about how the city inflates our utility bills with franchise fees and then turns around and adds 5% Utility User’s Tax to the total. The city takes over $7 million a year in UUT, from our PG&E, water and landlines, after adding a franchise fee to our PG&E rates. They also add franchise fees to our garbage and Comcast bills. In addition to constant rate hikes, none of which the city of Chico has ever protested, we have two taxes, both fairly well hidden.
In this way the city of Chico took advantage of people who had been through a horror story known as “The Camp Fire”. I asked city finance manager Scott Dowell just exactly how much the city of Chico profited from the tragedy, and I was shocked with the total.
“Utility Users Tax receipts exceeded budget by $99,738 for the year ended June 30, 2019.”
That’s only seven months after the fire. $100,000 in seven months – wow. That’s about $14,000/month. I’m assuming most of the evacuees had relocated out of Chico by June, but I also believe we can assume that most of this “boost” came from those people who were still driving cars with the rear-end lights melted off.
I didn’t live in Paradise but I saw stuff that changed my life. It changed the way I feel about Chico, a town I’ve known since I was born, and lived in most of my adult life. I saw an ugly side of Chico – city management – and I’ll never feel the same way about this town again.
Orme, Constantin and Dowell need to go. Schwab, Stone, Ory and Morgan are at the end of their terms, and I think it’s time to show them the door as well. But what candidates do we have to choose from? Good question.
I saw in my stats that somebody read this old post – and I realized, it was worth a re-run.
In 2012, Chico voters rejected Measure J, the cell phone tax proposed by council member and former mayor Ann Schwab. I didn’t take a poll, but something I heard from people when I spoke to them about it was outrage – “what does the city of Chico have to do with my cell phone service?”
Good question. Answer: NOTHING, it was just an outright grab into your wallets. I hope people are still asking good questions, because what Joseph Neff is saying here, in a 6 year old letter, is still true. The majority of our budget goes toward salaries, benefits, and now, the employees’ pension liability.
Below Joseph Neff reminds us, even well paid private sector positions do not usually include pension, but we are all forced to pay outrageous benefits to public employees. And he offers a solution – I bold-faced the last paragraph, cut it out and send it to Chico City Council, and then you might want to send a copy to your county supervisor.
This letter still stands, so I’m running it again. Thank you Joseph Neff, wherever you are.
Letter: Your tax hike went to raises, pensions
Chico Enterprise-Record
POSTED: 12/06/2013 10:41:12 PM PST
Conservative voters realized that Gov. Jerry Brown’s sales tax increases would not be used to benefit taxpayers but to provide lawmakers a raise and to protect the golden pensions of public employees.
As a 45-year career employee with bachelor’s and master’s degrees in engineering and an MBA, my two private-sector pensions are $15,000 yearly. Only two of six career employers had pensions during the past 50 years of plant closures from union strikes, global competition and company moves to right to work, more business friendly states.
None of my wife’s 30-year employers, including 11 as a teacher and 20 as either a degreed hospital medical records administrator, or as an advanced degreed nuclear medicine technologist supervisor, had pensions. Only one had a 401(k) plan. That is typical of the private sector for degreed private sector employees since the 1950s.
Public employee pensions should be halved to civilian levels, delayed to age 65, never adjusted for inflation, and based only on the first $50,000 of pre-retirement income. A $25,000 maximum annual public employee pension would be fair since savings and Social Security will provide the needed additional two-thirds of retirement spending.
If you watch the government steadily over time like I have the last 50 or so years, you see the contradictions and the outright lies. My favorite of late was Obama’s promise that we would not lose our health care providers under Obamacare.
So when Chico City management started repeating their Big Lie about the Camp Fire evacuees all landing on Chico like a plague of locusts, I knew it was really all about pushing for the sales tax increase. In fact, at a Finance Committee presentation of the proposed measure, Ass City Mangler Chris Constantin actually said we should put it on the March ballot so we could “take advantage of the population influx.” He not only acknowledged then that the evacuees would be temporary, he also predicted that the economy would tank soon. That’s another blog.
But CARD got their parcel tax (Measure A) on the March ballot before the city could decide what to do with theirs, and knowing they would be stupid to have two tax measures on one ballot, the city decided to wait until November. That gives them more time to campaign anyway, since they can’t campaign for the measure once it has been submitted and accepted for the ballot by the county clerk.
Brian Nakamura made the mistake of using taxpayer money to produce and distribute flyers promoting the city of Rancho Cordova’s tax measure, and that got him the can, so his former cronies will not make the same mistake.
So staff has to be creative, they need to create financial problems and then convince the taxpayers that they need to pay more money to solve them. They don’t want us to find out the real truth about city finances – whole funds are in arrears because they’ve been siphoning off money to pay down the pension liability. Look at the budget here,
and push “Control F” on your keyboard. Then type in the words, “pension” or “pension liability”, look at it for yourself if you don’t want to take my word for it. Then type in “gas tax” and be further outraged.
I think you will see stuff that inspires you to write your own letter to the editor, here’s mine.
NOTE: Here’s a further irony I was not able to address in 250 words – they add a franchise fee that increases your rates, and then they use that total to figure the 5% Utility Tax. Sock it to me BABEE!
After a year of Chico staffers complaining that the Camp Fire evacuees were “straining” our services, we find a $20,000,000 “boost” in city coffers. Where did that come from?
Staff reports sales and bed tax were up, way up, during those months after the fire. Staff didn’t mention Utility Tax or the franchise fees that are tacked onto our utility bills. The city adds a 5% Utility Tax to your PG&E, Cal Water/sewer, and landline bills, taking $7,051,581 last year. With rate increases and new development, that goes up about $50,000/year. Think what a temporary population influx meant.
A letter writer mentioned the trash tax or “franchise fee”. The city also collects franchise fees from PG&E and Comcast. Last year the city added $1,102,674 to our trash bills and expects to collect about $1,600,000 in 2019-20. They tacked another $757,192 onto our PG&E bills and $899,942 to our cable tv bills.
Shouldn’t these funds be used for street maintenance? Last year staff used almost $400,000 in Comcast fees to remodel council chambers. These hidden taxes go into the General Fund, where they are available for any whim of council.
Council created the ordinances by which these taxes are added to our utility rates, and council can lower or eliminate them. Ironically, they also created a “no price gouging” ordinance, but proceeded to make profit from the tragedy. Let them know how you feel about that by claiming your annual Utility Tax Rebate, available from May 1 to June 30. Email the clerk at debbie.presson@chicoca.gov for details.
Time for New Year’s Resolutions! I recommend this because last year I realized all my pants were too tight, including a pair I’d only bought a couple of months earlier. I resolved to lose 10 lbs instead of buying new pants. I quit eating a big breakfast, opting instead for a fruit/yogurt smoothie, and I started an exercise routine. It’s been pretty up and down since then, but I’ve lost 8 of the 10, and I haven’t gained it back. I’ll say WOW! I’ve gone back to the factory made holes on my belt!
So this year I’m telling all my friends to resolve to stop being ripped off by the city of Chico and turn in a Utility Tax Rebate form.
Never heard of Utility Tax? Take a look at your PG&E, Cal Water and “telecom” (landline) bills. HINT: you won’t find “utility tax”, it will say something like “local user’s tax”. Your PG&E bill splits it up – look at all the pages, it will be listed at least twice on your electric bill and again on your gas bill.
Fortunately, the city is required by law to rebate the tax to those households that fall under a certain income level – I think it’s about $43,000/year. But, neither the city nor the utility companies are required to tell anybody about this rebate, so I try to tell people. The rebate is available from May 1 through June 30. By May 1, there will be a rebate form available on the city website, or you can ask the clerk for it – that’s debbie.presson@chicoca.gov I like to jangle her chain about the last week of May, cause you know, the squeaky wheel gets the grease.
You will have to fill in each month’s total take for each utility bill and then add them twice. Then attach all your bills – I recommend making copies – and send or deliver them to the city. If you send them, it’s going to cost you more than a stamp, and you can only deliver them during business hours, M – F. But it’s probably worth it. Since I’ve been doing this my return has gone from around $35 to almost $100 a year. About a year ago they started adding it to my water bill, and of course all the rates have gone up drastically over the last few years. So, judging from your usage, it might be well worth the trouble.
Listen, even if it’s less than $50, let me tell you why I do it anyway – I resent that they take it, at all. Here’s a couple of reasons why you should resent it too.
they also tax the utility companies by way of a “franchise fee”, which, added to your bill, means they double tax you
the city just announced a budget surplus
I try to read the city budget at least a couple of times a year.
It’s funny – when I’m looking for one thing I see other, interesting things. Here’s a note from the most recently adopted 2019-20 budget that should really piss all of us off: “(5) Assumes 100% of waste hauler franchise fees will be retained by the General Fund beginning in 2022-23.” I know, dammit, they said they were going to use that franchise fee – excuse me, TRASH TAX – to fix the streets. Ha ha – joke’s on us! They transfer it to the General Fund – they can transfer monies as they please – and then they can use it for whatever they want.
Oh yeah, franchise fees –
they also tax the utility companies by way of a “franchise fee”, which, added to your bill, means they double tax you
The city collects franchise fees from Waste Management, Recology, PG&E, and Comcast. Here’s the spread from the 2019-20 budget. The first 5 digit number is the Fund Number, the other figures are dollar amounts. The first two dollar amounts are actual, from 2016 – 2018. The other numbers are projected, based on trends, because they don’t have the actual figures yet. For those years they have two figures – the first is the figure the council has approved and the second slot will show “modifications” made as the year progresses. This budget is from last June so they hadn’t done the modifications – you have to attend the monthly Finance Committee meetings to get that “dynamic” information. So, I added the years and some dollar signs, and I’ve bold-faced the “actuals”.
Ha ha – I always read this stuff a million times, but just now while I was bold-facing those first two years, I saw the Waste Hauler Franchise Fee went from $236,112 in 2016-17 to $1,102,674 in 2018-19. WHAAAAATTTT! That’s our money folks! Feeling a little hollow in your right butt cheek? I mean, that’s where the average American keeps their wallet, so I’m just wondering. I keep my wallet on a strap over my shoulder, cause I might want to use that thing to smack somebody upside the head! I mean, don’t even be sticking your fingers in my purse honey, you gonna come up with a stump.
Yeah, I get mad. What the hell is wrong with you people? We paid those franchise fees, on top of the Utility Tax the city of Chico has added to our monthly bills. Don’t be a Meathead.
Yes, the city of Chico made profit off the Camp Fire – I can just see Mark Orme, Chris Constantin and Scott Dowell standing together, twisting their mustaches over the small army of evacuees that landed on our town. While they complained about the “strain” these people were putting on our infrastructure, they probably laughed out loud behind closed doors (remember the Enron scandal) over the money that would be pouring into Chico. Including millions in “reimbursements” from the state.
They announced this budget surplus as if butter wouldn’t melt in their mouths. Oh gee, says Scott Dowell, I found this money in the cushions of my office sofa... No, they got it from increased sales tax receipts, bed tax receipts, and utility tax receipts, those dirty, rotten scoundrels. They took advantage of a tragedy. Instead of saying, shouldn’t we drop or at least lower these taxes – I mean, we just passed a ‘no gouging’ ordinance, Chris Constantin told a gathering at a Finance Committee meeting in late 2018 that we needed to raise sales tax immediately to take advantage of the influx in population.
He didn’t twist his mustache, but he said that.
On page FS-1 of the 2019-20 budget, you’ll see both the franchise fee figures I listed above and the Utility Tax takings. I don’t have time to edit the UT figures to make it easier to read, but you can figure it out. Like the franchise fee table, it starts with 2016-17, and those first two figures are actual numbers, so I boldfaced them.
For fiscal years 2016 – 2020
40460 UUT Refunds 16-17(5,035) 17-18(6,160) 0 0 0 0 40490 Utility User Tax – Gas 2016-17 $1,155,438; 2017-18 $1,108,081 1,200,000 1,200,000 1,200,000 1,200,000 40491 Utility User Tax – Electric 2016-17 $4,490,948; 2017-18 $4,569,241 4,600,000 4,600,000 4,600,000 4,600,000 40492 Utility User Tax – Telecom 2016-17 $355,319; 2017-18 $367,465 300,000 300,000 290,000 290,000 40493 Utility User Tax – Water 2016-17 $898,519; 2017-18 $1,012,954 1,000,000 1,000,000 1,050,000 1,050,000 Total Utility Users Tax 2016-17 $6,895,189; 2017-18 $7,051,581 7,100,000 7,100,000 7,140,000 7,140,000
I know why the water figure went up ALOT – they only added the UT to my water bill a little over a year ago. They realized that Cal Water had drastically raised rates during the dry spell of 2016 and instead of filing a formal protest to the CPUC, they rubbed their sweaty little mitts together in glee and stuck it to us good! But you see they are projecting lower amounts as people simply turn off their sprinklers and kill every living thing in their yards to save money. You can see gas and electric takings were down, but of course they predict higher totals for 2019-20 because of the evacuees. We’ll see what the actual numbers look like in a year or so.
But, looking at the totals you see – they go up by about $50,000 a year, year after year.
I sent a note to Scott Dowell asking if UT figures went up along with sales tax and bed tax totals, but he informed me that he is on vacation until January 2. Well, la-tee-dah Scott, how nice for you!
Meanwhile, we should all be wondering, why are we paying a tax on our utilities? The city council instituted the tax with an ordinance, years ago. They put a 5% maximum on that, but when rolled it out at 3%. A drug and alcohol addict named Scott Gruendl proposed an increase to the full five percent when he was on council here. But when he skipped town, in a hail of turds, nobody proposed lowering the tax. Well, I’d like to propose we revisit the Utility Tax. And maybe we should just get rid of it.
One of my favorite movies is “A Christmas Story,” a 1983 comedy about a boy who just wants a bb gun for Christmas. It touches memories of childhood that are dear to me, and it’s funny. I wish they’d play it every Christmas instead of some of the crap they show now, but I guess I should get cable if I want to sit around watching the boob tube all the time.
But you can listen to the original story that became the movie, as told by the author, radio announcer Jean Shepherd. Remember radio? Remember when disc jokey’s had to have a personality? This guy was great. And, it’s his story, so he reads it as if he’s re-living the events.
Here’s a story I found in the Enterprise Record. I noticed it because I am a Chico State alumnus and I wondered if it was one of my old professors. I think this story was downplayed for some reason at the time it happened, and now the ER just prints what amounts to a news release from the court. No investigation. No follow-up.
A Butte County jury today found a Chico man guilty of a brutal assault on a Chico State professor in his home in October of 2017, according to a Butte County District Attorney’s Office press release.
Butte County District Attorney Mike Ramsey said Ryan Edgar Wayne Muscat, 35, was convicted by a nine-man, three-woman jury Friday for the assault that occurred in October of 2017 at the professor’s home in Chico, where Muscat was a boarder.
The jury convicted Muscat of felony assault causing serious bodily harm. The jury also found Muscat had previously suffered a previous felony “strike” conviction for robbery in Orange County in 2006.
Muscat
Ramsey said in the release that the assault victim was a 59-year-old CSUC science professor who had rented a room in his home to Muscat as a favor to a friend who was an employer of Muscat. The professor had begun to evict Muscat for his alcohol and drug use when Muscat attacked him during the early morning hours of Oct. 29, 2017. The professor suffered severe and permanently disabling injuries to his face, shoulder and brain.
Muscat faces up to 24 years 8 months in state prison when he is sentenced. However sentencing has been postponed awaiting the setting of trials next month on two other criminal cases alleged to have been committed by Muscat. Ramsey said Muscat faces felony charges for carrying a concealed knife in September of 2018 and for throwing urine on Butte County Jail correctional officers while in the jail in October of 2018.
According to the Butte County Court Case Index, Muscat has been in and out of court in Butte County since 2015. At the time of the attack, he was living in the professor’s house, but by the time the professor realized he had made a mistake taking in a drug and alcohol addict, it was too late.
At a meeting a few years ago, documented in this blog, I listened to Butte County Behavioral Health Director Dorian Kittrell explain that they were bringing people in from other cities/counties/agencies in California, and they needed “more beds”. He suggested finding people in the community to take strangers with documented mental and behavioral problems into their homes as boarders, even helping them “remember to take their meds.” I was outraged – these people need professional help, not just good will. Anybody who has had to deal with addiction among their family/friends would know that, and I’d guess most of us have had that experience at one time or another. Telling people to take in transients off the street is irresponsible. I’ll say it – I told you so Dorian.
We thought we were helping our friend who was struggling with heroin addiction by employing him on a remodel, he is a excellent carpenter and really loves wood working. But his wife called one day and told us he was just using the money for heroin, blowing off his morphine sessions. She asked us not to “help” him anymore. Helping a drug addict when you don’t really know what you’re doing is called “enabling,” and that’s the problem with groups like CHAT, Safe Space, and the Northern Valley Harm Reduction Coalition.
What I also see here is a sinister attempt on the part of the local media to play down stories like this. Mike, if you have a story about this incident from 2017, you can show it to me and I’ll be glad to eat my hat on this one. But after the conversation you had with my husband over his recent letter to the editor, I believe you are more of a censor than a journalist. You say you just want everybody to “get along.” Well, Romeo, a pox on your yellow newspaper.
Gather ’round Children, I want to tell you about a film that might just change your life, or at least, make you think about your consumer habits.
Over 10 years ago, I met a man named Bill Talen, who, with his wife Savitri, runs the “Church of Stop Shopping.” Talen’s stage name is “Reverend Billy.” He’s very theatrical, wears a white (nowadays pink) suit and clerical collar, and performs with his “Stop Shopping” choir, both on tours around the country and at a regular gig at Joe’s Pub in NYC.
I met them on the 2008 tour they did to publicize the film, “What Would Jesus Buy?” They had come all the way to Sacramento, and, since my family had been listening to me yak about them, they drove me up to see the show.
At the time, Bill wasn’t really sure what to do, there was really no set-up. He’d been invited by the owners of a small coffee shop, and they hadn’t done any preliminary advertising, just expected him to show up and gather a crowd, on a seedy street corner miles from the shopping centers. Instead of the usual choir, it was just him and Savitri, who looked very nervous. He greeted my family very warmly, autographed my copy of the movie, and went about his street preaching.
Instead of shoppers, we were immediately surrounded by a kind of hostile group of transients. I used to work in a store down the street when I was in college, the neighborhood had been bad then, it was worse in 2008, and it’s really bad now. But I had to admire Bill’s resolve as he went into his pitch. I stood nearby shouting “AMEN!” at the appropriate moments while my wide-eyed family moved closer to the store fronts, under the lights. At one point a drunk came speeding up on a bike and nearly hit Bill. He didn’t miss a beat.
We shook hands and made our goodbyes as the night moved in, Bill thanked us for driving all the way from Chico, and we left him with Savitri standing in front of the darkened store fronts.
But I still have my DVD copy of the movie, and I watch it once a year. It’s funny, but it has a pretty sinister dark message to it.
The film opens with warm scenes of America at Christmas. But it goes quickly from small town fall colors and simple visions of children decorating a Christmas tree, to glitzy ads, roads shut down with traffic, and crowded shopping malls – “the halls of worship”.
The narrator speaks of a new God . “He tells us to buy now and pay later, he tempts us with promises of endless credit, as he leads us down the path to eternal debt.”
“We used to be a nation of producers and are now a nation of consumers. “
“For the first time since the Great Depression, our household personal savings rate is below zero, and 60 percent of us are in long term debt on our credit cards. We now spend under one hour a week in religious or spiritual time, and over 5 hours a week shopping.”
The narrator compares shopping to addiction. A news woman remarks that most people would run over a pregnant woman to get what they want at Christmas.
Christmas, says the narrator, creates 5 million tons of extra waste every year.
And here we meet Reverend Billy, who had just launched his first nationwide “Stop Shopping Tour”.
I don’t really go in for theatrics usually. I like Bill’s street preaching, but the big productions with the choir are not really my thing. They sing pretty silly songs, and the old time revival setting is a little much. But my favorite part is when Bill asks people in the audience to bring forward their credit cards for “exorcising.”
It’s also fun to watch him walk into a store, hold a huge Mickey Mouse toy over his head, and proclaim, “Mickey Mouse is the Anti-Christ!”
I know, if Bill was your brother in law, you’d probably skip family dinners. He can be a bit much, like all your theater friends. But he’s right – America is out of control on spending. Even 11 years after this movie was made, it’s pertinent, probably more pertinent than ever.
Just today my grocery checker says she’s already getting aftershock from the spending. “I can’t believe I put so much on my credit card,” she tells me. “It will take me til Easter to pay for it!”
I’ll guess, she’ll be paying it off for years, because most Americans never pay off their credit cards, they just keep using them and paying that interest. So, that gift you bought on Black Friday because you thought you were saving all this money will end up costing you more than the regular price.
A Walmart employee recounts being spit on by “about a 60 year old woman” because she did not have the X-Box the woman wanted for her 6 year old grandchild. Yes, I’ve seen that kind of behavior. While you don’t see violence every day, you get used to JUST PLAIN RUDE. The one time my family went Black Friday shopping, while we were at an out-of-town kids’ sport tournament, I was at one of those outlet stores, looking at a pair of pants for my husband and a woman LITERALLY grabbed them out of my hands, put them in her cart and rolled away.
I’m not going to go Glenn County over a pair of pants. I see some people are more aggressive than me, so I stay away from the stores after November 21. I mean, if I don’t have a present for you by the end of October you can forget it. Today I went grocery shopping and it was already getting crazy.
I used to say, “I hate Christmas,” but I realize, I just hate the way people act at Christmas. So after you get home from the mall tonight you might take a look at this film. Here’s the trailer on youtube, where you can also watch the full movie.
Now get out there and spread some peace and joy, DAMMIT!
My husband constantly reminds me that the new revenues brought in by tax increases just free up existing funds to be spent on pensions and benefits. Dan Walters has a word for this deception – “fungibility” – “If a city’s voters can be persuaded to raise their taxes for parks and recreation, for example, it effectively frees up more money to pay its pension bills without acknowledging that motive.”
Walters calls this a bait-and-switch approach to getting voters to raise taxes on themselves – they offer you a carrot – oh yeah, ice rink – to take your eyes off their pension deficit. The city of Chico, for example, has been taking money out of various funds and placing it in the General Fund, from which they can transfer it anywhere they want. And they’ve established TWO pension “trust” funds – “CalPERS Unfunded Liability Reserve Fund (903) and the Pension Stabilization Trust (904).
From budget policies 2019-20
“CalPERS Unfunded Liability Reserve Fund (903) Fund 903 has been established to accumulate funds for the annual payment of the CalPERS unfunded liability payment for the City. The targeted reserve amount is equal to the estimated unfunded liability payment for the subsequent year due to CalPERS. In accordance with GASB 54, this fund balance is committed.”
“Beginning in FY2017-18, each department will set aside a set percentage of payroll costs to fund the annual payment of the CalPERS unfunded liability. A target reserve of 10% of the annual unfunded liability expenditure will be retained in the fund.”
From 2019-20 draft budget – page FS 75, Attachment A, Fund Summaries CALPERS UNFUNDED LIABILITY RSV FUND
In fiscal year 2017-18 they moved $7,323,978 into the Unfunded Liability Reserve Fund – $3.9 million from the miscellaneous employees payroll, and $3.2 million from public safety funds. In 2018-19 they took $8,358,417. The city manager’s recommendation for 2019-20 is $9,615,778.
The Pension Stabilization Trust is a separate fund – The City Council established a Pension Stabilization Trust under Internal Revenue Code Section 115 on June 19, 2018. The irrevocable trust is restricted for use to pay future CalPERS retirement contributions. The investment model strategy for the Trust is conservative. A conservative investment model is defined as a strategy that does not exceed an investment allocation over 20% in equity securities with the remainder investment allocation in fixed income securities. The model strategy may only be modified by the City Manager with City Council approval.
Fund 904 – Pension Stabilization Trust shall account for the financial activity of the Trust. Trust accounting will be provided at least quarterly as part of the monthly monitoring reports provided to City Council.
Correct me if I’m wrong, but what I see is not only a fund through which they take from other funds to pay down their deficit, but another, separate fund that also takes money from other funds – to be invested on behalf of the pensioneers.
Here’s something scary I ran across in the budget policy documents – the city manager can approve up to $100,000 transfers without council approval.
Transfers Between Council Approved Capital Projects (Different Years – Rescheduling Projects) – Projects are approved over a ten-year period by Council. Each budgeted project has been appropriated an amount that may include funding from multiple City Funds. Appropriation transfers between capital projects scheduled in different years requires approval of the City Manager and City Council based the following authorization amounts:
• Up to $100,000 – City Manager; • Over $100,000 – City Manager and City Council
Now, ask yourself Pollyanna – why are the road, sewer and park funds bottomed out?
Because, as Walters reports, pension costs, especially for public safety employees, “are rising especially fast. They now average about 50% of payroll and are projected in the new report to top 55% by the mid-2020s. A few cities are already nearing or reaching 100%.” And, city management, as you see above, is allowed to dip into funds as they wish, transferring the garbage tax money from the Road Fund to the General Fund last year, as noted in the budget. From the General Fund they can transfer as much as they want into the Unfunded Liability Reserve or the Pension Stabilization Trust, as long as it’s in increments less than $100,000.
When Brian Nakamura came on as City Manager in 2012, he reported two deficit figures – one about $168,000,000, the other around $194,000,000. I think the first figure was the pension deficit figure, and the second was the total deficit for pensions AND benefits. Today the city finance manglers report a total deficit of around $130,000,000. How do you think they paid that down so fast?
Local officials, particularly those in California’s 400-plus cities, have been complaining loudly in recent years about pension costs, raising the specter of insolvency if they continue their rapid increase.
Last year, the League of California Cities issued a report declaring that “pension costs will dramatically increase to unsustainable levels.”
The California Public Employees Retirement System (CalPERS) confirms that projection in a new report.
The report reveals that mandatory “employer contributions,” including those from the state and school districts, as well as local governments, rose from $12 billion in 2016-17 to $20 billion a year later.
It also warns that the payments will continue to rise well into the next decade as the giant trust fund tries to recover from dramatic investment losses in the Great Recession, adjusts to lower earnings projections and handles a surge of baby boomer generation retirees claiming benefits.
“The greatest risk to the system continues to be the ability of employers to make their required contributions,” the new report declares, adding, “It is difficult to assess just how much strain current contribution levels are putting on employers. However, evidence such as collections activities, requests for extensions to amortization schedules and information regarding termination procedures indicate that some public agencies are under significant strain.”
Pension costs for “safety employees,” police officers and firefighters mostly, are rising especially fast. They now average about 50% of payroll and are projected in the new report to top 55% by the mid-2020s. A few cities are already nearing or reaching 100%.
However, as much as they complain about CalPERS forever dunning them, California’s local officials are largely unwilling to directly ask their voters for more taxes to pay pension bills.
Hundreds of local tax increase measures were placed on the ballot last year and hundreds more are likely to be proposed next year, but almost universally they are billed as improving popular local services, such as “public safety” or parks.
It’s where the concept of “fungibility” kicks in. If a city’s voters can be persuaded to raise their taxes for parks and recreation, for example, it effectively frees up more money to pay its pension bills without acknowledging that motive.
We saw a wonderful example of fungibility last year in Sacramento, where voters were persuaded to raise local sales taxes on the promise of civic improvements by an amount that closely matched increases in the city’s obligations to CalPERS.
We may be seeing another in Oakland next year.
The Oakland City Council is placing a “parcel tax” — a form of property tax — on the March ballot to improve parks, recreational and homeless services and stormwater drainage. The tax, $148 annually per real estate parcel, would generate an estimated $20 million a year.
As it happens, however, the most recent CalPERS report on Oakland’s pension obligations reveals that they will increase from $194 million in 2020-21 to $226 million by 2025-26, which would more than consume the revenue from the parcel tax.
So why don’t city officials just own up and publicly acknowledge that pension costs are driving their budgets into red ink and ask voters for more tax money to cover them?
They — and the unions that finance tax increase campaigns — clearly fear that being candid would backfire. If voters knew they would be paying more taxes to support pension benefits for city workers that are probably much better than they have themselves, they might refuse to go along.
It’s official – I got my “free” subscription from Mike Wolcott and now I know – the only good part of the tired, old and fuddled Enterprise Record cat box liner is the letters section. Thank you Linda McCann for tipping us to the latest assault on Prop 13.
I read with interest and concern the article in the December 6 Chico E-R regarding AB 48, or as it’s been dubbed Proposition 13. OK I get that, a proposition to put to a vote a bond issue to raise money for our schools. However there’s one sentence that is of great concern to me as it should be to all home owners protected under the 1978 Proposition 13.
The article states and I quote, “AB 48, Proposition 13 is not to be confused with the 1978 Proposition 13 which some education groups hope to overhaul in November to raise revenue for cities and schools.”
Wake up people, you should be concerned as another hand wants to slip in your pocket to remove your cash!
This is a proposal to lower the voter approval for bonds from 2/3’s to 55 percent. This is not democracy, it’s overpaid school administrators sticking their hands in our pockets to pay for their outrageous pensions. In Sacramento, one school district is tanking because of a 15% raise they gave their already generously compensated teachers.
Do they really think we’re stupid enough to fall for this trick? Calling a bad proposition “13”? Are we that dumb? Don’t wait until after the election to find out – tell your family, friends and neighbors not to fall for this trick. Write a letter like Linda McCann.
Just think, what if Paul Revere had thought his actions didn’t matter?
A couple of months ago I heard somebody(ies) were circulating a petition(s) for the recall of Gavin Newsom. I found out there are two groups, and there’s “some drama involved.” Hear all about it from Sacramento radio windbag Phil Cowan.
Two groups, “takecaback.org” and “recallnewsom.us”
“takecaback.org” is being run by California senate candidate Erin Cruz (feb 13 deadline)
“recallnewsom.us” is being run by a San Diego physician named James Veltmeyer
That’s the facts. Which petition should you sign? Can you sign both? Cowan quotes a woman named “Mimi” from “recallnewsom.us” as saying you can sigh both petitions without voiding your signature. Given Cowan’s obvious bias, and blowface style, I decided to check other sources before I pass that along.
Also, I would suggest you listen to Erin Cruz’s response to Veltmeyer’s condescending proposal that she drop her recall and join his team. He offers to make her “the face” of his campaign, as if that’s all a woman wants. Then he offers to include a fundraising packet with each petition packet mailed out – that makes the whole campaign sound suspicious.
I was offended by Veltmeyer’s proposition, telling Cruz to step back, and let a doctor from San Diego run a political campaign. Blowhard Cowan says Cruz’s ego is getting in the way, and insinuates that her recall efforts are all about getting her elected. I don’t know – it sounds to me like Veltmeyer is setting himself up as a future candidate.
Cruz reports that she already had her petition approved and circulating when Veltmeyer contacted her. She is telling the truth, as reported by Ballotpedia.
Cruz also ran a good race against Dianne Feinstein in 2018, I liked her message, and voted for her, even though I knew I was throwing my vote away in that overcrowded race. So, I’m signing her petition. I don’t trust Veltmeyer’s source when she says it’s okay to sign both petitions – the “language” does sound very much alike.
You can look at both petitions for yourself. You can download, print, sign and send yours back if you prefer:
