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Shasta County opens Supervisor meetings – Chico council, still hiding under cover of COnVid, pushes Pension Obligation Bond forward

9 Jan

On Tuesday, as Chicoans got ready for another “virtual” (closed) city council meeting, two Shasta County Supervisors held an open meeting, allowing citizens to come into the chambers and speak freely about how they’ve suffered under the COnVID shut down.

https://www.actionnewsnow.com/content/news/Crowd-of-people-speak-inside-Shasta-County-Board-of-Supervisors-chambers-573536611.html

REDDING, Calif. – On Tuesday, a crowd of people gathered inside the Shasta County Board of Supervisors chambers. People passionately pleading to county leaders lift coronavirus restrictions and resume in-person meetings.

Inside the chambers, many people stood together, with only very few wearing masks.

The virtual meeting opened to the crowd that gathered outside, demanding to have their voices heard in person.

One by one each person spoke their three minutes.

Thank you Les Baugh and Pat Jones for doing the right thing, while the rest of the board cowered at their keyboards.

Supervisor Les Baugh and Jones were the only two to sit inside the chambers with the crowd. While Supervisors Rickert, Chimenti, Moty, and other county staff remained online.

Here in Chico, council and staff are trying to use the shut-down to shove as many tax measures through the system as they can, hand over fist. In addition to the Pension Obligation Bond already on the table, our new mayor Andrew Coolidge has proposed another bond, “for streets”, and a sales tax increase measure. 

The Pension Obligation Bond presentation, same as the presentation given in September 2020, elicited almost no discussion from council, who voted unanimously to give the consultant more money to set up the “validation process“. In September, the consultant told the Finance Committee one of the best things about a POB is that it “does not require validation...” He meant, by the voters. This bond, he explained, requires only “judicial validation“, a purely administrative process, with absolutely no input from the public.  

The consultant assured council, “they all get approved, it’s just a matter of time.” 

After the presentation, Coolidge asked Scott Dowell for a list of costs, and then Kasey Reynolds asked the consultant if there would be any “public informational meetings”. The consultant told her that is up to council, that they could do “small groups” if that was what council would like. And, I’m guessing, that would cost extra. 

It’s obvious Reynolds just wants to be able to say the public was informed about this bomb before it got dropped. What a bitch.

I was also shocked to see so few comments on Chico Engaged, but I noticed, all nine, including mine, were negative.  The clerk referred council to the comments without reading names. The clerk already quit reading the comments because they became abusive, and now she’s quit reading the names because nobody should have to read fakes names like “Harry Gonads.” Council spent less than a minute reading before they advised staff and the consultant to bring more information.  

Meanwhile, I wanted people to know how much money flows through this city, directly out of the pockets of city residents. You know you pay a gas tax, right? Got any idea how much of that the city of Chico  gets? Or what they use it for? Have you seen $5,997,251 going into the streets or roads near your house? How about the garbage tax, cleverly titled, “Waste Hauler Franchise Fee” – $1,980,318 added to our garbage bills. And if you get cable tv, you paid into a total of $969,124, received as of June 30, 2020. 

Here’s a double whammy – you not only pay a franchise on your PG&E bill, you pay “Utility Tax”. You also pay UT on your water bill, and if you have a landline you pay UT on that too. 

Of course, I assume everybody knows about property taxes and sales tax, but I’m probably wrong – a lot of people have their property taxes paid by their mortgage company, so they can sail through life without a care in the world?

Here’s the totals for those revenues, as of June 2020. Roughly $60 million in revenues, just from these sources. But our fair city never seems to have enough money to fix or maintain anything? I don’t think it’s a no-brainer that these funds should be available for street/road maintenance. The city used almost half a million in cable tv fees to remodel council chambers a couple of years back, with Andrew Coolidge telling me those funds “had to be used for that…they couldn’t be used for street maintenance…”

Gas Tax $5,997,251 
Waste Hauler franchise fees $1,980,313 
Cable tv franchise fees $969,124
PG&E franchise fees $787,861
utility tax $7,317,103
prop tax $18,621,070
sales tax  $24,434,686

During the same period, over $11,000,000 was paid to CalPERS through the Pensions Stabilization Trust and another fund called the “CalPERS Liability Reserve”. Both of these funds are filled by siphoning money out of all the other funds on a percentage of payroll. Most of the budgets of all these departments consists of salaries and monthly benefits payments, and many are in the red because of the further allocations for the UAL payments.

Scott Dowell reported our UAL has grown 43% over the last 5 years, but he didn’t say why. The reason is the unrealistically low employee contributions of 9 – 15%. In fact, management and public safety only started paying ANYTHING  in 2012, when the UAL  was already over $125,000,000.  When City Manager Mark Orme and other management agreed to pay an additional 3% share, council gave them a raise to cover that percentage. Furthermore, Orme got himself a 457 Plan – a special 401K for public management. We pay over $20,000 a year into that 457, while Orme brags again and again that he has not received a raise for almost 5 years. That’s bullshit, what a stinking liar.

All this shoved through under the guise of public health and safety. Are we just stupid, lame, weak? Before you condemn the rioters in DC, take a look at yourself, and then read the US Constitution again. 

And Best Wishes to Shasta County, I hope this is the beginning of the end. 

 

Have you seen the new CPOA proposal?

17 Nov

Tonight is the last meeting of the current city council. The next meeting will begin the new “conservative” SUPER MAJORITY. I just like writing that in all caps, because I don’t know if people realize what it means.

Simply put, it means the five “conservatives” can do whatever they agree to among themselves, and the new “infinitesimal minority” of Brown and Huber will have to sit on their thumbs the next couple of years.

Of course I expect Huber to ingratiate himself with the conservatives.

But tonight, the last “elected at large” council will be discussing new contracts for Chico Police Officers Association, the old contract set to expire in December. I’ve been trying to look over the proposals since last week when I got the agenda, but they are onerously huge files that I can’t open with my dinky little internet connection. Why they aren’t displayed at the Human Resources page alongside the expired agreement is beyond me – well, no it’s not, they obviously don’t want us to see it. So, I have not seen the new proposal that will be discussed, in closed session, at tonight’s closed council meeting. 

Have you?  Cause if you go to the city website and direct yourself to the “minutes and agendas” page, look at tonight’s agenda, and then scroll down and open the reports and hit the links, here are some specific items I wish you would look for:

  1. Mandatory overtime
  2. STO
  3. CTO

And then go to this link, below, and re-read this post, because I don’t have time to go over all this again.

https://chicotaxpayers.com/2020/07/10/take-a-cup-of-ot-and-add-a-cup-and-a-half-of-cto-pour-in-some-sto-and-you-get-an-iou/

I tried to have this conversation with my district rep, Kasey Reynolds, but she played dumb. I just wrote the following note to the city clerk and asked her to forward it to the full council:

Dani, I know how hard you work, but I can’t download or even preview these documents. 

This is a problem – the public obviously isn’t let in on this conversation. Most people in town don’t have time to look at this stuff – I got it late Thursday, and staff was out of office by Friday noon.  Most people probably wouldn’t understand it if they did read it – they are purposely written in onerous language. I always wonder how many council members really read or understand these contracts. I’m a landlady, I know people just sign stuff without reading it, I often wonder how many council members do that. 

But council continues to agree to stuff like “CTO”, and “STO”, and all the other perks and benies that make these people outrageously over paid. According to Scott Dowell, public safety, especially CPOA, make up over half our UAL. And only pay 12 – 15% toward pensions of 90% of salaries over $100,000, plus perks like getting paid for not working (CTO, STO).

I’m including Mike Wolcott in this email because I’d like to see more about the contracts in the newspaper. This is why our town is tanking. And Staff’s only solution is to put our town over our heads in debt with a Pension Obligation Bond.

Other towns are talking about switching to 401K’s – Chico has already given Orme a 457 Plan in addition to his pension, an extra $20,000 year, while Orme claims no employees have had raises? Orme also got a raise when he agreed to pay his own “employee share,” previously paid in full by the taxpayers. 

Meanwhile, our park is a wreck, our streets are shredded, and crime is outrageous. This is on the “conversative” majority. You guys can’t blame this wreck on the liberals anymore. If you approve the CPOA contracts without any concessions from the union you are putting another nail in our town coffin. 

Good question Bob: Why do we need to replace Constantin with anyone?

14 Nov

One last word on the departure of Chris Constantin – from a comment Bob left the other day:

Why do we need to replace Constantin with anyone? The truth is the City is over its head in debt and we can’t afford a replacement.

Besides, why should we continue to pay hundreds of thousands of dollars every year for a bureaucrat who does nothing but scheme how to raise our taxes and get us deeper in debt with things like POBs while letting our streets and everything else fall apart.

Wow, good question Bob! So I wrote a letter to the ER about it.

When departing Chico administrator Chris Constantin was hired in 2013, he spoke to the Tea Party. He said our previous finance director was “Loosey Goosey”, bragging about his qualifications to “straighten out the mess” she’d left. He told us, once he fixed things, “you can hire someone cheaper, with less initials behind their name.”

Seven years later, I see a bigger mess. Constantin himself has told us, staff deferred maintenance on streets and other infrastructure while they continued to make bigger payments toward their pension liability (UAL) – this year $11,000,000. But the UAL continues to increase –  this year, the city manager created three new management positions with $100,000+ salaries.

When Brian Nakamura was hired, he went on a firing spree, gutting lower level staffers and bringing his own friends in for management positions – Mark Orme and then Constantin. Since then the assistant manager’s salary has gone from $142,652 to over $189,000/year. Orme and Constantin have also garnered themselves 457 Plans worth an additional $20,000/year each.

From a 2018 report to the California League of Cities: “City pension costs will dramatically increase to unsustainable levels.” Their first suggestion – make more aggressive payments to CalPERS. Meanwhile, “Change service delivery methods and levels of certain public services.” Meaning, squeeze the taxpayers for more money.

Top heavy management and perpetual demands for higher salaries and more benefits has our city upside-down. Constantin’s position should be eliminated, along with other unnecessary management positions, so we can hire the lower-paid workers we need to get this town “straightened out.” 

Juanita Sumner, Chico CA

Chico since Nakamura, Orme and Constantin – do you feel “healed”? Or “heeled”?

12 Nov

Chico disaster timeline – rough montage of the last 8 years of city management, or, mismanagement?

Sept 2012 – Nakamura hired from Hemet – Hemet was shocked, said Nakamura had not told them he was looking for another job

Jan 15 2013 – Asst City Manager John Rucker’s “sudden departure” https://www.newsreview.com/chico/content/sudden-departure/8827217/

Mar 7 2013 – Nakamura hires his former asst mgr from Hemet Mark Orme – from the above article – “This week the Chico Enterprise-Record reported the story and also published in its classified section an ad for the position. The ad says the salary offered for assistant manager is $142,652 per year with the potential to reach $172,382 based on performance. The ad refers to the city website for more information.”

[EDITOR’S NOTE: 7 years later, as of his resignation, Constantin was making $189,000+ as Asst City Mgr. Let’s see what council intends to pay his replacement]

Mar-Apr ? 2013 – Jennifer Hennessy resigns as finance director – “As the city’s finances worsened, Hennessy was often the target of sharp criticism from some council members and agenda-driven citizens. ” CN&R article link below

April 16 2013 – Nakamura hires former Hemet employee Chris Constantin from an auditor position in San Diego “

“In an interview prior to the council meeting, the 37-year-old Constantin talked about his decision and the controversies he is escaping in San Diego, where he’s served as assistant auditor since 2010.”

https://www.newsreview.com/chico/content/money-man/9619285/

“I made a three-year commitment in San Diego that was up in February,” he said. “At about that point I wasn’t really happy because I wasn’t feeling appreciated.”

[EDITOR’S NOTE: Read the N&R article – Constantin left San Diego with a shit storm at his heels.]

May 28, 2014 – Nakamura leaves https://www.newsreview.com/chico/content/so-long-nakamura/13622217/

““It caught us a little bit off guard,” said Mayor Scott Gruendl, who received Nakamura’s resignation letter last Wednesday (May 28) during a breakfast meeting.”

“When Nakamura arrived in September 2012, the city was in a bad place financially and it was his job to fix it. About six months into his time in Chico, Nakamura laid out his three-part plan to Gruendl. Part one was to identify the problems. Part two was to put a team in place to remedy those problems. Part three was to step back and allow the town to heal.

“He pulled the covers back on stuff, and also came up with responses on how to deal with it,” Gruendl said. “That meant a lot of layoffs, unfortunately. What was devastating for a lot of people is how many people we had to let go. Each time, it was more seasoned and experienced people, and it got harder. There was no good way to reconcile that.”

“He’s the lightning rod for the hard decisions that were made—the significant number of layoffs that we did, the collapse of 11 departments into five, the actual moving out of key management people who, for no better explanation, blatantly fucked up,” Gruendl said. “We had people who had good intentions but really didn’t know what they were doing. Brian dealt with it.”

“But the drastic reorganization of city departments has certainly left some with a bad taste in their mouths. Layoffs included many employees who had dedicated years—decades, even—to the organization, and key positions were eliminated, leaving things like the city’s trees untended.”

June 3 2014 – Orme appointed interim city manager

Same article – “Looking forward, Mark Orme—who was promoted from assistant to interim city manager at the City Council meeting Tuesday (June 3)—said he’s excited to work with Chico to begin the healing process.

“There’s been a lot of pain and heartache. That takes time to heal,” Orme said. “There are also external challenges. There’s been a lot of impact on the community financially as it relates to community organizations and a lot of the norms Chico was used to.”

[EDITORS NOTE: “the norms Chico was used to…” What the hell did he mean by that? If you lived here before 2013, let me ask – do you feel “healed”, or “heeled”?

City of Chico is management top-heavy, and it shows

31 Aug

Well, I don’t know if the needle giveaway happened at Humboldt Park yesterday. I had a stack of chores yesterday morning, including fix my bike, so I didn’t make it over there to check. I looked at various social media sites today, and there was no mention of it, so I’m  going to guess it just went away. We’ll see.

My bike looks great, and I’m getting the new tires today – all the freaking way from Holland. I guess they love old bikes in Holland. 

I probably won’t ride my bike in Bidwell Park.  What a mess. Tents still line the waterways, along with the requisite trash piles. We’ll see how long it takes council to be good on their word, and whether this new police chief – $20,000/year richer than the old police chief – will clean them out. There’s also a discussion scheduled for tomorrow’s meeting about a “sanctioned campground” at the Silver Dollar. We can’t let them take the fairgrounds, make yourself heard on Chico Engaged.

Yesterday I read Natalie Hansen’s interview with Councilors Brown, Schwab and Huber about social media. Brown is full of shit – I not only email them, I make comments on Chico Engaged. Brown has NEVER responded to even the most polite emails.  I believe she believes any disagreement is “impolite”.  I believe they all look at the sender before they read, and if you’ve criticized them or disagreed with them in past, they just skip your comments. Brown can prove me wrong by reading the Engaged comments out loud. The councilors should have to do that, not the clerk. But Brown has her own agenda, her mind is wrapped up in a Zip-lock bag to keep out any dissenting viewpoints. 

So I write the occasional letter to the editor.

The city of Chico is now being sued by a jogger badly injured in 2017 when a huge tree branch fell on her in Lower Bidwell Park. She was trapped for 30 minutes and had major injuries.

The suit alleges the city does not budget for tree maintenance in Lower Park, which is “traversed by tens of thousands of people every year.” The plaintiff was using an established path, alongside “various recreational amenities, including picnic tables and barbecue pits.” According to the suit, many staffers knew the tree, hanging over South Park Drive, was dangerous, but not only failed to prune or remove it, they didn’t bother to place signs or barricades to keep people away from it.

In 2017 the city budgeted about $45,000 toward “Park Tree Maintenance”.  This year $57,500. For perspective, my family paid $10,000 to have 16 dead trees removed from our property. Bidwell Park has thousands and thousands of trees, many of them dead or dying.

While staff claims to have been cutting positions and costs, the city manager recently hired another management position for Public Works, at $125,000/yr, plus benefits. He created a new management position – Public Information Officer – and is asking council to approve another full time management position – Homeless Coordinator.

Meanwhile staff is “considering” a fire suppression plan after homes were threatened near Annie’s Glen.

Our city is management top-heavy and it shows. The park is horribly neglected.  We need timber cruisers and heavy equipment operators, but we get people who sit in meetings all day.

Juanita Sumner, Chico

 

 

 

Interesting comments from readers

21 Jun

I get comments from people that deserve another look sometimes.

Yvonne asked me what I think about Newsom’s mask order and “other dirty deeds.” Thanks Yvonne, a quick search led me to some answers to questions I already had, and then more questions.

https://www.latimes.com/california/story/2020-04-20/gavin-newsom-n95-masks-byd-chinese-company-california-legislature

The question it answered for me is how California went from a $5.6 billion budget surplus to a $54 billion deficit just over the span of about three months of shut-down. Remember folks, we’re talking BILLIONS here. I don’t think most people could count to a billion in three months, but here Gavin Newsom went through $60 billion plus faster than prune juice through the guts of an 80 year old man. A billion off to China for substandard COVID masks, sheesh, I’d hate to see the governor’s credit card bill.

https://www.politico.com/states/california/story/2020/05/07/california-faces-54b-budget-deficit-1282926

Legislators are asking Newsom’s staff for the details of the deal, but they won’t tell. Furthermore, the KN95 masks manufactured by the Chinese are not exactly top rated. In April the FDA updated their recommendations, “limiting the use of certain KN95 masks as suitable NIOSH alternatives in a healthcare setting…” The reason is that these masks have the over the ear straps instead of the tighter fitting around the head straps.

So, Newsom spent a billion dollars ($1,000,000,000) on masks that are not the first choice of the FDA, and then won’t tell us the details of the deal.

I’m not sure how to feel about that. I’m still processing the new order that we all have to wear masks. I’ve read all the recommendations, and the N95’s are the only ones I would trust if I were truly afraid of this disease or thought I was in danger of spreading it. In fact, if I believed that, I would stay home. But I don’t believe it. I think this order is more about controlling people than controlling any disease. I will wear a bandana around my face when required to get into a food store, but I can shop online without a mask and that’s going to stick.

I got a comment from Robyn, who took offense to my use of the phrase “bum camp” to describe a place where people who do not contribute anything to society sleep, defecate, urinate, and accumulate large piles of trash, despite laws to the contrary.

I was appreciating this page until I read your term ‘bum camps.’ That’s horrendously insensitive towards human beings. Poverty is not a crime. Stigmatizing our most impoverished only fuels crimes against them.

I think it’s horrendously insensitive to trash the park and other public spaces that are supposed to be for all of us. Transients stigmatize themselves – their stigmata is their absolute refusal to comply with norms the rest of us have agreed to live by. Like, don’t shit and leave garbage on the ground next to a water way. Don’t leave needles on children’s playgrounds. Don’t set up camp in my neighborhood and then creep up to my house in the middle of the night to steal my catalytic converter or rout out my recycling bins.

Crimes against them? The only crimes I hear about against the transient population are assaults and robberies perpetrated by other transients.

Somehow she relates all this to racial injustice and police brutality.

By the way, a 1 or .5 percent sales tax, which is a highly contentious issue for so many people of privilege, is not the issue at hand nationally or globally. Racial justice and police brutality is. It would’ve been nice to see something about that here. Absence is silence, which is complicity with racism and white supremacy. But your “bum camp” comment already indicated your stance.

Here this nice lady is telling me what I’m supposed to talk about on my blog. Do I go to her house and tell her what to write in her diary? She tells me I’m racist because I want to discuss what’s on my mind. I’m a white supremist, because I don’t like people shitting on the ground in the park? Where does she get that?

It’s not okay for me to talk about a tax on “Chico Taxpayers Association” but it’s okay for her to tell me my concerns are not important because my skin’s not the right color – okay Robyn, I get it. When will these people learn how NOT to start a conversation?

Joe sent me some good comments related to the current unrest.

Is defunding police how streets are repaved? Don’t think so.

Good question. From what I understand, these people are not calling for the elimination of police services, but want a portion of the public safety budget to go to other agencies, unspecified. I don’t think the protesters understand how public agencies budget money. They don’t see how much money is poured into these public agencies – the Butte County Behavioral Health Department, for example, gets almost $100 million a year, but we still have old, mentally ill people and drug addicts dying on the streets, and we have a problem with police who don’t know how to handle either. The protesters need to come up with more creative answers than “throw money at it!”

Like Joe says, these agencies just use this angst as the basis for tax measure after tax measure, threatening to cut services if they don’t get more money, more money, more money. “Council’s dog/pony show, sales tax 101, promotes an immoral, unfeasible and regressive grab for people’s money, regardless of timing. “ Yeah, people are hurting right now, including local businesses – hardly a time to encourage people to shop less or shop online.

Here Joe suggests a harsher course than I’ve suggested so far, but I agree when he says, “California Rule be damned.

Best course of action: ALL city workers take a 50% pay cut and totally fund their retirement. California Rule be damned. Money would then be there to REPAVE the streets and address homelessness, lighting and crime.

The California Rule is a blatant taking. It’s like having some bum walk right in your front door and stuff his mangy fist in your cookie jar, take all your cookies, and then declare you have to buy more. The CA Rule says, point blank – the pension deficit will be paid before anything else. That’s what’s happened to our public programs, our streets, our park, The California Rule.

According to Joe Matthews in Zoccalo, “The California Rule is the misleading moniker we’ve given to our most troublesome legal precedent: public employees are entitled to whatever pension benefits were in place when they started work.” Matthews adds, “By requiring ever-escalating retirement benefits that force cuts in public services, the California Rule has effectively made a lie out of every significant guarantee in the state constitution, from balanced budgets to speedy trials.

In other states, Matthews says, “only pension benefits already earned by actual work are protected. California is one of only 12 states that have protected the right to earn future pension benefits for work not yet performed.”

 Joe expresses the frustration I feel, especially when I talk to a person like Robyn. “What’s a citizen like me to do? I don’t protest, pillage, rape, burn or kill!

Robyn, I wonder if you have an answer for Joe? Let him eat chocolate, you say?

City sales tax measure in June 23 agenda – speak up, we might still be able to keep this measure off the ballot

20 Jun

The agenda is out for this Tuesday, June 23, so-called “special” and most certainly CLOSED city council meeting. You can look at it here, on the Chico Engaged site.

https://chico-ca.granicusideas.com/meetings/706-june-23-2020-special-city-council-meeting/agenda_items

I hate the report they’ve presented for 3.1 on the Consent Agenda – the mysterious Supplemental Allocation/Budget Modification. That’s a holdover from a cancelled meeting in April. Remember, they had a rainbow list of stuff to spend that projected money on, until Orme pulled the plug with dire predictions of COVID tanking our finances.

Now, look at the report in Tuesday’s agenda, Item 3.1, it’s nothing like the straight forward report in that April agenda. Can anybody tell me exactly where the money comes from, whether it exists or is still only a projection, and what exactly they intend to spend it on? They wrote the report “not for dummies,” so I don’t get it.

When will council get it? This is exactly the kind of stuff that leaves the public with a taste of mistrust.

Then there’s the ballot measures – wow, these all merit more serious discussion in OPEN meetings, but see how these guys are shoveling through this stuff just as fast as they can while they have the cover of COVID.

Again, this is what fosters mistrust in these people. Just keep it comin’!

Here’s my favorite ballot measure:

Shall an ordinance to fund essential city services such as preserving the number of on-duty police officers and fire fighters, protecting 911 emergency response times, maintaining and repairing streets, sidewalks and Bidwell Park, and funding other general services and essential activity, by establishing a 0.5 percent sales tax, providing approximately $9,000,000 annually until June 30, 2029, subject to annual audits, with all funds staying local, be adopted?

I’ve been waiting for this measure for years. They’ve been talking about it since at least 2012, when Tom Lando ran a survey. He reported a “negative” response, but the idea stuck. Since then both the city of Chico and Chico Area Recreation District have hired various consultants, all on taxpayer money, to run surveys trying to convince us that we do want to pay more taxes.

Here’s how that works. The consultant asked respondents to “rank” various arguments. “I’d like to read you statements from people who SUPPORT the Chico City Services Measure. After each one, please tell me how convincing [very convincing or somewhat convincing] that statement is as a reason to vote FOR the measure.”

That’s the Band Wagon Effect – telling you that other people support this measure. And then they begin campaigning for the measure by reading you reasons to support it.

They hold out a stick in one hand – implying cuts to fire and police – “We need to pass this measure to make sure city services can keep up with the increase in population, keeping us all safe and protecting our quality of
life..
.” – and a carrot in the other – “much needed revenue for road upgrades and repairs“.

As you can see, looking at the proposed measure above, they use the most popular responses to write the measure.

I always wonder – am I the only one who is offended that they use my own money to manipulate me in this way? Using a survey of 400 people in a town of over 90,000? Really think I’m that dumb? Really?

When I looked at Chico Engaged I didn’t see any comments posted. I hope more people will tune in and chime in – we still might have a chance to stop this measure before it gets to the ballot.

Orme and Constantin propose to use the sales tax proceeds to incur bonded debt for capital – what does that mean?

16 Jun

Bob reminds me that city staffers Mark Orme and Chris Constantin have made it pretty clear they want to use the proceeds from the sales tax measure to secure a bond (bonds?). But it never really comes into the conversation.

In his report at the June 9 meeting, Item 5.2, proposal for a tax measure, Orme explained the “sensitivity range” for the tax – meaning, what they expect to get from the tax, from worst case scenario ($12 million annually) to the best ($21 million).

Using an average estimate of $18 million, Orme begins a sales pitch for a bond. “In Exhibit 3, the City would receive approximately $18 million on average. The exhibit highlights both the worst and best scenario for revenue with the worst case being the amount which could be safely relied upon for ongoing expenditures. As such, the City may incur bonded debt for capital or hire staff and not have a high risk or need to default or layoff should the economy shift.”

He talks at first about hiring more staff but here he tells us he wants $9 million for debt service on the bonds while only $3.8 million for hiring staffers. “As debt for capital represents the largest ongoing commitment, the exhibit shows the amount available for debt service should the City Council determine to allocate 50-80% of the worst case revenue amount for capital. The remaining revenue would be available for other ongoing uses, and what is left in each year may be used for onetime type of expenditures. For example, if the City allocates no more than 70% for capital, the City may safely use almost $9 million for capital debt and $3.8 million of staffing and related expenditures annually.”

Debt for capital” means either a loan or a bond. Investopedia explain this as it relates to private business, but it’s the same for public agencies.

https://www.investopedia.com/ask/answers/032515/what-are-different-ways-corporations-can-raise-capital.asp

“Debt capital is also referred to as debt financing. Funding by means of debt capital happens when a company borrows money and agrees to pay it back to the lender at a later date. The most common types of debt capital companies use are loans and bonds— “

As you know, a business goes under when it makes bad decisions and can’t pay it’s debts, but when a public agency makes bad decisions, the taxpayers get stuck with the debt service. Orme wants 50 – 80% of this sales tax for servicing the bond, but like Bob pointed out, nobody on council raised a single question when he flew through this report.

And here’s the whammy – they can do this without the consent of the voters. It will not be mentioned in the text of the measure. Council and staff will make those arrangements behind closed doors. One option they will probably discuss is a Pension Obligation Bond.

According to Howard Jarvis Taxpayers Association President Jon Coupal, “POBs are bonds issued to fund, in whole or in part, the unfunded portion of public pension liabilities by the creation of new debt. It is like paying your Visa bill with your Mastercard.”

And, I believe it’s a tax passed without the voters’ consent. Coupal reminds us, “A policy reflected in the California Constitution since the 1800s is that government debt should be approved by the voters.  The reason for this is simple — today’s politicians should not be allowed to burden tomorrow’s taxpayers without the consent of those financially obligated for the repayment. Back in 2003, the Howard Jarvis Taxpayers Association sued the state of California for its attempt to issue a statewide POB without voter approval. HJTA prevailed and the POB bond proposal was invalidated.

But Coupal reports that cities in California are still procuring POB’s without voter approval. Even after their victory against the state in 2003, HJTA joined the Ventura County Taxpayers Association to force the town of Simi Valley to rescind an illegal POB by demanding it be put before the voters.

Furthermore, “Other cities are considering or have actually pursued POBs without voter approval, including Riverside and Montebello.”

The Government Finance Officers Association warns that “the invested POB proceeds might fail to earn more than the interest rate owed over the term of the bonds, leading to increased overall liabilities for the government…

This is exactly what has happened to CalPERS – poor investment returns led to increased overall liabilities for the government, and you know, that means the taxpayers.

They will bring this all back to the table at another closed meeting on June 23. Between now and then we need to let our city council members know we know what’s going on and we’re not going to go for it.

City’s tax measure is a “bait and switch”

15 Jun

Why are things like gyms and hair salons, even Cal Skate, opening up but city hall still shut down to the public?

Because they’re working on their tax measure. Chico city mangler Mark Orme says they only have until July 7 to get it finished. The county clerk’s deadline for submission of ballot measures is July 10.

At the upcoming June 23 meeting, $taff is supposed to introduce the text for what council agreed to at the June 9 meeting – Karl Ory’s proposal for a half-cent sales tax increase, to begin in late 2021, with a “sunset”, or termination date, yet to be finalized.

This is an old tactic, and used very commonly. Propose a smaller tax, with a sunset date, and then delay the implementation until people forget they passed it. Then chide them about how little they noticed it, and convince them to make it bigger and permanent on a subsequent ballot.

In 2011, Jerry Brown put a half cent increase on the ballot, Proposition 30, saying it would be “temporary”. He also wrote in an income tax increase for people making over $250,000, because polls at the time showed that a large number of California voters believed the state was “divided between the haves and have-nots”, and most believed they were among the “nots”, so it was more likely to pass if it took a poke at the upper class.

https://www.scpr.org/blogs/economy/2011/12/06/3952/jerry-browns-tax-proposals-will-they-solve-202/

In 2014, he “slammed” Republicans for blocking an extension of this “temporary” tax. Later that year he ran a survey that indicated 53% support for extending the tax.

https://www.sfgate.com/news/article/California-s-temporary-tax-increase-should-be-5928248.php

He tried to make both taxes permanent in 2016 but polls indicated voters would only support the tax on “the rich”. So Brown put Prop 55 on the 2016 ballot and the voters made the “tax on the rich” permanent.

There were a lot of local income tax measures on the ballot that year.

https://ballotpedia.org/November_8,_2016_ballot_measures_in_California

And a lot of them passed. Parcel taxes and bonds of all kinds. That was the year both Butte College and Chico Unified put bonds on our homes. The voters approved those with very high margins.

But March 2020 was the turnaround. Many local tax measures failed, in fact, Tehama County kicked the shit out of theirs. And, the CARD parcel tax measure didn’t even get a simple majority. The analysts call this “tax fatigue.”

So, you see why Mark Orme and Chris Constantin are afraid to put up a 2/3’s measure. It’s certainly not because it would have to be dedicated, because it is not true that a 2/3’s is automatically dedicated. Measure A, for example, was not dedicated, but required 2/3’s.

In order to get the 2/3’s people off their back, they offer a smaller tax and a sunset. Ory is hoping the Chamber of Commerce will drop their demand for a 2/3’s measure and run their campaign for them.

We’ll see if they bite.

The discussion is finally getting interesting

13 Jun

Last week’s meetings (6/9 continued to 6/10) were the most outrageous yet. You can get an entertaining and informative recap from Rob Berry here:

https://www.facebook.com/groups/chicofirst.org/

“One day later, another city council recap, June 10, 2020”

Berry’s a lawyer, he understands a lot more of this crap than the average housewife, and he loves to yak, so I like to read his recaps.

I also like to check the comments on Chico Engaged. I don’t think Engaged is a substitute for open meetings, but it’s an interesting site. For example, the biggest conversation regarding this past week’s meetings was the tax measure. Of 87 comments, I only counted 3 or 4 that said they would support a simple measure. The rest registered themselves as “opposed.” A few of those said they wouldn’t support any tax, others expressed a willingness to discuss a 2/3’s measure, even support it. Most of those cited public safety, but a few others mentioned roads.

Troubling to me was that some actually mentioned schools – it’s scary how little people know about the government and which agency funds what. The city has nothing to do with the schools, in fact, those agencies are often pitted against each other over property issues like mowing weeds and bum camps.

The most common reason to oppose was distrust in the current Chico City Council – 44 comments included that as a reason they would not support the proposed measure. Some named Ory, Stone, Brown and Huber directly, some included Schwab, and a couple included “the city manager.”

Here’s a high note – 22 people complained that the discussion was taking place in closed meetings. Some cited the shut down as their only or main reason to reject the sales tax measure, accusing the council of trying to shove a poor measure through the chute behind closed doors.

Which brings the conversation back to the mistrust in council and staff. Look further at the Chico First site, I see these comments:

“If 30 or 40 Chico City employees would reduce their fat bloated salaries, we might have enough money to operate.”

It is so refreshing to read someone else’s thoughts on that, I was afraid people are deaf, dumb and blind to the payroll expenses. I wish everybody was this interested in the budget.

Here’s another that says it pretty plain.

“If the council weren’t crooks wasting the tax money they already have and actually used it for its said purposes the city wouldn’t be in this situation! Cut the council’s salaries! NO NEW TAXES! Screw you your vagrants, addicts, park campers and the crime that you fucks promote! To hell with your communist college too!”

It’s comforting to know that other people know about little perks like the council members’ salaries and, hopefully, their overgenerous health packages. And, as I knew, people are pissed off about what the “homeless industrial complex” is doing to our town. But you know, I haven’t heard the college called “communist” since I was a kid!

Finally, a really well thought-out response to the weird meeting I watched on Tuesday night:

“My three thoughts from this meeting.

First, I found Chris Constantine’s presentation uncomfortable. I didn’t appreciate him telling the council his marriage ended because his job is so hard. The simple fact is the citizens of Chico do not trust this council or staff to spend the money wisely.

Second, I laughed out loud when the discussion of ‘sunsetting’ the sales tax came up. When has a tax ever seen a sunset? 😂

Third, did anybody catch Mark Orme’s sneaky maneuver with the Homeless Solutions Coordinator position during the budget discussion? When Joy Amaro was brought on board, it was only funded as a 4-month trial. When Ann asked about that approaching end date, Mark Orme said: ‘I asked them to put that in my budget…the full year’s worth of funding.’ Ann’s reply: ‘I appreciate that you have done that. I think that’s an investment this community really can’t go without.’ Hmmm.

The whole presentation was unbelievable. Very emotional, unprofessional, troubling behavior. Constantin’s melt-down, then Ory’s stuttering, shaking, desperate delivery, followed by a very visibly pissed off Mark Orme. I sense a lot of trouble Downtown. These people can’t even run their own lives, but they think we should be grateful to have them? Grateful to the tune of paying their outrageous salaries and then paying them again in pension? Thank you Mother, may I have another?

And no, I have never seen a tax sunset, including the recent sales tax that Governor Moonbeam foisted on us as temporary and then put it on the next ballot as permanent. It passed – people get used to things fast, especially when they are not implemented for a year after the election, as Ory suggests for this measure. People forget, and then they don’t notice a few pennies here and there. Ka-CHING!

And yes, while they keep telling us Orme just laid off 11 employees (which is misleading, they were empty and part-time positions, even interns), they don’t talk about the hiring of Amaro or the new Public Information Officer. Full time positions with benefits.

I’m so glad others are hip to the poor decisions and the misleading by staff that add up to a big mess for those of us who pay for all of it.

Yeah, what a meeting. So now we have a proposal for a half-cent tax that will not take effect for one year after the election and which will sunset in a short amount of time – did Ory say 9 years or something like that? But thank goodness we have some voters who question what’s going on. The discussion is finally picking up.