Tag Archives: Chico Pension Obligation Bond

Chico City Council forwards two new taxes to Fin Comm for consideration, but fails to discuss Pension Obligation Bond

5 Mar

Tuesday night (3/2/21), Chico city council took on an agenda packed full of troublesome items, but didn’t end up discussing all of them. One item casually left out was the Pension Obligation Bond that staff has been pushing forward since 9/23/20. But, council did take up Mayor (really?) Andrew Coolidge’s proposed “sales tax for police and fire” and “bonds for roads”. 

I thought it was strange that those two items were combined, but it got even stranger during the discussion. Coolidge made a brief introduction – since he’s the horse’s ass who is suggesting two new taxes, he figured it should come straight from him. “our roads are in horrific shape…” despite the fact that “each year we’re spending $3 – 4 million… they are still failing…” 

Yes, that sounds about right, the city spends about $3 – 4 million on our streets each year. But I’ve been to the meetings – a lot of that money comes from very specific state and federal grants. And, it’s not usually maintenance – a lot of times it’s a new bike trail, or an experiment like they are currently conducting with the street lights on Esplanade, or enhancements for new subdivisions that developers paid (?) for. 

Meanwhile, Staff spends at least three times as much toward their burgeoning Unfunded Actuarial (Pension) Liability”. This year Scott Dowell reported paying $11.4 million in “catch up” payments to CalPERS – that’s IN ADDITION to the payroll amount. 

UAL 101: Staff makes two different payments to CalPERS toward the pensions, the payroll amount, and the “catch up” amount. The payroll amount includes the petty 9 – 15% “employee share”, and goes toward the “base” of the debt. The catch up payments are “allocated” out of each department, and include NO EMPLOYEE CONTRIBUTION. “Catch up” payments go toward the unfunded liability, which is created by the abysmally and completely unrealistic and unreasonable “employee share.” 

I just wanted to make that clear.

Mr. Coolidge immediately went about making a motion that these items be sent to the Finance Committee for vetting. The conversation that followed was so confusing I had to re-listen several times.

Coolidge does not seem to remember that the city hired and paid a consultant (EMC) to explore the various nuances of a sales  tax measure. He wants to start that conversation all over again, and I’ll tell you why. The first conversation did not include the prospect of the Pension Obligation Bond. Cause see, that’s what this is all about – they need some new revenue sources to secure the incredible debt they will be taking on with that POB. 

The size of the sales tax increase, Mr. Coolidge opined, “it’s open for discussion… what size bond and what percentage of that sales tax would go for a road bond…”

So, are you hearing that? At the beginning of the conversation, Coolidge very clearly asks for a “sales tax for police and fire…”, but as he winds along, he admits, the sales tax increase will be used to secure the road bond. 

Or does he mean the Pension Obligation Bond? The whole conversation that followed was very confusing, and I felt several members of council were also very confused.

For one thing, Brown is confused between a “special” tax and a “general” tax, and had to have this explained to her. For another, the entire council seems to be laboring under the popular misconception that just because a tax requires 2/3’s voter approval, that it is “special” – designated or “dedicated” to a specific purpose. For example, CARD Measure A, defeated just last March, was a 2/3’s measure that would have been spent at the discretion of the CARD board.

It is all about the wording of the measure. As explained to me by Attorney(!) Rob Berry, “Measure A and sales tax are two different things.  I’m talking sales tax, which has not been written yet.  Measure A is general revenue, but because it is a parcel tax, it requires 2/3.  It is written to leave them broad discretion.  That is different than a special sales tax written to tie their hands as tightly as possible. ” 

Berry added, “You can write a requirement that no general fund line item can be reduced to be funded by this tax, that way preventing them from cutting the general fund expenditure for roads and police for example, and paying the whole thing from the new tax.  It must be IN ADDITION to existing budget line items.”

Brown made it clear that she wants a General Tax, that can be spent at the discretion of council. This led Coolidge and new-found friend Scott Huber to make amends to their first motion. Huber suggested, “the finance committee will discuss the possibility of taxes or bonds for fire and police and roads…” Coolidge added,  “any configuration of those…” 

This seems to leave the door open to just about anything. I felt they were pandering to Brown, and I think they all want a measure that can be interpreted loosely. But they forwarded the motion anyway. Denlay, saying she wanted more budget information, ABSTAINED. Why didn’t she just vote NO? HUBER: YES MORGAN: YES  TANDON: YES REYNOLDS: YES COOLIDGE: YES BROWN: NO 

Morgan and Reynolds both made very limp-wristed statements about wanting to vote no, then quickly voted yes. 

I’ve followed the conversation since Staff brought forward the POB last September. The consultant Mark Orme hired made it clear they would need an additional revenue source to guarantee the POB. And here we are!

Expect this conversation to go as underground as the POB conversation has gone. While they can’t put any tax measure on the ballot until November 2022,  I fully expect council, under the direction of Svengali Mark Orme, to implement the POB within the next few months. And then they will pursue both a bond measure and a sales tax measure that will be used to secure the POB, not to fix streets or hire more cops or firefighters. A POB would put the taxpayers PERMANTLY on the hook for the pension deficit, employees will never pay a rational share, and our economy will tank. 

Unless we put the heat on them right now. And hard. Reynolds, Huber and Brown are all up for re-election in 2022.


Coolidge’s tax increase proposals are the grist they need for their pension obligation bond. Chico cost of living will increase while quality of living will decrease.

28 Feb

This Tuesday Chico City council has an over-full agenda. I notice a lot of the remarks on Engaged Chico question the timing of some of the items, with meetings closed to the public. It seems like they’ve packed the agenda with stupid crap like a Downtown card room, after promising us they’d only discuss “essential business” during the shutdown. 

Nichole Nava sums it up, “This topic and a couple of others should be tabled until the E[xecutive] O[rder] has ended and FULL public participation resumes. Continuing to place items such as this one on the agenda while still under the PHE is not the responsible course of action.”

Hidden deep in this mystery meat agenda are two tax proposals from Andrew Coolidge. Coolidge is proposing not only a sales tax increase for “police and fire,” but a bond for “road improvements.” I feel this agenda has been packed for a reason – they want to distract us from the tax increase proposals they are trying to run under the wire. 

If you read the financial reports attached at the end of the agenda, you see that the city is collecting more revenues every year, and paying more toward the UAL every year. This year they paid out $11.4 million, just in “catch-up” payments, That doesn’t include the regular payroll payments they allocate out of each department budget. But Coolidge wants these measures to guarantee the POB that comes up later in the agenda. All the while the UAL is growing out of control because council has failed to control employee costs.

Hidden even more deeply in the casserole – Item 5.12 – is a request from City Manager Mark Orme (“Staff”) to move forward the Pension Obligation validation process. 

 “Staff is requesting approval to continue exploring the CalPERS Unfunded Accrued Liability (UAL)…”

Well, that’s interesting – “staff is requesting approval…” Meaning, Mark Orme. Orme knows they need that POB before CalPERS ups the ante again. And, he knows they need the sales tax increase and a bond to cover the payments on the POB. This is a desperate scheme, and we’re the ones who will be left holding the bag for this bond. If we don’t approve the sales tax increase and Coolidge’s bond, the POB payments will bottom out our budget. But even if we do approve those new taxes, we will not get street/road repairs, we will not see more police, but the cops and the rest of the employees will be guaranteed their overgenerous pensions. 

Right now the city is bargaining with the Chico Police Officers Association for a new contract. Instead of asking them to pay more toward their generous pensions and benefits, council is turning the stick on the rest of us. The public safety groups – CPOA and the International Firefighters – only pay 15% toward pensions of 90% of salaries exceeding $100,000/year. That’s ridiculous – $15 for every $100 they expect to collect for sitting on their asses in retirement. But here’s the funny thing – they also pay more than any other bargaining group. Management, with the highest salaries, pay the least – 9%. They expect us to pay their salaries now, and then pay them again, with Cost of Living Increase!  

If you haven’t already commented on Engaged Chico


please do. This bond will tank our budget. The sales tax increase and (yet another!) bond on our homes will raise the cost of living in Chico even further, just in case things are expensive enough for you already. 

They raised the cost of our trash service 19% – have you seen any improvement in the street in front of your house? Coolidge is bullshitting us again, just say NO.