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Dan Walters: local government officials throughout California have been thumbing their noses at a state law that prohibits them from using taxpayer funds for political campaigns

27 Jun

In February I read that the FPPC, under new chairwoman Alice Germond, is trying to expand it’s powers to prosecute government agencies who misuse public funding to finance tax increase campaigns. In March the request went to the legislature, as reported here by Dan Walters.

https://www.desertsun.com/story/opinion/2019/03/03/fppc-sets-sights-on-illegal-use-of-tax-funds-in-campaigns-dan-walters-calmatters-commentary/3022610002/

Walters says, “State law very clearly and specifically makes misuse of taxpayer funds for political purposes illegal, but the FPPC has no power to enforce the law. That’s up to local prosecutors and the state Department of Justice, but as the FPPC report concluded, ‘The Enforcement Division is not aware of any actions brought by state or local prosecutors related to those cases.’”

Of course, it seems pretty simple – why would a county employee – like Butte County District Attorney Mike Ramsey – bite the hand that pays his salary? Would it even be worth contacting Ramsey to report this? Not sure.  The school district is the major offender here, although, in the last bond election, they put up a sham “citizen’s committee” to do their campaigning – a committee that did not have public meetings, keep records, or disclose their membership. 

The city of Chico and Chico Area Recreation District, meanwhile, have both spent 10’s of thousands of public dollars – CARD has spent nearly $100,000 in the past few years – to hire consultants to put forward their tax campaigns. Ramsey must be too busy chasing pot farmers to pay attention. When I looked at his website to see how to file a complaint, the only form that popped up was for pot patches.

Mike, I think you should read a newspaper once in a while. Dan Walters has been talking about this issue for over a year now. 

So, I took some advice from the Howard Jarvis Taxpayers Association, and wrote a letter to CARD, who has been the most egregious offender so far. I used a form letter at their website for inspiration, but I don’t use form letters, I write my own. Form letters look stupid and put up, and are easier to ignore. I made sure to ask that my letter be made part of the public record, and I included not only the manager Ann Willmann ( annw@chicorec.com ) but the entire board – tlando@chicorec.com, mmcginnis@chicorec.com, tnickell@chicorec.com, mworley@chicorec.com, and ddonnan@chicorec.com

Please Note: I would like this email to be part of the public record.

To Ann Willmann, CARD General Manager, and members of the board, Tom Lando, Mike McGinnis, Tom Nickell, Michael Worley and Dave Donnan. 

I believe Chico Area Recreation District (CARD) is illegally using taxpayer dollars for political advocacy. The Political Reform Act prohibits public agencies from spending public funds in support of or opposition to ballot measure campaigns. 

CARD has hired EMC Research to advise them in placing a tax measure on an upcoming ballot. A quote from their website:

https://www.emcresearch.com/what-we-do/#Political

“Great campaigns don’t just happen. That’s why we offer a full suite of political research and predictive analytics to help your candidates, organizations and ballot measures succeed.” 

CARD has paid EMC to conduct a survey.  EMC’s website makes it clear that they use demographics to shape the outcome of their surveys in order to sway public opinion in favor of passing tax measures. This is an illegal use of taxpayer funds. I have contacted the Howard Jarvis Taxpayers Association and they tell me they have successfully sued agencies for this misuse of public money. The FPPC also requires these expenditures to be reported as campaign donations. 

Below I’ve provided links to a couple of recent articles from Cal Matters and the San Jose Mercury News that provide further details and resources.

Thank you for your anticipated responses, Juanita Sumner, Chico Taxpayers Association 

I included the following links to a couple articles Dan Walters has posted:

Finally, a crackdown on misuse of taxpayer money

Walters: California should crack down on misuse of taxpayer money

Yes, these two local agencies are illegally using taxpayer funding to put forward tax increase measures, but unless we call them on it, nobody else will. We have to get this issue out into the newspaper, and then we need to start a serious letter writing campaign to Ramsey, and then maybe the Grand Jury, asking that the city and CARD be investigated. 

In the meantime, write your own letter to Ann Willmann and the CARD board to let them know how you feel about a government agency that breaks the law. 

CARD consultant admits a tax measure might not succeed, will take lots of “education”

29 May

Chico Area Recreation District has hired a consultant, EMC, of Oakland, to help them put a new  tax measure on the 2020 spring ballot. EMC recently conducted a survey of 405 district “likely voters” (meaning, picked and chosen)  and brought the following conclusions to the CARD board at their May meeting.

https://www.chicorec.com/files/1117523aa/Survey+Results+Presentation.pdf

“A parcel tax measure may be feasible for the March 2020 ballot but a bond measure would be a significant challenge.” Furthermore, “Initial support for a parcel tax for local parks and recreation is near the two thirds threshold needed to pass.”

Keep that word “initial” in mind, I’ll get back to that.

“Given the survey findings and the current community climate following the Camp Fire, we recommend that CARD begin an extensive public outreach and engagement effort before placing a measure on the ballot. Informational communications are essential to the community’s understanding of the need for revenue, particularly funds to maintain park programs and safety.”

You may have read that the majority of survey respondents indicated “public safety/safe parks and playgrounds” as their main concern. I’ve seen a lot of posts on social media from disgruntled parents – a very common complaint is the play fields their kids’ sports  teams use are becoming illegal campsites, littered with trash, poop, and used needles. CARD has also complained about criminal activity and vandalism at various playgrounds, such as broken glass littering the skate park – bottles and trash thrown over the security fence after closing. 

In order of importance, survey respondents ranked “Reducing crime and homelessness in parks, providing clean, safe parks and recreational programs, and upgrading park safety features would be important components of a parcel tax measure.”  A graph on page 6 makes it very clear – of topics “Homelessness, Public safety, Housing, Street and roads, Public education, Jobs and the economy, Parks and recreation,” 63% of respondents ranked “Homelessness” (whatever that means…) as a “very high priority“, while only 22% ranked “Parks and recreation” as same.

Looking at that list, I only see one category that has anything to do with CARD, “Parks and recreation,” so, if you believe in the results of a survey of less than 5% of the population, carefully chosen to reflect the desired results, you would think very few people in this town give a rat’s patoot about CARD. Doing the math, I find that figure to be 89 people, which is a little more than 1% of the total population of Chico.

There’s doublespeak in this report. They start off saying there’s enough support to pass this tax, but here they reveal it will really take some convincing. They also remind the board, such a campaign needs to be “privately funded“. I love the words, “make sure the voters understand…” 

A parcel tax measure would be vulnerable to opposition. Therefore, a successful measure would likely require a well-coordinated, privately funded outreach effort to ensure that voters understand how additional funding would reduce crime and homelessness in parks, provide clean, safe parks and recreation for local residents, and help maintain the Chico area as a desirable place to live, work and raise a family.”

And there you see them listing the priorities respondents chose from their carefully worded survey options, using what the people want to hear, just like Joseph Goebbels. That’s exactly the intention of these surveys – they aren’t out to get your true opinion, they’re out to get you to say what they want, and believe it’s your own idea.

What’s the anecdote to brain washing? 

These are good …

but the truth will set us free! On page 12 of the power point presentation, there’s a graph showing that initial support dropped off as respondents were given “information.” Parcel tax support went from 67% to 59% over the course of the interview, opposition went from 36% to 44%. It shows similar results for a bond. 

The survey questions are provided in the report, give it a read, see how they twist the “information” their way. On page 9, for example, they lead us to believe there would be ” NO money for salaries.”

That is true for a bond, which is restricted to use for facilities, not “operating costs (salaries and benefits)” But a parcel tax is different – they can spend the proceeds of a parcel tax any way they want. 

And here’s the thing – since 2013, CARD’s pension liability has almost doubled. Next post I’ll talk about WHY, and how much money has been diverted from “provid[ing] clean, safe parks and recreation for local residents, and help[ing] maintain the Chico area as a desirable place to live, work and raise a family”  toward staving off the pension tsunami.

 

Oroville transfers $366,000 in Camp Fire money to Pension Stabilization Fund

5 Mar

PUBLISHED OROVILLE MERCURY NEWS:  | UPDATED: 

LETTERS TO THE EDITOR

“Let the games begin, or should I say, let the shell games continue.  On Feb. 19,  Oroville Financial Director Ruth Wright,  gave an update on Oroville’s city  budget. She caught my attention when I heard her say $366,000 in FEMA funds were applied to the “Pension Stabilization Fund.”

Oroville’s previous council decided to repurpose all “one-time money”, to this fund.  This year over $1 million was swept  away from city improvements and funneled into the  CALpers stabilization accounts.

For those that voted themselves a one percent tax increase in hopes of fewer crimes, street repairs, and clean parks, I fear you will be disappointed. It’s all about  the unsustainable CALpers fund. Oroville now has a one percent added-on sales tax plus a five percent Utility Users Tax. Look at the five utility bills you receive each month. Check out the UUT you are paying.

The city has been asked to repeal the five percent Utility Users Tax now that the one percent sales tax has passed.  City staff has recommended “no,” citing the city’s precarious financial situation. The council decided to delay that decision for a year.

I would predict there will be no repeal. The shell games will continue. The city will still be crying poor. New fees and tax proposals will be pursued. The proceeds will be used for CALpers contributions in a futile attempt to delay its inevitable collapse.

— Lorraine Christensen, Oroville”

“Why is there always enough money for large pensions and raises (and propaganda) for bureaucrats yet never enough money to maintain the streets?”

4 Mar

I want to thank Dave for writing this kick-ass letter to the Enterprise Record last week. I know it ran either the day before or the day of the Finance Committee meeting last week and I know Mark Orme read it. Now I also know I’m not the only person who has a problem with paying for a campaign to raise my taxes to pay  for the pension deficit created by years of entitlement. 

Orme mentioned the pensions, but would not admit they are the real drive behind a revenue measure. He said they want the money to either  fix streets or hire more cops. But we’ve all seen the method by which they transfer money from every department into the “Pension Stabilization Trust” and the “UAL” fund to pay down a deficit that the employees created themselves by not paying enough into their own pensions. 

Write your own letter folks – don’t be an ostrich, stick your head up and be heard. 

Why is there always enough money for large pensions and raises for bureaucrats yet never enough money to maintain the streets?

And now our city council members have decided there is plenty of money in city coffers to propagandize the public, so they are giving tens of thousand of our tax dollars (and most likely more later) to a PR firm to sell us another bond measure (just another type of tax increase) or a sales tax increase. And this does not include the cost of the city bureaucracy’s staff time. Is this how you want your hard-earned tax dollars spent?

And whatever tax increase they sell you will be just a down payment as the city’s unfunded pension liability will only get worse. Just wait for the next recession and stock market plunge. Then the politicians will spend more of your tax dollars to sell you yet another tax increase.

I urge everyone to read the long time political watchdog and journalist Dan Walters’ editorials: “Despite law, politicians use taxpayer funds for campaigns,” “Local tax hikes cleverly packaged,” “Cities should fess up about taxes, pensions,” and “Property tax surge reveals the truth: Local tax hikes are all about pensions” athttps://calmatters.org/articles/author/dan-walters/. (Some of these editorials ran in the Chico ER.)

As Walters notes, “With very rare exceptions, however, officials who place the tax increases on the ballot will not publicly say the extra revenue is needed to offset rising pension costs. Rather, on the advice of high-priced consultants, they say the money is needed for popular police and fire services and parks.”And he says, “The League of California Cities has raised the alarm about ‘unsustainable levels’ of pension costs. Isn’t it time for the cities themselves to be truthful when they ask voters for new taxes?”

Our community is in a state that has some of the highest taxes and living expenses in the nation. And if the local politicians have their way your taxes and expenses are going up. Also, wages in Butte County are in the bottom 10 percent of the larger counties in the nation. California has the highest poverty rate in the nation at 19% and Butte County is even worse at 21%. It is unfair to increase this community’s tax burden while government employee pensions go unreformed.

It is long past time for politicians to spend within our means and represent us instead of special interests at our expense.

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

 

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:

http://www.ci.chico.ca.us/government/minutes_agendas/documents/1.23.19FinanceCommitteeAgendaPacket.pdf

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

 

Howard Jarvis Taxpayers Association taking Yuba County to court over fraudulent tax revenue Measure K

27 Dec

In November the voters of Yuba County barely passed Measure K, a 1 cent/.01 sales tax increase. The measure read as follows:

To maintain and protect essential services such as 9-1-1 emergency medical/fire response; improving wildland fire containment; maintaining 24-hours sheriff’s patrol; attracting/ retaining jobs, businesses, and qualified sheriff deputies; and other essential services, shall the measure to establish a 1 cent sales tax for 10 years in unincorporated Yuba County, providing an estimated $4,300,000 annually requiring accountability, citizens’ oversight/ audits, and all revenue controlled locally, be adopted?”

California law currently requires a 2/3’s vote to pass a “special tax” for revenues that will be set aside for a specific purpose. But Yuba County ran Measure K as a general measure, only requiring 51% of the vote, even while telling the voters that the money would dedicated to public safety. You’ll note, they don’t mention services such as street maintenance or library funding, but specifically mention “emergency medical/fire response, wildland fire containment, and sheriff’s patrol…” 

There is a weird section about “retaining jobs, businesses…” – I’ll say, this measure was at the very least poorly written in a direct attempt to confuse the voters. But I think the specific mention of safety services should mean it requires 2/3’s voter passage. Of course I’m not a lawyer.

Luckily the Howard Jarvis Taxpayers Association has plenty of lawyers on staff, and a couple of vigilant Yuba County businessmen were quick to ask for help. HJTA retained a Sacramento law firm to file an action against the County of Yuba to stop the implementation of the tax. 

From Lou Binninger, at the Territorial Dispatch in Yuba County:

https://www.eterritorial.com/47-guest-writers/lou-binninger/14419-measure-k-challenged

On Friday December 21, 2018, the Sacramento law firm of Bell, McAndrews and Hiltachk filed an action in Yuba County Superior Court to invalidate Measure K – the Public Safety/Essential Services Protection Ordinance that appeared on the November 6 ballot. Measure K received 54.1% of the vote. The suit contends that the measure needed a two-thirds voter approval to become law.

The suit’s plaintiffs are Howard Jarvis Taxpayers Association (HJTA), a nonprofit public benefit corporation comprised of over 200,000 taxpayers, Charlie Mathews, a local rice farmer and businessman, and John Mistler, former Yuba County Supervisor and owner of the Territorial Dispatch weekly newspaper. Defendants are the County of Yuba, its Supervisors, and the California Department of Tax and Fee Administration.

54.1% – no wonder the Yuba County Board of Supervisors  decided to cheat! They knew they could not get the required two/thirds. 

Binninger also raises the question of using public funds to run a tax measure campaign.

“The suit does not address the county’s biased media campaign or the use of hundreds of thousands of taxpayer dollars to sway voters. Measure K opponents argued that both were illegal. The California Fair Political Practices Commission has jurisdiction over where monies are derived and how they are used for a campaign.”

The city of Chico is currently using hundreds of thousands of taxpayer dollars to mount a revenue measure campaign, not only in $taff time, but in consultants. The Chico Area Recreation District has already hired various consultants, spending over $100,000 that I know of, to put their own revenue measure on the ballot. The school district has run at least four bond campaigns using taxpayer money. 

We need to hold city of Chico and CARD staff up to the law. We need to be ready to make our own complaints to the FPPC and court. And we need to be ready to take it beyond Butte County, because the county of Butte is not likely to take such complaints seriously – they’re in the same boat with Chico!