Tag Archives: CalPERS going broke

More agencies scrambling out of CalPERS

18 Sep

Here’s another interesting article I found regarding cities/agencies leaving CalPERS, from the Sacramento Bee:

http://www.sacbee.com/news/politics-government/the-state-worker/article172960601.html

“Trinity County Waterworks District No. 1 west of Redding and Niland Sanitary District from Imperial County are in line to become the third and fourth government agencies to break with CalPERS over the past 12 months in a manner that shortchanges their retirees.”

“shortchanges their retirees”?  No, I think, maybe the employees expected to get something for nothing, and that’s always a risky proposition.  These deals were cut behind the taxpayers’ backs – pensioneers can take it up with their labor negotiators, their city managers, their CalPERS board, but shouldn’t look at me.

“Trinity Waterworks is not in financial trouble, its district manager said. It voted to leave CalPERS in 2015 as it shifted its business model to one that relied on a contractor, meaning it did not have new public employees.

It has set aside money for CalPERS, but it does not have the full amount the pension fund wants.”

Trinity was wise to get out – CalPERS gambles funds on the market, in high risk investments. When an agency opts out, if they pay their liability, they are put in a “low-risk fund.”

“To fully fund their workers’ pensions, the two districts would have to muster up hefty termination fees. CalPERS asks for that money up front, and then moves the separating agency to a low-risk fund called the terminated agency pool.”

That’s the whole problem, CalPERS has continued to take gambles that have led their agency into near bankruptcy, they’ve had to be bailed out twice by the California legislature, that I know of. 

I don’t blame agencies for not paying their liabilities either – those employee contracts weren’t made on the level.  Let’s the employees come out and ask the rest of us for that kind of deal – they won’t, because they know it’s a rip. They do it behind closed doors, with “collective bargaining” and “binding arbitration.”  They pay their unions to pay off our legislature to uphold the laws keeping the public away from the bargaining table. 

Maybe we’re seeing the beginning of the end – 

“Three other small departments, including the Herald Fire District near Galt, have filed notices to separate from CalPERS.

The Herald Fire District voted unanimously in January to withdraw from the pension fund, citing a preference to expand its volunteer firefighter program. It’s not clear yet how much money it would have to pay CalPERS to find pensions for five former workers.”

This is embezzlement. “Nice people” don’t embezzle.

23 Dec

Below is one page of absolute SHIT sent to me by Chico City Manager Brian Nakamura regarding our city’s unfunded pension liability. He sent me two downloads, hundreds of pages of gunk. You’d need to lay down bread crumbs to get through this stuff. Sent to me just the other day, I feel this is just a distraction for me, to read over Christmas Holiday? And show up at a meeting scheduled very purposely for one day after Christmas.

Look over the table below – what you should get out of this is, our city council has promised these ridiculous pension packages, promised an “employer share” that is more than the “employee share”, and then promised to pay most of the “employee share” too. Also, you should see, CalPERS promised they’d fund these crazy pensions, including their own, by investing on the stock market, and it’s not working. Compare the liabilities with the assets, and you’ll see CalPERS tanking. When CalPERS tanks, Brian Nakamura and his friends want us to think we’re liable for paying these pensions. 

Why are we putting up with this? Please write to Brian Nakamura, bnakamura@ci.chico.ca.us, and tell him we want new contracts, and we’re sick of paying for these plush pensions and benefits packages, including his. Write to your new mayor, Mary Goloff too, at mgoloff@ci.chico.ca.us.  Tell her we’re sick of paying her benefits package too. 

Nakamura tries to act as though he’s here to help us out! At $212,000 a year in salary, a roughly $50,000 increase over retired city manager Dave Burkland. In fact the council’s first act after hiring Nakamura was to approve a $50-something-thousand budget increase to pay his salary – it’s in the minutes folks, look that up yourselves.  And, Burkland just joined the pension club – at 70% of his $165,000+ salary. 

Let me make something  clear to  all these other public employees that have been wishing me a “Merry Christmas” with one hand in my purse: I don’t like you. I think you are an evil person who steals from and uses less-fortunate, or “not publicly employed”,  people to feather your own nest. I have lost all my respect for the concept of “public servant.” You people are public leeches. When CalPERS crashes, I don’t care what happens to you. I don’t wish you a Merry Christmas, in fact, I hope your Christmas sucks. 

Here’s the message Public Worker: I need your phony good will like a moose needs a hat rack. When you can stand up on your hind legs like homo sapiens instead slithering along like blood-sucking annelids, I might get some respect for you. Until then, just stay the hell out of my way and do your fucking jobs. 

CALPERS ACTUARIAL VALUATION – June 30, 2011
MISCELLANEOUS PLAN OF THE CITY OF CHICO
CalPERS ID 6818749730
Page 11
Development of Accrued and Unfunded Liabilities

1. Present Value of Projected Benefits

a) active members – $78,271,949

 b) Transferred members – $5,531,540

c) Terminated Members $2,951,837

d) Members and Beneficiaries Receiving Payments – $76,270,600

e) Total – $163,025,926


2. Present Value of Future Employer Normal Costs – $13,282,215

3. Present Value of Future Employee Contributions – $9,362,722

4. Entry Age Normal Accrued Liability

a) Active Members [(1a) – (2) – (3)] – $55,627,012

b) Transferred Members (1b) – $5,531,540

c) Terminated Members (1c) – $2,951,837

d) Members and Beneficiaries Receiving Payments (1d) – $76,270,600

e) Total – $140,380,989

5. Actuarial Value of Assets (AVA) $103,493,220

6. Unfunded Accrued Liability (AVA Basis)  [(4e) – (5)] – $36,887,769

7. Funded Ratio (AVA Basis) [(5) / (4e)] – 73.7%

8. Market Value of Assets (MVA) – $93,027,024

9. Unfunded Liability (MVA Basis)  [(4e) – (8)] – $47,353,96

10. Funded Ratio (MVA Basis) [(8) / (4e)] – 66.3%

 

The City of Chico owes $63 million in “unfunded pension liabilities” – and counting!

21 Dec

I’m sorry, I’m just now digging out this report from the October Finance Committee meeting. I missed it, and the clerk has just recently posted the report, or minutes, for that meeting. The clerk’s office is getting faster at posting these minutes, they’re more complete, at least, better than before, and easier to read.

That is, if you have your dictionary handy. These people are experts at the legal lingo that’s intended to keep the rest of us out of the discussion. But, if you’re patient, persistent, and maybe throw down a trail of breadcrumbs, you’ll maybe come out of it with your head twisted on straight.

The blob below is cut and pasted right out of the report. It’s like one of those steaks – if you eat the whole thing, you get it free?  NO!

 I’d recommend, take an aspirin before you start reading these reports, but that’s up to your doctor.

These people use obtuse language to hide the truth. Here you see, “internal operational obligations” means workers comp, sick leave and vacation accruals. By “accruals” they mean, these people don’t use their sick or vacation time, and they get a cash pay-out for it later. They worked those days, and got paid, and then they get paid again for the vacation or sick days they didn’t take.  In other words, they get paid twice for the same block of time, just one of the scams these people use to jack their salaries up from a reasonable range to over $100,000 a year.

And, if you look into it, you’ll find study after study that links over work and excessive overtime directly to excessive workman’s comp payout. Twice I’ve heard Jennifer Hennessy report that the city has been over budget on workman’s comp, so they’ve just raised the budget projections to cover it.

If your child goes “overbudget” on their texting, do you pay more on your plan, or do you take the kid’s cell phone away?  My son was told that if he wants to text, he needs to get a job and pay for it himself. Being a taxpayer living in the City of Chico is like being tied to a chair while somebody goes crazy with your credit cards. 

“External operational obligations” are CalPERS and health care. How many of you are without insurance? How many of you have NO retirement fund? In the real world, it’s all fine and good to talk about saving away for the future – well, how do you do that with excessive taxes on your home, excessive fees for sending your kid to college, excessive fees on your small business? Most people are struggling just to make ends meet. I know I’ve had to make more than one foray on my “retirement fund”.   My new plan is, DIE BY 65! I’ll let you know how that’s going!

 

FROM THE OCTOBER FINANCE COMMITTEE MEETING – available at this link, under “2012 Minutes”:

http://www.chico.ca.us/government/minutes_agendas/finance_committee.asp

C. Discussion of Unfunded Obligations – The City Manager asked the Committee to begin discussion of
Unfunded Obligations. Discussion from this meeting will provide the framework for future discussions on
this item. (Verbal Report – Brian Nakamura, City Manager and Jennifer Hennessy, Finance Director)
City Manager Nakamura has been working with Finance Director Hennessy on creating a draft table of
unfunded obligations. She has been able to divide the unfunded obligations into three general categories:
internal and external operational and capital. This is more commonly termed unfunded liabilities, which
means these are items that the City may be responsible for in the future in terms of what could be paid
for PERS or workers comp. Examples of internal operational obligations include workers compensation,
sick leave and vacation accruals. External operational obligations include PERS and health care. Capital
obligations include infrastructure improvements and maintenance, vehicle replacements and facilities
expansions and development.
City Manager Nakamura noted in the table there is approximately $63 million for unfunded liabilities for
CalPERS. This is difficult to get your hands around because it relates to employees who are either retired,
are going to retire or who are currently with the City. However, that amount would only be incurred if all
employees retired at once. With pension reform happening, we know that number will start to shrink. We
can also be hopeful that CalPERS investments start to increase and we start to see a more positive
adjustment.
Committee Member Sorensen stated he would like to have a better understanding of fleet and technology
replacement and find out where we are versus where we ought to be, knowing that we shorted these funds
in previous years. Chair Gruendl added to also find out if there is a budget policy that says where the
funds ought to be.
Finance Director Hennessy replied that there is a fleet replacement schedule, however staff hasn’t
prepared a full update since implementing a lot of the budget reduction strategies along with the new ways
staff is managing the fleet. On technology replacement, in 09/10, staff put together a schedule related to
hardware replacement. Staff has not quantified what it would be to replace all the software systems, such
as financial accounting software and the police department system.
Chair Gruendl noted that the fleet replacement fund is down $500,000. He asked if this is a result of
purchases that have already occurred and we have failed to put an adequate amount in to cover it, have
we put nothing in there since 07/08 and are we not meeting a budget obligation for what should be going
in there.
Finance Director Hennessy replied that the obligation of the budget policy is not being met. Prior to 07/08,
we were putting around $600,000 in annually and the fund balance was around $4 million. After 07/08, we
felt it would be okay to reduce that annual amount due to the fleet optimization implemented by GSD.
There is currently $2.7 million in the fund.

The squeaky wheel might get the grease, but that’s not all it’s going to take to shut her up.

21 Dec

Debbie Presson sent me a note to say she’d had the report for the November 27 Finance Committee meeting amended to reflect the other questions I asked at the meeting, and the answers from staff. You can see that here:

Click to access 2012Minutes.pdf

The minutes for that meeting are posted there at the end of 2012.  

I also got a note from Brian Nakamura, with attached documents regarding the city’s share of CalPERS costs – yeah, it’s bad alright. You have to write to your council, and ask them what made them promise these outrageous packages in those closed door bargaining sessions they’ve held us out of for so long. Now we’re allowed to look at the contracts, sure – like a condemned prisoner stares out the cell window at the gallows. These idiots have put us on the hook for MILLIONS of dollars, a YEAR, in pension payments, more than the employees pay. And then there’s the “unfunded obligations” – that is on the agendas for the next six months! Nakamura is trying to spoon-feed us that manure, and I don’t know about you, but I’m spitting it out. 

We need to shut this city down. 

Time to write to the city council about these pension payments – Scott Gruendl thinks “pension reform” means making US pay MORE!

12 Dec

Hi Debbie, Council members, 

 
I was just going over the minutes for  the Finance Committee meeting I attended earlier this month. I see that one question I asked, about the cost of certain consultant reports, was included in the minutes, but not the question I asked regarding what the city pays toward the “employee share” of pension premiums. Jennifer Hennessy stated at that time, “about $7 million.” Later she sent me an e-mail correction – the actual figure was closer to $10.1 million.
 
I wonder why my question and Hennessy’s answer are not included in the minutes? I asked this question during the discussion regarding the loss of Measure J. I was trying to point out, that while the city is complaining about losing $900,000 on a failed tax measure, they spend millions paying THE EMPLOYEE SHARE of pension costs, in addition to the employer share. Our city’s financial problems would be solved if the contracts were rewritten so that the employee pays their own share. Why isn’t this option coming up in the discussion? 
 
I also notice, the police advisory board gets verbatim minutes. I wonder, why aren’t all the committee meetings, including the ad hoc meetings, recorded verbatim? 
 
I’d like this letter to be attached to the next city council agenda as a “communication.” 
 
I’d also like to thank Fritz McKinley for answering my flood notice question. 
 
Thank you for your anticipated cooperation, Juanita Sumner