Butte County to use PG&E settlement funds to pay down employee pension deficit

5 Jun

I wrote to the county board of supervisors yesterday, sending them the links regarding Howard Jarvis Taxpayers litigating over the issue of Pension Obligation Bonds and their letter to the city of Chico. Meanwhile, Dave Howell got on the phone and called his district rep, Todd Kimmelshue, to get more information. Hold onto your seat, I was shocked to find out how the county plans to handle it’s pension deficit.

I spoke with Kimmelshue’s aid and was told the supervisors have decided not to pursue a POB. And apparently they made that decision not because a POB is very risky and an all around bad idea, but because they plan to dump money from the PG&E settlement into the pension UAL, so they don’t think a POB is “necessary” at this time. (They’re also going to use the money to go on a bureaucrat hiring spree but that’s another ridiculous story.)

Why should money from PG&E for the fire settlement go to the pensions? That money should go to fix the damage done by the fire and if it’s already been fixed it should go to prevent future fires or to fix the terrible roads or why not give it back to the county’s taxpayers who are also PG&E rate payers? After all, WHERE do they think PG&E got the money they have to give to the county? They got it from us, the rate payers!

But they are going to throw this money down the pension rat hole, just like they do with the money for the roads and so many other necessities.

Why oh why do we have such awful politicians???

I can’t answer that, but I will say, the politicians are only as good as we demand. Whenever I tell people to write to their elected officials I worry that nothing we do matters. But we’ve seen otherwise. So sit down and write those emails, make those phone calls. This is WRONG. People were burned out of their homes, some murdered, by a corporation’s blatant incompetence and greed, and now county staffers will dance on the graves of the dead while sharing the blood money among themselves?

I don’t think that’s over-dramatic.

GUESS WHAT! Howard Jarvis Taxpayers have sent a CEASE AND DESIST letter to Chico Staff, “advising against filing a validation action for a $146 million pension obligation bond…”

4 Jun

I got good news from council member Kami Denlay last night, I been too busy to post it.

Hello Juanita!
Since our previous emails we received a cease and desist style letter from HJTA. They outlined all of the same issues you have mentioned, as well as those issues I echoed at the April 26th meeting (violations of State Constitution, etc).
The City’s movement on the bonds is now temporarily halted until council is briefed on the legal letter from HJTA. I look forward to hearing how my colleagues respond now that our concerns have been further validated by this new HJTA action.

Talk about a gobstopper.

Ms. Denlay also sent me a screen shot of the letter, but I can’t cut and paste from it and have no link to refer to. So I’ll just give you some highlights.

This letter advises against filing a validation action for a $146 million pension obligation bond indebting the city of Chico’s Taxpayers without their approval.” They cite a resolution “to that effect” passed in April of this year. They also cite the California Constitution, as did Denlay when she voted NO to Staff’s proposal.

“No county (city etc) shall incur any indebtedness or liability … without the assent of two-thirds of the voters…”

Please note, they don’t say “tax” or “bond”, they say “debt” and “liability”. This leads me to question the whole “Unfunded Actuarial Liability” that Staff is always telling us is the responsibility of the taxpayers. Bull shit!

Hey, you know what else – the county has been pursuing a Pension Obligation Bond as well. Excuse me while I send a copy of this letter to the Board of Supervisors.

Thank goodness for recalls, but in future, let’s be more careful who we elect in the first place

2 Jun

I didn’t use to be a recall supporter. I always felt they were not worth the expense, let’s just do it at election time. But the COVID shut down has been a giant disaster, perpetuated by people who misused their power for their own agendas. For some it was just the absolute power of being able to run other people’s lives and dictate their behaviors. I think that would be Gavin Newsom, I think he just let it all go to his giant Joker-shaped head. Others saw gain to be made, and they took it. That would be the unions. So I wrote this letter to the ER in support of the recall that is being run by Chico Parents for In Person Learning. Here’s the link to their website:

https://www.chicoparents.org/recall-petitions

And here are locations in Chico where you can sign:

Rosedale Elementary School
100 Oak Street, Chico

M-W-F from 10:00AM to 10:45AM

Hobby Lobby
1919 E 20th Street, Chico

M-W-F from 12:30PM to 2:30PM

I hope you’ll sign too, and if you get a chance, send a letter to the Enterprise Record. Here’s mine.

After I saw Chico Unified School Board members Elaine Robinson, Kathy Kaiser, Tom Lando and Kaitlyn Dalby hand out nearly $2.5 million in bonuses to Chico school employees who refused to return to the classroom, I decided to support the recall effort led by Chico Parents for In Person Learning. This board majority perpetuated the school closure without regard for our community.

Public employees are very generously compensated based on the assumption that they go above and beyond to serve the community. According to board agenda reports, the average Chico teacher makes $106,732/year, plus benefits, including health insurance for themselves and their families.

The median family income in Chico is $43,000/year. Those families can’t miss a paycheck. Suddenly finding their children locked out of school is an immediate disaster. Leave them home alone? Use up your sick days hoping for good news? Affordable daycare was hard enough to find before COVID. Quit your job and go on welfare? All this is crippling our economy.

To think that families all over town are under that kind of strain while school district employees are enjoying full pay, benefits, and now a bonus. As a friend of mine put it, this is a stab to the kidney for working parents.

All four board members are also members of public unions. That has been a problem with the school board in past years – members whose allegiance to the union overrode their judgement.

Lesson learned – in future, let’s pay more attention to who we’re electing.

Juanita Sumner, Chico CA

Please write to Howard Jarvis Taxpayers Association and tell them we need their help with this illegal bond Staff is trying to shove down our throats

2 Jun

Well, the cat is out of the bag – the city of Chico is trying to foist an illegal bond on us without taking it to the ballot. Howard Jarvis Taxpayers Association has sued both the state of California and the SoCal town of Simi Valley and stopped them in their tracks, Simi Valley council voting unanimously to rescind their POB just last year.

Other towns have gone through with these bonds, because nobody stood in their way.

So yesterday I wrote a note to the HJTA office in Sacramento – that’s info@hjta.org I simply told them my city is taking a POB to court for approval, and asked them how I can stop that.

And I’m asking others to do same. Please write a quick email to HJTA and tell them you would like more information about stopping your city from issuing Pension Obligation Bonds. I’m afraid my little email won’t catch their attention. These people are busy with a lot of requests, we have to get on their radar if we want to get help with this illegal tax.

I also wrote an email to District 3 council member Kami Denlay, because she was the only council member to vote no when Staff brought this bond forward, telling me she thought it should go before the voters. I sent her links to the story about Simi Valley. I asked her what court Staff is taking the bond to. She responded,

I will double check the details for you this evening. When I previously asked about this I was told that legal counsel was taking it to court to check our legal ability to pursue the bond. I did not receive a lot of detail, so I will be happy to follow up and let you know what information I get.

Her response makes me suspicious – Staff is not telling council everything. They never told council about the Simi Valley case. Staff tends to treat council like children, manipulating them by omitting important facts and just plain lying. They have repeatedly denied this is a tax, denied that it will result in new debt, and refused to discuss other avenues for paying down the UAL.

I had almost given up on my own district rep, Kasey Reynolds, but I will also send this information along to her. Please send your rep an email, send them the link to the Simi Valley story. We need to nip this mess in the bud before it ends up costing any more money. They’ve already shelled out for consultants and put a $$$$ of Staff time into it. Let’s stop it before it goes any further. Here’s the Simi Valley story,

Howard Jarvis Taxpayers Association has successfully sued at least twice to stop POBs on the grounds that they must have voter approval

29 May
This article from the Howard Jarvis Taxpayers Association sheds some legal doubts on the whole POB scam.

On a tip from a reader, I found this article, originally printed in January 2020. Jon Coupal begins with statewide bond measures, but picks up with a warning about Pension Obligation Bonds. “...at the local level, taxpayers need to be aware of a recent resurgence in the use of pension obligation bonds, a risky financing method that fell out of favor during the recession but is now making a comeback.”

Coupal analogizes, “A POB is basically paying your Visa bill with your MasterCard,” adding, “Pension obligation bonds (POBs) are bonds issued to fund, in whole or in part, the unfunded portion of public pension liabilities by the creation of new debt.

Council members Andrew Coolidge and Sean Morgan, and other proponents of POBs, are denying that a POB is new debt, they chant it like a mantra, because they think they can hypnotize us into believing it.

Coupal continues, “The use of POBs relies on an assumption that the bond proceeds, when invested with pension assets in higher-yielding assets, will be able to achieve a rate of return that is greater than the interest rate owed over the term of the bonds.

Even Staffer Scott Dowell has used the word, “gamble“, even while he and city manager Mark Orme have pressed forward with this scheme. Council has given them permission to send this bond for judicial approval. The consultant told council and staff that this type of bond does not require voter approval. They said it would only take approval from a judge, which should only take a few months. The expect to implement this thing within the next few months.

If this seems odd to you, you’re not alone, the HJTA is on your side.

Back in 2003, the state of California attempted to float a statewide pension obligation bond without voter approval.

The Howard Jarvis Taxpayers Association sued to invalidate the bonds and prevailed in court.

That’s not the only lawsuit HJTA has pursued against POBs. The reader who tipped me to all this sent me the story of HJTA vs the city of Simi Valley.

The Simi Valley City Council voted 5-0 on April 6, 2020, to rescind a December 2019 resolution authorizing a $150 million pension obligation bond and future similar bonds, thanking the Ventura County Taxpayers Association for working with the City in avoiding what could have been a lengthy battle over legally questionable bonds. The rescission was part of a settlement agreement with the VCTA and the Howard Jarvis Taxpayers Association.

Apparently, the city asked for validation from the Ventura County Superior Court. HJTA and the Ventura County Taxpayers Association then “answered” the suit. And the city backed down, but I’m not really sure why.

“In settling, the Simi Valley City Council recognized the constitutional concern in the VCTA/HJTA answer to the City’s lawsuit — whether the California Constitution requires two-thirds voter approval of any such bond. Agreeing to wait for legal clarity, and with each side bearing its own costs, the City agreed to dismiss its lawsuit with prejudice, and rescind the bond authorization resolution.

recognized the constitutional concern” ? ” Agreeing to wait for legal clarity” ? I’m not sure what has happened since then – has the court given any further ruling on these bonds? Any legal clarity? I’ll have to look into that. But I think that’s a good question for Staff at that POB forum.

DAY: Tuesday, June 8, 2021
TIME: 2:00 P.M.
PLACE: City Council Chamber – 421 Main Street

CANCELLED: City hosting an interactive forum to discuss POBs

27 May

I got this notice from Dave – thanks Dave!

I also got the cancellation notice from Dave – thanks again Dave!

DAY: Tuesday, June 8, 2021
TIME: 2:00 P.M.
PLACE: City Council Chamber – 421 Main Street


The City of Chico’s employees and retirees participate in the CalPERS retirement system. CalPERS has
determined that the City has an unfunded accrued liability (UAL) of over $140,000,000 which carries an
interest rate of 7%. As such, the City Council is researching all options on reducing this liability. One
possibility is to issue pension obligation bonds (POBs) at a lower interest rate than 7% and use the
proceeds to pay down the CalPERS UAL.


The City is hosting an interactive forum to discuss POBs including the benefits and risks associated with
their issuance. The consulting firm of NHA Advisors will be conducting the forum on June 8th starting at
2:00 pm and concluding by 4:00pm. This forum will be interactive and participants are encouraged to ask
questions and provide feedback to the consultant. Attendees are encouraged to join in person at the City
Council Chambers or watch online. There is no cost to attend this educational forum.

Orme and Dowell want to take the city of Chico on a Tax-stravaganza

25 May

Tomorrow the Chico Finance Committee is meeting, again, CLOSED in a room with public participation limited to Zoom, to discuss the smorgasbord of taxes and fee increases brought forward by city manager Mark Orme and Administrative Services (Finance) Director Scott Dowell. I will try to “attend” on Zoom, but in the meantime I wrote a letter to the ER.

The city of Chico is embarking on an unprecedented “tax-stravaganza”. At the 5/26/21 Finance Committee meeting, Mark Orme and Scott Dowell brought forth an incredible list of tax measures and fee increases for council’s consideration, including a sales tax increase, and new cell phone tax. Staff also suggested raising sewer fees by implementing volume charges, raising the transient occupancy tax, and increasing franchise fees on PG&E, the waste haulers, and other service providers. Mayor Coolidge has also suggested a road bond.

The common thread here is the pension deficit. Staff is desperate to pay CalPERS, to save pensions into which they have contributed less than 15% for 70-90% of their highest year’s pay.

The city has been receiving more sales tax, property tax, developer fees, and Utility Tax revenues every year as development brings more people to Chico. Instead of maintaining and improving infrastructure, Staff has poured these funds into their pension deficit, $11,500,000 this year, by 2025, $13,000,000. This money is allocated from all the department funds, at the expense of infrastructure and services.

Instead of pursuing new taxes that will hurt our local economy, council needs to switch from CalPERS’ defined benefit plan to a defined contribution plan, like 401Ks. Why should the taxpayers but never the employees bear the burden of the risks taken by CalPERS? The POB scheme, which Dowell admits is “gambling”, puts ALL the burden on the taxpayers, forever. Any new revenues will go to the pension obligation first.

We’re paying Staff for nothing but perpetuating their own retirement system.

Juanita Sumner, Chico

Sign the petitions to recall CUSD board members

25 May

As soon as I posted yesterday about the Chico Unified board recall, I got several people asking, “where can I sign?” I am glad – look how the recall of Gavin Newsome has suddenly opened up the state! The school district is not complying because pressure from the school employees’ unions – four of five board members also belong to public unions. This recall is necessary to remind people the school is for the kids, not the other way around.

There is a separate petition for each board member. Maybe you think one or two of them are okay, you only want to sign the others? That’s your prerogative. Just remember the petitions are separate. Always read something before you sign it, make sure it’s legit.

Chico Parents for In Person Learning is running the recall. Here’s their website:

https://www.chicoparents.org/recall-petitions

There you can print out petitions, sign and send in, but they have petitions at locations around town, including the following:

Rosedale Elementary School
100 Oak Street, Chico

M-W-F from 10:00AM to 10:45AM

Hobby Lobby
1919 E 20th Street, Chico

M-W-F from 12:30PM to 2:30PM

Rare Air Trampoline Park
1090 E 20th Street, Chico

May 21 from 12:30PM to 4:00PM

Chico Unified School District board recall has merit – all four are union members, that’s why they voted to give teachers who haven’t been teaching $2.5 million in bonuses

24 May

I’ve got a few notes lately from anxious parents and even some administrators about a recent school board decision to spend $2,463,606. on bonuses for school district staff, on the heels of a controversial decision to keep schools open only half days for the rest of the term.

I think that sucks too. Teachers refused to come back to the classroom for over a year, citing concerns about COVID, while parents all over town HAD to go to work or get no pay. Front line jobs like medical workers, grocery store workers, gas station workers, etc. You ever wonder how fast society would shut down if these people just didn’t show up for work? Meanwhile, teachers can refuse to come to work and not only be secure in their jobs, but get a bonus?

I’ll say something else here that will probably offend just about everybody – many of our schools have become nothing but daycare centers. Think about that. Many households have two working parents, many have only one parent at all. Many parents are poorly educated themselves. It is important to have some public institution where kids can go to be safe and educated while their parents are unavoidably away from home during the day.

That model of the nice lady down the street who will watch all the neighborhood kids, give them a slice of homemade bread smeared with peanut butter and jelly and a glass of Kool Aide – that never happened. I was born in 1960 and every mom on the block worked 8 hours a day. My grandma was a school teacher, and all her friends worked. I never knew any ladies like June Cleaver. School is a necessary institution.

COVID didn’t shut down Chico schools, the employee unions shut down the schools. Mostly I heard from the teacher’s union. That’s funny to me. When I was in the teaching program at Chico State, it was considered common knowledge that children carry a lot of germs, and new teachers get sick a lot the first year or two. Same with Chico State, when the new kids come into town. My son brought the flu home to our whole family his first semester at Butte College. It went around our house, picking us off, one by one. We were each sick for about a week, and when I got over it, I had to hold on to the furniture to get around the house.

But COVID shuts down the schools, ka-PUT! And now, almost $2.5 million in bonuses spread among school employees. Here’s an interesting bit of information I got from the agenda reports from that meeting

Looking at the reports for that agenda item, I see the average salaries for various school employees would probably shock a lot of people. For example, the average salary for a teacher, not including benefits, is $106,732. AVERAGE, remember what that means? And the starting salaries for CUSD teachers start at almost $60,000 these days.

Management is even more shocking, considering, they don’t really do the most important job at the school, they’re mostly desk jockeys who have nothing to do with taking care of or ensuring the education of your children. But they make an average – AVERAGE – salary of $139,723/year.

And then we have the lower-level “classified” staff – these folks do the maintenance on the grounds, cafeteria staff, office staff. You’d expect them to be on the low end of the totem pole, but even they make an average salary of $62,960.

For comparison, I’ll tell you, the “median” family income in Chico is about $43,000/year. I know, median and average are not exactly the same, but they’re close enough for this discussion.

But households like those have worked and skimped and saved to pay their bills, all the while paying the sales tax and property tax and other hidden fees that pay into the schools, supporting those salaries. Not to mention benefits packages, which I’ve noticed, for management anyway, are usually about half of salary.

So, this is why I’m signing the recall of board members Eileen Robinson, Kathleen Kaiser, Tom Lando, and Caitlin Dalby.

Contact recall proponents at https://www.chicoparents.org/

You might know, I supported Matt Tennis for the board and this is the reason – he’s the only one calling to get the schools back open full time, and he’s the only one who voted against the bonuses. The rest of the board are obviously not concerned with the welfare of the kids or their families. Dalby and Lando are CUSD teachers, Robinson retired from CUSD in 2002, and Kaiser has been a professor at Chico State for years, currently serving as the Chair of the Academic Senate. It’s not hard to see where their real interests lie.

Business taxes, housing taxes, parking tax, pot tax, poop tax! City of Chico is on a Tax Blitz!

22 May

I got the agenda for next week’s CLOSED Finance Committee meeting and it’s a gobstopper.

https://chico.ca.us/sites/main/files/file-attachments/5.26.21_finance_committee_agenda.pdf?1621544673

Item A, Business Tax Analysis Update – just what it sounds like, only this also includes a tax on rentals.

Item B, Cost Allocation Plan – another (why?) presentation from consultant Chad Wolford about “allocating” money from one fund to another to pay management salaries and benefits.

Item C, Sewer Enterprise Study and Rate Analysis – oh, you people on sewer are not going to like this and those of you who have still held onto your septic tanks better take good care of them.

Item D, Overview of Revenue Enhancements – this is an item that brings the art of Euphemism to a new level. Yes, Dammit, they’re talking about taxes!

These items all have one thing in common – a greedy, desperate city staff that wants to fund their pensions, damn the torpedoes. I’ve talked about A, B, and C, and will talk about them again in future, but right now let’s dive into D, which I will call “Operation Tax Blitz”.

City Manager Mark Orme and Admin. Services Director Scott Dowell have announced budget surpluses the last three years running, but are still making dark predictions for the future, and trying to tell us we need to raise taxes.

“Although the City has made great progress to overcome deep financial deficits and reestablish reserves,
projections point to a likely budget deficit in the coming years if revenue enhancements are not
approved.”

What they won’t say, is that our problem, which Orme has called “The Elephant in the Room,” is the pension deficit, the Unfunded Actuarial Liability. They’re trying to tell us we’re cheap asses who don’t pay enough taxes. As a member of a family living on less than $50,000/year, with tenants who all live on about same, it is really tough to take that kind of smack from some asshole making over $200,000/year with a benefits package of over $50,000 who only pays 9% of the cost.

California cities have a variety of avenues to increase revenues for services and capital projects, which ranges from general and special taxes to bonded indebtedness.”

And the report proceeds to list those avenues.

Admissions Tax – Admissions tax is a revenue enhancement used when people attend a show, performance, display or
exhibit.

Business License Fees – Business license fees are considered a tax and any increase would need to be approved by a majority vote of the electorate.

Cannabis Tax – A sales tax measure on cannabis is already being discussed by the City Council.

Construction/Development Tax – A construction or development tax is an excise tax imposed for the advantage of building within the City. The tax is imposed only on new construction and is generally based on number of units, number of bedrooms or square footage. These taxes differ from development impact fees in that impact fees must be spent on services or facilities to mitigate the impact of development. [NOTE: This is a redundant tax – in addition to Impact Fees, and not restricted to mitigating the impact of development. In other words, it’s just a GRAB, as are so many of these suggestions. This is one way the city adds to the cost of housing.]

Documentary Transfer and Real Property Transfer Tax – A document transfer tax is a revenue enhancement allowed under the State Transfer Tax Act on documents which transfer the ownership of real property… Butte County and the City of Chico enacted this tax ordinance and the City received one half of the tax, $0.275 per $500 in recorded value. [NOTE: So, the city already has an ordinance with the county, but here Staff suggests a separate ordinance just for the city, which will raise the cost of housing] Dozens of California charter cities have enacted their own transfer tax ordinances. The tax rates vary with rates as low as $1.10 per $1,000 to $15.00 per $1,000.

Local Vehicle Registration Tax – Local vehicle registration taxes are special taxes collected by the DMV in the form of vehicle registration fees and remitted to the participating counties who in turn remit to the City. [NOTE: Butte County already has this program]

Parking Tax – A parking tax is imposed on citizens who rent parking space that is privately owned.

Property Tax – Generally, property tax cannot be modified by the City and would require State action. California’s
property tax is ad valorem, meaning it is based on the value of the property. Proposition 13 limits property tax to one percent and restricts the enactment of any additional ad valorem property tax, transaction tax or sales tax on the sales of real property. Proposition 46 modified this rule to allow for an increase towards funding indebtedness.
[NOTE: the only real “indebtedness” the city faces right now is the UAL]

Parcel Tax – Parcel taxes are a tax on a parcel of property and are not directly based on property value, which is what
allows a parcel tax to circumvent Proposition 13.
[NOTE: Staff reports these have had a dismal showing lately, mentioning CARD’s failed attempt at passing Measure A last year.]

I’ll stop here to say, with the exception of the Cannabis Tax they are already discussing, I don’t think any of the above suggestions are serious. Tomorrow I’ll pick up with what they are really getting at – sales tax increase. Although, there is a frightening report on raising the Utility Tax, as well as a very frank discussion of the other kind of tax – franchise fees.

Next time, on This Old Lady goes to a Tea Party!