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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. 

The pension deficit is the difference between what public employees expect to get and what they are willing to pay into it

5 Apr

Well, anybody who saw my last post and then saw my letter in the News and Review can see that I had to edit dramatically to get my letter in.  When I sent my original letter to the address I’ve used for years, it was sent back, rejected for size? And I was told to use the form letter mechanism on the N&R website, which only allows 150 words. Snip, snip, snip – I still got my point across, and it was a good exercise. 

Write those letters folks! When do I find the time? When I’m so pissed off I can’t sleep. Writing letters to the editor will save your teeth, believe me!

I sent the following letter to the Enterprise Record two days ago, watch for it, and write your letters too. Just yesterday Dan Walters ran a column about the spending of taxpayer money to pass revenue measures that will only end up being squandered on the pension deficit –

https://www.sacbee.com/opinion/op-ed/article228799774.html

so people are thinking about this subject. Write now!

And don’t just write to the papers, forward to the city manager mark.orme@chicoca.gov and CARD general manager Ann Willmann annw@chicorec.com

Chico Area Recreation District board and staff have spent over $100,000 on consultants to help them pass a revenue measure  but have yet to show the taxpayers that they can be trusted with money.

In 2014, CARD staff reported a pension deficit of $1,700,721 .  Only five years later, that deficit has ballooned to $2,800,000, despite nearly $1,000,000 in “side fund payoffs”.  

CARD staff announced they have “set aside” another $1,700,000 for payment toward the  deficit, having admitted they have deferred maintenance to various facilities for years, including Shapiro Pool, which was closed permanently last year.

CARD only started asking employees to pay toward their own pensions in 2013, but management staffers pay 6% or less, with the general manager paying only 2 percent of an $108,500 salary.

CARD staff describe the pension/unfunded liability as “What we owe to CalPERS because of the difference in their guesses.”

Wrong.  The pension deficit is the difference between what employees expect to get (70 percent of their highest year’s salary at age 55) and what they want to pay for it (less than 10 percent of their salary). For example, the general manager pays $2170/year toward a pension of  more than $75,000.  That is not sustainable.

CARD staff have used taxpayer revenues to enrich themselves while ignoring their mission. Now they tell us we need to pass a revenue measure, or they will further defer maintenance, close facilities, and cut programs. At the same time offering a grandiose new sports facility south of town? Let the board of directors know how you feel about that, at annw@chicorec.com

 

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

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.

Who’s responsible for these elephant turds?

2 Mar

At last week’s Finance Committee meeting (Feb. 27) Mayor Randall Stone (Chair) and council members Sean Morgan and Ann Schwab heard a consultant’s pitch for a revenue measure campaign, starting with the usual “survey”. City mangler Mark Orme made some interesting comments before introducing the consultant.

Orme stated that since he came to the city in 2013 he has “resisted” revenue measures. “I think there needs to be a high level of trust within the community that those funds are going to be spent prudently.” 

I always wonder about public sentiment. Do most Chico voters trust the city council and staff to use their money wisely? And here’s the scary question – what would they know about it?

Orme feels that he and staff have “created a higher level of trust.” opining, “We have learned to live within our means.”

Orme reminisced about his arrival in Chico in 2013, reminding us that the city “has been through hard times.”  He talked about “lost” staffers as though they wandered away in a storm or left for better digs elsewhere. No, hit man Brian Nakamura was hired, long time staffers were fired, or in some cases, simply encouraged to take a position in another city. “Hit Man” brought in former co-workers as new management and skipped off to his next assignment. Over the next year or so staff was pared down until there were no more workers, just management. And management salaries have continued to get higher – now in excess of $200,000/year – while they only pay 11 percent of their pension cost.

So I’d really like to ask Orme just whose means he’s been living within.

He certainly did mention the pensions – “one of the big elephants that cruises through any government living room…” He acknowledges the pension deficit. But here’s where the fiction continues – “The city  didn’t create it…”

I have to take exception with that last claim.  Looking at Orme’s contract here, it’s not hard to see what really happened.

http://www.chico.ca.us/human_resources_and_risk_management/documents/OrmeEmploymentAgreement10-2017.pdf

“WHEREAS, the Council desires to have Orme participate in CalPERS cost sharing, and pay three percent (3%) of the Employer’s cost, in addition to Orme’s contribution for CalPERS;”

On “Exhibit A” you find the employee share, Orme’s contribution, is 8%. Plus 3% of the “employer share” equals 11%. For 70% of his $207,500 salary at age 60. The city payment has been increasing every year, I  believe they now pay 39% but it might be more. CalPERS is constantly demanding more. The other 50 or so percent rides on the stock market. This hasn’t worked out so far – CalPERS promises 7% return but has been lucky to see 1%. This has caused the PENSION DEFICIT, aka PENSION LIABILITY.

Not only that, but Orme, as well as other management staffers, have recently added a IRC 457 plan to their contracts. In addition to their salaries and CalPERS contributions paid, they get tax exempt “deferred” compensation.

“Plans of deferred compensation described in IRC section 457 are available for certain state and local governments and non-governmental entities tax exempt under IRC Section 501. They can be either eligible plans under IRC 457(b) or ineligible plans under IRC 457(f). Plans eligible under 457(b) allow employees of sponsoring organizations to defer income taxation on retirement savings into future years.

“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 5, 2017 the City agrees to contribute four and fifty-two hundredths percent (4.52%) of base salary to Employee’s IRC 45 plan.”

See, the city most certainly did create the deficit, because they’ve continued to agree not only to CalPERS stipulations but to bigger and bigger salaries (and therefore PENSIONS) and more generous contracts all along. Since 2013, Orme’s salary has gone up almost $20,000. Laying off people who made $35,000 – 65,000 a year while raising management salaries by 10’s of thousands is like taking 5 steps backward and no steps forward. As Orme acknowledged last Wednesday, we now get no services.

“Now we’re a city that’s living within their means that isn’t meeting the needs of the community…”

We need to ask ourselves, what the hell is the use of a city that doesn’t meet the needs of it’s community?

Orme casually mentions the elephant in the room – he is the elephant in the room. Somebody better get him a shovel, he has a huge pile of crap to clean up.

 

 

 

 

Dan Walter: School officials and school unions are teaching students that it’s all right to run up credit card bills, blame others for overspending and then cross their fingers that someone will bail them out

11 Feb

After I wrote my analysis of CARD’s use of their expensive Cal Park Lakeside Pavilion facility, I read this piece by Dan Walter:

https://calmatters.org/articles/commentary/school-districts-set-poor-example-for-students/

Walters is talking about various California school districts, but what he says also applies to our local recreation district – ” it’s all right to run up credit card bills, blame others for overspending and then cross their fingers that someone will bail them out.”

That’s becoming standard public agency policy these days, and it’s not just the pensions, but poor spending decisions by policy makers. I mean, blatant decisions, like spend $385,000 on a remodel for council chambers, or paying a million borrowed dollars on a crapped out old building and then several hundred thousand fixing it. 

But most poor spending decisions seem to involve public salaries and benefits. Walter reports ” In 2017, when Sacramento Unified’s teachers were threatening to strike, Sacramento Mayor Darrell Steinberg mediated a new contract that gave teachers an 11 percent raise. Later, it emerged that the salary increases would come from a reserve set aside for pension fund payments.”

In Chico, both the city and CARD have set up “pension trust” funds, allocating money from other city funds, to pay down their pension deficit. this is in addition to what taxpayers already pay toward pensions on a monthly basis. We pay their payments monthly, and then we’re on the hook for an annual payment that increases every year – this year, $7,598,561.  Former CARD finance director Scott Dowell now runs the city finances, so he set up both funds. He says these funds save money by avoiding penalties from CalPERS. What it amounts to is embezzling money from one fund to another so you can spend it any way you want. 

In Sacramento, contrary to the  rules for one of these “trusts”, they spent the money to give their teachers an 11 percent raise. Of course, you know what those raises are going to do to those teachers’ pensions, right?

As soon as Chico Unified passed Measure K in 2016, district finance mangler Kevin Bultema told the board they were still looking at deficits caused by raises given teachers. He told me in an e-mail that if they didn’t get more money they’d cut programs. 

Walter’s point in this piece is that the schools are setting a poor example for the kids. I’d say,  government in general is setting a poor example for everybody.