Chico Taxpayers Association

I had a question from BC a few weeks ago –

I have said it before, and I will say it again:  When it comes to municipal finance in California, There’s the cost of pensions, and there’s everything else.

What is the size of chico’s unfunded liability today?  A couple of years ago it was more than 100 million dollars.  Do I have that right, I’m not trying to be inflammatory?

I don’t think questions are inflammatory, and hey, you’re not that far off! But I didn’t want to bother staff with this question – you only get so many before they cut you off. They act like they pay for their own time! So, I googled it – “city of chico ca current pension liability 2024″

Here’s what I got –

This is the annual report from CalPERS about how much money the city owes for un-supported city wages and benefits. Yes, unsupported – meaning, these positions are not fully funded. The city essentially borrows the money from CalPERS, at incredible rates. CalPERS said they could pay alot of the cost with stock market investments. That hasn’t worked out very well over the past 20 or so years, leaving CalPERS, along with all its “members”, in a heap of shit.

The city has gone along, like many CalPERS members, making the smallest possible payments. The employees pay a tiny fraction of the cost, while the city pays a little bit more – leaving a huge deficit, known as the Unfunded Actuarial Liability. You can look those words up in a dictionary – it means, the city actually didn’t have the money to promise these outrageous salaries and benefits, but they promised them anyway, and now the city is actually liable for the money.

Here’s the best answer I could get for BC – In 2021, the pension deficit was $64,293,003. In 2022, which is the most recent figure given in the report, it was $92,247,723. That’s over $28,000,000 more in a year.

The question is, who is going to pay it now? The city gave us a new tax, Measure H. They claim it’s brought in about $24 million, with which they said they would make all these wonderful road improvements. Instead they’ve budgeted an $18 million payment toward the pension liability. Whoa-ho-ho Nelly! By 2024 it’s projected to be about $25 million.

The payments they’re making are tanking our budget, but they don’t amount to spit on the CalPERS griddle. The problem is, let’s face it – employees need to pay more. Alot more. And Council needs to stop approving new hires – duplicate management positions, a consultant actually told them they are “management top-heavy”. How many $200,000/year management positions does it take to fill a pothole? Look at the staff salaries – I count at least three people in Public Works at over $200,000 in total compensation. Sorensen just created a new management position for Brendan Ottoboni last year.

Instead of asking employees to contribute a rational share, or downsizing management, Council has approved spending another $100,000 trying to save Measure H, which is under threat by the voter-initiated Taxpayer Protection Act. The TPA will overturn Measure H, because the city slid it under the door with less than 53% approval by the voters. The TPA will require 2/3’s approval of all local tax measures. So Mark Sorensen has led City Council to approve an initial $100,000 (we’ll see how many additional “allocations” they make over the next six months) to get that turkey back on the ballot with the required changes, just in case the TPA passes. It will require 2/3’s approval from Chico voters. Last time it got about 52.8%.

So hey BC, they’ve scheduled a “special” Finance Committee meeting for this Wednesday at 8:30am, go in there and ask some questions.

Now that Valley’s Edge is off the table for a while, we should start talking about November. It’s easy to get caught up in the presidential race but there are local and state issues to which we should pay careful attention.

As of now, according to Ballotpedia, the Taxpayer Protection Act, also known as the The California Two-Thirds Legislative Vote and Voter Approval for Fee and Charge Increases Initiative (#21-0042), is scheduled to be on the ballot.

https://ballotpedia.org/California_Two-Thirds_Legislative_Vote_and_Voter_Approval_for_New_or_Increased_Taxes_Initiative_(2024)

Governor Newsom and members of the California legislature are so worried this measure will stop them from raising taxes they’ve sued to stop it, claiming the TPA is an, “‘unlawful effort to revise our state constitution’ which ‘seeks to eliminate the state’s ability to swiftly respond to emergencies and provide resources for critical services that Californians and communities rely upon.'”

https://marinpost.org/blog/2024/2/6/governor-newsom-sues-1-3-million-californians

I was trying to read old finance reports, trying to keep track of discussions regarding the TPA and Measure H, when I found some stuff that really blew my mind. I wanted to share it here immediately, but I found links that wouldn’t work and text that would not cut-and-paste. So I contacted the clerk’s office and asked them if they could load it correctly. I received a mailbox full of reports that I will try to share, but it’s going to take a lot of reading. It doesn’t make sense at this point.

In 2020 the city was already crying about lost revenues, when they had over $20 million in settlement money from the Camp Fire. Then came millions more in American Rescue money for COVID. They just recently received another $24 million in PG&E settlement money.

In one report staff says revenues were so low, they talked about deferrig the Cal PERS annual catch-up payment – that would cost them over $500,000 in interest! There were a lot of alarming little details. What I came away with, is that city council is not qualified to handle a budget of that size, and staff is suggesting projects not based on need or the community’s best interests.

Right now, I’m going to get ready to go grocery shopping, I find it’s best to get out and get it over with before the traffic shuts down the south side of town.

I woke up early for the news that Chico voters have very definitely rejected the proposal for Valley’s Edge. I don’t think that land should be developed at all, and the high density they were proposing would have been a disaster. And like my husband reminds me – it offered nothing to our town except sprawl and further strain on infrastructure.

Now the question, what will Brouhard and his investors come back with – we should keep an eye on further developments in this area. It’s currently zoned for much lower density residential.

As of late yesterday, Butte County Recorder Keaton Denlay worried that “Turnout is lower than it has been. In our last Presidential primary we were over 58%, right now we’re sitting at 26%”.

Well, I’ll say, that’s pretty sad. I mailed my ballot two days after I received it, first week in February. My husband and I checked the county website and found our ballots were received by the following Monday. Denlay blames low turnout on the weather – that’s no excuse. I think this election has been a turn-off.

One example – what Adam Schiff did to Katie Porter and Barbara Lee shows us the seamier side of politics – he spent 10’s of millions throwing them under the bus with attack ads, members of his own party, while he very obviously pushed Garvey as his preferred opponent. He really thinks he can demonize Garvey because he voted for Donald Trump. Schiff is a nasty, nasty man, who obviously believes in dirty politics. I’m tired of his “leadership” of our state – a welfare state with the highest taxes in the nation. I’m looking forward to voting for Garvey again. I might even send him 25 bucks.

People blame Don Trump for turning the election negative – they’ve got to be kidding. The mess in Washington is all on Biden. Here’s what I think is really going on – the Democrats are desperately seeking somebody else to run. Michelle Obama’s sudden announcement that she won’t run tells us they’ve been talking about it. And it’s very reminiscent of Barack Obama’s denial that he was going to run in 2008 – he told Tim Russert several times in 2006, very firmly, that he would not run, but by 2007 he was telling Russert why he should be president. Let’s see what happens with the Democrats over the next few months.

Tomorrow the Internal Affairs Committee will discuss a “$60-80 million” remodel of Downtown Chico. They plan to use American Rescue Plan money received after COVID, as well as Measure H revenues. The newspaper also reported the city will use part or all of the $24 million Camp Fire Settlement money. After they dig up the entire sewer system for replacement, they intend to completely redesign streets, eliminating still more parking for restaurant seating and new bike lanes. One plan shows elimination of car lanes.

Since I bought my house, Downtown has been “remodeled” several times, at a cost of millions each time. Seeking to increase parking, one plan turned parallel parking to lateral. After concerns were raised about accidents caused by cars backing out, a subsequent plan changed some streets back to parallel. Seeking to lower the speed at which cars traveled through Downtown, sidewalks were bulbed, putting the pedestrian out in the street as a “traffic calming measure.” At that time, they added a “Studebaker strip, the wheelchair, and high-heel accessible strip of flat walkway which lines the center of downtown crosswalks.” I don’t know if that even exists anymore, the streets are in pretty bad shape. Fancy, expensive concrete garbage bins were set at corners in the Downtown grid – they were so badly vandalized by the night people, they had to be removed. All their “experiments” were paid for by the taxpayers, at the expense of local infrastructure.

Meanwhile, the street in front of my house, annexed over 20 years ago, still needs extensive drainage, sidewalks, and resurfacing. There’s a puddle at the end of my driveway right now, created by years of garbage trucks grinding to a stop out front, that smells like an old fish pond. My tax bill is over $7,000 a year. We’ve had new subdivisions built into people’s back yards up and down my street, but promises of “street work” have never materialized. Many properties on my street, a block from Bidwell Park, are still on septic – the city wants 10’s of thousands to hook up to sewer, in addition to the work done on the owner’s property.

How’s the internet at your house, cause people in my neighborhood are still standing in their driveways to use their cell phones while their kids go to the library to do their homework. My internet providers have told me, there are too many trees in my neighborhood, that my house is too far from the street, and finally, they told us, we’re too far from the tower that is located over in college town? What? Hellooooo? Mark Orme, before he hit the road for sweeter pastures, told us we have no internet in whole sections of Chico. That conversation ended when he sidled out of town.

But Downtown gets a total remodel about every ten years. Hmmmm. I think it’s time to take out the trash.

Sunday my husband and I got out early to do our grocery shopping, to avoid the ever worsening traffic jam on the south side of town. We hit the bargain stores to do the bulk of our shopping, all on the south end of town. Of course, Raley’s is expensive, but they had chicken parts for 97 cents a pound, so we stopped by to see what we could get. Who should we encounter in the parking lot but Mark Sorensen, Chico city manager. Yeah, at his $211,000/year plus benefits, he can afford to shop exclusively at Raley’s! Mark’s a shy guy, when our eyes met, he looked like he’d just seen somebody he owes money. My husband laughed out loud as Sorensen and his wife hightailed it into the store. He looked very uncomfortable, and I think he should be uncomfortable – he’s the biggest head on the stinking fish that is tanking our town right now. Cause when the fish stinks, it’s the head of the fish that stinks.

Sorensen is busy right now trying to save Measure H, City of Chico’s one-cent sales tax measure. Measure H is a train wreck. They spent hundreds of thousands over the past 10 years, hiring consultants to “survey” the public into taxing themselves. The consultants told council and staff that Chico’s main problems were the growing pension deficit, a “management top-heavy” staff, and public mistrust of council because of years of poor spending decisions. They told council that again and again, but council did nothing to alleviate those burdens, they just kept making it worse. They’ve created new positions at over $100,000/year, they’ve handed out raises without significantly increasing employee shares. As you see in the letter below, the pension catch-up payments get more than our tanking infrastructure.

When Sorensen was on council, he said he would not put a general measure on the ballot, he and Morgan both said they wanted a 2/3’s measure to show the public was behind the tax. I don’t know if they were lying, or just changed their minds under pressure. Actually, now that they’re both public employees, I believe they are trying to save CalPERS, cause they know who butters their bread (I know that’s not the original saying but that’s what my German mother-in-law said and it makes more sense).

Something the consultants told them repeatedly was that they could not pass a 2/3’s measure because surveys showed the public had not trusted council for many years, that they’d never get 2/3’s voter approval. But here’s what former city manager and his assistant told council repeatedly – a 2/3’s measure has restrictions on spending. You have to tell the voters what you are going to do, exactly, with a 2/3’s measure, and then you have to follow that plan to the letter. What they want the money for, is to pay down the pension deficit, and they knew they’d never get the voters to approve that. So they ran a general measure and they LIED. They still only got 52%.

The problem with a general measure, is you’re not allowed to promise specific uses. The TPA makes calls for even more restrictions on uses. But here’s where Chico council and staff got their dick in the mousetrap – the consultants also told them that the voters wanted specific stuff. So they promised all those street repairs in the text of their general measure, and that’s not okay. They never had any intention of putting that money toward street maintenance.

This year they’ve budgeted $18 million toward the pension catch-up payments, up from $11 million. They project the payments will be around $25 million by 2025. It’s a black hole, and they won’t make the employees pay more or accept lower salaries. They’re trying to trick the taxpayers into paying it – they tried to get a Pension Obligation Bond without even telling us about it, Howard Jarvis Taxpayers had to put a cease and desist order on them.

On a related note, I and other taxpayer groups joined HJTA in an “amicus” letter to the state supreme court, asking them not to throw out the Taxpayer Protection Act. I’ll keep you posted. Letters were also submitted by our Assemblyman James Gallagher and the California Business Roundtable, to mention a couple. Here’s a letter I’m sending to the Enterprise Record.

In November, the Taxpayer Protection Act (TPA) will be on the state ballot – or will it? The governor and legislature are so worried about this measure they’re suing to remove it from the ballot before the voters have a chance to consider it.

The TPA requires voter approval of any new tax. It requires clear language regarding use of revenues. Chico staff informed council Measure H would be nullified if the TPA passed, because of ” a particular phrase”, meaning, use. Declaring the TPA “catastrophic”, staff convinced council to approve $100,000 to write a modified measure for the November ballot, in case TPA passes. The new measure will include the phrase “for general government use”.

Measure H was misleading, a 50%+1, or “general” measure that made specific promises which would require a 2/3’s vote under TPA – “repairing streets, storm drains, sidewalks, and fixing potholes; addressing homelessness; protecting 911 emergency response times; preserving the number of on‐duty police officers and fire fighters; maintaining/improving Bidwell Park, neighborhood parks…” General measures have no spending requirements.

If the new measure is passed, the revenues will continue to go into the General Fund. According to city budget policies, “financial surplus (determined by staff) in the General Fund shall be allocated as follows: 50% will be allocated to the Section 115 Pension Stabilization Trust; 25% will be allocated to the Public Infrastructure Replacement Fund…” the remainder going toward technology and equipment updates. This year council has budgeted $18,000,000 to CalPERS toward the pension deficit.

I received a note from the Howard Jarvis Taxpayers Association as well as the Taxpayer Protection and Government Accountability Act (TPA) sponsors that a lawsuit is still proceeding through the Supreme Court that attempts to take the TPA off the November 2024 ballot before the voters even have a chance to consider it. Your governor and legislature at work!

Chico Taxpayers Association has joined a coalition of other groups to submit an “amicus letter” to the court on behalf of the TPA, I’ll keep you posted.

According to City Manager Mark Sorensen, Measure H, the one-cent sales tax increase passed by the city of Chico in November 2022, is “in danger” if voters are allowed to pass the Taxpayer Protection Act in November ’24. The city is quickly preparing a correction measure for the 2024 ballot. The city’s new measure would have to run on the same ballot with the TPA or they risk losing years of revenue. That’s right, without knowing if the TPA will actually even make the ballot, the city of Chico has authorized $100,000 for a new ballot measure.

The TPA would require two corrections in the text of Measure H – 1) a duration, or sunset date, and 2) “the inclusion of a particular phrase“. Sorensen didn’t say, but according to the staff report, the required phrase would be, “ for general government use.“

Sorensen didn’t want to mention the “general use” phrase out loud because that was not how they sold Measure H. As you see in the following press release, issued February 2023, they continued to claim that Measure H revenues would be spent on infrastructure and public safety.

Click to access city_of_chico_press_release_-_measure_h_2-27-23_wattachments.pdf

“This measure specifically supports the Chico community, and the dollars stay here locally.” said Vice Mayor, Kasey Reynolds. “Groceries, rent, and prescription medications will not be taxed. Chico visitors will pay their fair share, so residents won’t shoulder the entire cost. The State cannot take this funding, all Measure H funds will be locally controlled in Chico.

“The additional funds will be allocated by the City Council during the regular annual budget hearings in
May and June of 2023. Some of the concepts for utilizing the funds generated through Measure H are focused on public safety and infrastructure and may include:
• Maintenance and reconstruction of roads and sidewalks.
• Maintenance of parks, open spaces, trees and vegetation management.
• Maintain neighborhood police patrols, protect 911 emergency response times, preserve the
number of on-duty firefighters and police officers, and enhance emergency and disaster
preparedness ADD Repair and maintain storm drains

Some people are easily fooled – “Some of the concepts for utilizing the funds...” How many people would have voted for H if they admitted point blank in the ballot text that the money would be “for general government use”? Like paying the pension deficit, or getting out of various lawsuits they’ve blundered us into? Another $235,000 for the Downtown Skating Rink?

Opposition, like myself, reminded everyone that because H was a 50%+1 measure, it goes to the General Fund. Council can make their promises, but they have no legal obligation to spend that money on infrastructure or public safety. Actually, the road and sidewalk work currently being done around town is mostly paid for out of state and federal grants. They’re using Paradise disaster money for a Downtown remodel.

When they first started discussing this tax publicly, former finance manager Chris Constantin said older streets all over town needed complete replacement due to years of neglect, projecting the cost at 100’s of millions. At the rate they’re going, a pothole patch here, a slurry there, that will be the day.

Meanwhile, council allocated over $18 million from the General Fund into the Pension Stabilization Trust, for this year’s “catch-up” payment toward the CalPERS pension deficit. Only a couple of years ago, it was $11 million, now it’s over $18 million – you have to ask, where is that money coming from?

H was a 50%+1 measure because a consultant, paid with money out of the General Fund, told city council and staff that a 2/3’s measure had to have specific restrictions on use, like police or roads. Having attended those morning meetings since Sorensen was a council member, I know their biggest problem with a 2/3’s measure was the restriction on spending. At the same time, they discussed the pension deficit as the biggest financial problem facing the city, and tried to pass an illegal Pension Obligation Bond. They are desperate to pay down the city’s pension deficit, under intense pressure from the employee unions who finance our local elections.

So no, they don’t want to talk about the “general use” clause, those chickenshits. That’s really the meat of this issue. The voters were promised specific uses for the money, when it was a General Fund measure.

The city is doing road work all over town. Think that’s Measure H money? Guess again. Here’s a line I cut and paste from this week’s city council agenda. These agendas are supposed to be loaded in such a way that they can be copied and shared. Try to read the following.

The 2024 Road Rehabilitatjol acquisi{ion pu.rchase price of $36,275 wiil be funded through Gas Tax funds (307), street Facility lmprovement funds'(3osi”iropr;il i;;il#e Repracement funds (943).

In the old days, I would have contacted staff and told them it had been loaded incorrectly and they would have fixed it. But these days, given the burden Council has placed on the clerk’s office, these onerous, overloaded, and oftentimes facetious agenda items all have to be loaded onto these agendas and mailed out by three people. I know they get sweet salaries and benefits, but there’s a limit to what three old ladies can do in eight hours. So, I’ll just go back and forth from screen to screen and type it. The things I do to get you people to pay attention. Here’s what it’s supposed to look like.

“ The 2024 Road Rehabilitation acquisition purchase price of $36,275 will be funded through Gas Tax funds (307), street Facility lmprovement funds (308) and Public Infrastructure Replacement funds (943).”

Read it – no, they’re not paying for all this necessary updating with Measure H funding, like they promised. And here’s the other thing – they are 30 years behind in this work, the ADA was passed in 1990. Instead of fixing the older parts of town, tax money has been going into streets, sidewalks and gutters for new subdivisions. Developers are supposed to pay for the new infrastructure out of their developer fees, which they pass along to new home buyers. Who knows where that money goes? Somebody ask Greg Webb, who, along with two other developers, successfully sued the city of Chico for about $500,000 in fees that they were able to prove had not been used on infrastructure for their subdivisions.

So, the city of Chico, 30 years behind, is playing catch-up, using gas tax funding that is supposed to be used to maintain all of our city streets, to bring old streets in crumbling, neglected parts of town, up to par. There’s obviously a big difference in cost between maintaining and rebuilding. The ADA project will require tearing out concrete, plumbing, and lights in many parts of town, along with the purchase of private property to complete the task.

This kind of catch-up work is always more costly, more time-consuming, and really irritating and inconvenient for people who have to get up every day and drive to work.

This city just ignores it’s responsibility to maintain and cries for more money whenever the inevitable happens. With all this going on, they still intend to spend COVID and Camp Fire money on a total revamp of Downtown. They will be narrowing the streets, eliminating car lanes, adding wider bike lanes and sidewalks. Even though I didn’t see anything about sewers in the written plans, my council rep Kasey Reynolds assures me that they will be replacing all the sewer lines Downtown as well.

Meanwhile, you will continue to trip on the section of blown out sidewalk in front of your house until you move to a newer neighborhood. Becca will continue to pay to have her failing septic tank pumped because the sewer lines a block from her house have yet to be completed.

So, I have to ask – are you people happy with Measure H? Are you getting anything out of Measure H? Let me know here.

2023 out, 2024 in – this year I hope to continue to keep the foxes who are running our henhouse, well, at least somewhat nervous.

We’ve all heard California is one of the highest tax states in the union. It even has an effect on the quality of sports teams you get. My family enjoys baseball, whenever our son calls, we talk about the latest news. A player named Shohei Ohtani, has caught our attention, because he is fighting Gavin Newsom’s tax-happy agenda by deferring his $700 mil contract, essentially, until he retires and moves out of state.

https://www.mlbtraderumors.com/2023/12/shohei-ohtani-dodgers-contract-opt-out-specifici-change-dodger-personnel.html

The good thing for the Dodgers is they get to use the money now to hire more good players. My son remarked that this will help balance the league – right now, he says, Florida is snatching up all the good players because they have no income tax. We’ll see what happens.

Did you know, all states have different ways of funding themselves? Did you know, nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) operate with no income tax – how do they do it?

“…[income] tax-free states make up for the absence of income tax by charging other types of taxes, such as sales tax, corporate income tax, and property tax.” No, not all states charge all the same taxes, and some states rely on higher property, corporate and sales tax than other states. Sheesh, let’s all move to Wyoming – …” neither personal income taxes nor corporate income taxes. Property taxes and sales taxes are also low…” 

California is one of the higher tax states – not only does California have allllll the taxes, some of them are also higher than other states that charge the same taxes. Look at this article from US News –

https://www.usnews.com/news/best-states/articles/states-with-the-lowest-taxes

Let’s look at Chico.

Sales Tax $29,200,000; District Sales Tax $24,000,000; Property Tax 12,467,330; Property Tax in Lieu of VLF 9,800,000; Utility Users Tax 8,662,000; Transient Occupancy Tax 3,800,000; Other Taxes 4,679,400; All Other Revenues 1,583,901; Total Revenues $94,192,631.

I learned something new – I read an article about “Property Tax in Lieu of Vehicle License Fees” – read that and we’ll do a quiz next time. This is why the city keeps building more housing – the more they raise their property tax valuations the more VLF they get. The best way to raise property tax valuations is build new stuff, because you raise the base.

As far as where it’s going – Salaries and Benefits $52,050,314, over half the budget. And that’s just salaries – with all their additional costs, gear and such, the cops and fire take over 50% of the budget. I’m waiting to hear back from Dave Waddell about the amount of money we give the cops for “uniforms”, and how much of that goes to their personal gun hoards.

And Happy New Year to you folks out there. I hope you will make a resolution to guard your constitutional rights and make sure your elected officials are doing the job they’ve been entrusted with. As soon as somebody knows you’re not looking, it’s just too easy for them to fudge. We really owe it to the people we’ve put in these positions to help them do their jobs – just think of it that way!