Tag Archives: Chris Constantin City of Chico Ca

Chico now follows Yuba City into the abyss

25 Mar

Here’s a story from the Appeal Democrat in Yuba City/Marysville. The title states the problem – read further – city expenses have increased to pre-recession levels while revenues have continued to fall, retirement costs have increased by almost 10  percent a year while 32 positions have remained vacant. 

Sound familiar? Well, not if you’ve been listening to Chico Assistant City Mangler Chris Constantin lately – he just made a Pollyanna speech about how everything will be getting better and we need to pump more money into police salaries for cops who only pay 12 percent of their pensions, 90 percent available at age 50. Constantin assumes higher property tax and sales tax revenues – I’d like to see the crystal ball he’s been using, cause my crystal ball says we’re headed straight for the second dip in the ‘W’. Housing prices are going up too fast, builders are building in a glutted market.  In my neighborhood, the same contractor is flipping three houses – putting lipstick on pigs, and jacking the price up to $400,000 plus.  

Below, Constantin admits we can’t really afford these raises for the cops, but insinuates they won’t stay if we don’t pay them more. Meanwhile, interim chief Dunbaugh told Stephanie Taber we had more than 100 recruits for those three positions they just filled the other day. The lies just keep on flowing – Chris Constantin is full of double talk.

“While this agreement includes base pay adjustments, the CPOA has agreed to pay more of their pensions costs (the highest of any employee group) and to convert to a new employee 14-step schedule that reduces the annual step increases from 5% down to 2.5% (a new salary schedule also agreed to by our non-public safety management group). This is a unique solution to the unique issue faced by this high priority area. Unfortunately, it is not something we can afford to give to others without compromising our financial future; however, I believe the return on the investment will positively impact all of us and will bring relief to a workforce that is struggling to maintain even a minimum safe staffing level.”

I predict Constantin will fly the coop before the city announces plans to pursue a sales tax increase. But, read below, you see we’re on the same road as Yuba City. 

 

 

Yuba City budget deficits remain as costs rise

By Andrew Creasey acreasey@appealdemocrat.com

There is a light at the end of the tunnel for Yuba City’s budget woes, but it’s obscured by a mountain of pension debt and rising health care costs.

Those rising costs mean budget deficits will remain until 2018, when the city pays off its pension obligation bonds. Consequently, it’s unlikely the city will be able to add or expand services, Finance Director Robin Bertagna told the City Council during a mid-year budget update at last Tuesday’s meeting.

 Basically, city expenses have increased to pre-recession levels, while revenues, despite an uptick from the improving economy, have not, Bertagna said.

Bertagna projected the city would have a $2 million budget deficit by the end of the fiscal year, although the actual number will likely be lower due to one-time savings realized by 32 vacant positions in the city, said City Manager Steve Kroeger.

Since 2004, retirement costs have increased by almost 10 percent each year. Health benefit payments have increased by 5 percent annually and overtime costs have risen by almost 8 percent each year. Comparatively, general fund revenues have increased by almost 3 percent a year over that same time period.

And required contributions to the Public Employee Retirement System (PERS) will increase by 33 percent by 2021, which will add just less than $2.2 million to the city’s budget.

The city has handled the budget deficit in several ways. Employee furloughs have resulted in significant savings — without the 10 percent furlough, the projected deficit this year would be $4.2 million, Bertagna said.

The city has also used a reserve fund, the Economic Stabilization Fund, to balance the budget.

Currently, the fund has a balance of $4.5 million, which Kroeger said should sustain the city’s deficit through 2018.

In 2018, the city will have paid off its pension obligation bond. The city sold the bond to make a one-time PERS payment of about $7 million.

The bond was sold in the interest of saving money, as the bond’s interest rate is two percentage points lower than the unfunded liability rate that PERS charges the city, Kroeger said.

Even with the one-time payment, the city’s total unfunded PERS liability, representing the difference between the assets the city has to pay pension costs and the amount of pension obligations it has, is $53 million.

Kroeger said the city has planned well for the extended economic slump.

“It’s a downturn that most expected to recover sooner than it has,” Kroeger said. “The city’s conservative fiscal planning has served us well.”

CONTACT reporter Andrew Creasey at 749-4780 and on Twitter @AD_Creasey.

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Thanks for the link Chico Politics – City of Chico #8 on list of most fiscally distressed cities in California

10 Nov

Well, I want to take a vacation, but it’s hard to stop thinking about politics. I checked in with Michael Jones over at Chico Politics:

http://chicopolitics.com/2014/11/07/i-wish-i-wish-to-be-a-fiscal-conservative/

and found this frightening article from California Policy Center –  I hate it when I realize,  it’s worse than even I could imagine:

http://californiapolicycenter.org/californias-most-financially-stressed-cities-and-counties/

Why am I not surprised? Neither is “Publius”, who compares the scenarios from other cities on the list to exactly what Chris Constantin has been doing in Chico:

The supporting documentation for the article is entertaining as well. My favorite quote came from the LA TIMES article used to support the comments about Compton:

“A recent grand jury report found that the High Desert city of Victorville used a series of disparate, possibly illegal measures to stave off insolvency. Those included dipping into sanitation funds to help keep the city’s treasury afloat, loaning water agency funds to bail out the city’s electric utility and siphoning $2 million in airport bond funds to buy land for a city library.”

When they talked about borrowing from the sanitation fund, I felt like I was reading the Enterprise Record from a couple of weeks ago.

Some more entertaining lines:

“In Montebello, state auditors last year said they were troubled to learn that the city regularly used money designed for specific purposes to balance its budget — in apparent violation of the law.

‘It appears that the City moved money wherever it wanted, whenever it wanted, regardless of the law or the intended purpose of those taxpayer dollars,’ Controller John Chiang said in a statement.

Montebello officials said they are not close to bankruptcy but acknowledged that accounting problems were serious. ‘We borrowed money from all over the place, from all sorts of restricted funds. Every type of restricted fund, we have borrowed from it at some point to balance the budget,’ said Councilwoman Christina Cortez.”

It’s good to see we are at least following the Industry Standard when it comes to balancing our budget.

Yes, Publius is correct. If you go to a meeting once in a while, you will hear Constantin report exactly the same stuff. He’s running a shell game out of City Hall, and we’re all standing around watching him like we just fell of the turnip truck yesterday. 

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Finance Committee meeting: Monkeys in suits moving peas under walnut shells

27 Nov

 

Here sits the brain trust of Chico. Be afraid, be very, very afraid.

Here sits the brain trust of Chico. Be afraid, be very, very afraid.  

It was a chipper 38 degrees when I headed Downtown for the monthly Finance Committee meeting, a cold that penetrated two pairs of pants, two shirts and a heavy jacket. It is a trip that would hardly impress my hillbilly relations, but I feel pretty exhilarated when I arrive at  the city building, my face stinging, eyeballs watering, my hands frozen, fumbling with the bike lock.  It’s good to be awake before you wander into one of these meetings.

They have got a lot better since Chris Constantin arrived, I’ll say. It’s a lot to chew over, some of it hard to understand if you don’t have a degree in administration, but it’s all really important in explaining how our town got into the shape it’s in and why we’re not getting out in any big hurry.

Not long after  Constantin came to town, he introduced the nursery words “loosey goosey” into the official fiscal lexicon (I dare you to say that three times, fast!). He was talking about the way this city had grown accustomed to spending money, each department using their own imaginary credit card with no oversight from Jennifer Hennessy, Miss Finance Mis-director. They were just spending as they pleased and handing Hennessy the bill, and she was using her own personal accounting style to stay a hair’s breadth  ahead of the bill collector. Of course many of us had imagined something like that was going on, we screamed and yelled for her to present the monthly accounting, and she said it was too much work. Dave Burkland said she didn’t have to do it. This may never have changed if Toby Schindelbeck hadn’t made issue of it during the last election. Council finally leaned on Hennessy, but she still didn’t give the kind of reports Constantin has been giving.

Hennessy liked to give power point presentations with  bullet lists and cartoons. A little man standing under a raincloud with the caption, “how did we get here?”  Constantin’s reports are dryer and look boring, but contain more meat.  If you look at the agenda, available here:

http://www.chico.ca.us/document_library/minutes_agendas/finance_committee/11-26-13FinanceCommitteeAgendaPacket.pdf

you will see sheet after sheet of figures, monthly revenues and expenditures for each department.  When I think how many times Hennessy just flat refused to produce these reports, I get a headache. At first, I was a little intimidated by these stacks of figures, but I just started reading through. Starting with the reports,  I just peruse through them, writing down words I don’t understand, then google them.

In short, departments continue to spend money “loosey goosey” without oversight, and, Constantin says, “we’re still letting our costs drive our funding instead of letting our funding drive our costs…” 

The problem I have with his statement is the use of the word “costs”. They don’t ever really tell us the true “cost” of anything down there, instead they mean, “price” that they assign stuff, which includes their salaries and benefits. See, this is how 1500 feet of plastic pipe and a couple of hydrants ends up costing $432,000 – they figure in the “overhead” of salaries and benefits of every employee who dotted an ‘i’ on a form having to do with that particular job.

What they talked about for about an hour yesterday was the process by which they transfer money from one fund to another, making it legal to use the money for uses it could not originally be used for. Over at Truth Matters they are discussing the use of sewer funds to fix the streets. Well, you say, they ripped up the streets to fix the sewers, isn’t it appropriate to use the sewer funds to fix them back?  No, sorry. There’s a road improvements fund for that purpose, which is fed through stuff like the gas tax, and all kinds of federal and state grants, etc. Unfortunately,  Jennifer Hennessy told us at one meeting years ago, that money all went to salaries and benefits, including every dime of that gas tax, which was supposed to be restricted to fixing streets. 

I thought the fund raiding would end with Hennessy, but it’s still a matter of everyday business Downtown. Yesterday they discussed “overhead” – salaries and benefits. They discussed the process by which these salaries and benefits are supposed to be charged to the specific project on which an employee is working – like a subdivision. Then the charges would go to the developer who brought the plans in. Let them complain about the salaries. But no, that’s not how it’s happening,  because council decided a few years back to defer developer fees until a project is built out. In other words, these developers come and go from the city building, using city staff like their own private toadies, and PAY NOTHING. That’s why the development fund is like, what, $9 million in deficit? And capital projects is another $3.4 million in the hole – I’m sure on that figure, they bounced that around a few times yesterday. So, they spend a lot of time talking yesterday about where they were supposed to get the money to pay salaries and benefits of those staffers remaining employed. They need about $36 million dollars to cover that. Anybody got any ideas?

Staff is chomping at the bit to start the Hwy 32 widening project, not because CalTRANS will sue us if we don’t – that never even comes up. No, they are desperate for grant money to pay salaries. Does Hwy 32 really need widening? No. But the city needs the money like a hype needs a needle.  Ruben Martinez said it in exactly so many words – “We need to get $36 million in projects done to meet our budget.” 

And Scott Gruendl asked, “How many staffers would we be able to get out of that…”

There it is folks, just what Contantin said earlier, “we’re still letting our costs drive our funding instead of letting our funding drive our costs…”  And by “costs” they really mean, staff salaries and benefits.

There was more to this meeting, I’ll get back to it when I get a chance, but for now here’s how I’d describe our city government – a bunch of monkeys in suits moving peas around under walnuts shells, waiting for more peas to appear out of the clear blue sky. 

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