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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! 

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

Brown Act suspended, public cut out of meetings, Chico is not ENGAGED!

5 Apr

Here’s an article from the Yuba-Sutter Territorial Dispatch that I can’t find in the Enterprise Record:

Parts of Brown Act suspended

https://www.eterritorial.com/16582-parts-of-brown-act-suspended

On March 17th, Governor Newsom issued the second of two Executive Orders conditionally suspending certain Brown Act provisions to allow local agencies to hold public meetings “virtually” through teleconferencing, without any physical gathering of people. (The first Executive Order had required agencies to provide at least one physical location from which members of the public could participate in the meeting. The March 17th Order eliminated this requirement.)

Legislative body meetings must still be publicly noticed in accordance the Brown Act, and the agency must provide a means for the public to observe the meeting and provide public comment electronically or telephonically. (For example, livestreaming the meeting and accepting comments by email, similar to a webinar, or allowing the public to dial into the meeting conference call and be “unmuted” during public comment.)  The opportunities for public observation and participation must be included in the meeting notice, and the agency is also required to establish a process for receiving and resolving any requests for reasonable accommodation to allow accessibility to persons with disabilities.  These provisions will remain in effect “during the period in which state or local public health officials have imposed or recommended social distancing measures.”

The Executive Order admonishes public agencies to “use sound discretion” in applying these provisions, and counties would be well-advised to defer controversial matters that are not time-critical until normal Brown Act meetings can be resumed.

This is just a news release – the Territorial Dispatch has suspended a lot of their publishing operations, but still managed to put this out. Meanwhile, the ER continues to pump out stuff like this:

Coming face-to-face with our newsroom reality | Editor’s notes

Again, Wolcott brags about his staff. He references back to the Camp Fire, as if he knows anything about the Camp Fire that somebody else didn’t tell him. Got any real news Mike? Got any journalism down there? 

Meanwhile Chico manager turned coronavirus czar Mark Orme continues to run city business under the CVBS radar. 

Is the public concerned with the April 7 agenda? Doesn’t look like it – here’s the latest post from Chico Engaged!

“derek bow at April 04, 2020 at 9:56pm PDT

this is great info thanks so much for this! oahulifecoach.com”

This is a spam ad in response to a post about suicide prevention, which is not on any upcoming agenda.  The whole post is full of spam. Look for yourself. 

https://chico-ca.granicusideas.com/ideas/march-for-the-22

When you look at the site you’ll see most of the latest posted “ideas” are spam ads for stuff like “work at home”, hair care, window cleaning, you name it. Are we really supposed to believe this site is an appropriate or practical way to reach our council representatives? 

Write to your council and tell them the meetings need to stop until the CVBS is officially over. Tell them to take control away from Mark Orme, who is using CVBS to keep the public OUT of the conversation. He doesn’t want to hear what we think of his pension or his sales tax increase measure. 

Mayor Ann Schwab ann.schwab@chicoca.gov

Vice Mayor Alex Brown  alex.brown@chicoca.gov

scott.huber@chicoca.gov

karl.ory@chicoca.gov

kasey.reynolds@chicoca.gov

sean.morgan@chicoca.gov

randall.stone@chicoca.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.

The CVBS will likely be over by November – but none of us should forget how we were treated by the government

3 Apr

After the last ridiculous response I got from Chico City Mangler Mark Orme, I decided to take my question to the full council. I sent them the conversation, and I also told them – they need to postpone the meeting until the CVBS is over. None of us should forget how Staff has used the hysteria to shut the public out of public business, and we shouldn’t forget that council went right along with it. 

I have asked staff but they have not been able to answer my question – what happened to $1.8 million in “unanticipated” sales tax revenues that were reported in the March 17 agenda? The April 7th figure is off by that much. 

Below is our conversation.   

I also would like to say that nothing in this agenda seems “essential” enough to suspend The Brown Act. You should reschedule the April 7 meeting until such a time that the public is able to attend the meeting. 

Alex, you were so busy reading emails at that last special meeting that you couldn’t pay attention to the conversation at hand, you had to ask people to repeat themselves several times. I have to wonder how many of the rest of you read the public’s emails – how can you do that and have a conversation on the dais? And then to tell the public that their comments on Chico Engaged would be read by council members when they will really only be read and tallied by the clerk is misleading. 

The April  7 meeting should be postponed until after the governor’s orders are rescinded. 

Juanita Sumner, Chico Taxpayers Association

City $taff putting me off about that “unanticipated revenue” – I’ll just keep asking

2 Apr

When most people find out I don’t have a “job”, they ask the stupidest questions about what I do all day. I would like to say, “I sit all day watching Movies! tv and eating from my Russell Stover sampler. See this ass? It’s made completely out of chocolate and soft centers…”

Cause when I tell people what I really do all day, they think I’m either lying or nuts. And I don’t blame them, cause sometimes I get into some pretty weird conversations with City of Chico staffers. You ask a simple question, know what I mean?

I signed up for the notification list for Silly Council, so every two weeks I get the agenda for the upcoming meeting. Clerk does not have to post the agendas until 72 hours ahead but she’s pretty good about getting them out a week or so ahead, most weeks. 

Because of the CVBS, (coronavirus bullshit), they are again having a “special meeting” on April 7, no public allowed. We are again held off by the forehead, expected to watch the meetings at home and comment online. Even after that last disaster of a meeting, during which Alex Brown was so preoccupied reading her emails (at least that’s what she said she was reading on her little device)  that she had to constantly ask other members of council and staffers to repeat themselves.  So she’s  not really paying attention, and I’m guessing the other council members are doing no better. 

At a real meeting, the public is present and everybody gets their own opportunity to talk, you’re not being compromised to half or less of council’s peewee attention span. 

Special meetings are supposed to be for emergencies, but that is a subjective rule that gets corrupted by many agencies. CARD, for example, wanted to have a conversation about the failure of Measure A without having to suffer the public, so they called TWO emergency meetings in two days, with very little notice, only a week ahead of their regular March board meeting. What a crock. 

So Mark Orme is using CVBS to call “special” meetings at which the public is not allowed. Looking at the latest agenda, I have to ask, where’s the fire? 

http://chico-ca.granicus.com/GeneratedAgendaViewer.php?view_id=2&event_id=333

First item – approve the list of projects funded by the gas tax, SB1. That’s interesting, you really should read this report, but it’s hardly an emergency in the face of a pandemic. When has $taff treated street repairs like an emergency? 

Second item – weed abatement? Really? 

Third Item – I don’t really understand it, but I think I see enough to know, it’s not an emergency.

“The Butte County Affordable Housing Development Corporation (BCAHDC) is a non-profit
instrumentality of the Housing Authority of the County of Butte (HACB), and received a City loan of
federal HOME funds and a City grant of federal CDBG funds for the Cordillera Apartments in 1998.
The HACB seeks to re-finance and improve the five-building, 20-unit Cordillera Apartments property
consistent with its own portfolio of other properties. Including the Cordillera Apartments, the HACB
has bundled six (6) properties for re-finance, rehabilitation, and leverage purposes, under a proposed
bond issuance. In order to accomplish this most efficiently, the Cordillera property needs to be moved
to HACB possession, so that the public bond issuance can be applied.
The HACB will assume all obligations under the City Loan and Regulatory Agreements with this
assignment and assumption.”

Fourth Item – approval of minutes? You have got to be fucking kidding.

And that’s the Consent Agenda – meaning, no discussion unless a member of council or the public “pulls it” for discussion.

The regular agenda is where it gets very questionable.

Item 5.1 CONSIDERATION OF APPROVAL OF SUPPLEMENTAL APPROPRIATION/BUDGET MODIFICATION NO. 2020-ASD-006

The City is projecting to receive unanticipated revenue over budget totaling $1,230,000 during the fiscal year ending June 30, 2020.  The City Manager requests consideration and approval of a Supplemental Appropriation/Budget Modification to the FY 2019-20 Budget for use of these one-time funds. (Mark Orme, City Manager)

Recommendation : The City Manager recommends the City Council approval Supplemental Appropriation/Budget Modification No. 2020-ASD-006.

This is very similar to  the item from the cancelled March 17 meeting.

5.3  CONSIDERATION OF APPROVAL OF SUPPLEMENTAL APPROPRIATION/BUDGET MODIFICATION
NO. 2020-ASD-006

The City is projecting to receive unanticipated revenue over budget totaling $3,050,000 during the fiscal year ending June 30, 2020. The City Manager requests consideration and approval of a Supplemental Appropriation/Budget Modification to the FY 2019-20 Budget for use of these one-time funds. (Mark Orme, City Manager)

Recommendation: The City Manager recommends the City Council approval Supplemental
Appropriation/Budget Modification No. 2020-ASD-006.

Nearly word-for-word, except one major difference – the figure changes by over $1,800,000. One minute it’s $3,050,000 and less than a month later it’s $1,230,000. 

I think it’s pretty natural and reasonable to wonder, where did that other $1.8 million go? But there’s no explanation in the report either. But there is another discrepancy between the two agenda reports that sheds some light – 

3/17 – “$2,550,000 in additional sales tax revenue, $400,000 additional property tax in lieu of vehicle license fees and $100,000 additional short-term rental transient occupancy tax.”

4/7 –  $730,000 in additional sales tax revenue, $400,000 additional property tax in lieu of vehicle license fees and $100,000 additional short-term rental transient occupancy tax.

Well, there it is – a difference of $1,820,000 in the “additional sales tax revenue”. 

So, was that a mistake? You have to wonder. Here’s what happened when I asked $taff. 

NOTE: There’s also very marked differences in the list of proposed projects to be funded out of this money, but that’s another blog. 

I emailed Scott Dowell first: 

“Hello, My question regarding the 4/7 agenda,  Item 5.1 – what happened to the $3,050,000 reported in the March 17 agenda? Thanks, Juanita Sumner”

Dowell’s response:  “Juanita. The previous agenda item on 3/17 was replaced by this item in the 4/7 agenda.  No action was taken on the 3/17 item. Scott”

That was not an answer, so I asked him again.

“thank you,  Let me get this straight, I hate to spread misinformation: 

  •  Is the $1.2 million on the Apr 7 agenda new money? Is it a separate  from the $3,050,000 mentioned in the Mar 17 agenda? 
  • or is it part of the $3,050,000 from Mar 7 ? 
  • if so, what happened to the other approx $1.8 million from the Mar 17 agenda item? 
  • if not, what happened to that $3,050,000?

I hope my questions are  clear – thank you for your anticipated cooperation in answering my concerns. 

Juanita Sumner”

Dowell’s response #2: 

“Juanita.  In summary.  The original request of $3,050,000 was removed and replaced by a new request of $1,200,000.  Council is only being asked to review the $1,200,000 request.  Scott”

This man is very frustrating, he’s evasive as a rabbit. But you know, a  good old dog has patience, and that’s what I am, a good old dog. So I asked him again.

“I’m sorry, you did not answer my third question, what happened to the other 1.8 million dollars?

Thank you for your anticipated cooperation, Juanita Sumner”

But Dowell is a stubborn rabbit, even when you are standing over his hole and digging him in, he keeps refusing to answer. 

Dowell #3:  “The request was withdrawn by staff at this time.”

Wow, this guy is the slipperyest little bastard I have ever dealt with.  And I’m a landlady in a college town!

I was wondering how to ask again, when a little suggested message popped up in my email – isn’t that creepy? Your computer reads your emails and suggests responses. But this was a good one – “can you tell me why?”  That’s a lot more polite than the response that was swishing around in my mouth, so I sent it.

That’s when Dowell’s Big Bro Mark Orme stepped into the conversation. Wouldn’t that be nice? Some old lady trying to get some honest answers out of you, and all you have to do is call your boss!

Orme’s response was very weird.

Juanita,

I cannot, in good conscience, attempt to appropriate funds to things other than essential needs.  We are dealing with a pandemic and it would be imprudent to expend public tax dollars at a time when I anticipate a decline in city revenues.   This is a logical approach, in my mind, to not entertain expending funds during a time when I need to bolster the ability to ensure essential services remain viable during the anticipated economic contraction from the Coronavirus. 

Good day,

Mark

Remember the question – what happened to the $1.8 million mentioned in the original report in the March 17 agenda? 

I know he’s pissed, I can hear it. He’s trying hysterics. “We are in the middle of a pandemic…” Really? I’ve had kids, that’s not going to cut the mustard with me. So I asked again.

I’m sorry, I am completely confused by your response.  I wasn’t arguing with you about how to spend it. I had asked Mr. Dowell  a question, I don’t know what you are responding to. 

The March 17 agenda says that staff has reported $3,050,000 in “unanticipated revenues” in this year’s budget, “$2,550,000 in additional sales tax revenue, $400,000 additional property tax in lieu of vehicle license fees and $100,000 additional short-term rental transient occupancy tax.” 

The April 7 agenda now reports $1.2 million.  What happened to the other $1.8 million? Was there an accounting error? 

 

Your response also does not make sense in light of the list of proposed uses for the $1.2 million:

 
Community Choice Aggregation Loan $350,000
 BMX Relocation Project  $100,000
 Redistricting Costs  $60,000
 Fire Station #1 Remodel  $250,000
 COVID-19 Contingency $470,000

Total Recommendation: $1,230,000

 

There is only one covid related item here, the others hardly impress me as “essential”. I have to ask, is this proposed April 7 meeting so “essential” that you are suspending the Brown Act? 

 

“COVID-19 Contingency” – could you give some details about that? 

thank you for your anticipated cooperation, Juanita Sumner

So far no answer. I’ll just keep asking. 

 

 

 

 

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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

 

 

 

 

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