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You know how it goes – you hear about things on the news, but it doesn’t hit you until it’s right under your nose. Until you can smell it.

30 Nov

For years now I’ve been talking about the illegal camping, the defecating, the urinating, the trash, the crime – the smell of Chico. I’ll have to admit, it’s driven me out of Bidwell Park and other “public” areas of town, I avoid non-food shopping, and local restaurants, I don’t attend public meetings anymore – I’ve lost my appetite for Chico. I don’t even like to bike or drive around town anymore.

But when we heard about the problems with the Chico ice rink – lack of “access”, vandalism – my husband got so curious we made a side-trip through Downtown on our way out to run errands the other day. I was shocked. It’s true what that woman said in her letter to the editor – they’ve blocked off all the parking spaces at the plaza with the kind of ugly chain-link fencing you see at construction sites and toxic waste dumps. They’ve installed a fence around the actual rink, and I’m not sure where “observers” are allowed to stand, but if you want to get into that rink, it’s 12 bucks.

But, apparently, it’s free to camp alongside the fence, in the street, we saw the little makeshift tents propped right up against the chain link. It’s free to camp in Bidwell Park, Commanche Creek, the Devil’s Triangle, and any patch of city-owned property around town. We’d been hearing all kinds of news about Commanche Creek – including news of one notorious transient kicked out, by other residents of CC, for sexual assault. So we wound our way over to see what’s become of that mess – wow, just when you think something’s bad, it gets worse. I happen to know some “street people,” and the news isn’t reporting everything that goes on at Commanche Creek, most notably, the rapes. Anybody who takes the time to listen to an “unhoused” person knows that rape is a problem in camps all over town.

I don’t understand the reasoning behind various council decisions, including the redeclaration of the Shelter Crisis Designation. I do know city manager Mark Orme is motivated by money to pay the outrageous pension deficit he and other employees have racked up through unrealistic pension contributions. Council members, some of them also pensioners, are motivated by the money they get from the unions at election time. The unions know the transients not only generate a lot of money in state and federal funding, but they keep the rest of us scared, ready to shell out any amount of money to keep them from pitching their tents in our front yards. Mark Orme reminds me of the Nazi soldier who demands that Sophie make her choice.

Then we have people like Patrick Newman, and people he has misled into believing that the city of Chico has any responsibility for housing anybody. A recent letter Newman penned, blaming anybody who isn’t destitute for the problem, really pissed me off. Newman reminds me of the lady from Dr. Zhivago – “all this house, for just ONE family?!”

She scolds Zhivago for living in a house that could house 13 families – yeah, in conditions no intelligent, hard working person would live in. You work your ass off, build your own place, and the leeches just start marching in. If you have ANYTHING, these people act as though you are the criminal. Having an entitled, soft-handed little perp like Newman tell me I have to give the fruits of my labor to support dead beats, that was just over the top. I wrote a pissed off letter and sent it to Wolcott.

Here’s a story from Aesop:

“One bright day in late autumn a family of Ants were bustling about in the warm sunshine, drying out the grain they had stored up during the summer, when a starving Grasshopper, his fiddle under his arm, came up and begged for a bite to eat.

‘What!’ cried the Ants in surprise, ‘haven’t you stored anything away for the winter? What in the world were you doing all last summer?’

‘I didn’t have time to store up any food,’ whined the Grasshopper; ‘I was so busy making music that before I knew it the summer was gone.’

The Ants shrugged their shoulders in disgust.

‘Making music, were you?’ they cried. ‘Very well; now dance!’ And they turned their backs on the Grasshopper and went on with their work.”

Fellow human Patrick Newman likes to take up his fiddle, damning those of us “housed” individuals for our “materialism”. Well, winter is coming Mr. Newman, it’s time to put down your tiny violin, and get to work.

I have to ask – who wouldn’t have known that Commanche Creek would flood as soon as it started to rain? With rain coming next week, and shanties propped in flood zones all over Chico, our city staff and council are caught with their Shelter Crisis Designation hanging around their ankles.

Old Yiddish Proverb: When the fish stinks, it’s the head of the fish. Our Chico fish has eight stinking heads – council and manager Mark Orme.

Something certainly stinks around here.

Reynolds and Brown, and I think, O’Brien, are up in 2022, let them know what you think of the tax measure they endorsed for the 2022 ballot

25 Nov

Well, as I was trying to decide whether or not to renew this blog, it automatically renewed itself. So here we are for another year, fellow taxpayers!

What’s on the menu? Well, all I got in my sights is the sales tax increase measure that the city of Chico has announced for the 2022 ballot. Mayor Andrew Coolidge says the revenues from this sales tax increase would be used to secure a bond. He’s talked about “road bonds” but has not come forward with the details.

Talk is cheap, you have to watch what these people actually do. Earlier this year, council, led by Staff, tried to get an illegal Pension Obligation Bond approved by the courts. They had to be threatened with a lawsuit from the Howard Jarvis Taxpayers Association, even after then-council member Kami Denlay correctly stated that instituting a tax without voter approval is against the law.

It seems clear to me that Chico City Staffers are desperate to get money to pay down their pension deficit. That’s why they finally persuaded council members to put forward a general tax measure, with no restrictions on spending, and only 51% voter approval to pass it.

And what the badge bunnies don’t understand is that the revenues will go to public safety alright – cops and fire are responsible for over half the pension deficit. That’s what you get when you allow somebody making over $100,000/year to pitch in $15,000/year for a $90,000/year pension. Plus benies, with Cost Of Living Increase. If you can’t see how unsustainable that is, you need to go back to Mr. Shipplehoute’s math class.

And, just as I predicted over a year ago, Mark Orme brought in a consultant to put up a skating rink, as suggested by an earlier consultant. $400,000+ in taxpayer money, needed so badly to fix streets and tweak infrastructure. Orme cries poormouth when it comes to the streets and services, but he’s willing to bring in a $100,000 consultant to spend $300,000 putting up an ice rink. Here’s why – the earlier consultant said his firm had used a skating rink to pitch a sales tax measure in the Tahoe area, and it worked.

So here we are, we got our work cut out for us between now and the next election. Do you want to pay more taxes? For a small class of privileged elites to have their Downtown party? Well, start writing those letters. Start telling your friends who are registered to vote in Chico.

Don’t forget to drop a quick note to council members Alex Brown and Kasey Reynolds, whose terms are up in 2022. I think Mike O’Brien is up as well, having been named to replace Scott Huber. Let them know, that if they plan to run, they better not be stupid enough to back a tax measure. Don’t forget to tell them what you think of them ILLEGALLY using tax money to run it.

Frankly, I don’t think council had any business appointing anybody (certainly not a pensioner). Furthermore, Reynolds and Brown have had their run, and need to be shown the door. But, if by some miracle, they all three reversed their vote to run this measure, I’d be willing to think about supporting their candidacy. I’d have to think pretty hard on it.

Should the city of Chico be using taxpayer money to run their tax measure?

18 Nov

According to the California Constitution, state law prohibits local agencies to use public funds, public employees, or public resources to expressly advocate the approval or rejection of a ballot measure. While the Fair Political Practices Commission (FPPC) has said they have limited jurisdiction over this matter, county district attorneys can take on an agency that violates this law.

Unfortunately our district attorney has a very poor record of upholding the laws that protect the people. Fortunately for the taxpayers, there’s the Howard Jarvis Taxpayers Association. HJTA uses funding provided by members like you and me to take on the agencies that buck the law. But they need taxpayers like us to be on alert to these illegal activities. When the city of Chico tried to get “judicial validation” of a Pension Obligation Bond instead of putting it on the ballot, concerned Chicoans contacted HJTA – we sent a Bat Signal! – and their attorneys went into action, filing a Cease and Desist Order with a threat to sue if Chico Staffers continued on that track. I kind of held my breath, expecting City of Chico to call HJTA’s bluff and proceed. So far they seem to have abandoned that action. I realize, Chico knows that action was illegal, and the chances are very good that they would spend a bunch of money to lose in court.

Locally, HJTA has taken on both Yuba County and the Hamilton Branch Fire Protection District (near Chester) over deceptive and illegally-funded tax measure campaigns. In Yuba County, 2018, voters were asked to approve Measure K, a 1% sales tax increase for “public safety/essential services.” The language of the measure listed exclusive special purposes, and followed all code requirements for a special tax. HJTA advised the county that it was a special tax requiring a two-thirds vote, but the county ignored the law and declared it a general tax. It barely passed with 54% of the vote. The trial court sided with HJTA, declaring Measure K invalid. Unfortunately the appeals court reversed that decision and Yuba County was allowed to go on collecting their illegal tax.

In 2020, Hamilton Fire Protection District proposed Measure A, a $175 increase in the local special tax. Run as a two-thirds measure, it failed. A year later, they brought the same proposal back to the ballot. It passed with 74% of the vote. But here’s where city of Chico residents need to pay attention – the district illegally used taxpayer money to run their campaign. Their Facebook page, as well as full-page glossy color photo brochures urging voters to “please Vote YES on Measure A“, declaring it “well worth the peace of mind!“

That is patently illegal. HJTA filed suit against Hamilton Branch Fire District. And like the city of Chico, the tiny district realized they were had and asked for terms of settlement. Among other points, HJTA asked for “adoption of an official written policy that would prevent such abuse in the future”.

The city of Chico is running a tax measure, it would seem logical they have to use city funds. So far they’ve hired a consultant to run the campaign.

https://chico.ca.us/request-proposalsqualifications

RFP- Revenue Measure & Communications Consultant 
The City of Chico is seeking to obtain proposals from qualified firms to advise the City Council and City staff on developing appropriate ballot language for a proposed 1% general sales tax to appear on the 2022 November general election. Additionally, consultation will be necessary on how best to educate voters on the proposed 1% general sales tax measure and the development of materials and other outreach efforts to ensure citizens receive objective and accurate information related to the ballot measure.  The City will accept proposals until 5:00 p.m. on Friday, November 5, 2021. Please click on “Projects to Bid” on the right to view the RFP within Public Purchase. 

This seems illegal to me but I’m no lawyer. “how best to educate voters… efforts to ensure citizens receive objective and accurate information…” There’s the important point – just exactly how do they intend to “educate” the voters? CARD’s “educational” process was deceptive. Director Ann Willmann held “public information sessions,” during which one taxpayer caught her saying the district had no debt – despite their $128 million pension deficit. The board approved the use of taxpayer money to print glossy brochures extoling their virtues, leaving out important facts about the measure, including the bond they intended to secure with the revenues. So I’ll contact HJTA to put them on alert to the city’s tax measure, if they aren’t already aware.

And I’ll add, you can be a member of Howard Jarvis Taxpayers Association for as little as $15. Your money goes to efforts like these. They have a small legal staff to go up against huge public agencies. They could use some back-up.

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Stop a train wreck before it happens – email Chico City Council and tell them you won’t support a new tax measure until we have a conversation about the employee contributions

12 Oct

I was actually surprised to see this letter from former city councilor Karl Ory. I’m not surprised that Ory is still active with the local Democrats, but I’m kind of surprised he’d attack a sales tax increase measure that he himself proposed while on council. Sure, it’s partisanship – whenever we have a change in the council majority the losers sit along the sidelines throwing eggs.

Letter: Conservatives have bled the city dry

The council proposal for a general sales tax increase is DOA. Conservatives have bled the city dry for a decade and will oppose any tax increase. Just ask Juanita Sumner and the Chico Taxpayers Assoc. But worse, this council has alienated nearly every moderate voice in the city. On their agenda is denying climate change, steamrolling a 1,448 acre development, doing away with the Greenline, and generally kowtowing to their developer benefactors.

Councilmember Morgan’s KPAY broadcasts show he intends to ride liberal bashing all the way to Sacramento. Tax revenues will be used for salaries and benefits; no assurances any will go for roads and creekways. This is just a sham to make them look good.  Afterward they’ll wring their hands and say they tried. Maybe blame the loss on the previous council.

Karl Ory, Chico

Yeah, we all know, the liberals have done plenty of bleeding in their day. They’ve voted right along with the conservatives to approve every new subdivision that’s come before them. They’ve also unanimously approved the employee contracts with overgenerous salary and benefits and unrealistic employee contributions toward the UAL. They all get money from the unions at election time, and many of them continue to take donations from power players like PG&E and Franklin Construction. But Ory is spot on when he says, “Tax revenues will be used for salaries and benefits; no assurances any will go for roads and creekways. This is just a sham to make them look good.  Afterward they’ll wring their hands and say they tried.“

Of course the liberals would do same if they had the majority, Ory himself proposed a 1-cent general sales tax increase when he was on council. If you haven’t noticed this pattern before, you just moved here, or you’re deaf, dumb and blind. But I’m not going to squabble over that – when the liberals get the majority again I’ll criticize their poor management. The common thread here is that the money is not going to the roads or any public services, it’s going to service a bond(s). Remember this bit from the 9/21/21 council staff report:

“General Obligation Bond
If the City were to pass a general sales tax, the Council could also consider issuing bonds to fund infrastructure, facilities, and equipment. The debt would be repaid over time with anticipated increased
revenues. A general obligation bond would require a two-thirds vote of the electorate to pass.
If the electorate were to pass a bond for infrastructure in the amount of $180,000,000 with interest at a
rate of 3.5 percent over a twenty (20) year period, the annual payment would be $12,664,994.”

They want to use the sales tax increase revenues to get us deeper into debt. Think about that – not only will they NOT be using the sales tax money toward infrastructure as Coolidge keeps saying, they will be taking another 12 and a half million dollars away from infrastructure to pay off the bonds.

And yes, “bonds”, plural. They want money to pay the pension deficit, having failed in their attempt to make an end-run around the voters with their proposed Pension Obligation Bond.

Read the reports people, don’t just allow yourself to be mesmerized by their moving lips. They are liars, and they will lie to get what they want. Coolidge is one of the most bald-faced liars I’ve ever heard. And the local media just eats it up without question.

I can’t just sit by and watch the insanity, I had to respond to Ory’s letter.

Karl Ory is right, (10/9/21) “Tax revenues will be used for salaries and benefits; no assurances any will go for roads and creekways.” Correct, council has approved a general sales tax increase measure, meaning revenues will go to the General Fund and be spent as council determines.

Ory, a two-time council member, knows that the pension deficit (Unfunded Actuarial Liability) is the city’s only real debt, created by unrealistically high salaries/benefits and unreasonably low employee contributions. He knows that council directed staff to establish a “Pension Stabilization Trust,” into which money is purloined from each department – money that should go toward city services – to pay down the UAL. Recently, council and Staff tried to establish a “Pension Obligation Bond” without voter approval, only the threat of a lawsuit from Howard Jarvis Taxpayers Association stopped them. They told us they’d spend the garbage tax on the roads, but as Ory has also pointed out, the money has gone to the General Fund every year, spent on salaries, benefits, and new positions.

Look at the city budget – the city’s biggest expense is staff, taking almost the entire budget. Where are the services? Last year over $11.5 million went to the pension deficit. But the deficit keeps going up, because council keeps approving unsustainable contracts. Mark Orme created three new positions last year, at salaries over $100,000.

Until we have a real conversation about who owns the UAL, Chico Taxpayers Association will definitely oppose any new tax increases.

Juanita Sumner, Chico CA

Here’s another blurb from that 9/21 report:

  • there will be costs associated with educating the public on the proposed measure (hiring a consultant to conduct such work) and costs associated with placing the measure on the 2022 ballot (such costs will be estimated by the City Clerk in working with the County Elections Office)

    • Yes, the rules for using taxpayer money to run political campaigns are foggy, the FPPC seems to be standing down on this. So, they will be going up your ass with your own money. Let’s try to stop this taxpayer-funded train wreck before it gets out of the station – email your district rep, and tell them not only will you not support this tax measure, but you might just be voting for somebody else when the time comes.

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    Howard Jarvis Taxpayers Association has successfully sued at least twice to stop POBs on the grounds that they must have voter approval

    29 May
    Bonds are a risky way to deal with pension woes
    This article from the Howard Jarvis Taxpayers Association sheds some legal doubts on the whole POB scam.

    On a tip from a reader, I found this article, originally printed in January 2020. Jon Coupal begins with statewide bond measures, but picks up with a warning about Pension Obligation Bonds. “...at the local level, taxpayers need to be aware of a recent resurgence in the use of pension obligation bonds, a risky financing method that fell out of favor during the recession but is now making a comeback.”

    Coupal analogizes, “A POB is basically paying your Visa bill with your MasterCard,” adding, “Pension obligation bonds (POBs) are bonds issued to fund, in whole or in part, the unfunded portion of public pension liabilities by the creation of new debt.“

    Council members Andrew Coolidge and Sean Morgan, and other proponents of POBs, are denying that a POB is new debt, they chant it like a mantra, because they think they can hypnotize us into believing it.

    Coupal continues, “The use of POBs relies on an assumption that the bond proceeds, when invested with pension assets in higher-yielding assets, will be able to achieve a rate of return that is greater than the interest rate owed over the term of the bonds.“

    Even Staffer Scott Dowell has used the word, “gamble“, even while he and city manager Mark Orme have pressed forward with this scheme. Council has given them permission to send this bond for judicial approval. The consultant told council and staff that this type of bond does not require voter approval. They said it would only take approval from a judge, which should only take a few months. The expect to implement this thing within the next few months.

    If this seems odd to you, you’re not alone, the HJTA is on your side.

    “Back in 2003, the state of California attempted to float a statewide pension obligation bond without voter approval.

    The Howard Jarvis Taxpayers Association sued to invalidate the bonds and prevailed in court.“

    That’s not the only lawsuit HJTA has pursued against POBs. The reader who tipped me to all this sent me the story of HJTA vs the city of Simi Valley.

    City of Simi Valley reaches settlement with taxpayer groups, rescinds authorization for pension obligation bonds

    “The Simi Valley City Council voted 5-0 on April 6, 2020, to rescind a December 2019 resolution authorizing a $150 million pension obligation bond and future similar bonds, thanking the Ventura County Taxpayers Association for working with the City in avoiding what could have been a lengthy battle over legally questionable bonds. The rescission was part of a settlement agreement with the VCTA and the Howard Jarvis Taxpayers Association.“

    Apparently, the city asked for validation from the Ventura County Superior Court. HJTA and the Ventura County Taxpayers Association then “answered” the suit. And the city backed down, but I’m not really sure why.

    “In settling, the Simi Valley City Council recognized the constitutional concern in the VCTA/HJTA answer to the City’s lawsuit — whether the California Constitution requires two-thirds voter approval of any such bond. Agreeing to wait for legal clarity, and with each side bearing its own costs, the City agreed to dismiss its lawsuit with prejudice, and rescind the bond authorization resolution.“

    “recognized the constitutional concern” ? ” Agreeing to wait for legal clarity” ? I’m not sure what has happened since then – has the court given any further ruling on these bonds? Any legal clarity? I’ll have to look into that. But I think that’s a good question for Staff at that POB forum.

    DAY: Tuesday, June 8, 2021
    TIME: 2:00 P.M.
    PLACE: City Council Chamber – 421 Main Street

    CANCELLED: City hosting an interactive forum to discuss POBs

    27 May

    I got this notice from Dave – thanks Dave!

    I also got the cancellation notice from Dave – thanks again Dave!

    DAY: Tuesday, June 8, 2021
    TIME: 2:00 P.M.
    PLACE: City Council Chamber – 421 Main Street


    The City of Chico’s employees and retirees participate in the CalPERS retirement system. CalPERS has
    determined that the City has an unfunded accrued liability (UAL) of over $140,000,000 which carries an
    interest rate of 7%. As such, the City Council is researching all options on reducing this liability. One
    possibility is to issue pension obligation bonds (POBs) at a lower interest rate than 7% and use the
    proceeds to pay down the CalPERS UAL.


    The City is hosting an interactive forum to discuss POBs including the benefits and risks associated with
    their issuance. The consulting firm of NHA Advisors will be conducting the forum on June 8th starting at
    2:00 pm and concluding by 4:00pm. This forum will be interactive and participants are encouraged to ask
    questions and provide feedback to the consultant. Attendees are encouraged to join in person at the City
    Council Chambers or watch online. There is no cost to attend this educational forum.

    Orme and Dowell want to take the city of Chico on a Tax-stravaganza

    25 May

    Tomorrow the Chico Finance Committee is meeting, again, CLOSED in a room with public participation limited to Zoom, to discuss the smorgasbord of taxes and fee increases brought forward by city manager Mark Orme and Administrative Services (Finance) Director Scott Dowell. I will try to “attend” on Zoom, but in the meantime I wrote a letter to the ER.

    The city of Chico is embarking on an unprecedented “tax-stravaganza”. At the 5/26/21 Finance Committee meeting, Mark Orme and Scott Dowell brought forth an incredible list of tax measures and fee increases for council’s consideration, including a sales tax increase, and new cell phone tax. Staff also suggested raising sewer fees by implementing volume charges, raising the transient occupancy tax, and increasing franchise fees on PG&E, the waste haulers, and other service providers. Mayor Coolidge has also suggested a road bond.

    The common thread here is the pension deficit. Staff is desperate to pay CalPERS, to save pensions into which they have contributed less than 15% for 70-90% of their highest year’s pay.

    The city has been receiving more sales tax, property tax, developer fees, and Utility Tax revenues every year as development brings more people to Chico. Instead of maintaining and improving infrastructure, Staff has poured these funds into their pension deficit, $11,500,000 this year, by 2025, $13,000,000. This money is allocated from all the department funds, at the expense of infrastructure and services.

    Instead of pursuing new taxes that will hurt our local economy, council needs to switch from CalPERS’ defined benefit plan to a defined contribution plan, like 401Ks. Why should the taxpayers but never the employees bear the burden of the risks taken by CalPERS? The POB scheme, which Dowell admits is “gambling”, puts ALL the burden on the taxpayers, forever. Any new revenues will go to the pension obligation first.

    We’re paying Staff for nothing but perpetuating their own retirement system.

    Juanita Sumner, Chico

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    Business taxes, housing taxes, parking tax, pot tax, poop tax! City of Chico is on a Tax Blitz!

    22 May

    I got the agenda for next week’s CLOSED Finance Committee meeting and it’s a gobstopper.

    https://chico.ca.us/sites/main/files/file-attachments/5.26.21_finance_committee_agenda.pdf?1621544673

    Item A, Business Tax Analysis Update – just what it sounds like, only this also includes a tax on rentals.

    Item B, Cost Allocation Plan – another (why?) presentation from consultant Chad Wolford about “allocating” money from one fund to another to pay management salaries and benefits.

    Item C, Sewer Enterprise Study and Rate Analysis – oh, you people on sewer are not going to like this and those of you who have still held onto your septic tanks better take good care of them.

    Item D, Overview of Revenue Enhancements – this is an item that brings the art of Euphemism to a new level. Yes, Dammit, they’re talking about taxes!

    These items all have one thing in common – a greedy, desperate city staff that wants to fund their pensions, damn the torpedoes. I’ve talked about A, B, and C, and will talk about them again in future, but right now let’s dive into D, which I will call “Operation Tax Blitz”.

    City Manager Mark Orme and Admin. Services Director Scott Dowell have announced budget surpluses the last three years running, but are still making dark predictions for the future, and trying to tell us we need to raise taxes.

    “Although the City has made great progress to overcome deep financial deficits and reestablish reserves,
    projections point to a likely budget deficit in the coming years if revenue enhancements are not
    approved.”

    What they won’t say, is that our problem, which Orme has called “The Elephant in the Room,” is the pension deficit, the Unfunded Actuarial Liability. They’re trying to tell us we’re cheap asses who don’t pay enough taxes. As a member of a family living on less than $50,000/year, with tenants who all live on about same, it is really tough to take that kind of smack from some asshole making over $200,000/year with a benefits package of over $50,000 who only pays 9% of the cost.

    “California cities have a variety of avenues to increase revenues for services and capital projects, which ranges from general and special taxes to bonded indebtedness.”

    And the report proceeds to list those avenues.

    Admissions Tax – Admissions tax is a revenue enhancement used when people attend a show, performance, display or
    exhibit.

    Business License Fees – Business license fees are considered a tax and any increase would need to be approved by a majority vote of the electorate.

    Cannabis Tax – A sales tax measure on cannabis is already being discussed by the City Council.

    Construction/Development Tax – A construction or development tax is an excise tax imposed for the advantage of building within the City. The tax is imposed only on new construction and is generally based on number of units, number of bedrooms or square footage. These taxes differ from development impact fees in that impact fees must be spent on services or facilities to mitigate the impact of development. [NOTE: This is a redundant tax – in addition to Impact Fees, and not restricted to mitigating the impact of development. In other words, it’s just a GRAB, as are so many of these suggestions. This is one way the city adds to the cost of housing.]

    Documentary Transfer and Real Property Transfer Tax – A document transfer tax is a revenue enhancement allowed under the State Transfer Tax Act on documents which transfer the ownership of real property… Butte County and the City of Chico enacted this tax ordinance and the City received one half of the tax, $0.275 per $500 in recorded value. [NOTE: So, the city already has an ordinance with the county, but here Staff suggests a separate ordinance just for the city, which will raise the cost of housing] Dozens of California charter cities have enacted their own transfer tax ordinances. The tax rates vary with rates as low as $1.10 per $1,000 to $15.00 per $1,000.

    Local Vehicle Registration Tax – Local vehicle registration taxes are special taxes collected by the DMV in the form of vehicle registration fees and remitted to the participating counties who in turn remit to the City. [NOTE: Butte County already has this program]

    Parking Tax – A parking tax is imposed on citizens who rent parking space that is privately owned.

    Property Tax – Generally, property tax cannot be modified by the City and would require State action. California’s
    property tax is ad valorem, meaning it is based on the value of the property. Proposition 13 limits property tax to one percent and restricts the enactment of any additional ad valorem property tax, transaction tax or sales tax on the sales of real property. Proposition 46 modified this rule to allow for an increase towards funding indebtedness.     [NOTE: the only real “indebtedness” the city faces right now is the UAL]

    Parcel Tax – Parcel taxes are a tax on a parcel of property and are not directly based on property value, which is what
    allows a parcel tax to circumvent Proposition 13.     [NOTE: Staff reports these have had a dismal showing lately, mentioning CARD’s failed attempt at passing Measure A last year.]

    I’ll stop here to say, with the exception of the Cannabis Tax they are already discussing, I don’t think any of the above suggestions are serious. Tomorrow I’ll pick up with what they are really getting at – sales tax increase. Although, there is a frightening report on raising the Utility Tax, as well as a very frank discussion of the other kind of tax – franchise fees.

    Next time, on This Old Lady goes to a Tea Party!

    The Pension Obligation Bag

    15 May

    Well, I must be onto something, because Chico Administrative Services Director Scott Dowell came back to my question about who manages the Pension Stabilization Trust with an order to staff to make it a Formal Request for Public Information. He threatened to make me pay 25 cents a page for anything that couldn’t be transmitted electronically. I don’t know how many of you have ever had to pay for documents, but they don’t let you pick the pages you want, they copy the ENTIRE document and charge you for every page.

    Excuse me, but what a prick! You know he could have just sent me the answer, he hired them! This is just your basic intimidation.

    So I wrote a letter to the editor about what I already found out.

    As city staff prepares to implement Pension Obligation Bonds, there are more questions about this risky scheme.

    The consultant explained that the city would issue bonds and invest that borrowed money in the stock market, hoping to make enough return to pay back the bond issue as well as make “extra” payments on the Pension Deficit. The consultant said the city might be able to get an interest rate of 3 – 4% on the bonds, which would mean staff would have to make at least twice that in their investments to achieve their farfetched goal. Failure would mean new debt, in addition to the Pension Deficit.

    Staff has already established a Pension Stabilization Trust, made up of funds taken from each department by percentage. As the consultant explained, these trusts are managed by an agency which presents staff with various portfolios to choose from. At the 9/23/20 meeting, staff reported their portfolio was returning “about 4%…”, then, “3 to 4%,” finally admitting, “it may be a little bit lower right now…”

    The finance reports for March 2021 show the PST returning 2.7% interest. That does not add up. Can city staff promise to do better with borrowed money? Who would borrow money at 4 – 5% interest to make 2.7% interest on the stock market?

    I don’t know if staff is too concerned about the future consequences of POBs. By the time the city’s infrastructure is rotten and failing, they will all have skipped off to retirement, even other towns, leaving our kids holding the Pension Obligation Bag.

    Juanita Sumner, Chico CA

    No wonder Staff wants the POB, the sales tax measure, and the “road” bond – their Pension Stabilization Trust investments are only returning at 2.7%

    13 May

    I wrote to Chico Administrative Services Director Scott Dowell the other day and asked him what is the current interest return on the investments that have been made with the Pension Stabilization Trust. Remember, the PST is made up of “allocations” (stealing) from all the other city department funds, a percentage of department payroll. The money is invested in the stock market, very much like the proposed Pension Obligation Bond scheme.

    I was kind of perturbed when Dowell responded with a 265 page download, telling me, “The information you want is on page 264…” You know he knows the exact figure, he just doesn’t want to admit it. I think, frankly, he’s in denial, he’s desperate to get council to agree to this.

    But there it was, and I can see why he’d have trouble actually saying it, or even typing it into an email – it’s kind of embarrassing. Especially when he is trying to convince city council to go along with the POB scheme. See, if they don’t make enough money off investing the BORROWED money they will get from the POB holders, gee, they not only won’t be able to make those “extra” payments toward the Pension Deficit, but they won’t be able to pay back the bond money either. Oh my goodness, you know what that means – another day older, and deeper in debt.

    New debt.

    Here’s the bad news – the PST has only been returning 2.7%. With an investment of $1,868,000, taken from the streets, sewer and other city funds, Staff got $3,887. Three thousand, eight hundred and eighty-seven dollars. Staff reports our “extra” payments, now $11.5 million, will be $13 million within a few years.

    I know, I’m starting to sound like a late-night waterbed salesman, but I’ll say it again – watch the video!

    The consultant from NHA spoke of borrowing bond money at 3-4%. CalPERS, to whom we owe a whopping $146 million, charges 7% interest. Dowell reports we get a 3.5% “discount” for making those “extra” payments, but I’m not sure how that works. The PST is only returning at 2.7%. The market, volatile for a year now, is not looking good lately.

    https://www.cnbc.com/2021/05/11/stock-market-futures-open-to-close-news.html

    This POB plan looks more ludicrous every day.

    I also asked Dowell who manages the PST and how much do they charge. That’s another issue – these investment firms charge high fees, how much do they eat? We’ll see if he gets back to me there.

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