Thanks Dave, for writing a letter to the editor about the Pension Obligation Bonds the city is considering.
No, there are no “conservatives” on council – maybe they’re “conservative” with their own money, but they treat the collective pot like a big cookie jar. They rode into office on money from public employee unions, and now they are trying to pay back their benefactors by roping the taxpayers into paying for the overgenerous pensions and “post employment benefits“.
Here’s Dave’s letter – take his example, and start writing your own letters and emails folks.
Conservatives are supposed to stand for low taxes and fiscal responsibility. We are told we now have a conservative majority on the city council. But what we actually have is a council of impostors. They plan to use the revenue from their proposed sales tax increase to take on hundreds of millions in new debt. They also plan to take on an additional hundreds of millions in new debt in the form of a pension obligation bond. It’s a dangerous gamble. And on the off chance it pays off, it WON’T make the pensions sustainable. And if it doesn’t pay off it could bankrupt the city.
Combined pension and other post employment benefit liabilities plus interest are over a quarter billion dollars and growing. It can never be paid. But our local politicians will raise our taxes and bury us in debt to keep the gravy train rolling a few more election cycles. After all, bureaucrats and other city employees must continue to receive unaffordable compensation packages, including multi-million dollar pensions. And this in a county with a 21% poverty rate BEFORE COVID. It’s unconscionable, especially at a time when so many businesses and working people struggle to make ends meet. But it is to be expected when our local politicians are tools of special interests.
These politicians don’t represent hard working taxpayers and never will. Voters should remember this in the next election and defeat the sales tax increase and those council members responsible for it.
Dave Howell, Chico
No, these people DON’T represent the average Chico resident, they represent the public employee unions. It’s time to start thinking about replacements. Kasey Reynolds, Scott Huber and Alex Brown are out in 2022, let’s find some decent hardworking taxpayers to fill their seats. Reynolds is the worst kind of faker, running as a “conservative” and then bringing in not one, not two, but THREE TAX MEASURES. And Huber and Brown pose as protectors of the poor – BULLSHIT people! At a time like this, they want to raise taxes? Tell them HELL NO!
These people are all beholden to the union PACs. The employee unions are the worst kind of communist plot – the enrichment of the few, paid for by the many. Don’t fall for it, demand council bring employees back to the table to pay more of their own benefits, or throw these IMPOSTERS to the curb in 2022 and 2024.
The worst thing about Pension Obligation Bonds is that the proceeds would be gambled on the stock market. The assumption is that the investments would pay both the bond service and the pension deficit. How nuts is that?
I’ve heard various analogies – taking a credit card to the casino, taking a second mortgage on your house to pay the first mortgage, paying your credit card with your other credit card, etc. Of course people do all these things, and we’ve seen what happens to them. We’ve watched neighbors, friends, even family members lose it all in gambits like that, and we’ve shaken our heads and wondered how they could be so stupid. How is it suddenly prudent just because it’s a government agency doing the dumb thing?
They will tell us they know what they’re doing, just like CalPERS told the governor and all the state agencies that they knew what they were doing. They don’t.
The consultant who pitched this horror story in the making to the Chico City Council said the key would be to borrow the bond money at a rate of 3 – 4% interest. He speculated that money would make a good enough return on the market to pay that rate, and then some for the pension fund. But he made it clear, constantly, that a “downturn” in the market would be a very bad thing – then the city would owe both the bond money and the pension payments, both with interest.
The difference between those two debts, as reported by the consultant, is that CalPERS won’t dump us for not being able to make our full payments, our “obligation”. As long as we pay SOMETHING, they will keep on paying out the crazy pension payments. In fact, each agency negotiates their own deal with CalPERS and sets the employee contributions. Of course, if they don’t pay enough, the debt grows, with interest – that creates the Unfunded Actuarial Liability, or, the “pension deficit”.
On the other hand, a Pension Obligation Bond has to be paid, in regular installments, or the bond holders can demand either the back payments or the entire debt, on the spot. This means, they could empty the General Fund, and every other fund the city holds, except the Pension Stabilization Trust. The PST is the only truly, legally restricted fund the city has established. All other funds, from the streets fund to the park fund to the sewer fund and on, are available for allocation to the General Fund.
The proponents keep trying to tell us this is a fool proof scheme. They won’t acknowledge the fact that the market can turn ugly on a dime. Really ugly. Pension systems around the country are making some really desperate, stupid investments, according to this article from the Reason Foundation.
In the United States, public pension funds, which have an average investment return target of 7.25 percent, will likely struggle to meet those investment targets and could be severely impacted by plummeting interest rates. Without changes to pension plans’ assumed rates of return, many public pension systems will see an increase in debt.
Unfortunately, many public pension plan managers are not interested in adjusting their investment return targets to realistic levels at this time. Instead, they are seeking riskier, potentially higher-yielding investments in an effort to make up for depressed interest rates and hit their targets.
What’s super frustrating is the double talk. Our mayor, Andrew Coolidge, acknowledges that CalPERS is doing horribly, but tries to assure us that our staff can pull of successful investments. In this market?
According to this article, government agencies’ share of the UAL is about to go up again, due to risky investments. For example, “New Mexico’s Educational Retirement Board (ERB), which serves the state’s teachers, is one such plan that dedicates roughly a quarter of its portfolio to fixed-income assets. Within New Mexico ERB’s fixed income-investment allocation, 7 percent of funds go to emerging market debt, which is essentially sovereign bonds issued by countries classified by the World Bank as lower-to-middle-income to upper-middle-income. This includes countries such as Brazil, India, and Nigeria.”
“Even though emerging market debt carries much higher yields that are attractive to pension funds, those benefits can be outweighed by enormous risks since several of these countries have defaulted on their debt in the past. Due to this risk, public pension investment allocations to emerging market debt have historically been used sparingly in pension fund portfolios. However, in recent months, pension fund managers have signaled a growing appetite for allocating more assets to this asset class.”
As more pension funds take on these risky investments, more will fail, debt will increase, and be passed on to government agencies. In California, CalPERS has a horrible record of corruption, with various board members leaving in disgrace over manipulating the public trust to their own gain. Most recently an investments advisor left after he was found to be using CalPERS funds to buy stock in funds he owned. CalPERS is also floundering under huge board member salaries – here’s a thought – CalPERS has it’s own pension deficit.
Instead of screaming for investigations and reform, I think those public employees who stand to get pensions are getting desperate to make sure the pension systems are funded. I just can’t decide whether our council members are being led by the nose or if they are coming to the table knowing exactly what they are doing.
Crane gives us the history of collective bargaining in California, “which endowed police and other local personnel with the power to bargain collectively with the governments that employed them, handing political power over local budgets to government employees who were the principal beneficiaries of those budgets…”
Established by Ronald Reagan in 1968, this agreement “created a piggy bank to help finance GOP legislators.” But of course, it works for whichever party is in power, son when he became governor in 1975, Jerry Brown extended this agreement to school teachers and employees. This has resulted in elections controlled not by the Russians or the Iranians but by the public employee unions.
In Chico the biggest contributors in every election are the SEIU (management) and the CPOA (cops), with the IFFA (firefighters) coming in a close third.
In my opinion, this relationship is completely inappropriate – council approves hires, salaries, and benefits, sets staffing levels, and then accepts huge campaign contributions from the very people who benefit from their actions. I can’t believe the voters don’t see the conflict of interest in this system, but I’m guessing, most people don’t know. Everybody’s got their panties in a knot over the notion that Russia and Iran have influenced elections, but they don’t see corruption that is as plain as the nose on their faces.
So City of Chico and County of Butte, both of whom have outrageous pension deficits, are considering Pension Obligation Bonds. This action would forever place the burden of the pension deficit – created by the ridiculous salaries, overly-generous benefits, and completely unrealistically low employee contributions approved by our “local leaders” – on the backs of the taxpayers.
Instead, I suggest we dump collective bargaining – this could be done by city ordinance, and could be accomplished by a petition of citizens. Another option would be a city ordinance that cut the union PAC donations down to the same level as individual donations – about $1,000 per candidate.
Crane agrees on point #1 – “The antidotes are to repeal collective bargaining rights for government employees or to offset these voters’ power with persistent support of our political parties from donors who care about the general interest (full disclosure: Govern for California provides such support), not to whine about one-party dominance.“
Right now, as Doug Ose has said, “we are going backwards” as a state. Over-taxation has made housing too expensive, while infrastructure all over the state is failing. Chico Mayor Andrew Coolidge acknowledges the poor condition of streets in Chico, but advocates a POB, which would suck all the money out of the General Fund, which is made from allocations out of all the other funds – the streets fund, the park fund, the sewer fund, etc. You get the picture every time you drive or bike around town, or open your new sewer bill. Did you get the picture last night when council voted to INSTITUTE A FEE FOR USE OF UPPER PARK?
Wake the hell up Chico, and write a note to your mayor – that’s andrew.coolidge@chicoca.gov
A popular topic among academics is “intergenerational equity”. One explanation, taken from a box of laundry detergent: “Iroquois philosophy says that the decisions we make today should result in a sustainable world seven generations into the future.”
An old example of intergenerational equity would be “debtor’s prison”.
“Since the first recorded debt issuance in Sumaria in 1796 BC,[10] one of the penalties for failure to repay a loan has been debt bondage. In some instances, this repayment of financial debt with labor included the debtor’s children, essentially condemning the debtor family to perpetual slavery.”
Can you even imagine your kids being dragged off to jail because you can’t make your house payments? Apparently it still happens in other parts of the world.
“While slavery is illegal in all countries today, North Korea has a policy called, “Three Generations of Punishment”[11] which has been documented by Shin Dong-hyuk and used as a moral paragon of punishing children for parents’ mistakes.”
You think Americans are any better?
“Stanley Druckenmiller and Geoffrey Canada have applied this concept (calling it “Generational Theft”[12]) to the large increase in government debt being left by the Baby Boomers to their children.”
And part of that debt is the retirement system. Here they are talking about Social Security, which we’ve heard for years is failing because it is not funded adequately. “What?” you say. “Anybody who has a job pays into it, it must be funded!” Hold onto your hat for this declaration.
“The U.S. Social Security system has provided a greater net benefit to those who reached retirement closest to the first implementation of the system. The system is unfunded, meaning the elderly who retired right after the implementation of the system did not pay any taxes into the social security system, but reaped the benefits.”
Sound familiar? Well, maybe you didn’t know – our former city manager, Tom Lando, receives about $155,000/year in pension, for which he paid NOTHING. Until 2013, when Mark Orme agreed to pay a paltry 6%, the city made the “employer paid member contribution”. Meaning, the taxpayers footed the bill for pensions in excess of $100,000 a year, for people who paid nothing. And now, those people, including Orme, only pay 9%. Their underlings – those hired after 2013 – are required to pay more. It’s a big pyramid scam – the members at the top of the pyramid get the money paid by the bottom rung. Here’s an analogy of the Social Security system that is also true for the public pension system.
“Professor Michael Doran estimates that cohorts born previous to 1938 will receive more in benefits than they pay in taxes, while the reverse is true to cohorts born after. Further, he admits that the long-term insolvency of Social Security will likely lead to be further unintentional intergenerational transfers.”
Just substitute “CalPERS” for “Social Security” and there it is – the “intergenerational transfers“. A nice way to say “stealing candy from babies.” A nice way to say, “condemning your children to debt, poverty and enslavement to the system.”
It’s time for young people to realize what is going on. The pension system is not only a pyramid, it’s an upside down pyramid. There are too many taking out that never paid in, and too few paying too little. The system will collapse within the next 10 years unless older pensioners agree to take less, and younger pensioners agree not only to take less but to pay more. The taxpayers cannot sustain this system. Like ex Chico city council member Randall Stone said – this burden should be born by the employees, not the taxpayers, who have nothing to gain. Especially since all the money is going to the pension deficit, leaving nothing for services.
But I’m not too worried – I heard about this concept from my son, who told me, the biggest problem facing young people today, “is the pensions…“
Last week Chico City Council and Staff confirmed my suspicion that they are using closed meetings to run Staff’s Pension Obligation Bond by the taxpayers. Without any notice to the public, and only 46 members of the public participating via Zoom, they combined two agenda items. The POB was supposed to be discussed as Item 5.12, but they summarily decided to discuss and vote on it during the Item 5.1 – Scott Dowell’s 5 year projection report.
While the POB was a small part of the 5 year projection, I don’t think it was appropriate to just move forward with the 5.12 discussion. Here’s the thing – I read the agenda ahead, and planned to participate in the 5.12 discussion. When I tuned in, there was no 5.12 discussion, and no explanation why. So, I got cut out. I don’t think that’s okay.
So I asked the clerk what happened to Item 5.12. She responded:
The POB was added to the 3/2/16 agenda (with items carried over from the 2/16/21 agenda). Because the POB was tied into with 5 year projection (Item 5.1.), staff discussed the items together.
Council took the following action: A motion was made by Councilmember Morgan and seconded by Councilmember Denlay to authorize staff to continue exploring the CalPERS Unfunded Accrued Liability (UAL) restructuring including a legal validation process, applicable public outreach and analysis for possible pension obligation bonds, with it noted that this action does not commit the City to move in this direction. Staff was also requested to bring back more information to the Council regarding the process as it becomes available. The motion carried by the following vote:
I was just floored. Another smooth move under cover of COnVID.
And of course the report is misleading.
“Staff is requesting approval to continue exploring the CalPERS Unfunded Accrued Liability (UAL) restructuring including a legal validation process, applicable public outreach and continued analysis. This process would take approximately four months and prepare the City should City Council decide to issue POBs in the future.”
It’s not a “restructuring,” it’s NEW DEBT. The “legal validation process” is completely administerial – no ballot measure, no voter approval. “Applicable public outreach“? Here’s what it says in the report: “Continued public education and information shared through reports to the Finance Committee and other public forums.” Really? There are no “public forums” right now, only Zoom meetings, with poor reception and limited participation. And that “continued analysis” is going to cost “$10,000 – $20,000”. That in addition to $25 – 30,000 for the “legal validation process“.
Staff’s report also recommends “initiate a legal validation process” as Step 1, while “Continued public education” is Step 3.
Public education? Shouldn’t it be “public input”?
So you see this whole thing is being ramrodded in as quickly as possible in closed meetings because they don’t want the public to find out what they’re really doing.
Normally this is where I would tell you to write to or call your city council rep, but I keep hearing back from folks who have tried that, and got no response. I can’t report any better from my rep Kasey Reynolds. And you see the vote above – unanimously idiots. So, I would say, don’t waste your time trying to contact them directly, write a letter to the editor of either the Enterprise Record or the News and Review, or both.
And if you really want to get your point across, you have to stick your neck out there a little. Do your errands in a yellow vest, with “NO NEW TAXES FOR CHICO” scrawled across the back. Place a small sign in your car window saying same. If you have windows on your home facing the street, make 8 x 11.5 signs and post them in those windows. Get some blank postcards, write NO NEW TAXES FOR CHICO on one side, and send it to your rep via snail mail to their home.
Arlo Guthrie said, “One guy is crazy, two guys are (bleeep!), but three guys – THAT’S a MOVEMENT. And he’s right. They can ignore one or two of us, but I’m telling you, three, four, five more, and they start to pay attention.
I will remind you until I’m blue in the face – if we let them sell these Pension Obligation Bonds, we are on the hook for the pension deficit FOR-EV-ER, not to mention, the new debt. Meanwhile, we will watch our streets and infrastructure deteriorate to 3rd World standards. As their investments fail, they will bottom out first the General Fund, and then all the other funds, to service the bonds and pay the still growing Unfunded Pension Liability. As you see in the report referenced above, Staff suggests “Projected costs [for the POB] are as follows and would come from the General Fund: • Legal validation process: $25,000-$30,000. • Public education and continued analysis by a municipal advisor: $10,000-$20,000.”
So don’t wait until it’s too late, and then complain – COMPLAIN NOW!
I know, Chico First is a more fun website. I know, Rob Berry is more the action type, chasing Scott Huber around with a camera. Unfortunately, that circus is distracting people from something they should be paying attention to – that boring old Pension Obligation Bond that Mark Orme is currently trying to end-run around Chico voters/taxpayers.
Luckily there are other eyes on council right now, folks who are educated and number-savvy and also hip to this scam. A friend of mine recently contacted council to discuss his concerns about the POB, and he got a response from his district representative, Mayor Andrew Coolidge. My friend told me I could use Coolidge’s response for a letter to the editor, so I did. Coolidge is either stupid or a liar – you decide.
Chico Staffers are asking council to implement a Pension Obligation Bond. Recently a friend expressed his concerns to Mayor Andrew Coolidge, who responded, “That bond is basically financing the city’s obligation (around $147 million to cal pers) at a lower interest rate so it can be paid off over the long term, rather than on Cal Pers rollercoaster payback schedule.”
That is not true. A POB is new debt. The consultant explained, the city would invest the borrowed money in the stock market, hoping for return enough to pay both the bond debt and the CalPERS debt. The consultant speculated an interest rate of 3 – 4% on the POB, compared to 7% paid to CalPERS. But, the consultant was clear – if investments don’t do well, then we still owe CalPERS, and we also owe the bond holders.
Government Finance Officers Association says POBs are not worth the risk. But Coolidge, without really understanding what he is talking about, says, “I do believe faced with this huge burden the city may wish to pay it through a bank with minimal interest rather than to a state fund (cal pers) with an awful history of robbing from taxpayers.”
That is not how a POB works, we will still have to pay CalPERS. I don’t think any member of council really understands POBs, they are trusting Staff, who have everything to gain. Meanwhile, the taxpayers, who will be permanently on the hook for the pensions, are left out of the conversation.
Contact Coolidge, and your district representative.
Sorry to be a broken record these days, but I can’t emphasize enough that this Pension Obligation Bond that Staff is trying to force through will tank our town. While there is a complicated mess going on in our town right now, all related to poor management, the POB is the worst thing coming at us right now. I’ll repeat – this bond would cement the taxpayers into paying the pension deficit created by Staff. Meaning, all our resources would be drained into paying the deficit by way of the bonds – not to mention, a proposed sales tax increase. The POB comes before any other “obligations” – like roads, park, sewer and other infrastructure. And, as the economy tanks, the revenues will turn into debt, the biggest debt the city has ever taken on. Don’t be a dupe – the sales tax measure and the “roads” bond are just part of the exhaustive scheme to finance the POB.
Our biggest financial problem is Staff and their unsustainable salaries and benefits. Instead of trying to control employee costs, City Manager Mark Orme and Financial Services Director Scott Dowell have convinced council that we can just put it all under the rug with a POB.
I’ll guess I’ve done more research on this topic than any member of council. I’ve tried to share what I’ve found – here’s an article I sent to Kasey Reynolds and Sean Morgan. I chose them because I’ve had a pretty good rapport with them in past, and the other night when they voted YES on the sales tax increase and the “roads” bond, they at least tried to fake wanting to vote NO. So, I think they are malleable – you know, like metal – if you put enough heat on it and beat it with a hammer, you might get what you want.
“In the recent years, the Government Finance Officers Association (GFOA) came out with a stern advisory for local and state governments to NOT issue pension obligation bonds (POBs) to meet their unfunded liabilities and made a case for them being ‘complex instruments that carry considerable risk.’ It’s also important to note that some of the large municipalities that filed for bankruptcies in the United States had some exposure to pension obligation debt – including the City of Stockton and City of San Bernardino – in the years leading up to their insolvencies.”
Here’s an important point I want to come back to later –
“Primarily, these pension liabilities are based on a few factors: retirement age, mortality, projected salary increases attributed to inflation, across-the-board raises and merit raises, increases in retirement benefits, cost-of-living adjustments, valuation of current assets, investment return and other matters.”
For now I’d like to look at how exactly these bonds work and why the risk isn’t worth it for Chico.
Right now Staffers, especially Mark Orme and Scott Dowell, are trying to mislead council as to the risk of this scheme.
“One of the biggest challenges and largest variables in the aforementioned list of factors is the investment return on the pension portfolio; this single variable is also responsible for creating the large unfunded liabilities for many of the local governments.”
This is the risk that was ignored in the late 1990’s, when CalPERS said they could fund the outrageous pensions by playing the stock market, and here’s what happened:
“For example: a pension fund assumes an investment return of 7% for the year and bases its actuarial pension obligations for local cities and counties; however, the financial markets had a terrible year and the pension fund only generated 2% returns – this means that the 5% gets added to the unfunded liabilities portion for cities and counties – because that money, originally expected to be generated through investment returns, is still needed to fully meet the pension obligation for city and counties.”
On the one end, CalPERS was making bad investments – we see now, many of those were based on bribery and personal gain. On the other end, CalPERS kept promising better returns, and cities, counties and other local entities all over California started making unsustainable agreements with employees, giving across the board salary increases and overgenerous benefits packages. Even as CalPERS has failed again and again, government agencies like City of Chico have ignored the crisis, continuing to agree to over-generous salaries and perks, even lately creating three new management positions, with salaries over $100,000/year.
Here’s an older article (2013) that details “CalPERS’s three-decade-long transformation from a prudently managed steward of workers’ pensions into a highly politicized advocate for special interests.”
It was at long before that – early 2000’s – when former city manager Tom Lando made an MOU (memo of understanding) for Chico employees (including himself) that “attached salaries to increases in revenues, but not decreases…” That MOU resulted in Lando’s salary going from about $65,000/year to over $130,000/year. In retirement, he is now making about $155,000 (that’s where the COLA comes in).
The gentleman mentioned in that article, Alfred Villalobos, committed suicide about a year later over allegations that he had been bribing/accepting bribes to unload bad stocks. Just a year ago, another scandal led to the forced resignation of Chief Investments Advisor Ben Meng. Meng resigned Aug. 2019 after questions arose about why he did not recuse himself from decisions by CalPERS to invest in private equity funds in which he was holding stock! CalPERS made a more than $1 billion investment in April 2019 in a Blackstone fundMeng owned stock in, and Meng never recused himself.
Meng’s successor, Henry Jones, was also asked to resign, critics accusing him of concealing ethics violations made by Meng. Jones denied everything, saying, “CalPERS has known about questions regarding Ben’s Fair Political Practices [Commission] disclosure filings...”
So there it is – Meng disclosed his investments in those private equity funds, but the board still not only appointed him Chief Investments Advisor, but approved a $1 billion investment in those same equity funds.
So, CalPERS is a total disaster of fraud and corruption, and everybody’s known it for at least six years,, but the city of Chico didn’t change a thing, just kept doling out higher salaries and refusing to raise the employees’ share of the cost to a sustainable level.
Let’s go back to that first article – “Primarily, these pension liabilities are based on a few factors: retirement age, mortality, projected salary increases attributed to inflation, across-the-board raises and merit raises, increases in retirement benefits, cost-of-living adjustments, valuation of current assets, investment return and other matters.”
Chico makes all of the above mistakes, failing to manage employee costs. I like to refer to this bit from “Two and a Half Men” –
Yes, Charlie is an idiot. Get what I’m saying?
This is how the city of Chico spends money. New Public Information Officer? Homeless Coordinator? Another management position for Public Works? Complete with inappropriate shoes? All three positions created – not filled, created – in the last year, by Mark Orme, at salaries over $100.000/year.
Does this sound like prudent management to you? Frankly, I think the first thing we need to do, is get rid of Orme, and send his buddy Dowell right out the door behind him.
And then, in 2022, we should probably dump Reynolds and Huber. Because they just signed on to the sales tax increase and the “roads” bond. Coolidge already alluded to those revenues being used to service the POB. Another note from municipalbonds.com:
“Furthermore, the taxable form of pension debt is often secured by some sort of revenue sources, like sales tax or property tax, which means that the issuance of this debt cuts into a municipality’s debt capacity that could be used for other purposes. Issuing taxable debt to fund the pension’s liability increases the jurisdiction’s bonded debt burden, and potentially uses up debt capacity that could be used for other purposes. Also, the taxable form of debt is often issued without a call option, which makes it hard for a municipality to refund the debt at a lower interest rate in the future.”
Remember what Coolidge said at Tuesday’s meeting – “it’s open for discussion… what size bond and what percentage of that sales tax would go for a road bond…”
Orme, Dowell, and Coolidge, are knowingly trying to dupe us into thinking that sales tax increase would be for public safety, and the “roads” bond would be for roads. “Special” taxes, oh yeah!
This Tuesday Chico City council has an over-full agenda. I notice a lot of the remarks on Engaged Chico question the timing of some of the items, with meetings closed to the public. It seems like they’ve packed the agenda with stupid crap like a Downtown card room, after promising us they’d only discuss “essential business” during the shutdown.
Nichole Nava sums it up, “This topic and a couple of others should be tabled until the E[xecutive] O[rder] has ended and FULL public participation resumes. Continuing to place items such as this one on the agenda while still under the PHE is not the responsible course of action.”
Hidden deep in this mystery meat agenda are two tax proposals from Andrew Coolidge. Coolidge is proposing not only a sales tax increase for “police and fire,” but a bond for “road improvements.” I feel this agenda has been packed for a reason – they want to distract us from the tax increase proposals they are trying to run under the wire.
If you read the financial reports attached at the end of the agenda, you see that the city is collecting more revenues every year, and paying more toward the UAL every year. This year they paid out $11.4 million, just in “catch-up” payments, That doesn’t include the regular payroll payments they allocate out of each department budget. But Coolidge wants these measures to guarantee the POB that comes up later in the agenda. All the while the UAL is growing out of control because council has failed to control employee costs.
Hidden even more deeply in the casserole – Item 5.12 – is a request from City Manager Mark Orme (“Staff”) to move forward the Pension Obligation validation process.
“Staff is requesting approval to continue exploring the CalPERS Unfunded Accrued Liability (UAL)…”
Well, that’s interesting – “staff is requesting approval…” Meaning, Mark Orme. Orme knows they need that POB before CalPERS ups the ante again. And, he knows they need the sales tax increase and a bond to cover the payments on the POB. This is a desperate scheme, and we’re the ones who will be left holding the bag for this bond. If we don’t approve the sales tax increase and Coolidge’s bond, the POB payments will bottom out our budget. But even if we do approve those new taxes, we will not get street/road repairs, we will not see more police, but the cops and the rest of the employees will be guaranteed their overgenerous pensions.
Right now the city is bargaining with the Chico Police Officers Association for a new contract. Instead of asking them to pay more toward their generous pensions and benefits, council is turning the stick on the rest of us. The public safety groups – CPOA and the International Firefighters – only pay 15% toward pensions of 90% of salaries exceeding $100,000/year. That’s ridiculous – $15 for every $100 they expect to collect for sitting on their asses in retirement. But here’s the funny thing – they also pay more than any other bargaining group. Management, with the highest salaries, pay the least – 9%. They expect us to pay their salaries now, and then pay them again, with Cost of Living Increase!
please do. This bond will tank our budget. The sales tax increase and (yet another!) bond on our homes will raise the cost of living in Chico even further, just in case things are expensive enough for you already.
They raised the cost of our trash service 19% – have you seen any improvement in the street in front of your house? Coolidge is bullshitting us again, just say NO.
Every three months I open my garbage bill and get pissed off.
First of all, it took me the first 5 years to get Waste Management to stop charging me for the yard waste bin. In the very beginning of this forced deal, I told them I wanted to opt out of the $6+ charge for a yard waste bin that I don’t need. They agreed, but I kept seeing the charge on the bill. Rather than beating my head against the wall trying to contact them via their website or phone, I just scribbled a correction on the bill and made the check out for the correct amount. For five years. That finally worked, and as of January, 2020, they finally got it right, I stopped seeing that charge.
But I also noticed, they were raising the rates slowly but surely, every bill seemed different. So when I sat down to pay my January 2021 bill, I dug out the January 2020 bill, and yes, rates are up. A 32 gal trash bin has gone from $52.89/quarter to $62.79/quarter, just over the past year. That’s an increase of 19%.
Which led me to do more math. I looked at my old Recology bills. We had Recology for 10 years, and they NEVER raised their rates. In fact, they had a fuel surcharge that fluctuated with the price of gas – meaning, it actually went down occasionally. Their average charge per quarter was about $82, for a 96 gallon trash bin, or about $27/month. Now I pay $20+ for a 32 gallon bin?
In fact, my total bill, for a 32 gal and a 64 gal, is $134/quarter, or $45/month. Pay attention – I used to get a 96 gal bin for $27/month, now I pay $45/month for two bins totaling same. That is a 60% increase.
I’ve been talking about the franchise fee the city gets from the haulers – as of fiscal year June 2020, $1,980,313. That’s almost $2 million dollars, of YOUR MONEY. You paid that in extra fees. For what? Well, I don’t think I’m the only one who remembers staff and council telling us the money would go to fix our neighborhood streets. Former City Manager Brian Nakamura told us “too many” trash trucks were destroying our streets, and that he felt they should pay for that. He led us to believe the money would be dedicated to the streets, and council members, including Andrew Coolidge, sat by and let him do it.
The first year the money was used on the section of Cohasset Road leading to the airport. Every year since, it’s been dumped into the General Fund, where it is used at the whim of council. Can you imagine what $1,980,313 would look like on the street in front of your house? Or maybe give Vallombrosa more than a patch job? Maybe upgrade the streets around the college beyond Third World Country?
You know, the city also gave Waste Management a contract to empty the trash cans in the park, so they run those behemoths around the park roads once a week – a job that used to be done by a city employee with a pick-up truck. So maybe council should use some of that franchise money to fix South Park Drive before it falls into the creek. Ya think?
Let’s write to council and tell them that Waste Hauler Franchise Fee needs to be spent on neighborhood streets. Let’s start with our new mayor, Andrew Coolidge – that’s andrew.coolidge@chicoca.gov
While you’re at it, tell him what he can do with his “roads bond” and his sales tax increase.
Almost a month ago, on December 13, I contacted my Chico city council representative Kasey Reynolds to ask her about the progress in removing transient camps in public spaces around town. We’d been having a conversation about the situation, and I forwarded her a conversation between Rob Berry and Chico PD officer Scott Zuchin regarding the DA’s unwillingness to prosecute City of Chico Municipal Code violations.
She responded, same day, “I will take a look at it for sure. However our City Attorney was meeting with the County and DA on Friday to talk about our newly passed resolution and the prosecution/enforcing aspect of it. I have not talked to the Atty since the meeting so not sure the outcome. I’ll find out and let you know.”
I waited until the 22nd, then, realizing it was nearly Christmas, I wrote her again. I asked about the Shelter Crisis Designation, asking “1) if that’s still in effect, 2) if we are still receiving a grant for that designation, and 3) if so, where does the money go (into the General Fund?). I’ll add, 4) do we still get a grant for consolidating services at the fair grounds?”
I also reminded her that she had previously promised to get back to me regarding the conversation our city attorney had with the county DA.
As of today, 1/11/21, I have had no response from Reynolds. I know she’s busy – you realize, candy and ice cream are considered an “essential business”, so her shop is open.
We’re open and ready to scoop your favorite flavors and pack your favorite candies! Stop by the shop until 10:00pm to pick up your favorite sweet treat and see all the new renovations We will now be open regular hours, Monday through Friday 10am-10pm, Saturday & Sunday 11am-10pm
Well, isn’t that just nice!
But the same woman thinks it’s okay for council chambers to be CLOSED TO THE PUBLIC? You can run out and grab yourself a SCOOP OF DIABETES, but forget about participating in your local government, especially when they are discussing a tax measure that does not require voter approval.
So, instead of trying to contact my “representative” again, I wrote a letter to the newspaper. Hope you will do same.
On January 5, while Chico City Council prepared for another closed meeting, Shasta County Supervisors Les Baugh and Pat Jones opened their meeting to the public. Residents were invited inside to redress their grievances, no mask required.
Meanwhile, Chico City Council and Staff continue to hold the public out while they discuss their Pension Obligation Bond. It’s hard to believe we have a “conservative” majority on our council – 5 people voting unanimously to raise taxes? Without voter approval?
That’s right, the consultant reports this bond requires no voter approval. This bond, he explained, requires only “judicial validation”, a purely administrative process. In fact, the consultant assured council, “they all get approved, it’s just a matter of time.”
Staff reports the UAL has grown 43% over 5 years, even while making bigger payments toward the deficit every year, this year over $11 million. Staff blames poor CalPERS investment returns, but the real reason is drastically unrealistic employee shares, just 9 – 15%, for pensions of 70 – 90% of salary. The situation is exacerbated by incredibly generous salaries, including three new hires in the last year at salaries over $100,000.
The payments for both CalPERS and the bond service will be appropriated by percentage from all city funds. But POB revenues are restricted to paying the UAL, because, as finance director Scott Dowell has said, “otherwise we’d be tempted to spend it on needed things…” He means, infrastructure maintenance and public safety – the needs of the citizens.
Employee demands have officially superseded the rights and needs of the public.
We will now be open regular hours, 
Chico Taxpayers Association 