessness*, Road Maintenance, Parks, Conservation*, and Economic Vibrancy*”. This isn’t really a choice, it’s a threat to cut one or all of these services if we don’t pony up a sales tax increase. (* These ridiculously specious terms deserve their own blog post)

Here’s what they left out – I just opened the city’s 2021-22 budget, here:

https://chico.ca.us/city-budget

I did a routine F-search with words like “pension stabilization trust”, or just “pension”, and here’s something new I found – “CALPERS UNFUNDED LIABILITY RSV FUND” – that’s Fund 903, page 115. That is separate from the “PENSION STABILIZATION TRUST FUND”, Fund 904, page 116. I knew about the PST, and so should you, cause I’ve mentioned it here about 365 times. But wow, another fund I haven’t heard of, with a 2021-22 balance of over $11.6 million. These bastards are finding new nutshells to hide their peas under every time I turn around!

Revenue sources for this fund include transfers from the General Fund. The description for this fund – “Fund to account for annual payments of CalPERS Unfunded Liability.” Apparently, they use this fund to provide revenues for the “Pension Stabilization Fund,” out of which they make the payments to CalPERS. See what I mean about nutshells?

And how is it funded? “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 percent of the annual unfunded liability expenditure will be retained in the fund.“

There it is – they’ve been TAKING 10 percent of the liability – now over $150 million – siphoned from existing funds – the road fund, the park fund, the sewer fund, etc. That’s why the street in front of your house looks like something from Downtown Kyiv right now, and the city is talking about taxing you based on the volume of water you get from Cal Water.

I guess I should thank Jeremy Lazarus for challenging me to prove this. He’s been calling me out, telling me to “get a clue.” Well, thanks, you Idiot, I got it, I got it good.

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Let’s just call it “The Pallet Shelter Tax”

16 Apr

I was shocked when I went Downtown the other day and saw Downtown Plaza was still fenced off. And then I saw this story on the news:

https://www.actionnewsnow.com/news/chico-changes-its-focus-to-city-plaza-repairs/article_2cf3bc28-baca-11ec-a1a2-bbb329a05249.html

“City workers have been focusing on other projects in Chico like the micro shelter site, but they want the plaza to be open by the end of the month for all the upcoming events in downtown.“

This is more of their ploy to raise our sales tax – a subtle hint that the city is understaffed. Yeah, ever since 2013, when then city manager Brian Nakamura and his little toady Mark Orme gutted all the lower level staff positions – the worker bees! – and went about raising their own salaries and benefits. The archives (see right) are full of that, dig in and learn some Chico history! I’ve attended two meetings at which consultant Chad Wolford told successive councils city staff was getting “management top-heavy,” had “too much overhead“, and this was driving up costs while they were cutting services left and right.

We also see here the burden the city has taken on with their badly thought-out “plan to end homelessness”. Staff has been so busy – six-figure staffers by the way – putting up the pallet shelters, which were supposed to be put up by volunteers, that they don’t have time to do their jobs. They’ve allowed the plaza to fall into such a state of disrepair that they had to close it. They cite vandalism – how the hell was anybody able to commit vandalism while the damned thing was fenced off? For Pete’s sake, it’s right there, the cops can’t see vandalism going on through a chain link fence?

This is dereliction of duty, but they try to turn it around saying we don’t pay enough fucking taxes? Get the hell out!

Local gadfly Rob Berry opines that this is where the sales tax revenues will go, down the Homeless Industrial Complex drain.

“For those of you who doubt it, and the many who have said it, expect the City to support the outyears for the Pallet project from the new sales tax. This from the explanation of what this tax can be used for: ‘• ADDRESSING HOMELESSNESS: Providing solutions to address homelessness in Chico.‘”

You’re such a dummass Rob, you don’t see the real rabbit hole – the pensions. Who cares if they are working on pallet shelters or the streets, the sales tax revenues will be used to secure bonds that will be funneled into the Pension Stabilization Trust.

But the city knows people are pissed off about the illegal camps, and the filth and crime everywhere, and they will use it as a wedge to get us to approve their sales tax measure. Don’t buy it. Tell them they need to do their fucking jobs and pay a rational share of their own pensions and benefits.

Of course the city will continue to use taxpayer funding to forward this measure, and that is legal right up until June, when the county clerk will give it a letter designation. What letter should it get?

How about ‘P,’ for pallets and pensions?

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They keep us in the dark and feed us on bullshit – namely, the lie that Mark Orme has not had a raise “in years”…

22 Mar

My mom used to have a sign over her desk – “They must think I’m a mushroom – they keep me in the dark and feed me bullshit.” It was a crude reproduction of a reproduction of a reproduction – before we had forwards, we had the Xerox machine.

I have felt same lately. The city of Chico has gone completely off the radar since the COVID shutdown. Masks are off and meetings are open again, but they are doing stuff behind closed doors, using “special meetings”. A special meeting is not publicly noticed, unless you have signed up for notifications from the clerk, or you happen to check the front door of City Hall every day by 5 pm. I’ve been signed up for years.

Late yesterday afternoon I received a notice for a meeting scheduled for 5:00* (see post script) tomorrow afternoon, with the attached agenda, which reads:

SPECIAL AGENDA – Pursuant to Government Code § 54954.3(a), the City Council is prohibited by law from considering any other business at this meeting.
2.1. CLOSED SESSION PUBLIC COMMENTS OR COUNCIL DISQUALIFICATIONS
2.2. CLOSED SESSION – Council will recess to Closed Session in Conference Room 1
2.3. PUBLIC EMPLOYEE PERFORMANCE EVALUATION: (Gov. Code section 54957(b).) Title: City Manager

Government Code 549543(a) says “Every agenda for regular meetings shall provide an opportunity for members of the public to directly address the legislative body on any item of interest to the public, before or during the legislative body’s consideration of the item, that is within the subject matter jurisdiction of the legislative body, provided that no action shall be taken on any item not appearing on the agenda unless the action is otherwise authorized by subdivision.”

What a mouthful. What they are saying, put simply, is that they have to give the public an opportunity to speak on this subject. What’s the subject? Mark Orme. It’s his performance review.

The first question I have is, what’s the emergency worthy of a special meeting? Special meetings are supposed to be reserved for emergencies, like lawsuits against the city, or pending bankruptcy. Both of which are common problems facing the city of Chico. This is a perfunctory employee review. I never understood why these reviews, which should be a matter of public information, are closed. And now they’re held in special meetings, without real notice of the public. I know it says they are not supposed to discuss anything that’s not on the agenda, but things come up in these conversations, and who is there to report it?

I have an opinion on Mark Orme’s performance – I think he’s lied to the public. For one thing, he is constantly reporting that no member of management has received a raise for years – what about his 457 Plan?

https://www.calpers.ca.gov/page/active-members/retirement-benefits/deferred-compensation

“CalPERS deferred compensation plans include the 457 Plan and Supplemental Contributions Plan. ” Yes, Orme receives “supplemental contributions”, in addition to the usual employer-paid contribution toward his pension, plus the catch-up payments, he gets a special kind of 401K into which the city contributes most of the money. He received this 457 Plan for agreeing to pay a part of the “employer share” of his pension. So Orme pays 14% of his cost, and gets the 457 Plan, into which the city puts over $20,000/year. This is how they try to deceive the public into believing the employees are paying more. Orme has not had a raise? But he gets an additional $20,000 in a secret bank account? Liar, liar, liar – don’t stand too close to this guy, the seat of his pants is likely to spontaneously combust. (You Repo Man fans know that can happen, but did you know why?)

Hey, do you have an opinion on the city manager’s performance that you’d like to share? Well, share it – send your opinions directly to council.

andrew.coolidge@chicoca.gov

 dale.bennett@chicoca.gov 

alex.brown@chicoca.gov

sean.morgan@chicoca.gov

mike.obrien@chicoca.gov

kasey.reynolds@chicoca.gov

 deepika.tandon@chicoca.gov

*Here’s a post script – they rescheduled the meeting to 6:30, due to a scheduling problem with one or another members of council. That gives you an extra hour and a half to contact council.

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It’s St Paddy’s, let’s spread some enlightenment – write those letters, emails, yak it up – council is putting a simple tax measure on the ballot, and the proceeds can be spent any way Mark Orme decides to spend them. And that will be, on the pensions.

17 Mar

Happy St. Patrick’s Day, all ye faithful. Like St. Patrick, you might try a little enlightenment!

Start with the truth about the city’s proposed sales tax measure. There’s a lot of misinformation floating around about this measure, but if I were to pick the most important non-truth being forwarded, purposefully, by the proponents, here it is: Mark Orme is trying to make people believe that the revenues generated by this new tax will go toward infrastructure and public safety. He spreads this willful misinformation, knowing fully well that council is planning to pursue a simple measure, requiring only 51% of the vote to pass, and that means there are no restrictions on the spending, and none can be made.

I’m not going to sit here while a guy who makes over $200,000/year to mismanage our town uses his position of respect in the community to spread a bunch of lies. So here’s my letter about that.

The city of Chico suffers from poor leadership and mismanagement. While city manager Mark Orme boasts that Chico is in  “the best financial shape it has been in recent years…”, taxpayers experience deteriorating infrastructure and increasing lack of services. Mayor Andrew Coolidge responds to our concerns as petty complaints, telling us to “roll up your sleeves and get to work…” What does that mean?

Orme and Coolidge propose a one-cent sales tax increase. Orme says, “It’s an opportunity for the public to make a determination of what they want their future to look like…”

Let me guess what the future will look like if we pass this tax. The city’s biggest debt at present is the over $150 million Unfunded Accrued Liability, or pension deficit, to CalPERS. While deferring maintenance and services, Staff makes increasing payments toward the UAL, millions a year.

According to NSPR News, “Orme made indications during Thursday’s address that investments in police and fire departments, road maintenance, homelessness solutions and small business support would be made.”

But Orme can’t make any promises, since council and staff have made it clear they will put a simple majority measure on the ballot, and the revenues will be deposited in the General Fund, with no restrictions on spending. The voters, if they pass this measure, will have absolutely no determination how the money is spent.

If the past is any indication of the future, we’ll watch the price of everything go up, while infrastructure and services continue to deteriorate.

Juanita Sumner, Chico CA

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City Manager Mark Orme and Mayor Andrew Coolidge are trying to mislead the public regarding the sales tax measure

12 Mar

In a recent news conference, Chico Mayor Andrew Coolidge chastised those of us who are unhappy with the direction the city has taken. “You have the choice to be a critic and complain about the issues we face, or roll up your sleeves, get to work and help make Chico a better place to live,” he said, adding, “Progress was never made by complaining.”

Roll up your sleeves? Who the hell does this total jackass think he’s talking to?

Coolidge likes to avoid the real issues that are causing people to criticize. He won’t admit, Chicoans have plenty to complain about. City manager Mark Orme boasts that, “The City of Chico says it’s in the best financial shape it has been in recent years,” the next minute telling Chicoans they won’t get the usual basic services if they don’t pass the upcoming sales tax increase measure. “It’s an opportunity for the public to make a determination of what they want their future to look like. I’m not going to advocate one side or the other, but what I am going to be is honest about the constraints on current resources.”

Despite his dire warnings, Orme continues to make sure he and the rest of staff get their pensions, funneling millions of dollars from city departments – money intended for services and infrastructure – into the Pension Stabilization Trust. Every year that Orme has told us they have deferred maintenance because they can’t afford to fix the streets or clean the parks, or guarantee our safety in our own homes, he’s paid increasing amounts toward the pension deficit. We’re under “constraints” but we are still able to dump $11.5 million into the pensions? Apparently Mr. Orme gets to decide who is under “constraints” and who is not.

I also believe Orme is publicly insinuating that the measure is a specific tax. According to NSPR, “Orme, however, made indications during Thursday’s address that investments in police and fire departments, road maintenance, homelessness solutions and small business support would be made.”

Council members and staff have said repeatedly that this measure will only require a simple 51% majority to pass. That means – Sean Morgan has reminded people – if they state any intended expenditures for this money, it has to be a 2/3’s majority measure, that would be dedicated to those specific expenditures. Morgan has made it clear that he, for one, wants a general measure that can be spent as council and staff determine among themselves.

Let’s all remember, council and staff wanted a Pension Obligation Bond until Howard Jarvis Taxpayers Association made it very clear that such a bond had to go before the voters, and threatened to sue the city of Chico if any such bond was passed without voter approval. And it would have had to get 2/3’s approval.

When Yuba County used specific promises to pass a simple majority tax measure, they were sued by HJTA and two Yuba County citizens. The first judge decided against the county, but the county used taxpayer money to take it to a higher court, where their appeal was approved. Very unfortunate for the taxpayers of Yuba County.

Let’s not make the same mistake in Chico. We have to make sure the voters get the straight facts. Don’t depend on Mark Orme to “educate” anybody.

I’d also discourage people from participating in the online survey – they can screw your submission any way they want. That’s why your responses are not made public on the site, you don’t even know if they are read by anyone but Staff.

Instead, notify your district representative, and include the entire council in your email, that you will not support this tax.

Passing the pension buck – letter writer tries to ignore the “catch-up” payments, which are all on the taxpayers

3 Mar

Last week a regular letter writer responded to my last letter to the editor. He misquoted a figure, and then he falsely stated that most of CalPERS benefits are paid through investments.

I am concerned with an error in fact appearing in a letter in the Feb. 23 edition on your Opinion page. Juanita Sumner (who often writes good fact-based letters) is clearly mistaken. At the conclusion of her second paragraph she states that public employees pay (at the most) 27%* of their retirement benefit “leaving the rest … to be picked up by the taxpayers.”

(*NOTE – I didn’t say “27%”, I said 22.7%, and that’s the correct number. That’s a big difference with these numbers, pay attention. I’d also like to see ER Editor Mike Wolcott PROOFREAD SOMETHING once in awhile. This is how misinformation gets out there. )

At least 60% of every CalPERS retirement benefit dollar annuity paid (to about 633,000 retirees) at this point in time is paid from investment profits gained with the CalPERS fund (now at least $475B). This leaves local contracting agencies, like the city of Chico, or state taxpayers to pay, at the most, 27%. These percentages vary little from year to year, from fractions of 1% to a very few percentage points over the past several decades.

All public employees (yes, I am a retired one) have negotiated their contracts with administrators under the direction and supervision of elected public office holders. We get the government we deserve by who we elect. Each reader, citizen, registered voter should decide whether they elected the right folks.

It is obvious to me that special interest groups strongly influence who gets elected. In the case of the CalPERS complex, but not always transparent, workings those groups would include: political parties, labor unions, leagues or associations of cities, counties, school board administrators and probably a few others I can’t think of right now.

Abe Baily, Chico CA

I don’t think he’s a liar, I think he was misled, or more likely, misunderstood information he got from the CalPERS website. I know retirees, and they don’t understand any of it, they don’t know how close they are to losing everything with CalPERS. They mislead themselves about how unsustainable CalPERS is, and who really pays. Yes, as taxpayers, they pay – they have to drive the same streets we do, live in the same crappy town – but they are also on the very generous receiving end. So yeah, they really don’t want to know the truth. These crazy pensions are like heroin – as long as you get your monthly fix, you don’t care where it comes from, or think about whether it will come next month.

https://www.calpers.ca.gov/page/about/organization/facts-at-a-glance/asset-liability-management

There you have a presentation that is confusing, but if you pay attention, you see and hear what’s really going on. Look at the “CalPERS buck” – very misleading. The illustration tells us that 60 cents of every dollar paid to retirees comes from CalPERS investments, while CalPERS employers pay (an average?) of 29 cents and members, or retirees, pay 11 cents. Those employer and employee shares are close to reality, but what they don’t include, are the “extra” or “catch-up” payments made toward the deficit. That’s all on the taxpayers. (+the 29 cents!)

The deficit is created by unrealistic payments, unrealistic shares paid by members, and historically poor performance by CalPERS investments. While CalPERS made great gains this year – 21%! – there are a couple of problems. First of all, it’s a one-time gain made on the backs of people recovering from the COVID shutdown.

Second, it follows years of single digit performance. In fact, in 2016, the fund returned only .61% – that’s 61 cents on the dollar, kids. Up from 2009 when they tanked, going 24 points into the red.

With losses like that, year after year, CalPERS has racked up a deficit of over $150 million for Chico, up from $143 million just last year. That’s despite rising “pension stabilization” or “extra” or “catch-up payments” – last year, $11.5, $18 million projected by 2025. Staff and council instituted the Pension Stabilization Trust a few years ago, siphoning millions from every city fund, but the deficit just keeps going up?

How does that happen? Well, for another thing, Council just handed out a bunch of raises to cover any added share the employees have agreed to. It’s like digging your way out of a sand pit.

So, I had to respond to Baily. I don’t like the nasty tit-for-tat Wolcott likes to run in the letters section, but I’m not going to sit by while Baily spreads misinformation, using my name to do it. Sorry Abe, nothing personal. You old gas-bag.

Abe Baily is mistaken when he states “At least 60% of every CalPERS retirement benefit dollar annuity paid at this point in time is paid from investment profits gained with the CalPERS fund”.

Bailey misinterpreted that from the CalPERS website. Gains are up this year – a 21% return, attributed to COVID recovery. A one-time gain after years of abysmal performance. Meanwhile, CalPERS administrators admit, “Obviously these gains, we have a lot to thank from you (sic) our EMPLOYER community, cause your contributions, I recognize, have gone up a lot to help fund that improved funded status.” CalPERS demands more from employers every year.

Furthermore, there’s still the pension deficit, $150 million, up from $143 million just last year, created and perpetuated by a combination of unrealistic employee contributions and consistently poor performance by CalPERS investments. Every year the city must make “extra” or “catch-up” payments. Last year, Staff took $11.5 million out of city funds – money intended for services and infrastructure – and siphoned it into the Pension Stabilization Trust, which is restricted to those payments.  

Contrary to Baily’s belief, the taxpayers contribute the lion’s share, not only paying a share toward payroll, but picking up the entire deficit, with interest. At the cost of our roads, parks, and public safety services.

Employees should pay a larger payroll share, and should pay a share toward the deficit. Instead, Mark Orme suggests a sales tax increase, to replace funds siphoned into the PST.  

This is called, “passing the pension buck”.

Juanita Sumner, Chico CA

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Chico Finance Committee will have an OPEN MEETING tomorrow – sewer rate increase, sales tax increase, CalPERS pension debt update

22 Feb

Wow – tomorrow the city of Chico is having an OPEN MEETING! I feel like I’m waking up from a bad dream. Just last week I sent a note to my district representative, Worthless Reynolds, asking her why she had agreed to chair a CLOSED Internal Affairs Commission meeting AFTER THE STATE MANDATE HAD BEEN DROPPED. She never got back to me.

So gee, it was a big surprise to get this agenda from the clerk.

https://chico.ca.us/sites/main/files/file-attachments/2.23.22_fc_agenda_packet.pdf?1645208231

And wow, here it is: “The agenda is also attached.  Please note this meeting is being held in person at the Council Chamber Building… ” I just about crapped myself with glee.

And just in time for some stuff that needs to be discussed with the public in attendance – a sewer rate analysis, a presentation from the consultant who is going to run the tax increase campaign, and a “CalPERS costs update”.

The sewer rate analysis is the beginning of a rate increase(s) for those of you on sewer. The city has been eeking up the sewer rates eversince Dan Nguyen-tan, Scott Gruendl, and Colleen Jarvis were on council. Staff complains they don’t get enough money to properly maintain the sewer – actually, the problem, according to people like former city council member Mark Sorensen, is that the sewer fund has been “dipped into” to pay salaries and pensions that don’t have anything to do with the sewer system. That’s called “allocation” – just type that, or “Chad Wolford”, into the search bar at the upper right of the blog and you’ll see I’ve written a lot about that here.

They’re going to tell us it’s because the sewer is over-whelmed – that is a lie. During the Paradise evacuation, they told us the sewer was running at less than half capacity, but still tried to say the evacuees were overwhelming it. Keep an eye on this conversation, it’s going to be full of shit.

Then we’ll hear from consultants Clifford Moss about their “PUBLIC ENGAGEMENT STRATEGY” regarding the sales tax increase measure. Meaning, the pitch they will give us to make us want to raise our own taxes. Please note – this is being done with $91,000 in taxpayer money. The irony is so rich it’s giving me the farts.

And then, the piece de resistance – finance department staffer Barbara Martin will give us the most recent “actuarial report released by CalPERS, the results of the recent Asset Liability Management (ALM) process CalPERS completed and steps that have been taken to manage costs.” This is important, because this is the reason for both the sewer rate and sales tax rate increases. Here’s the report from CalPERS. There are several videos here, if you really want to see why Chico is turning into a total shithole, watch this. There will be a quiz.

https://www.calpers.ca.gov/page/about/organization/facts-at-a-glance/asset-liability-management

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Recipe for a pension deficit

3 Feb

Employer Share Employee Base Share Employee Cost Sharing Total Employee Contribution  “Classic”                                               “Pepra” – employees hired after 2013
CME 7.54% 8% + 6% = 14.00%         CME 7.54% 7.50% + 6% = 13.50%CPSA 7.54% 8% + 6% = 14.00%        CPSA 7.54% 7.50% + 6% = 13.50%CNF 10.54% 8% + 3% = 11.00%        CNF 10.54% 7.50% + 3% = 10.50%DIR 10.54% 8% + 3% = 11.00%         DIR 10.54% 7.50% + 3% = 10.50%L39 10.54% 8% + 3% = 11.00%         L39 10.54% 7.50% + 3% = 10.50%SEIU 10.54% 8% + 3% = 11.00%       SEIU 10.54% 7.50% + 3% = 10.50%UPEC 6.86% 8% + 6.68% = 14.68% UPEC 6.86% 7.50% + 6.68% = 14.18%

CalPERS SAFETY – Classic                  CalPERS SAFETY – PEPRAEmployer Share Employee Base Share Employee Cost Sharing Total Employee ContributionCFSM 19.42% 9% + 3% = 12.00%      CFSM 19.42% 13.75% + 3% = 16.75%CPM 19.42% 9% + 3% = 12.00%        CPM 19.42% 13.75% + 3% = 16.75%CPOA* 13.42% 9% + 9% = 18.00%    CPOA* 13.42% 13.75% + 9% = 22.75%IAFF 19.42% 9% + 3% = 12.00%         IAFF 19.42% 13.75% + 3% = 16.75%

Gee, scuse me, but this above is what an answer from City of Chico Human Resources staff looks like. I asked the HR staffer for the most recent figures on the shares employees pay toward their own benefits, and she sent me a spread sheet. I’m not accusing her of anything, but it’s just about impossible to cut-and-paste a spread sheet. First she tried to pretend she didn’t understand the question, it took me a couple of days, asking the same question over and over until she sent me this chart. I guess she thought she was throwing toothpicks at a vampire.

So, here, let’s sort that mess out.

Let’s take the management unit, CME – meaning, Mark Orme and other department heads (public safety management, as you see further down, is separate). The chart is divided between “Classic” and “PEPRA” employees – Classic being, employees hired before 2013.

“Classic” Employer Share – 7.54%

Employee “base” share – 8%

Employee Cost Sharing – 6% – this is the amount of the former “Employer Share” that the employees have agreed to pay.

See there – the total “contribution” for management staff, some of the highest paid city employees – Employer + Employee contributions – is only 21.54%. For salaries in excess of $100,000/yr. Orme makes over $200,000, and only pays 14%, or $28,000/year. The taxpayers add another $15,080. For a pension of 70% of his highest year’s salary, or $140,000. Plus Cost of Living Increase. Plus benefits.

That kids, is why we have a pension deficit. Orme’s personal deficit is about $70,000. He’s been working for Chico since 2013. He started at a salary of about $189,000, increasing to his current “base pay” of $207,000/yr. He started out paying NOTHING toward his pension or benefits. That’s right, until the last few years, MANAGEMENT PAID NOTHING. Pressure from groups like ours led to tiny incremental increases, but the damage was done. A guy with a $189,000 starting salary, paying nothing, but expecting 70% of his highest year’s salary in pension – how can that be sustainable? And he knew exactly what he was doing, they all do.

While Orme keeps crowing that he and other employees now pay more of the “employers” share, they’re also getting salary increases that more than cover their increased shares. Of course that raises the debt, and the taxpayers are still on the hook for as much as 80% of the total cost.

Here’s a note for you “defund the cops” folks – the cops and fire department pay more than anybody. Look at the chart.

CPOA* Classic: Employer Share -13.42%; Employee base share – 13.75%; + Employee Cost Share – 9% = Total employee contribution – 22.75% The total contribution is almost 36%. Of course, that still creates a deficit. And again – the “employer share” is deceiving, we, “the employers” are on the hook for the deficit too. Including interest. And Cost of Living Increase.

So, if all this is confusing, let me give you a picture: You’re in an 8 foot hole on the beach, and the sand is crumbling in around your head. You shovel and scrape as fast as you can, but the sand is quickly building around your ankles. Suddenly you notice a person – Mark Orme – on top, shoveling sand right in on you. Faster and faster. You notice a group of seven others – that would be council – shoveling right along with him. That’s the pension deficit folks, and we can’t wait for Orme to bring us a ladder.

The tax measure he’s bringing us is just more sand.

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