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Joe Azzarito: Council needs to “serve notice to all city employees that as of a determinable date they will be paying the full cost of their ‘silver spoon’ pensions”

Joe Azzarito is a retired accountant who lives in Chico. Here’s a letter he recently sent to the city of Chico regarding the Tax-a-rama council has embarked upon since a “conservative” Super Majority took over in January. Thanks Joe, I hope this email inspires other people to express their outrage with this obvious ploy to leave the taxpayers holding the Pension Deficit Bag.

To all Chico city councilors and Senior City Staff:

The topics of municipal revenue enhancements, namely a sales tax increase and pension obligation bonds keep surfacing in the course of discourse and analysis by concerned citizens such as myself.

Now why would that be? Could it be that you all are not listening to your constituents demands that these disastrously wrong ill conceived options, for funding the massive unfunded pension obligations that this city has forced upon its citizens, be abandoned? Whenever I read or hear about these plans of enduring us to untold costs to fund city staff’s, be they unionized or not, exorbitant salaries and pensions, it makes my blood boil. Your dark of the night surreptitious intents, without transparency, to enact either of these programs is a dereliction of duty, maybe not to your sponsors, the unions, or your fellow colleagues, but certainly to your constituents – the people that pay your salary through taxes.

I have heard that programs such as these can be implemented, without the consent of the voters. How dare you! It is not enough to seek input from us but for us to approve of these wild schemes fraught with danger. Given that the ruling class of Chico earns far and away much more than the median income of the people of Chico, you have the gall to push these down our throats.

For those on the council, recently elected and those previously, you are not conservatives, in the slightest sense fiscally. You all seem to some how, symbiotically, look after each other’s tail. Unions give you campaign funds so that you can win elected office. In turn, you fulfill their needs by ensuring their members are well paid. Wherein do the citizens fit into your scenario? Oh, yes, we are to fill the city coffers with the funds you promised your benefactors. Our needs lay at the bottom of a very deep hole, somehow they are only minimally attended to. It shouldn’t be that way! We should come first as it is our sweat and toil that makes it all possible.

I have spoken many times of the badly written about California Rule that keeps you from “doing the right thing” – that being to serve notice to all city employees that as of a determinable date they will be paying the full cost of their “silver spoon” pensions and that salary structures must be revised, downward, to allow the city to adequately meets its obligations to its citizens, first. Promises, previously made in prior eras when economic conditions were much more rosier than now, need to be upended. It would necessitate that pay scales, merit raises, benefits, including pensions, be approved by a body, inclusive of a citizenry board, and not by the likes of City Manager, his staff and/or City Council. To keep the decision making in their hands alone is why these financial problems came about in the first place. Those that pay the salaries should be the ones deciding, not so now. To have city staff analyzing, recommending and being on the receiving end of the decisions made is tantamount to “conflict of interest.

At the very least a referendum should be devised and agreed to by vote of the electorate on all of the above. The unfunded elephant in the room must be sequestered and controlled. CALPERS should be informed of any changes and any separations be established. The pensions of all covered city employees would need to be renegotiated, with the stipulation that staff would be paying the full load of costs. Any conflict with current law needs to be assessed and corrected. It is high time that city pay the piper his due!

Respectfully, Joe Azzarito

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Categories 100K pension club, Chico pension deficit, Chico pursuing Pension Obligation Bond, Chico revenue measure, Chico sales tax increase, local sales tax increases, Pension Time Bomb, The Pension Deficit Bag

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

5 Apr

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

Parts of Brown Act suspended

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mayor Ann Schwab ann.schwab@chicoca.gov

Vice Mayor Alex Brown alex.brown@chicoca.gov

scott.huber@chicoca.gov

karl.ory@chicoca.gov

kasey.reynolds@chicoca.gov

sean.morgan@chicoca.gov

randall.stone@chicoca.gov

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Categories Chico revenue measure, Chico sales tax increase, local sales tax increases, revenue measures Chico CA

City Budget Workshop scheduled for March 12, 10 – 11:30 am, Old Muni Building on Main Street

6 Mar

I saw a blurb this morning in the Enterprise Record about a budget workshop hosted by city of Chico staff. That’s March 12, 10 am to 11:30 at the old Municipal Building on Main, right across the street from City Hall.

The article said something about “transparency”. Yes, the city has been pursuing “transparency”, but that only works if the public asks questions. I don’t really know who they expect to attend a weekday meeting at 10am, but I’ll try to attend. Frankly, I’m predicting, by March 12, I will be looking forward to getting my work done early and sitting in the air conditioning listening to these blowfaces try to foist their argument for a sales tax increase, cause that’s undoubtedly what is going on here.

I have asked the city clerk if the meeting will be video taped, but I expect her to say no. I don’t think the old muni building was set up for video taping. If that is the case I will lobby for this meeting to be held in the recently remodeled city council chambers – the city spent almost $400,000 of our Comcast fees on that remodel, with the excuse that they needed to upgrade the technology by which they televised the meetings. So there’s no excuse for any more un-recorded meetings, that bullshit has to end. ALL the meetings need to be videotaped, that’s something we need to push for.

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Categories Chico revenue measure, Chico sales tax increase, local sales tax increases, local tax increases

These letters writers can smell a rat, even at the sewer plant

16 Oct

Sometimes I’m afraid that if I let my guard down for one minute the liars will win. There are more of them, and they get paid. I’m talking, of course, of our Downtown city $taff and their specious claims that the Camp Fire evacuees overran our town and are causing all kinds of “strain” on the system, necessitating a sales tax increase.

I’ll tell you this, I heard Chris Constantin tell a group at a Finance Committee meeting that we better jump on board with this increase while we have the Camp Fire refugees in town – he was talking about them like they were a herd of exotic cash cows, hardly a strain on the system.

I haven’t had a chance to look at last year’s sales tax revenues, but I’d bet my last $5, they’re way up, along with Utility Tax revenues.

But both city manager Mark Orme and his partner in crime, Public Works Director Eric Gustafson, have been pandering to the media with the repeated lie that the Camp Fire victims are causing all the city’s problems – Gustafson again crying about the sewer. The sewer is barely over half capacity, read the story again. And, look around you – the city has permitted new homes and apartments all over town – and that means permit fees and new property taxes. And more money paid in sewer fees.

Like letter writer Jim Hertl and Linda McCann, I know the truth to these claims – it’s the money. Staff not only wants a sales tax increase, they want to raise sewer fees on everybody. To pay for their fucking pensions, is the thing.

And, as both writers point out, City of Chico staff was begging Paradise to hook up to our sewer system – what happened to that? Paradise opted out – and now the city of Chico has to come up with some other scheme to prop up a sewer fund that has been siphoned off to pay pensions for years. Along with the road fund, the park fund, and every fund on the city books.

Thank you Jim Hertl and Linda McCann, for speaking up! We all need to start screaming at the top of our lungs – no tax or rate increase until the city manager and his staff are out, and new employees are hired who pay their own pensions.

October 14, 2019 at 10:53 pm

In the Sunday E-R was an article that stated our sewer system is being “strained” by the population spike caused by the Camp Fire. If I recall, before the Camp Fire, there was talk of Chico treating ALL of Paradise wastewater because we had enough capacity at our treatment plant to do so. What happened, in the meantime, that our system is now being strained by the influx of 20,000 people from that same area? Is it just because of the “sudden influx”or are there other factors involved?— Jim Hertl, Chico

PUBLISHED: October 15, 2019 at 10:03 pm

Jim Hertl brings up an interesting point regarding the “strain” on Chico’s sewer system. Even after the Camp Fire, the Paradise town council brought up the subject of sending our waste to Chico. Thankfully they opted to go with our own treatment plant. That would mean jobs for our people and give us control over our sewage.

Jim, I think the answer to you question can be summed up in one word: Money.

— Linda McCann, Paradise

Tags: City of Chico Mark Orme, Eric Gustafson Chico Department of Public Works, Mark Orme Chico City Manager

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Categories Chico revenue measure, Chico sales tax increase, local sales tax increases, revenue measures Chico CA, Sewer fund, solid waste, utility rate increases

David Crane: tax increases are proposed across the state to fund retirement promises never approved by voters

8 Oct

Bob sent me the following link, and I think this article is worth discussion:

View at Medium.com

“Imagine you are a donor to a non-profit organization whose board members receive gifts from employees to whom the board, without your consent, promises retirement benefits. Now the organization is asking you for larger donations to cover surging retirement spending but not disclosing the real reason more money is needed.

That describes the current situation in California as tax increases are proposed across the state to fund retirement promises never approved by voters and made by elected officials who receive donations and other political support from beneficiaries of the retirement promises.”

This is exactly how I feel about the pensions – I was never asked, and I never approved this scheme, but now they hold their hand out to me.

Furthermore, “The state already spends 60 percent more on servicing never-voter-approved retirement obligations than on voter-approved debt obligations…”

I already knew that CARD, for example, spends over half of it’s $8 million budget on salaries and benefits, more if you add in payments made toward their pension obligation. The voters/taxpayers have never been asked to approve the contracts, the benefits, or the “side fund pay-off’s”. Now we are being asked to approve a parcel tax which will be used to float a bond. We are not being asked to weigh in on the bond, the board can decide to go for a pension obligation bond and tie all the parcel tax proceeds up in paying the pensions.

I think this whole process amounts to embezzlement – they’ve admitted to deferring maintenance while making the payments on their pensions. They have their hands in our cookie jar, and we need to slam that lid down good.

“State legislators should require state and local governments, school districts and other public entities to submit retirement obligations to voters for approval and to provide truthful and full disclosure of the real reasons behind proposed tax increases.”

This would only happen if the taxpayers shut down these tax measures and show state legislators we are not going to pay for their mistakes. That is why it is so important to defeat the measures being brought forward locally by Chico Area Recreation District and the City of Chico. We have to stop the gravy train.

Write those letters now. You can write to the CARD board via Ann Willmann and city council via Debbie Presson and ask that your email be forwarded to your elected leaders. Ask that your comments are put on the record.

letters@chicoer.com
chicoletters@newsreview.com
annw@chicorec.com
debbie.presson@chicoca.gov

Measure K lawsuit successful in district court, will move on to appeals court (at the taxpayers’ expense…)

14 Sep

Sorry, busy busy – I received GREAT NEWS about the Yuba County Measure K lawsuit, and I forgot to post it.

The judge ruled in favor of the plaintiffs –

Accordingly, for all of the forgoing reasons, the Court grants judgment in favor of Plaintiffs on their first and second causes of action seeking to invalidate Measure K because it failed to garner the required two-thirds vote required for enactment of a special tax.

What happens next – later that day I received a note from my friend Connie –

“At a BOS meeting yesterday, they voted in CLOSED SESSION to appeal the ruling. That gave the voters and taxpayers no opportunity to voice their concerns etc.”

Yes, the Yuba County supervisors voted to spend MORE TAXPAYER MONEY to fight a court ruling. Like I told my friend Connie, studies show appeals don’t have a very high success rate, only about 17% of these lower court decisions are actually overturned, it seems most appeals are thrown out without hearing due to procedural errors. But the taxpayers will pay for all that – I hope they remember all this at election time.

The city of Chico will not make the same mistakes Yuba County made. City Asst Mgr Chris Constantin has repeatedly warned city staffers, as well as elected and appointed officials, that the city can’t put any specific purpose on their planned sales tax increase because that would require a 2/3’s vote of the public. And I think their surveys have shown very clearly that they will be lucky to get 51%.

Their campaign so far, like CARD’s, has been to point out the failed state of our city infrastructure, the public safety concerns, and our growing population, telling us there’s not enough money to go on from here.

The answers to theses claims are as follows:

our city infrastructure has been neglected while they’ve raised their own salaries and paid their pension deficit with our money
public safety is at an all-time low because the city has declared a “shelter crisis designation” to get in on the gravy train of “the homeless industrial complex”
our population is growing because the city keeps approving development. And now they’re talking about buying water from Paradise to take the pressure off our ground water supply? Why do they continue to approve subdivisions for which there is no water? Because if they stopped approving all this new development they’d lose all those developer fees and the resulting new property taxes.

Our city staff are a bunch of junkies – money junkies. I know public workers – they tend to spend money just like the agencies they work for. The new job requires a bigger, fancier house and lifestyle (watch “Fun With Dick and Jane”, the old version). These people are as over their heads as the economy. They can’t stop making more money, they’re up to their necks in debt.

So while we raise a glass to the folks who fought Measure K, we better be getting ready to fight our own battle.

Comments 4 Comments
Categories CARD parcel tax March 2020, Chico sales tax increase, local sales tax increases, revenue measures Chico CA

Speak now or forever hold your hands over your behind

13 Mar

I was thrilled to read letters from Dave Howell of Chico and Steve and Lorraine Christensen of Oroville. I speak to people all the time who feel Californians pay too many taxes, but people seldom get around to writing letters about it. I think it’s important to let your “civic” leaders know how you feel, let them know you’ve had enough, let them know you’re ready to do something about it.

Now that the city of Chico has made it clear they will pursue a tax measure, I’m not mincing words – Mark Orme needs to go. Old Yiddish proverb – when the fish stinks, it’s the head of the fish that stinks!

Orme claims he’s done a lot to lead out city out of deficit, but he’s overseen the siphoning of money from various departments into the pension deficit. Rather than fess up and pay more of his own salary toward his pension, he continues to take pay increases while offering up a mere 11% of his base salary toward his benefits, FURTHERMORE adding a tax deferred IRC 457 to his package. This guy is enriching himself out of the public cookie jar, time to slap his hands.

Write those letters!

letters@chicoer.com
chicoletters@newsreview.com
debbie.presson@chicoca.gov

At the February 27 Finance Committee meeting, city manager Mark Orme said he has resisted revenue measures in the past, but that Chico’s current situation calls for a new tax to mitigate the impacts of the Camp Fire evacuation.

City staff has been calling for a tax increase since well before the Camp Fire. They wanted to tax our cell phones. Then they said garbage trucks were wrecking our streets and added a franchise fee to our rates. Long deferred street and park maintenance. Transients straining public safety agencies. Now it’s the evacuees.

But on February 27 Orme finally acknowledged the “elephant in the room” – pensions. The city spends almost $20,000,000 annually on pensions. About $8,000,000 of that goes to the pension deficit.

Orme insisted staff has learned to “live within our means.” Really? The city manager’s base salary has gone from $192,000 to $207,500 since his hire, but his total pay is over $225,000, including perks such as a $400/month car allowance. Tack on another $82,000 in pension and health benefits, including $18,000 for an IRC 457 added to his contract just last year.

Orme only pays 11% of his base salary for a pension of 70 percent of his highest year’s salary at age 60. This is how the deficit was created, the employees expect a lot but only want to contribute a fraction of the cost.

The question isn’t whether we need a new tax, but why the taxpayers should bear the burden of a pension deficit created by public employees.

Juanita Sumner

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Categories Chico bankruptcy, Chico garbage franchise, Chico pension deficit, Chico revenue measure, Chico sales tax increase, local sales tax increases, Pension Time Bomb, revenue measures Chico CA, Uncategorized

City staff using Camp Fire to justify sewer rate increase

1 Feb

According to a rambling letter from Stephanie Taber, somebody is running a survey to determine whether “the voters” want to support a sales tax increase for street maintenance. I’ve been waiting for such a survey, but of course I know they won’t sent it or call it to me. These consultants very carefully vet their audience and contact those who are most likely to support these increases. It’s not an attempt to see what people want, but to plant ideas in their heads, and talk them into coughing up more money.

Right now the city is using a very embedded local media to run their initial campaign. Public works director Eric Gustafson was on the news recently, showing us floating piles of poop down at the sewer plant, trying to tell us the Camp Fire evacuees are putting a strain on our sewer system.

Here’s my first question – why didn’t any of this come up during past discussions of new subdivisions? Why not during the approval of Air BNB?

I’ve heard them discuss the sewer plant – a year and a half ago, at a discussion of cost allocation, the sewer plant manager complained that salaries and benefits are eating up all the money at the sewer plant and they would need a rate increase or the sewer fund would go into deficit. Looking at the latest version of the city of Chico budget shows the sewer plant fund is running in deficit.

The sewer budget is divided into different categories. I used the ‘F’ search to scan down for each mention of sewer fund activity. As of July 2018 most of the totals are shown in parenthesis, which means “deficit”. Those funds not shown in deficit only have about $100,000 or less. But look at the revenues they take in – where does all that money go? Look at the top of the expenditures page 61/312 – “debt principal” and “debt interest”.

That’s allll about the pensions, Honey!

https://chicotaxpayers.com/2019/01/18/heres-how-the-city-hides-payments-toward-the-pension-deficit/

Again, on page 62 – another couple of million goes to “debt principal” and “debt interest”.

Millions of dollars for their pension funds, but no money to run the plant?

Gustafson contradicts himself in the news story too.

“Before the fire, Chico’s wastewater treatment facility processed about 6 million gallons of waste on average per day. Since then that amount has gone up to 7 million. Biosolid production has gone up 70%, while overall waste and sewage flows are up 17%.

Gustafson tells Action News Now, the facility is able to handle a capacity of 12 million gallons of waste per day. But, the city is currently equipped to take on an amount over a decade of growth, rather than overnight.”

He says capacity is 12 million gallons, but complains that waste production has gone up to 7 million. That leaves room for quite a bit more poo poo. What is this man trying to pull here?

“‘If those increased flows continue, there will be increased costs, and we will have to go to council for increased funds,’ Gustafson says.

“Chico Public Works is now working on a rate analysis to determine if a rate increase should happen to help with waste processing costs and fixing the 90-year-old underground plumbing system that supports the city.”

Now they’re mentioning the 90-year-old underground plumbing system that supports the city? This never comes up during discussions of approving ginormous new subdivisions.

Here’s the real reason:

“Chicoans now pay the lowest sewer rates out of all cities in the area: $22.98 per month. Compare this to Orland’s $26.10, Sacramento’s $32 and Napa’s $42.83.

Chicoans still pay the same rate, but new development has added many, many new customers since the rate was increased. And, again, the sewer plant is only operating at a little more than half capacity.

See how these people try to spin a story to make us think we need to raise our own taxes?

This is what Steven Greenhut is talking about in “PLUNDER!” These employees are in position to tell us whatever they want. They have a local media that is more than willing to run their propaganda campaign. It’s up to the rest of us to pay attention and say something.

From Ch 12 Action News Now

CHICO SEWAGE NUMBERS SPIKE POST-CAMP FIRE

The amount of human waste production in Chico has shot up by amounts normally seen over a 10 year period.

Posted: Jan. 29, 2019 11:46 AM

Updated: Jan. 30, 2019 10:06 AM

Posted By: Stephanie Lin Action News Now

CHICO, Calif. – The City of Chico has seen a population explosion, and it’s not just the roads that are impacted. Post-Camp Fire sewage production numbers are at an all-time high.

Action News Now reporter Stephanie Lin sat down with Public Works’ Eric Gustafson for a closer look at the cause behind all the waste. He reports seeing an average of a million gallons extra per day being pushed through the city’s treatment facilities.

“Multiple family members or friends are staying in one household,” Gustafson explains, “so that’s double the flow from one household but the [charged sewage] rate is still the same.”

The same idea applies to those living in RVs connecting to sewer hook-ups on one shared property. Then there’s all the septage from Cal OES, FEMA, and PG&E base camps. Add all these sources together, and you’ve got one big costly problem.

“If those increased flows continue, there will be increased costs, and we will have to go to council for increased funds,” Gustafson says.

Chico Public Works is now working on a rate analysis to determine if a rate increase should happen to help with waste processing costs and fixing the 90-year-old underground plumbing system that supports the city.

Chicoans now pay the lowest sewer rates out of all cities in the area: $22.98 per month. Compare this to Orland’s $26.10, Sacramento’s $32 and Napa’s $42.83.

Before the fire, Chico’s wastewater treatment facility processed about 6 million gallons of waste on average per day. Since then that amount has gone up to 7 million. Biosolid production has gone up 70%, while overall waste and sewage flows are up 17%.

THIS DOESN’T MAKE SENSE – Gustafson tells Action News Now, the facility is able to handle a capacity of 12 million gallons of waste per day. But, the city is currently equipped to take on an amount over a decade of growth, rather than overnight.

Public Works plans to present their rate analysis to city council late spring. Once that is done, the public will also be able to chime in.
No rate changes will happen until there is at least a 51% approval. Conversations also continue with state legislators to hopefully find a fast fix to the sewage problem.

In the meantime, the work continues to maintain the expected quality of life for Chicoans and their new neighbors.

“We want Paradise folks to know they are welcome in Chico, and hope they can find a bit of normalcy,” Gustafson emphasizes.

Tags: Eric Gustafson Chico Department of Public Works

Comments 3 Comments
Categories Chico pension deficit, Chico revenue measure, Chico sales tax increase, local sales tax increases, Pension Time Bomb, revenue measures Chico CA, Uncategorized, utility rate increases

Don’t be fooled – City of Chico’s proposed tax measure is all about the pensions

21 Jan

The city of Chico is ramping up their tax increase campaign, with city staffers soliciting the news paper for stories about funding shortages, and lately, using the Camp Fire as an excuse to seek a revenue measure.

https://www.chicoer.com/2019/01/15/theres-been-more-traffic-in-chico-since-the-camp-fire-and-thats-not-changing-anytime-soon/

No mention of the dramatic uptick in home sales and how the outrageous price increases will affect property tax valuations. No mention of the effect that 29,000 people swooping down on your retail sector is going to have on sales tax revenues. No mention of what full capacity motels will contribute in “Transient Occupancy” or “bed tax”. Property, sales, and TOT are three of the four biggest revenues our city receives. The fourth is Utility Tax, and that’s going up with increases in PG&E rates. It’s a win-win all the way around for City of Chico, but they cry poormouth and want a revenue measure.

Stand up people, and let them know what you think of this attempt to embezzle more taxpayer money into their own pockets. I sent the following letter to the Enterprise Record this morning.

City staff says traffic congestion and accidents are up in Chico and asks more money for road improvements, police and fire staffing. Despite an unprecedented increase in property tax valuations, sales tax receipts and TOT due to Camp Fire evacuees, council has directed staff to look into putting a revenue measure on an upcoming ballot.

Dan Walters opines most local revenue measures are “all about the pensions.” I agree. The mayor of Capitola admitted, “ if we put a measure across for pensions it would be doomed for failure immediately”, so their November ballot measure read “to help fund youth programs, protect parks, beaches and open space, and support local businesses.”

Pension liability is the difference between what is paid into the California Public Employee Retirement System, and what employees expect to get in retirement. City of Chico employees pay less than 10 percent of their pension cost, while the taxpayers pay roughly 30 percent. That leaves the city an unfunded liability of over $129 million.

In 2018 city staff made a $7,598,561 annual payment toward their pension liability. Part of that money is allocated from each department fund, based on total department compensation. The rest of the annual payment is allocated from the General Fund. Council approved allocations are how they transfer money from one fund to another in order to avoid spending restrictions – like spending public safety or road funding on their unfunded pension liability.

Despite any promises to the contrary, the city’s proposed revenue measure is all about the pensions.

Juanita Sumner, Chico

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Categories CalPERS, Chico pension deficit, Chico revenue measure, Chico sales tax increase, local sales tax increases, local tax increases, PG&E rate increases, revenue measures Chico CA, Uncategorized, utility rate increases

Here’s how the city hides payments toward the pension deficit

18 Jan

I got the agenda for next Wednesday’s City of Chico Finance Committee meeting – if you want to know how your money is being spent, these are worth a read:

The agenda includes the Finance Department’s monthly report – make yourself read through the gobblety-gook of numbers and acronyms, it gets easier to pick things out. Use Google search for any term (including acronyms) that you don’t understand.

I like to scan down and look for certain things – I like to see where revenues come from, I like to see where they’re spent. They move this money like peas under nut shells – certain funds are restricted to certain uses, but somehow they manager to “allocate” money from one fund to another, and then they can spend it the way they please.

You need to remember this when the city starts talking about their revenue measure. Right now the talking heads – including members of the public that have too much influence over council – are arguing between a sales tax increase measure and a bond. Whichever way they go, they will need to decide between a “special” tax and a “general” tax. Currently, a “special” tax requires 2/3’s voter approval, while a “general” tax only requires a simple 51 percent.

But it doesn’t really matter in the end, because once they get the money, they can “allocate” it right into their own pockets.

Look at the report and watch for the word “pension”. Right away I find “CalPERS UAL payment” – that’s for the unfunded pension liability – the difference between what public employees have paid for their retirement and what they expect to get. Last May city Finance Director Scott Dowell informed the Finance Committee that the city’s UAL is over $129 million.

The UAL payment is made once a year. This payment is separate from the regular pension payments made monthly – those are mushed in with salaries and benefits, you’d have to ask Dowell exactly what the city pays per month.

The 2018 pay out for the UAL is $7,598,561. That’s seven million, five hundred and ninety-eight thousand, five hundred and sixty-one dollars. Say it out loud a few times, you pay for it.

Because this money doesn’t come from the employees. They pay anywhere from two percent to nine percent of their monthly pension costs. The taxpayers float another 25 – 30 percent. The rest makes up the floating liability. Here’s how the city of Chico transfers this liability onto the backs of the taxpayers.

When I asked Scott Dowell where the money for these payments comes from I got the following answer:

Fund 903 has two inflows:

1. Each City fund that has payroll is charged a percentage of payroll for the applicable share of the estimated annual unfunded liability payment. That amount is transferred to Fund 903 from each applicable fund. These transfers are used to pay the annual unfunded liability payment to CalPERS out of Fund 903.

2. The second inflow is a direct transfer from the General Fund to the Fund 903 approved by the City Council. There was an initial transfer from the General Fund to Fund 903 of $541,455 for the year ending June 30, 2017.

Let’s look at that.

1. this is how they hide the payment – “transfers” – they take payroll money. Look at the budget, you see “salaries and benefits” in each department’s expenditures, nothing about paying down the UAL.

2. and there it is – “a direct transfer from the General Fund to the Fund 903 approved by the City Council.”

The General Fund is a cookie jar with no restrictions. I’ve sat at meetings and watched money being transferred from other, restricted funds, into the GF, so they can spend the money the way they want. This is “allocation.”

So when they tell you a tax measure will be devoted to “street maintenance” or “public safety,” here’s what that means.

CalPERS unfunded pension liability payment for 2018 – $7,598,561.00
Roughly half goes to “Safety” (cops and fire) – $3,660,240.00
An increase over last year ($6,547,673) of $1,055,888.00

Tags: City of Chico Finance Committee

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Categories CalPERS, Chico pension deficit, Chico revenue measure, Chico sales tax increase, local sales tax increases, local tax increases, Pension Time Bomb, revenue measures Chico CA, Uncategorized

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