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CARD propaganda blitz amounts to a lot of false claims

15 Aug

Chico Area Recreation District is hosting a series of informational meetings about their tax proposal over the next month. The first meeting was held this past Tuesday evening. It was short and very informative, I hope more people will take 45 minutes or an hour to attend one or more of these meetings.  It’s a perfect opportunity to ask questions. All meetings are scheduled at the CARD Center on Vallombrosa.

  • August 21, noon
  • August 28, 7pm
  • September 5, noon
  • September 10, 8am

Tuesday’s meeting started at 6 pm and was over shortly before 7pm.   CARD manager Ann Willmann gave a power point presentation. It was a good look at the coming propaganda blitz CARD is about to unleash.

Willmann shared some interesting general information.

• Created in 1948 (71 years ago)
• Encompasses over 250 square miles, beyond City of Chico city limits
• Population served is 121,000
• Operated separately from the City of Chico
• Oversight by an elected 5-member board of directors

I didn’t know those first three things, so here already I learned something by going to a public meeting. But it didn’t take long for Willmann to get into the full-on pitch.

What CARD Does  –  Provide parks & recreation facilities. Enrich our residents’ quality of life. Promote health, wellness, learning and fun. CARD is one of the most utilized agencies in our area,with our parks, facilities, and programs serving thousands of people annually.”

Beyond, “provide parks & recreation facilities,” none of that can be proven. Frankly, I’d liked to have seen a number besides “thousands” of people served annually. “one of the most utililized agencies in our area…” Well, prove it. There are no attendance numbers in the budget reports either. Are they including agencies like law enforcement and public safety, the road department?

I think a common misconception about CARD is that they are responsible for all the parks in town, not true. The city owns all of Bidwell Park. CARD leases the Nature Center from the city, and is responsible for maintenance on that specific property. I don’t know whether they own or lease the ball fields under the same type of agreement. But, I found the following claims to be a stretch.

Our parks:
Reflect the quality of our community.  Oh, that’s not good. Many of our parks are in pretty disgusting condition.

Improve property values.  I think this is highly disputable. When you look at real estate listings, parks and other public attractions like schools and churches are considered problematic. Especially when security and lighting are lacking, as has been one of the main complaints about CARD  facilities. Another complaint has been lack of upkeep, which damages curb appeal for any home.

Contribute to education.   I do notice,  since they took over the Nature Center, “day camps” have been their biggest source of income.

Reduce crime.   That’s funny – Terry Cleland said transients were stealing out of the dugout at ball games. CARD will have to keep working on this one.

Attract businesses and create jobs  Attracts businesses? CARD uses tax dollars to subsidize programs that drive local businesses out of the market. For example, Off the Wall Soccer, a longtime popular indoor sports facility, went out of business last year after CARD renegged on a promise not to compete with OTW’s special 7 man teams. CARD already had an outdoor program, why move in on a local business? Because they can undercut anybody with the guarantee of tax dollars. CARD is a very big competitor for private daycare facilities, and even the local wedding industry.

Creates jobs? CARD provides poverty positions, in fact, most of their workers earn less than $30,000/year, get no benefits, and rely on AFDC and Medi-Cal to fill in the gaps. A few years ago, they cut their part-time workers to 28 hours or less to get out of paying Obamacare.

Willmann shared the results of CARD’s recent survey, here are the “priorities” listed by respondents:

• Reducing crime and homelessness in parks by
providing security guards to patrol parks
• Providing clean, safe parks and recreational
programs for all Chico area residents
• Upgrading parks with lighting, security,
parking, and other safety features
• Improving and maintaining park bathrooms

• Repairing/updating aging recreation centers,
playgrounds, sports fields, swimming pools,
and facilities that promote active and healthy
living and maintain recreational programs for
seniors and youth
• Ensuring accessibility of parks and recreation
for persons with disabilities
• Renovating/expanding parks, trails, and
recreation areas, and completing parks under
construction

Here Willmann went on the defensive, listing “challenges”

• Aging Facilities + Reduced Funding =
Deferred Maintenance
• Continue to address safety needs
• Upgrades needed to aging parks and
facilities
• Create and maintain health-related
programs for all-youth to our seniors
• Discussions and studies have been
conducted
• Financial impacts out of our control
• Fees collected are not enough

Aging facilities? Willmann said most of our  facilities are over 35 years old, that’s not true.  DeGarmo Park, Humboldt Skateboard Park, the Disc Golf Course at 5 Mile, Oak Way Park – these are just some of the facilities that have been built recently. Wildwood Park is only about 25 years old. Reduced funding? Look at the budgets, available here, and tell me they haven’t been getting more money every year:

https://www.chicorec.com/district-budget

What’s true there is “deferred maintenance.” They’ve allowed facilities that should have been easy to keep in good working condition while they’ve paid more and more into their pension deficit, raised management salaries, and  taken on costly new liabilities like the rotten and aging Lakeside Pavillion and Nature Center. One of the top complaints listed in the survey was dirty bathrooms. But look at the budget, do some serious reading – they pay more for pensions every year, with employees only now being asked to contribute anything, and it’s still less than 10%. 

I was really shocked when she listed the Camp Fire as a challenge. 

“Reduced property tax base for the County means a reduction in property taxes for all public agencies. In 2019, CARD lost over $200,000 in revenue”

This was reported immediately after the Camp Fire, by city of Chico mismanager Mark Orme. But, as Orme reported, the state immediately announced they would “backfill” these lost revenues up to three years after the anniversary of the fire. So, CARD didn’t really lose $200,000 as Willmann tried to claim Tuesday night. Private homes within the Camp Fire burn area are already being rebuilt, some of them beyond their original footprint, which means they will be assessed for more within three years than they were assessed before the fire. 

Willman also claims that “Future tax reductions are expected, and plans are being made to adjust expenses.” What future tax reductions?  I’m calling bullshit on this one. There is currently a building boom going on in Chico, with more houses approved for the immediate future. That means more, more, more property taxes to maintain and upgrade current facilities,, not to mention, developer impact fees that pay for new parks. 

And finally she claims “We have seen an increase in participation in already impacted programs due to the increase in our local population.”

Oh, not this one again. Look around you  folks – the college students are back in town, families are getting  ready for school to start, but have you been held up  in any of the hellish traffic  jams that occurred in the weeks following the fire? Have you waited more than 5 minutes at a grocery store check-out? No.

When a woman asked from the back of the room if Willmann had any statistics to back up this claim, Willmann quickly answered, “No.” Furthermore, “we just noticed this increase…” 

I’ll have to stop here, I’ll pick up the rest of the meeting tomorrow. Things got kinda hot when the guy next to me brought up the pension liability. 

 

Pension Tsunami, Part 1: How we got here…

7 Aug

In the late 1990’s, Governor Gray Davis and other union-friendly legislators set up the current pension system, agreeing to “defined benefits”.  Public employees had previously been given a “defined contribution” system. The difference being, with a “defined contribution” system, the employer agrees to pay a certain amount, with a “defined benefit” system, the employer agrees to provide specific benefits, no matter the cost.

About 2006 an “MOU” – memo of understanding – was approved by the sitting Chico City Council, with the recommendation of then-city manager Tom Lando, to “attach salaries to revenue increases but not decreases…”  Read that again – “but not decreases…”

Does that sound right to you?  Think about that – give them raises when we’re flush, but no “adjustments” when we’re bust, just lay people off and cut services. That’s been the pattern in Chico for 15 years now. After Lando floated that turd, his salary went from about $65,000 a year to over $150,000 within a couple of  years. His successor came in at $190,000/year.

Council handed out raises of 14%, 19%, 22%, until that memo was outed to the public and the taxpayers started to howl about it. But too late –  City of Chico salaries had progressed well over $100,000  for management and public safety, and other salaries were not far behind. Council approves automatic raises in the contracts so the salaries just keep going up. Even though former city manager Dave Burkland agreed to take a lesser salary than his predecessor, our current city manager now makes over $200,000/year. Add his benefits package and he is taking almost $300,000.

When the public found out about this scheme the city dumped that revenue-based raises mechanism, but came up with something better – “the employer paid member contribution.” That meant, the city not only paid a share of the employee’s benefits, but paid a portion – in some cases the entire portion – of the employee’s share as well.

This finally ended a couple of years ago, when, under intense criticism, those staffers – public safety and city management – agreed to pay their whole portion. And, hold onto your hats – about a year ago, these people even agreed to pay 3% of the “employer share.” 

Excuse me, my hat didn’t even jitter on that, because that makes the employee’s total share less than 10 percent. Anybody who has been a member of CalPERS for 15 years is a “classic member” and pays only 6%, plus that extra 3% – 9%, for a pension of 70 – 90 percent of their highest year’s salary is absolutely RIDICULOUS.

Meanwhile, the employer share has increased and increased, not to mention, the employer is making altogether separate payments toward the deficit, by way of the newly established “Pension Stabilization Trust.”

So, I imagine you saw this article in the paper recently.

Number of California public retirees in $100K Club skyrockets, but they’re just part of the burden on state pension system

This article gives a good historic overview of how the pension deficit has grown. I call it “rabbit math” – first they based the contributions on the employees’ salaries, and then they jacked up employee salaries.

I wonder how many other cities in California used Tom Lando’s ploy of attaching salaries to city revenue increases and then going on a development binge. When overdevelopment finally tanked the local market a few years later and revenues plunged, the salaries, benefits, and automatic raises, stayed in place. Salaries got higher no matter how revenues dipped for Chico. And the pensions and city contributions are based on the salaries. 

Getting dizzy yet? Maybe a little pissed off? Well this is where we’ll close and pick it up again tomorrow. 

 

Will the taxpayers be left holding the Pension Deficit Bag?

31 Jul

Have you been “left holding the bag“?  This expression is generally used to describe a situation wherein a person or persons create a problem and then leave others to deal with it.  According to Grammar Girl,  there are different shades of meaning – “this idiom grew out of an earlier expression from about 1600: to give one the bag. That expression referred to someone being left with an empty bag after everyone else removed the good stuff.”

We all know what it’s like to be left holding the bag – empty or full – but I wonder, how do you all feel about the bag being handed to your children? This is what City of Chico staff are trying to do – hand their pension deficit bag to our kids.

The other night I took in a Chico Parks and Playgrounds Commission meeting to hear a pitch for a sales-tax-to-secure-bonds scheme that Ass City Mangler Chris Constantin has been pitching for months. Constantin describes a trick by which he can use the additional sales tax revenue to secure bonded debt. What it amounts to is trying to convince us that it won’t be that painful to pay this tax, because it will be stretched out over years. But when I looked into this scheme I found, that means our kids and their kids will be paying this debt, and it’s very unlikely they will see any benefit.  The bag we will be leaving for our children will be full of debt, crapped out infrastructure, and public salaries and benefits still spiraling out of control.

From the Tax Policy Center –

“State and local governments issue bonds to pay for large, expensive, and long-lived capital projects, such as roads, bridges, airports, schools, hospitals, water treatment facilities, power plants, courthouses, and other public buildings. Although states and localities can and sometimes do pay for capital investments with current revenues, borrowing allows them to spread the costs across multiple generations. Future project users bear some of the cost through higher taxes or tolls, fares, and other charges that help service the debts.”

At a meeting I attended earlier this year, Mark Orme admitted that the city had “kicked the can down the road” on street maintenance for many years, instead paying millions toward their pensions. This included payments toward the actual deficit, instituting a “Pension Stabilization Trust” that siphons money from every fund, even funds “dedicated” to capital maintenance. Through the PST, staff has tricked us into believing we only pay a certain “employer share” of the pensions, in reality, we pay most of their pension cost. This has created what I’m going  to call “the Pension Deficit Bag“.

If we  don’t get a handle on the public employee compensation now, we are handing our kids a disaster. This is the dilemma – the public employees want crazy salaries of as much as 4 and 5 times the median income, AND they want 70 – 90% of those outrageously inflated salaries in retirement,  BUT they don’t want to pay for it.  Years ago CalPERS promised they would make up the difference with investments in the stock market – but their investment strategies, including a bribery scandal, have only deepened the divide.  Now they want the taxpayers to take the bag. In fact, Constantin is trying to convince us that it’s okay to let our kids pay for his ridiculous lifestyle demands.

With groups like Pension Tracker shining a light on this grab, CalPERS and the unions have agreed that “new hires” (our kids) be asked to pay 50%. But top heavy management employees, “classic employees“, are only paying 11%. That is not sustainable. Sounds like a classic Ponzi scheme to me!

“Future project users bear some of the cost through higher taxes or tolls, fares, and other charges that help service the debts.”  But will they receive any benefits? That’s uncertain, in fact, I’d say it’s not going to happen. According to Constantin, we need hundreds of millions to bring existing streets up to safe standards, but the sales tax increase will only bring in a couple million a year. He explains enthusiastically that’s why we will use those proceeds to borrow money (bonds). That sounds nuts to me.

At that Finance Committee meeting earlier this year, Constantin also warned us that the economy is about to tank. If you’ve been paying attention over the last 35 years, as I have, you’ve seen that pattern of boom and bust.  Chico just enjoyed a giant BOOM, despite the poormouth complaining about the Camp Fire refugees. Contrary to the city’s claims, those refugees not only caused a short term blip in the price of housing, meaning MORE PROPERTY TAXES, but those who have remained are still providing a boost to our local sales tax revenues. This will dry up as the retail sector in Paradise recovers, and people start moving back to the Camp Fire burn area. The resulting correction will be tough times for Chico.

Constantin admitted there is such a downturn on the horizon, telling the Finance Committee that his scheme will “shore us up“. What? Who would borrow money in the  face of economic downturn?  The bonds he’s proposing have to be paid no matter what happens in the economy – just like Constantin’s “defined benefits“.

Throwing a sales tax increase onto people who are already experiencing uncertainty is another nail in our coffin. Studies suggest that when people find out there’s a sales tax increase on the agenda, they start hoarding, buying the bigger ticket items ahead of the sales tax increase. This of course creates a bubble. The same studies show that people develop different shopping habits, such as buying online.

Here’s my anecdote – when Tom Lando first suggested a sales tax increase in 2012, I started shopping out of town and online. Of course these purchases are still taxed, but here’s the message – local businesses lost my money, and they won’t get it back. Local businesses need to realize what they stand to lose. It’s not the box stores that are stealing your business, it’s the sales tax rhetoric coming out of the city of Chico.