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Camp Fire a year later – quite a turnaround from gloom and doom to prosperity for City of Chico

26 Dec

Remember claims made by City of Chico staff that Camp Fire evacuees were causing financial problems? Here’s a story from as late as May –  6 months after the fire – claiming that the evacuees were still overwhelming city services. 

https://chicotaxpayers.com/2019/05/10/state-population-estimates-based-on-new-housing-contruction-not-occupation-but-mark-orme-still-claims-he-has-hard-numbers-on-camp-fire-evacuation/

“Last week, the state Department of Finance released the figures, with Chico having grown by 20.7 percent as of Jan. 1, 2019. The population as of the new year was 112,111, according to the state, up by an estimated 19,250 people from a year earlier.”

As you should know by now, city of Chico is planning to put a sales tax increase on the November 2020 ballot. Like CARD, which has put a parcel tax titled “Measure A” on the March ballot, the city of Chico cannot openly campaign for their sales tax after it has been assigned a ballot title. So, like CARD, the city of Chico must do their campaigning now, with the help of the local fishwrap known as the Enterprise Record.

The ER went willingly along with city management, printing article after article about this imagined population boom. I said it then and I’ll say it now – where the hell are they? We just went through Christmas – why weren’t the roads around the mall shut down with all these displaced people? I drive in rush hour traffic almost every day – where are the commuters? Where the heck are all these new people? 

Of course, the evacuees left their mark alright – “The city saw $2.5 million more in sales tax revenue than they had budgeted for, Dowell said, and approximately $700,000 more in transient occupancy tax fees.”

Not to mention, “ approximately $500,000 in fire and police department costs have been reimbursed — as well as $3 million from the state government in recovery funds”

 But if seeing isn’t believing, here’s the data that tells us the lion’s share of the evacuees have gone.   “‘Those two [ sales and occupancy tax]  relate to what we can tell is a boost,’ [city finance director Scott]  Dowell said, ‘but we’ve actually seen those — particularly the occupancy tax — dip.’”

Furthermore, read Steve Schoonover’s article posted below –  Butte County Population Dips More Than 10,000 – quoting the same agency (Dept. of Finance) that “estimated” the population BOOM after the fire, Schoonover reports, “The latest report, from 2018 to 2019, Showed Butte’s population dipping from 227,353 to 216,965. That’s a loss of 10,388 people, or 4.57 percent of the population.”

Now think folks – you’ve heard about the upcoming US Census 2020. Remember US Census 2010?  The federal government does it’s best to actually COUNT people. What a concept. I remember the census worker who hounded us about our neighbors. I read stories in various news sources about census workers hounding people literally to death. Now THINK – have you seen or heard from any Census Workers since 2010?  No, they’re still looking for workers, the census doesn’t begin until 2020.   So where does the Dept. of Finance get these numbers? Read this, from the actual Dept. of Finance news release:

“Changes to the housing stock are used in the preparation of the annual city population estimates. Estimated occupancy of housing units and the number of persons per household further determine population levels. Changes in city housing stock result from new construction, demolitions, housing unit conversions, and annexations. The sub-county population estimates are then adjusted to be consistent with independently produced county estimates.”

I didn’t have to count. I saw what happened to Chico in the weeks directly after the fire and I watched as people fled the area over the following months. I personally know people who never even went  back to look at their burnt out lot, and I can’t say I blame them. They spent a month or two in Chico gathering their wits, and then they were scattered to the wind. As is reported in Schoonover’s article below.

Now the city of Chico admits they actually made profit off the fire. But you know they are still planning to put a sales tax increase on the November ballot. In fact, Scott Dowell mentions another one of his dog-and-pony budget presentations coming up in March.  “Dowell said his staff will start to work on budget items for the 2020-2021 budget when they get back from the holidays in January. Additionally, the city will host a public meeting to learn the ins and outs of the new budget on March 12.”

Uh-huh. That ought to be interesting. 

I cut and paste the articles into the blog because I know a lot of you don’t have a subscription to the Enterprise Record and may not be able to see this stuff. Which ought to be illegal, because the ER is very obviously running a propaganda blitz for the city, not to mention CARD. 

By  | repley@chicoer.com | Chico Enterprise-Record
PUBLISHED:  | UPDATED: 

CHICO — Financially, the Camp Fire hit the city of Chico hard in 2019, despite never physically crossing into the city’s territory. Despite that, the budget is actually doing OK, said Scott Dowell, Chico’s administrative services director.

The city of Chico did not make any substantial changes to the budget following the Camp Fire, and approximately $500,000 in fire and police department costs have been reimbursed — as well as $3 million from the state government in recovery funds, Dowell said.

Of course, “we’re still processing, we’re still living it,” Dowell said, of the aftereffects of the Camp Fire.

Because the city’s fiscal year runs from July to June, the most recent numbers available are from June 30, Dowell said. But those numbers show Chico with a significant surplus: More than $20 million.

That’s a big turnaround from 2013’s budget, when the city was facing bankruptcy.

Two of the biggest factors for that surplus are directly related to the Camp Fire: Sales tax and hotel tax, also known as the transient occupancy tax.

The city saw $2.5 million more in sales tax revenue than they had budgeted for, Dowell said, and approximately $700,000 more in transient occupancy tax fees.

“Those two relate to what we can tell is a boost,” Dowell said, “but we’ve actually seen those — particularly the occupancy tax — dip.”

A lot of that surplus hasn’t been designated to a use by council yet, but of the $3 million given by the state, half went toward new communications technology that will help the Chico police and fire departments better deal with emergencies in the long-term. The city has also considered putting in a new intelligent traffic system, which would replace the current technology that has been in use, in some cases, since the 1960s.

Dowell said his staff will start to work on budget items for the 2020-2021 budget when they get back from the holidays in January. Additionally, the city will host a public meeting to learn the ins and outs of the new budget on March 12.

“We’re doing far better than we were 6 years ago, but we have a ways to go,” he said.

 
 Butte County Population Dips More Than 10,000
By  | sschoonovernews@gmail.com | Chico Enterprise-Record

Butte County lost more than 10,000 residents due to the Camp Fire, according to estimates released last week by the state.

That was according to an annual report by the Department of Finance that calculates county populations from July 1 of one year to July 1 of the next.

The latest report, from 2018 to 2019, Showed Butte’s population dipping from 227,353 to 216,965. That’s a loss of 10,388 people, or 4.57 percent of the population.

Part of the loss — 142 — came because that many more people died than were born in the county.

But the state estimates 10,411 residents left Butte County for elsewhere in the United States. It attributes the change to the Camp Fire on Nov. 8, 2018, that killed 85 people, and also destroyed 6.5 percent of the housing supply in the county.

The outward flow was partially offset by 165 people immigrating here from other countries.

The population loss by numbers and percentage was the highest of the 58 counties in the state.

Conversely, the counties surrounding Butte had inflated growth rates, all far above the state average of 0.35 percent.

Sutter was the fastest growing county in the state by percentage, adding 2,243 people, or 2.21 percent. Most of that — 1,364 people — consisted of people moving in from elsewhere in the United States, most of them likely from Butte County.

Glenn County was No. 3 by percentage, adding 442 people, or 1.54 percent. The state estimated 365 of those people were “domestic migrants,” a category that would include those displaced by the fire.

By comparison, between July 1, 2017 and July 1, 2018, Glenn grew 0.48 percent.

Tehama County grew by 1.12 percent, adding 725 people. Yuba County also grew 1.12 percent, adding 866 people. Colusa grew 1.00 percent, with 223 new residents.

Even Plumas County, which has been losing population since 2016, was in the plus column this past year. It added 156 people, a 0.83 percent growth rate.

As a state, California added 141,300 between July 1, 2019 and July 1, 2019, for a total of 39,959,095, one of the lowest growth rates since 1900, according to a Department of Finance press release.

More people left the state for elsewhere in the United States than migrated here, with 197,594 moving out. However births outpaced deaths by 180,786, and 158,118 people immigrated to the state from other nations.

Butte County population dips by more than 10,000 due to Camp Fire

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“Fungibility” – moving peas under walnut shells

14 Dec

My husband constantly reminds me that the new revenues brought in by tax increases just free up existing funds to be spent on pensions and benefits. Dan Walters has a word for this deception – “fungibility” – “If a city’s voters can be persuaded to raise their taxes for parks and recreation, for example, it effectively frees up more money to pay its pension bills without acknowledging that motive.”

Walters calls this a bait-and-switch approach to getting voters to raise taxes on themselves – they offer you a carrot – oh yeah, ice rink – to take your eyes off their pension deficit. The city of Chico, for example, has been taking money out of various funds and placing it in the General Fund, from which they can transfer it anywhere they want. And they’ve established TWO pension “trust” funds – “CalPERS Unfunded Liability Reserve Fund (903) and the Pension Stabilization Trust (904).

From budget policies 2019-20

“CalPERS Unfunded Liability Reserve Fund (903)
Fund 903 has been established to accumulate funds for the annual payment of the CalPERS unfunded liability payment for the City. The targeted reserve amount is equal to the estimated unfunded liability payment for the subsequent year due to CalPERS. In accordance with GASB 54, this fund balance is committed.”

“Beginning in FY2017-18, each department will set aside a set percentage of payroll costs to fund the annual payment of the CalPERS unfunded liability. A target reserve of 10% of the annual unfunded liability expenditure will be retained in the fund.”

From 2019-20 draft budget – page FS 75, Attachment A, Fund Summaries CALPERS UNFUNDED LIABILITY RSV FUND

In fiscal year 2017-18 they moved $7,323,978 into the Unfunded Liability Reserve Fund – $3.9 million from the miscellaneous employees payroll, and $3.2 million from public safety funds.  In 2018-19 they took $8,358,417.  The city manager’s recommendation for 2019-20 is $9,615,778. 

The Pension Stabilization Trust is a separate fund – The City Council established a Pension Stabilization Trust under Internal Revenue Code
Section 115 on June 19, 2018. The irrevocable trust is restricted for use to pay future CalPERS retirement contributions. The investment model strategy for the Trust is conservative. A conservative investment model is defined as a strategy that does not exceed an investment allocation over 20% in equity securities with the remainder investment allocation in fixed income securities. The model strategy may only be modified by the City Manager with City Council approval.

Fund 904 – Pension Stabilization Trust shall account for the financial activity of the Trust. Trust accounting will be provided at least quarterly as part of the monthly monitoring reports provided to City Council.

Correct me if I’m wrong, but what I see is not only a fund through which they take from other funds to pay down their deficit, but another, separate fund that also takes money from other funds – to be invested on behalf of the pensioneers. 

Here’s something scary I ran across in the budget policy documents – the city manager can approve up to $100,000 transfers without council approval.

Transfers Between Council Approved Capital Projects (Different Years – Rescheduling Projects) – Projects are approved over a ten-year period by Council. Each budgeted project has been appropriated an amount that may include funding from multiple City Funds. Appropriation transfers between capital projects scheduled in different years requires approval of the City Manager and City Council based the following authorization amounts:

• Up to $100,000 – City Manager;
• Over $100,000 – City Manager and City Council

Now, ask yourself Pollyanna – why are the road, sewer and park funds bottomed out? 

Because, as Walters reports, pension costs, especially for public safety employees, “are rising especially fast. They now average about 50% of payroll and are projected in the new report to top 55% by the mid-2020s. A few cities are already nearing or reaching 100%.”  And, city management, as you see above, is allowed to dip into funds as they wish, transferring the garbage tax money from the Road Fund to the General Fund last year, as noted in the budget. From the General Fund they can transfer as much as they want into the Unfunded Liability Reserve or the Pension Stabilization Trust, as long as it’s in increments less than $100,000.

When Brian Nakamura came on as City Manager in 2012, he reported two deficit figures – one about $168,000,000, the other around $194,000,000. I think the  first figure was the pension deficit figure, and the second was the total deficit for pensions AND benefits. Today the city finance manglers report a total deficit of around $130,000,000. How do you think they paid that down so fast? 

Here’s Walters on the subject:

Dan Walters: It’s a bait and switch on the state’s public pensions

By  | CalMatters

Local officials, particularly those in California’s 400-plus cities, have been complaining loudly in recent years about pension costs, raising the specter of insolvency if they continue their rapid increase.

Last year, the League of California Cities issued a report declaring that “pension costs will dramatically increase to unsustainable levels.”

The California Public Employees Retirement System (CalPERS) confirms that projection in a new report.

The report reveals that mandatory “employer contributions,” including those from the state and school districts, as well as local governments, rose from $12 billion in 2016-17 to $20 billion a year later.

It also warns that the payments will continue to rise well into the next decade as the giant trust fund tries to recover from dramatic investment losses in the Great Recession, adjusts to lower earnings projections and handles a surge of baby boomer generation retirees claiming benefits.

“The greatest risk to the system continues to be the ability of employers to make their required contributions,” the new report declares, adding, “It is difficult to assess just how much strain current contribution levels are putting on employers. However, evidence such as collections activities, requests for extensions to amortization schedules and information regarding termination procedures indicate that some public agencies are under significant strain.”

Pension costs for “safety employees,” police officers and firefighters mostly, are rising especially fast. They now average about 50% of payroll and are projected in the new report to top 55% by the mid-2020s. A few cities are already nearing or reaching 100%.

However, as much as they complain about CalPERS forever dunning them, California’s local officials are largely unwilling to directly ask their voters for more taxes to pay pension bills.

Hundreds of local tax increase measures were placed on the ballot last year and hundreds more are likely to be proposed next year, but almost universally they are billed as improving popular local services, such as “public safety” or parks.

It’s where the concept of “fungibility” kicks in. If a city’s voters can be persuaded to raise their taxes for parks and recreation, for example, it effectively frees up more money to pay its pension bills without acknowledging that motive.

We saw a wonderful example of fungibility last year in Sacramento, where voters were persuaded to raise local sales taxes on the promise of civic improvements by an amount that closely matched increases in the city’s obligations to CalPERS.

We may be seeing another in Oakland next year.

The Oakland City Council is placing a “parcel tax” — a form of property tax — on the March ballot to improve parks, recreational and homeless services and stormwater drainage. The tax, $148 annually per real estate parcel, would generate an estimated $20 million a year.

As it happens, however, the most recent CalPERS report on Oakland’s pension obligations reveals that they will increase from $194 million in 2020-21 to $226 million by 2025-26, which would more than consume the revenue from the parcel tax.

So why don’t city officials just own up and publicly acknowledge that pension costs are driving their budgets into red ink and ask voters for more tax money to cover them?

They — and the unions that finance tax increase campaigns — clearly fear that being candid would backfire. If voters knew they would be paying more taxes to support pension benefits for city workers that are probably much better than they have themselves, they might refuse to go along.

Bait and switch is more politically expedient.

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Linda McCann: Wake up people, you should be concerned as another hand wants to slip in your pocket to remove your cash!

11 Dec

It’s official – I got my “free” subscription from Mike Wolcott and now I know – the only good part of the tired, old and fuddled Enterprise Record cat box liner is the letters section. Thank you Linda McCann for tipping us to the latest assault on Prop 13.

 

I read with interest and concern the article in the December 6 Chico E-R regarding AB 48, or as it’s been dubbed Proposition 13.   OK I get that,  a proposition to put to a vote a bond issue to raise money for our schools. However there’s one sentence that is of great concern to me as it should be to all home owners protected under the 1978 Proposition 13.

The article states and I quote, “AB 48, Proposition 13 is not to be confused with the 1978 Proposition 13 which some education groups hope to overhaul in November to raise revenue for cities and schools.”

Wake up people, you should be concerned as another hand wants to slip in your pocket to remove your cash!

— Linda McCann, Paradise

Here’s the legislative digest entry:

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB48

This is a proposal to lower the voter approval for bonds from 2/3’s to 55 percent. This is not democracy, it’s overpaid school administrators sticking their hands in our pockets to pay for their outrageous pensions. In Sacramento, one school district is tanking because of a 15% raise they gave their already generously compensated teachers. 

Do they really think we’re stupid enough to fall for this trick? Calling a bad proposition “13”? Are we that dumb? Don’t wait until after the election to find  out – tell your family, friends and neighbors not to fall for this trick. Write a letter like Linda McCann. 

Just think, what if Paul Revere had thought his actions didn’t matter?

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The Homeless Industrial Complex is a failure – how many people will die on Chico streets this winter despite all the money shoveled into the system?

30 Nov

The headlines were conflicting this week in Chico – Black Friday shopping, Thanksgiving fun run, community meals, city setting up a “warming tent”, and a woman found dead along Lindo Channel.

Knowing how extensive our “homeless” services are here, I have to wonder – how does this happen?

The city and county continue to bumble the whole operation. We have services, plenty of them, but they are not coordinated, often compete for funding, and work toward their own instead of the public’s best interests. For example, Tom Tenorio gets a very generous salary out of the Esplanade House, even taking one of the apartments intended for housing a family to supplement his office. I’m reminded of a scene from Doctor Zhivago: “All this office, for just one fat-cat bureaucrat!“

There’s alot of competing for funds and in-fighting in the Homeless Industrial Complex. They fight over money like crows fighting over road kill. When Stairways manager Mike Madeiros made a decision not to accept a grant because it would mean allowing transgender individuals into his shelter, Tenorio went on the warpath, complaining that they would lose that grant because Madeiros had refused it. Wow, that was an eye opener about the way these “non profits” are operated – too bad so few taxpayers were paying attention.

We also have disagreements over who will be served.  Madeiros was uncomfortable with allowing transgender or women in his all male shelter, worried about conflicts. Some shelters will not accept inebriated people, so CHAT (Chico Housing Action Team) has had set up “low barrier” shelters in houses around town. The city offers a warming tent, set up this weekend, that is supposed to be open to anyone who is cold. So far these tents have served less than 20 people a night, including city officials  and staffers.

And now Chico Housing Action Team wants to install “elderly” transients in Tough Sheds in a field along the freeway. 

All these programs are competing for money. And, as of this weekend, they are failing in their mission to get people off the street. 

In Chico we have many “low-income” subsidized housing projects. I just found out a huge old apartment building around the corner from one of my rentals is owned by HUD.  We have newer stuff, like Jarvis Gardens in south Chico, and 1200 Park Avenue, both built to house low-income seniors. These are public projects, paid for with tax dollars. 

But again, there is a lack of coordination. The Camp Fire is a good example of how these agencies have failed – here we had truly needy people, a natural disaster, and we couldn’t house them? But we spend millions a year on programs set up for drug addicts and criminals? 

CHAT proposes little sheds built on an empty lot along the freeway. These people are duplicitous. They already run low-barrier shelters in homes spread out across Chico, no noticing of the neighbors – CHAT knows they need to keep this project a secret. They have nothing to crow about – no list of names of people permanently taken off the street into stable housing. No success stories. And every year, several people die out on the street, regardless of all their feel-good fascism.

Now they want to build a project with city support –  they’ve already racked up a pile of $taff Time with their demands.  They want to be let out of the regular building process, sub code, no environmental review, NO FEES. And they are not being honest about how much it will cost to provide sanitary infrastructure. They first said there would be a common bathroom – now they show us plumbed sheds with toilets? Those will all have to be hooked up to sewer, which is not available on the property. There isn’t even water or electricity on the lot. 

But when my family bought a crapped out old house, the city and county, the school district, CARD – they all wanted to get their thumb in our pie, with all kinds of fees and constant inspections. The code enforcement officer, without so much as a smile, told us we had to put more Dap on the toilet because we had male children. She demanded a ladder to climb up on our roof.  She told us we had to  tear down an old building on the property before we could get clearance on the house.  And then she told us the tear  down required yet another permit. 

This is how taxpayers get treated. 

The city of Chico is a mess. Our finances are in the red, we have constant threats of bankruptcy, although, you will only hear about these problems in Chris Constantin’s pitch for a sales tax increase. Constantin and Orme are walking a fine line – trying to tell us what a mess our city is in without taking any blame for that mess.  For years they’ve mismanaged our money, putting most of it into their salaries, pensions and benefits, admittedly deferring maintenance on city infrastructure all the while. Management salaries are at an all time high, and Constantin admitted recently we spend more on cops than other California cities our size. 

The transient problem is just another part of the mismanagement. They allow these bums to trash our parks and creeks, predate on our neighborhoods, and spread drugs to our kids because they are a revenue source. When the city council signed the Shelter Crisis Designation, they got an annual grant worth over $4 million. They got another $4 million for handing part of the county fairgrounds over to the Jesus Center. That’s an annual grant, and it will go up. And they don’t have to spend it on the “homeless”, it just goes right into the General Fund. 

Just like the proposed  sales tax increase. 

So, we need to ask ourselves – why would we hand a tax increase to Mark Orme and Chris Constantin?  They stand over this whole mess, it’s their recommendations that council follows, dumb and blind. The best argument against this sales tax increase is our current management, and how they have mismanaged millions already.

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Jen Sidorova: Why millennials should care about government pensions

25 Nov

Here’s something hopeful – Bob sent this piece from Market Watch, written by a young person. 

https://www.marketwatch.com/story/why-millennials-should-care-about-government-pensions-even-if-they-dont-have-one-2019-11-21

Jen Sidorova explains the pension crisis and why young people should be concerned. 

“Governments with underfunded pensions need to come up with the money somehow, and the most obvious way is to raise taxes. What this means for millennials, who are already the largest generational group in the workforce, is that more of their tax dollars could be diverted to paying down public pension debt instead of paying for public services. All the funds that should have otherwise gone toward schools, roads and state parks, could be redirected to cover underfunded pensions for employees who stopped working 10 or 20 years ago. So, pension debt will affect all millennials, even those outside public sector jobs — because everyone’s a taxpayer.”

That last line, “everyone’s a taxpayer,” seems to escape certain groups – like renters, and young voters who still live at home or are supported by their parents. Young people have to stop saying “No worries” and start worrying about this mess before it’s just a fact of their lives. 

Sidorova explains the two-prong fork – not only will young people live with crapped out infrastructure and higher taxes, if they go into the public sector – like my son and many of my friends’ kids – they will not enjoy the same level of pay and benefits generously lavished on their predecessors. In fact, their contributions go directly into the pockets of retirees they never even knew.

“Currently, state and local pension contributions make up about 26% of the total payroll costs. According to my analysis of the PPD, in states like Illinois and Kentucky, the government’s contributions exceed 50 percent of the total payroll costs of their largest pension plans — a consequence of enormous unfunded liabilities. All the money that could’ve gone toward increasing salaries and improving work conditions now goes toward paying pension debt. That means young workers are missing out on benefits and pay raises in the short term. For state employees, given the constitutional protection of pensions, salary freezes are another likely consequence of growing pension debt.”

Here she talks about solutions,

“As these systems try to find solutions, it’s crucial they focus on reforms that ensure paying down debt as fast as possible, adopt more conservative actuarial assumptions about investment returns, and introduce financially sustainable retirement plan offerings, as those could go a long way to ensure retirement security of the millennial labor force.

what she doesn’t talk about is who should pay down the debt. I believe the workers should assume much higher shares, or accept the loss of their pensions and go with 401ks. But that would take strong, publicly supported politicians, and I don’t know where we will find those people. What I do know is, neither our city councilors not the CARD board have the guts to do this. In fact, Tom Lando, who has been with CARD for a few terms now, is the city of Chico’s biggest current pensioneer.

https://chicotaxpayers.com/2012/01/30/heres-why-lando-wants-to-raise-your-sales-tax/

LANDO, THOMAS J CHICO $11,236.48/mo $134,837.76/yr

That’s a nine year old post, they get cost of living increase every year. Here’s an up-to-date table from Transparent California.

https://transparentcalifornia.com/pensions/search/?q=Thomas+Lando

Wow, cost of living increases more than $1,000/year, for some people, because Lando’s pension has gone up by about $16,000 in 13 years, to $150,671.00  And he serves in various interim positions, which come with more salary – for example, he was the interim director of Feather River Recreation District, and then the interim city manager of Oroville for a couple more years. 

https://www.chicoer.com/2018/03/21/tom-lando-appointed-interim-oroville-city-administrator/

He took a smaller salary – “not to exceed $30,000” – so what? How many of us would like to pocket another $30,000, in addition to the $150,000/year we already get? For nothing. 

This is so  ridiculous – people have to wake up.

It’s up to us to vote for better people. In the mean time, we need to get the word out to young people about how they can change their own futures for the better.

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Joshua Rauh: Public Pensions are an economic time bomb, and young people will be at the epicenter of the blast

24 Nov

Bob sent a link to a really interesting video that explains the “pension time bomb” in language the average person can understand.

https://www.prageru.com/video/public-pensions-an-economic-time-bomb/

Josuah Rauh is a professor of finance at Stanford School of Business, Director of Research for the Hoover Institute, and has written extensively on the nationwide pension problem. I love his no-nonsense style. This problem is really simple.

Rauh doesn’t mince words.  “I want to talk about three words that should scare the heck out of you, especially if you’re young. PUBLIC PENSION LIABILITIES”

He’s absolutely right, young people will be left holding the bag.  To quote Chico City Manager Mark Orme and Assistant Manager Chris Constantin, this city has “kicked the can down the road” on infrastructure maintenance  for many years. What neither man mentions is that the city has continued to pay increasing salaries and benefits for city management. They both lie through their teeth, claiming to have “stopped the bleeding…” performed “a miracle”. In truth they have both taken very generous pay raises and have already added a 401k plan to their already generous pension packages. More about that later.

So, our kids will get stuck with failing infrastructure and the billions in taxes it will take to fix it. Not to mention, paying for generations of public workers, like Orme and Constantin,  allowed to retire at age 50 – 55 with well over $100,000/year in pension.

Unfortunately, this is a message that mostly falls on deaf ears. Rauh continues, “that’s why all of this is so scary – no one is paying attention.” Well, in defense of the average citizen – myself – I’ll say, it’s been made complicated on purpose – go to a meeting, and listen to staff make it as convoluted as possible. 

Rauh puts it in simple language, as if he is explaining this to someone from another planet, who has never heard of such a ludicrous policy. “What is a public pension liability,” he asks rhetorically. “A guaranteed lifetime payment to somebody after they retire.” That seems simple enough, but the important word here is “guaranteed“.

Years ago,  private sector workers got pensions, but private businesses were not able to keep up with the costs associated, and either dropped their pensions plans for 401K’s or went under. Right now, once giant media conglomerate McClatchy (which formerly owned newspapers and tv stations all over the state), is going under due to unfunded pension liabilities. 

McClatchy’s financial distress has the company exploring options — including a sale

 

But public workers will not cooperate, they demand to keep their guaranteed pensions.  According to public employee unions,  no matter how the economy tanks, they get their money. While CalPERS promised to fund these outrageous pensions via investments in the stock market, they have failed miserable, and now they are laying the bag at our feet. 

Rauh continues, “They are eating state and city budgets alive… more than 62,000 retired public employees are receiving pensions of over $100,000/year…  Currently many cities are paying for multiple public departments at the same time, the department that’s working now, and (due to people living longer) a generation of two of public employees.” Estimates of the state’s total unfunded pension liability go over $200 trillion. 

The problem, he says, is “a corrupt merry go round  – public employee unions give donations to candidates who are then responsible for negotiating how much of your money  goes  to public sector workers“. In Chico the biggest donors in every local election are the employee unions, usually led by Chico Police Officers Association. 

The other problem is, “they hide the payments that are  due down the road.” Here in Chico, you have to know the right question to ask, in the proper vernacular, or they just ignore you. You have to watch agendas and read onerous reports printed in the smallest typeset available, sideways on the page. 

You have to be forward with these people.  Even when Dave Howell corrected CARD General Manager about their pension deficit, Willmann overstated employee contribution figures at the informational meetings. She corrected herself in an email when I questioned her about it later, after she’d already been misinforming people for weeks. She made no attempt to correct herself publicly, even after I wrote a letter to the paper about it. 

Rauh points out same. “How do they get away with this? They use a time tested political strategy – they lie.“

The first, big lie was that they could pay for these increasingly generous pensions, “not by collecting taxes but by making investments.” Then they went about raising the roof on salaries. For example, former city manager Dave Burkland left in 2012 at $130,000 base salary. His replacement, Brian Nakamura, came in at $219,000. About a year later, Nakamura left for another job, and his assistant manager Mark Orme, also his former assistant in the city of Hemet, replaced him at a salary of $205,000. Now Orme enjoys a base salary of $223,000/year, with a benefits package of over $42,000. 

CalPERS keeps claiming a return of 7% on their investments. But, as Rauh says, ” it’s less and less likely that they will make their investment assessment, because they do risky investements.” So, why, oh why, does our council keep agreeing to annual pay raises for Orme and other management? Why did they give these people, in addition to their costly and generous benefits packages, 401k plans complete with an employer share? 

The problem is the salaries are too generous for the taxpayer to ever be able to guarantee 70 – 90% in retirement. Rauh says, “We need to turn things around using public pressure, discipline and common sense.”

Public pressure – read agendas and reports, do some simple research, and contact your elected officials to tell  them what you know about this problem. Some of our city council members seem genuinely clueless, willing to be led by  staff instead of the people. It’s time for the people to lead.

Discipline – I mean, really, read the damned agendas, read the reports, look up stuff you don’t understand, ask questions. Don’t let yourself believe you can’t make a difference, but yeah, it’s a lot of hard work. 

Common Sense – this issue really is simple, don’t let public employees try to make it sound too complicated. Here’s one common sense question to ask yourself – was I included in the conversation? Did I make these promises? Why should I be on the hook for these outrageous salaries and pensions? 

Now, using public pressure, discipline, and common sense, here’s what Rauh says we need to do:

“We need state and local governments to report their  unfunded liabilities honestly, the real numbers, using the 2 – 3 % yields that sound financial reporting would require. No more pie in the sky stuff…”  We have Stephanie Taber to thank, back in 2011, for demanding the finance reports be given properly. Then Finance Director Jennifer Hennessy was not doing reports at all, her boss Dave Burkland didn’t require her to do it. Can you believe that? What private sector company would get away with that? Taber had to use public pressure, discipline, and common sense. Now the finance reports are given every month and available online. 

And now, using letters to the editor and posts on this blog, Dave Howell is trying to question the city about their true pension costs, demanding they make their Annual Finance Report (CAFR) available to the public. The city is hiding their true liability figures, saying they are only $130 million in deficit when the true figure is over $200 million. 

“the truth should shock  voters into demanding action.”  Yes, it should, but people use the most ridiculous excuses for not paying attention. This is where discipline comes in – I’m not an accountant, but I’ve made myself read and understand those finance reports. You can too. And then open your mouth and squeal like Ned Beatty, cause you are being screwed.

The action Rauh suggests we demand is “to phase out the guaranteed pension programs as quickly as possible and introduce 401k plans…

I agree with Rauh. Public employees who do their jobs should be amply compensated. He calls 401k’s a “win-win’ which,  “if designed properly, can provide excellent retirement benefits…” Here’s the win for taxpayers – employees are responsible for their own investments, and if they choose poorly, the taxpayer is not on the hook to bail them out. 

Furthermore, “401k’s are portable, employees can take them along, don’t have to be locked into government jobs to get retirement benefits.“

Now, unfortunately, here’s where the corrupt merry-go-round comes in – our council, fed on employee union donations, has already given management employees a type of 401k called a “457 plan”, in addition to their guaranteed pensions. Here’s Orme’s contract, read it for yourself:

Click to access OrmeEmploymentAgreement10-2017.pdf

“The City has established a Deferred Compensation Plan in accordance
with Internal Revenue Code (IRC) 457 (“IRC 457 plan”). Effective from the first pay period in
January 2017 considered in calculating the maximum IRC 457 plan limit and annually, City agrees
to contribute nine thousand dollars ($9,000), to Employee’s IRC 457 plan. Additionally, effective
October 15,2017, the City agrees to contribute four and fifty- two hundredths percent (4.52%) of
base salary to Employee’s IRC 457 plan.”

In Chico, public employee unions SEIU, CPOA, AND IFFA are among the biggest donors in every council election. I think the only donor that gives more money is Franklin Construction.  So, I would add to Rauh’s list – change the laws to restrict donations from public employee unions. Our city council can do this, but as you can guess, that would take a lot of public pressure.

Rauh suggests “lets end the current structure of public sector pensions and move to a sustainable way of compensating our public employees.” He’s not advocating cutting anybody off, but frankly, I am. I would suggest we press council to refuse to approve new contracts for management employees who refuse to take pay and benefits cuts. As stated in Orme’s contract, council has the right to refuse salary increases, and even to ask employees to take a cut. Again, this would take a lot of public pressure. 

So, it’s really up to us. 

 

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Tax measures are piling up on California ballots – get informed, get involved!

22 Nov

The March 2020 ballot will bring tax measures to towns and counties all over the state. In Chico we’re looking at a 1 cent sales tax increase from the city and a parcel tax from the rec district. I was just watching a story on Ch 7 news about the 1 cent sales tax measure proposed by Shasta County supervisors and staff. And a friend of mine was just telling me that Yuba Community College District has a FIFTH bond measure on the ballot – and get a load of this – that district extends into Butte county. 

When my friend mentioned that, I realized, AGAIN, how little I know about stuff. That is a constant recurring event in my life, the book I could write about stuff I don’t know about. I started this blog to get people involved, but what I ended up with is a 7 year chronicle of an average educated taxpaying citizen who tries to understand the government. 

As I talked to my friend I suddenly remembered – my uncle was a PR man for Yuba College, back when community colleges were in their infancy, an idea that still needed to be sold to the public. My uncle’s job involved driving all over the surrounding countryside – to little towns like Colusa, Williams, Clear Lake, Esparto – trying to convince the local leaders they should buy in and establish a “satellite campus” in their town. It could be at the high school gym, or any available building. He was a great pitch man.

He used to take us along in tow – free food, and getting us out of my aunt’s hair for the day. I thought it was all about bringing education to the sticks, and I believe my uncle believed that too. But what it resulted in was a district that can put a tax on your house. 

There’s all kinds of districts. CARD is a district. It’s funny how that works. As CARD manager Ann Willmann told people at those poorly attended “informational” meetings, the district goes a short distance beyond the city of Chico boundaries. That is their assessable area, and everybody in that section would get the parcel tax.

Then there’s the “area of influence.” Willmann’s map shows the area of influence going over to the Tehama County line to the north, and into Cohasset and Forest Ranch to the east. These are the people who benefit most – they don’t pay the tax, they pay artificially low user fees subsidized, mostly, by city of Chico property owners. 

I can’t post the map, I had to ask Willmann (annw@chicorec.com)  for it, and she got it from LAFCO (Butte County). It shows that the sphere is a lot bigger than the district, and includes some of the wealthiest neighborhoods in Chico, including the unincorporated neighborhoods in North Chico. These are the people who use DeGarmo Park. Willmann listed DeGarmo Park as a big benefactor of the proposed parcel tax. For people who don’t pay taxes in the district?

The whole idea of a parcel tax or a bond is to spread the cost of something wanted by a very small portion of the population out onto the general population who does not benefit from the services offered. The theory is, these taxes are so miniscule that nobody will notice, and if they do, they would feel stupid to complain. It’s for the public good, after all!

Well these chiggers add up. Chico Unified has put three bonds on our homes in the last 20 years, adding up to over $100,000,000 in DEBT. And within months of the passage of each bond, CUSD finance manager Kevin Bultema has announced raises for teachers, demands for more pension payments, and threats to cut programs for the kids if the district doesn’t get a new revenue source. I believe they only decided not to put a bond on the 2020 ballot because the city and CARD asked them to hold off. I believe they will put a bond on a future ballot, within the next four years. 

And then there’s Butte Community College District. Between the two of them, I have five notations on my home property tax bill, totaling almost $800 a year.  Just school bonds.

Then the mosquito district comes along and throws on another tick for $21. $21? For what? They don’t spray in town, why are we paying that? Because the Butte County Mosquito and Vector District director gets a salary of over $142,000/year but only pays 3% of his pension. An agency with 17 full time employees has a pension deficit in the millions, even while paying nearly half a million a year in premiums. And because they were smart, and made a district, drew the lines, so now they have a direct feed into your wallet. 

Californians pay more taxes than most of the other 50 states. We’ve been asleep at the wheel.  It’s time to stand up, pay attention, and stop these blatant grabs. The Chico sales tax increase and CARD parcel tax are a  good opportunity to PUSH BACK. Write letters to the editors at letters@chicoer.com and chicoletters@newsreview.com, tell people what’s going on.  Then write to Chico city council at debbie.presson@chicoca.gov and CARD board members at annw@chicorec.com  Tell them you know this is just a grab for pensions and you’re not buying it. 

Look at your receipts from the grocery store. Soap, shampoo, detergent – 7 cents on the dollar, and they want to make it 8 cents. That adds up folks, especially for bigger families.  The bigger purchases like clothes, appliances, furniture and cars may not be as regular but will add up more quickly. They say you won’t pay sales tax on food or medicine, but watch out for prepared food – a sandwich from the deli, that roasted chicken at the grocery store – that’s taxed. So are over the counter medications like pain, fever, and allergy medicines, antiseptics and bandages – all that stuff is taxed. 

And you home owners should look at your property tax bill. I know a lot of people pay it through their mortgage company, and I wonder if they ever look at the bill. I know some people just feel so overwhelmed with life, they’re afraid to look. And, I know people who rent are not aware of what they pay, and they do pay, because taxes are a cost that landlords pass along in rent. 

Informed voters make the best choices. Get informed and get involved, don’t just stand by wringing your hands as Chico becomes too expensive for working people. 

 

 

 

 

Dave Howell: Chico ranks 50th worst financial risk out of 471 California cities

14 Nov

Dave Howell has been telling us about the CAFR – a Comprehensive Annual Financial Report, a set of U.S. government financial statements comprising the financial report of a state, municipal or other governmental entity. Out of 471 cities of similar population, Chico was ranked 50th worst financially. 

Read more about CAFR here:

https://en.wikipedia.org/wiki/Comprehensive_annual_financial_report

Thanks for writing Dave, and I hope more people will chime in.

By  |

Of 471 cities, the state auditor ranked Chico 50th worst for financial risk. Chico is at high risk in four pension and OPEB categories. The most recently available CAFR indicates Chico has over $200 million in liabilities, most of that for CalPERs which assumes an unrealistic 7% discount rate.  Chico has runaway employee costs that must be reformed.Instead, council member Scott Huber criticizes council member Sean Morgan for not supporting a tax increase. Yet Morgan like the rest of the city council voted to move the sales tax increase forward. Tax increases will not solve runaway unfunded liabilities. The city council knows this which is why they will use the revenue from the sales tax to take on hundreds of millions in new debt resulting in future tax increase demands. Of course the PR firm the city is paying our hard-earned tax dollars to didn’t mention any of this to the registered voters they contacted for their survey used to word the ballot measure.

Instead of reforming runaway city employee costs, Huber, Morgan and the rest of the city council put us on a path of ruinous debt and future tax increases. This in a county with a 21% poverty rate where bureaucrats and other city employees can retire in their fifties with multi-million dollar pensions.

This is what happens when a clueless citizenry doesn’t hold an incompetent and corrupt city council accountable and is yet another example of how democracy is failing in our country.

Dave Howell, Chico 

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Airport Commissioner trying to sell us a bag of rainbows, lollipops and bull puckey

12 Nov

Does Chico really need air service? I don’t think so, and this letter from Airport Commissioner B.T. Chapman is full of holes. 

By  |

Your “miss” comments on November 2 about the initiative to rename the airport certainly does nothing to help the many people working tirelessly behind the scenes to return air service to Chico.

First of all, I’d like to ask Chapman, how “many“?  Because most of the meetings on this subject are held at a private location, by a small private group, without notice of the public, without oversight by city staffers, and without any notes or videos available for review. I’m not a lawyer or I’d raise a Brown Act question, instead I’ll just say, it seems the public is being held out of this conversation by the forehead.

(NOTE: In fact, about a year ago, Chapman put his name on a letter sent to the Enterprise Record, but I found out it was actually written by ChicoJet member Norm Rosene. See the link at the end of this post.)

Chapman continues, “If you had participated in the research done by the 2-member committee appointed by the airport commission you would understand the proven marketing value of an effectively named airport. We’re not playing games here nor chasing a far-fetched “dream.”

 

A “2-member committee” – that answers my question – a 2 member, self appointed committee that already had an agenda. That’s not research, it’s rationalization.

 

Renaming the airport is not designed to attract an airline. We already have strong indicators there is interest in returning to Chico. Further, the JetChico attraction committee already has proven business support to return air service.

No, the renaming of the airport is not designed to attract an airline. Yes, the airport manager claims there are airlines with some interest in reestablishing air service to Chico. But, these airlines have made it clear they will not do so unless the city guarantees hundreds of thousands in revenues to the airline. What renaming the airport is supposed to do is get the taxpayers all on board, happy to put down tax dollars to subsidize (and that’s the word they use) a service that will only be used by a small portion of the population.

Returning air service is serious business with significant economic benefits to our city and convenience to our citizens and those in the counties that border Butte.

In  your dreams B.T. – if air service is so important to local citizens, why wasn’t it even mentioned, even in passing, in that $25,000 survey the city just ran?

— B T Chapman, Chico

Okay, that’s a point blank lie. We’ve never had reliable air service in Chico, people were constantly left stranded, either in Chico, or in San Francisco. Furthermore, the airlines refused to refund tickets when this happened, leaving people to pay for hotel rooms and then re-purchase tickets, or call for a ride home from San Francisco. This happened to my family and plenty of others.

Chapman is grasping at straws to convince us to pay for something from which most of us will never receive any benefit.

“Get on the bandwagon…”? Here’s a good quote from vocabulary.com: “A bandwagon is a trend that is so cool everyone wants to get in on it. If you start wearing a flowerpot on your head because everyone else is, you’ve jumped on a strange fashion bandwagon. Originally, a bandwagon was a large wagon that did indeed carry a band. Now it’s an idea — people jump on the bandwagon when they hop on a trend.”

This reminds me of the suggestion made by a $200,000 consultant hired by the city at the suggestion of JetChico a few years back. He suggested city staffers get pilot and stewardess costumes (paid for by the taxpayers), and then stroll around town, at public events like Saturday Market, trying to convince the public that it is, indeed, fun to fly!

This is the kind of bullshit our tax dollars are used for. This is what a new sales tax increase would pay for. Write a letter to the airport commission via sherry.miller@Chicoca.gov
NOTE: You might ask Miller if Chapman did indeed write this letter.  Here’s the post I did last year about another letter signed by B.T. Chapman, but actually authored by ChicoJet member Norm Rosene. Ask yourself, is it okay for a public official to sign a letter that was written by somebody else? Who is really running the airport commission? 

What I’ve learned from my dog – don’t take a screwing without a fight

10 Nov

Almost four years ago, my dog got so sick we thought she was a goner. We stayed up nights plying her with water and rice paste, going to various vets to find out what was trying to kill my dog.

Eventually we learned, she’d got pancreatitis, somehow, and was diabetic. After working for months to get her health back, we got her onto a medical routine that has been the center of our life ever since. We have good vets, and they continue to work with us to keep her healthy without driving us into the poor house. 

My husband said right at the get go – when the quality of her life is gone, we’re done. It’s been almost four years, and while she’s slowed down almost to a stop, she’ll still bite the hell out of you if you try to take a soft ball away from her. As long as she’s a bitch, she’s stayin’. 

And that’s what I’ve learned – don’t take a screwing without a fight. Death came at my dog like a big bully, and we put his ass dooooowwwn!

Of course every day is a new day, up and down, up and down. She gets up happily to eat, so wobbly, wagging her tail almost knocks her off her feet, but don’t get your hands in that food dish. She takes her shot with a grimace, and then she just keeps shoveling in the kibble. She demands a good walk, a chance to sniff the smells, take a good dump. This has been good for my husband and I too – we’ve found many good trails around Chico and in the hills above town, we walk a few miles most mornings. 

Then we go back to the house and she lays in bed for hours. At about 10:45 am, she shambles out of her bed, sniffing for her midday treat. I can put my hands right into her mouth with a bit of chicken and she takes it as gently at a baby.  A quick walk out to pee, and she’s back in her bed, or situated in a bright spot in the yard.

At about 4 pm, she wakes up and gets weirdly frisky. Ever play catch with a blind dog? Watch your fingers! It’s pretty amazing how fast she can react when she thinks somebody is trying to take something from her. 

And that’s what I’ll say about myself – watch your fingers, especially if you are planning to put them in my purse.  The tax measures coming to the Chico ballot in March 2020 – a sales tax increase from the city and a parcel tax from Chico Area Recreation District –  are nothing but stealing. We’ve paid taxes for years, and $taff has diverted our money into their own pockets. Time to call them on their filching. Time to nip some fingers. 

You’d be surprised how much power is contained in the word NO.

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