Last time we discussed a Defined Contribution Pension Plan offered by the city of Irvine California. The city of Chico uses a Defined Benefits Pension Plan. What’s the difference? Plenty. Here’s a good read from Investopedia:
The operative words here are “Benefits” and “Contribution”. Defined benefits means, whether or not business is good, the employee gets the pension they were promised. ” Defined-benefit plans provide eligible employees guaranteed income for life when they retire. Employers guarantee a specific retirement benefit amount for each participant that is based on factors such as the employee’s salary and years of service. “
In California, the state retirement systems made “guarantees” they couldn’t keep – 70 – 90% of highest years’ pay with minimal to no contribution from the employee. ” Employees are not expected to contribute to the plan, and they do not have individual accounts. Their right is not to an account, but to a stream of payments.”
In the beginning, CalPERS even told employers they didn’t have to contribute much of anything – CalPERS said they would make wise investments, and that would pay for these crazy pensions. That didn’t work out, so the employers – cities, counties, and public agencies all over the state – are on the hook for the pensions. And they are turning to the taxpayers like Mack the Knife. See, the contribution was never defined in this plan, so it’s whatever CalPERS demands. Like a junky on the street corner, they want it NOW!
On the other hand, the most common kind of Defined Contribution Pension Plan is a 401K. “Defined-contribution plans are funded primarily by the employee. But many employers make matching contributions to a certain amount .”
In Irvine, the city put up a little over 12% of salary. The employee is allowed to contribute whatever they want, and to control the investments. An interesting notation in that agreement is that the employee must wait 5 years before they are “100% vested” in the plan, meaning, they don’t get a full pension until they’ve proven to be a good and loyal employee.
And a DCPP is less risk for the employer. “As the employer has no obligation toward the account’s performance after the funds are deposited, these plans require little work, are low risk to the employer, and cost less to administer. The employee is responsible for making the contributions and choosing investments offered by the plan. Contributions are typically invested in select mutual funds, which contain a basket of stocks or securities, and money market funds, but the investment menu can also include annuities and individual stocks.“
Both set-ups are risky for the employee. If CalPERS fails, and that’s looking more likely all the time, pensioners GET NOTHING. With a DCPP, the employee makes their own investments, if they aren’t market savvy, they stand to lose there too. But, given CalPERS’ track record, I can see where an employee would be wise to opt for a DCPP.
Why hasn’t the city of Chico (or the county of Butte, or any of the local gov agencies…) offered a DCPP? I think that’s a no brainer. The DBPP is more lucrative, as long as they can keep propping up the failing CalPERS. The most popular form of prop these days is the Pension Obligation Bond.
It’s time for The Discussion about who will pay for these outrageous pensions. Will the employees step up to the plate and do the right thing, or will council allow Staff to force the taxpayers to the wheel with new debt and higher taxes?
What I get from this article, is that the police unions are the biggest threat to financial solvency facing California cities. They demand higher salaries and refuse to pay a sustainable share of their pensions costs. Instead of asking for concessions from the highest paid public employees in the state, “Stockton said from the outset pensions are necessary to be competitive in the job market, particularly for police.” Vallejo backed down from pension reform after being threatened by CalPERS.
Chico City Council has done same. When I asked my district rep Kasey Reynolds why such a high salary for the new police chief (higher than the departing chief), she responded, “ I just looked at other communities that are like size and their Chiefs are 20-40k higher.” I sent her the publicpay.gov records for Chico and Sacramento – yeah, Sacramento salaries are a little higher, but city of Chico pays more of the pensions. If we are going to continue to offer these crazy salaries, Chico cops need to pay more toward their pensions. I never got any response from Reynolds. They hired the chief above the old salary and just recently approved a new contract for CPOA without asking any concessions.
So, letter writer Steve Wolfe is correct – our elected officials are complicit with our city employees in driving our town into the financial abyss. He’s right again when he predicts the city will pursue a new revenue scheme. A POB would be just the vehicle to take us down! Here’s my response.
Steve Wolfe is right – the city is seeking a new revenue measure. At the Finance Committee meeting September 23, a consultant was asked to pitch Pension Obligation Bonds to the full Chico City council. Staff said the bond could be implemented as early as January 2021 because POBs don’t require voter approval.
POBs are a way of borrowing money to pay bills, while hoping to re-invest the borrowed money, producing a profit used not only to service the bond but to pay off the pension liability. If this outright gamble doesn’t work out, the taxpayers are on the hook not only for the unfunded pension liability, but the additional bond debt. POBs put Stockton and San Bernardino into bankruptcy.
This bond will not appear on your property taxes, it appears in the form of sagging infrastructure and service cuts – these bonds are guaranteed, bond holders take priority over our streets, our parks, our sewers and even public safety needs.
Instead of taking on new debt, we must reduce the long-term cost of public pensions for future employees. That’s not happening. With emergency powers, the city manager hired three new positions this year at $100,000+ salaries. New hires are paid more than predecessors. There’s no accountability for these decisions. While our town struggles with financial insolvency and sagging infrastructure, the staffers responsible skip off to another town, at a higher salary, with their pensions intact.
Contact your new, “fiscally conservative” council super majority, and tell them what you think.
One last word on the departure of Chris Constantin – from a comment Bob left the other day:
Why do we need to replace Constantin with anyone? The truth is the City is over its head in debt and we can’t afford a replacement.
Besides, why should we continue to pay hundreds of thousands of dollars every year for a bureaucrat who does nothing but scheme how to raise our taxes and get us deeper in debt with things like POBs while letting our streets and everything else fall apart.
Wow, good question Bob! So I wrote a letter to the ER about it.
When departing Chico administrator Chris Constantin was hired in 2013, he spoke to the Tea Party. He said our previous finance director was “Loosey Goosey”, bragging about his qualifications to “straighten out the mess” she’d left. He told us, once he fixed things, “you can hire someone cheaper, with less initials behind their name.”
Seven years later, I see a bigger mess. Constantin himself has told us, staff deferred maintenance on streets and other infrastructure while they continued to make bigger payments toward their pension liability (UAL) – this year $11,000,000. But the UAL continues to increase – this year, the city manager created three new management positions with $100,000+ salaries.
When Brian Nakamura was hired, he went on a firing spree, gutting lower level staffers and bringing his own friends in for management positions – Mark Orme and then Constantin. Since then the assistant manager’s salary has gone from $142,652 to over $189,000/year. Orme and Constantin have also garnered themselves 457 Plans worth an additional $20,000/year each.
From a 2018 report to the California League of Cities: “City pension costs will dramatically increase to unsustainable levels.” Their first suggestion – make more aggressive payments to CalPERS. Meanwhile, “Change service delivery methods and levels of certain public services.” Meaning, squeeze the taxpayers for more money.
Top heavy management and perpetual demands for higher salaries and more benefits has our city upside-down. Constantin’s position should be eliminated, along with other unnecessary management positions, so we can hire the lower-paid workers we need to get this town “straightened out.”
Bob reminds me that city staffers Mark Orme and Chris Constantin have made it pretty clear they want to use the proceeds from the sales tax measure to secure a bond (bonds?). But it never really comes into the conversation.
In his report at the June 9 meeting, Item 5.2, proposal for a tax measure, Orme explained the “sensitivity range” for the tax – meaning, what they expect to get from the tax, from worst case scenario ($12 million annually) to the best ($21 million).
Using an average estimate of $18 million, Orme begins a sales pitch for a bond. “In Exhibit 3, the City would receive approximately $18 million on average. The exhibit highlights both the worst and best scenario for revenue with the worst case being the amount which could be safely relied upon for ongoing expenditures. As such, the City may incur bonded debt for capital or hire staff and not have a high risk or need to default or layoff should the economy shift.”
He talks at first about hiring more staff but here he tells us he wants $9 million for debt service on the bonds while only $3.8 million for hiring staffers. “As debt for capital represents the largest ongoing commitment, the exhibit shows the amount available for debt service should the City Council determine to allocate 50-80% of the worst case revenue amount for capital. The remaining revenue would be available for other ongoing uses, and what is left in each year may be used for onetime type of expenditures. For example, if the City allocates no more than 70% for capital, the City may safely use almost $9 million for capital debt and $3.8 million of staffing and related expenditures annually.”
“Debt for capital” means either a loan or a bond. Investopedia explain this as it relates to private business, but it’s the same for public agencies.
“Debt capital is also referred to as debt financing. Funding by means of debt capital happens when a company borrows money and agrees to pay it back to the lender at a later date. The most common types of debt capital companies use are loans and bonds— “
As you know, a business goes under when it makes bad decisions and can’t pay it’s debts, but when a public agency makes bad decisions, the taxpayers get stuck with the debt service. Orme wants 50 – 80% of this sales tax for servicing the bond, but like Bob pointed out, nobody on council raised a single question when he flew through this report.
And here’s the whammy – they can do this without the consent of the voters. It will not be mentioned in the text of the measure. Council and staff will make those arrangements behind closed doors. One option they will probably discuss is a Pension Obligation Bond.
According to Howard Jarvis Taxpayers Association President Jon Coupal, “POBs are bonds issued to fund, in whole or in part, the unfunded portion of public pension liabilities by the creation of new debt. It is like paying your Visa bill with your Mastercard.”
And, I believe it’s a tax passed without the voters’ consent. Coupal reminds us, “A policy reflected in the California Constitution since the 1800s is that government debt should be approved by the voters. The reason for this is simple — today’s politicians should not be allowed to burden tomorrow’s taxpayers without the consent of those financially obligated for the repayment. Back in 2003, the Howard Jarvis Taxpayers Association sued the state of California for its attempt to issue a statewide POB without voter approval. HJTA prevailed and the POB bond proposal was invalidated.“
But Coupal reports that cities in California are still procuring POB’s without voter approval. Even after their victory against the state in 2003, HJTA joined the Ventura County Taxpayers Association to force the town of Simi Valley to rescind an illegal POB by demanding it be put before the voters.
Furthermore, “Other cities are considering or have actually pursued POBs without voter approval, including Riverside and Montebello.”
The Government Finance Officers Association warns that “the invested POB proceeds might fail to earn more than the interest rate owed over the term of the bonds, leading to increased overall liabilities for the government…“
This is exactly what has happened to CalPERS – poor investment returns led to increased overall liabilities for the government, and you know, that means the taxpayers.
They will bring this all back to the table at another closed meeting on June 23. Between now and then we need to let our city council members know we know what’s going on and we’re not going to go for it.
As you may know, the city of Chico has cancelled the March 17 meeting because of coronavirus. The agenda was full of contention, and they expected a big turnout, so heeding the governor’s recommendation against gatherings of over 250 people, they postponed the meeting until the first week of April.
They were scheduled to discuss overturning both “sit-and-lie” and the “crimes against property” ordinance, but the item that caught my eye was the extra $3,050,000 they found in the budget and what $taff wants to do with it.
Here’s the agenda they posted for March 17 before they cancelled.
To make a long story short, after pointing a dirty finger at the Camp Fire refugees, blaming them for “overwhelming” the streets and sewers, and using them pretty blatantly as an excuse for a sales tax increase, the city of Chico actually PROFITED FROM THE CAMP FIRE. To the tune of an extra $3 million+.
I believe this money should go into the streets fund, since city mangler Orme and public works director Erik Gustafson have claimed the refugees caused massive damage to our streets. They’ve already decided to raise sewer fees. $3 million would be a nice chunk for the road fund. And, $taff has admitted deferring maintenance while taking money from the road fund to transfer into the Pension Stabilization Trust, so I believe it would be a good use of one-time money to pay that back. Instead $taff has come up with their own wish list:
Grant Match for AIP Grant (Runway) $1,405,000 Community Choice Aggregation Loan $350,000 BMX Relocation Project $100,000 Redistricting Demographer $ 30,000 Fire Station #1 Remodel $250,000 Pension Stabilization Trust $400,000 Homeless Solutions Project $515,000
Every item on this list concerns me.
First, I think it’s foolish to spend one-time money on the airport, the airport should provide it’s own steady stream of revenue. That hasn’t happened for years, and using one-time money to prop up airline service is a mistake. Sure, they need to fix the runway, that is what lost them the contract for serving the fire planes. That money should have come out of the airport budget years ago, instead they constantly raided it to pay salaries, benefits, and the pension liability. If you don’t believe me, pull Mark Sorensen over at a stoplight and ask him.
Same for Community Choice Aggregation – Mark Orme’s Music Man pitch for the city to buy electricity and re-sell it to residents, using PG&E infrastructure. This scheme will never pencil out for the ratepayers, but will be a new and steady revenue stream for the city. Using one time money to jump start a scam like this is just the beginning.
As for the BMX relocation – they should have to pay for that out of the annual $4 million they receive for “consolidating” transient services on the site formerly leased to the group that built the BMX track.
I haven’t read the report on the fire station “remodel” but that money should come out of the public safety fund, which eats about half the city budget.
The last two items I find completely insulting.
$515,000, taken from people burned out of their homes and still on the lamb, for something as vague and amorphous as “Homeless Solutions Project”? Those people, including my son, had to find their own solutions, but now they are expected to pay for the warming tents and other “solutions” to keep the junkies happy? GFY City of Chico.
But most outrageous is that $taff must get their thumb in the pie – $400,000 for the Pension Stabilization Trust. Scott Dowell, Mark Orme and Chris Constantin like to brag about their “aggressive payments” toward THEIR pension deficit with OUR money. Meanwhile, they pay very little out of their own pocket toward their own benefits, and this has created the “unfunded pension liability” in the first place.
Last year I asked Scott Dowell about the “shares”. Employees are divided into groups that pay different shares. Two main groups – “safety” (cops and fire) and “miscellaneous” (everybody else) are divided into sub groups “classic” and “PEPRA”. “Classic” means, hired before 2013, when the Public Employee Pension Reform Act went on the books. This law requires employees hired after 2013 to pay 50 percent of employer cost for their pensions.
I didn’t get that, I thought the law meant employees would pay 50% of total cost. Silly me! It means they pay 50% of what the agency they work for has agreed to pay CalPERS. That varies with agency – for example, CARD only pays 14% total. The city pays more, but still not enough.
Notice management (Orme, Constantin, and Dowell) pay the second lowest contribution, even though they brag about picking up 3% of the employer contribution.
Group Employer Cost Employee Cost*
Miscellaneous Classic 10.235% 11% Total: 21.235% (leaving roughly 79% for the taxpayers)
PEPRA 10.235% 9.75% Total: 19.985% (leaving roughly 80% for the taxpayers)
Safety Classic 18.843% 12% Total: 30.843% (leaving roughly 70% for the taxpayers)
PEPRA 18.843% 15%** Total: 33.843% (leaving roughly 66% for the taxpayers)
*Includes 3% cost sharing of employer cost. Note CPSA employees pay 6% of employer cost.
**CPOA PEPRA pay 15%; IAFF PEPRA have ratified an agreement to pay 12%.
City of Chico employees are paying, or are nearly paying, HALF of the CalPERS pension costs.
So, the city pays different shares and totals than CARD, and even by group. And while they pay more than CARD, the highest total is only 33.843% of cost. That leaves the rest for the taxpayers. I know, they claim they will make it up on the stock market – but they keep lowering their anticipated returns, and demanding more and more from the various agencies (taxpayers).
I was unsure about how it works in $$$$, so I asked Scott Dowell for the figures on an employee making about $220,000/year (obviously a “classic” or management employee). Here’s what his staffer sent me:
A Miscellaneous Classic Employee earning a base salary of $220,000 has a PERS contribution of:
Employer: $22,517 (10.235%)
Employee: $24,200 (11.000%)
Total: $46,717 (21.235%)
An employee retiring with a salary of $220,000/year would get a base pension of $154,000. With cost of living increase, it will go up every year, adding to the liability. For example, ex city manger Tom Lando got a base pension of about $135,000 when he retired almost 15 years ago. Today,with COLA, he is taking almost $155,000/year. Just in pension, he also gets healthcare and other perks that we pay for.
Here’s a stumper – sit down and hold onto your seat – Lando never paid anything toward his pension. At that time, the city paid the “employer paid member contribution,” meaning, we paid Lando’s entire share. That scam went on until the taxpayers figured it out, and only now are employees beginning to pay anything. Any reform would have been something, but it’s not enough. It’s not true reform.
True reform would be dissolving CalPERS and hiring new employees who will pay their own pension costs. An agency contribution should be warranted by years of service and dedication, not a given. And, since CalPERS is 64% funded at this point, retirees will get over 50% of their anticipated pensions, which are based on some pretty generous, even outrageous salaries in the first place.
Don’t be afraid to speak up, don’t be intimidated by union members telling us we’re ripping them off – BULLSHIT! Time to press for TRUE PENSION REFORM!
Time for New Year’s Resolutions! I recommend this because last year I realized all my pants were too tight, including a pair I’d only bought a couple of months earlier. I resolved to lose 10 lbs instead of buying new pants. I quit eating a big breakfast, opting instead for a fruit/yogurt smoothie, and I started an exercise routine. It’s been pretty up and down since then, but I’ve lost 8 of the 10, and I haven’t gained it back. I’ll say WOW! I’ve gone back to the factory made holes on my belt!
So this year I’m telling all my friends to resolve to stop being ripped off by the city of Chico and turn in a Utility Tax Rebate form.
Never heard of Utility Tax? Take a look at your PG&E, Cal Water and “telecom” (landline) bills. HINT: you won’t find “utility tax”, it will say something like “local user’s tax”. Your PG&E bill splits it up – look at all the pages, it will be listed at least twice on your electric bill and again on your gas bill.
Fortunately, the city is required by law to rebate the tax to those households that fall under a certain income level – I think it’s about $43,000/year. But, neither the city nor the utility companies are required to tell anybody about this rebate, so I try to tell people. The rebate is available from May 1 through June 30. By May 1, there will be a rebate form available on the city website, or you can ask the clerk for it – that’s debbie.presson@chicoca.gov I like to jangle her chain about the last week of May, cause you know, the squeaky wheel gets the grease.
You will have to fill in each month’s total take for each utility bill and then add them twice. Then attach all your bills – I recommend making copies – and send or deliver them to the city. If you send them, it’s going to cost you more than a stamp, and you can only deliver them during business hours, M – F. But it’s probably worth it. Since I’ve been doing this my return has gone from around $35 to almost $100 a year. About a year ago they started adding it to my water bill, and of course all the rates have gone up drastically over the last few years. So, judging from your usage, it might be well worth the trouble.
Listen, even if it’s less than $50, let me tell you why I do it anyway – I resent that they take it, at all. Here’s a couple of reasons why you should resent it too.
they also tax the utility companies by way of a “franchise fee”, which, added to your bill, means they double tax you
the city just announced a budget surplus
I try to read the city budget at least a couple of times a year.
It’s funny – when I’m looking for one thing I see other, interesting things. Here’s a note from the most recently adopted 2019-20 budget that should really piss all of us off: “(5) Assumes 100% of waste hauler franchise fees will be retained by the General Fund beginning in 2022-23.” I know, dammit, they said they were going to use that franchise fee – excuse me, TRASH TAX – to fix the streets. Ha ha – joke’s on us! They transfer it to the General Fund – they can transfer monies as they please – and then they can use it for whatever they want.
Oh yeah, franchise fees –
they also tax the utility companies by way of a “franchise fee”, which, added to your bill, means they double tax you
The city collects franchise fees from Waste Management, Recology, PG&E, and Comcast. Here’s the spread from the 2019-20 budget. The first 5 digit number is the Fund Number, the other figures are dollar amounts. The first two dollar amounts are actual, from 2016 – 2018. The other numbers are projected, based on trends, because they don’t have the actual figures yet. For those years they have two figures – the first is the figure the council has approved and the second slot will show “modifications” made as the year progresses. This budget is from last June so they hadn’t done the modifications – you have to attend the monthly Finance Committee meetings to get that “dynamic” information. So, I added the years and some dollar signs, and I’ve bold-faced the “actuals”.
Ha ha – I always read this stuff a million times, but just now while I was bold-facing those first two years, I saw the Waste Hauler Franchise Fee went from $236,112 in 2016-17 to $1,102,674 in 2018-19. WHAAAAATTTT! That’s our money folks! Feeling a little hollow in your right butt cheek? I mean, that’s where the average American keeps their wallet, so I’m just wondering. I keep my wallet on a strap over my shoulder, cause I might want to use that thing to smack somebody upside the head! I mean, don’t even be sticking your fingers in my purse honey, you gonna come up with a stump.
Yeah, I get mad. What the hell is wrong with you people? We paid those franchise fees, on top of the Utility Tax the city of Chico has added to our monthly bills. Don’t be a Meathead.
Yes, the city of Chico made profit off the Camp Fire – I can just see Mark Orme, Chris Constantin and Scott Dowell standing together, twisting their mustaches over the small army of evacuees that landed on our town. While they complained about the “strain” these people were putting on our infrastructure, they probably laughed out loud behind closed doors (remember the Enron scandal) over the money that would be pouring into Chico. Including millions in “reimbursements” from the state.
They announced this budget surplus as if butter wouldn’t melt in their mouths. Oh gee, says Scott Dowell, I found this money in the cushions of my office sofa... No, they got it from increased sales tax receipts, bed tax receipts, and utility tax receipts, those dirty, rotten scoundrels. They took advantage of a tragedy. Instead of saying, shouldn’t we drop or at least lower these taxes – I mean, we just passed a ‘no gouging’ ordinance, Chris Constantin told a gathering at a Finance Committee meeting in late 2018 that we needed to raise sales tax immediately to take advantage of the influx in population.
He didn’t twist his mustache, but he said that.
On page FS-1 of the 2019-20 budget, you’ll see both the franchise fee figures I listed above and the Utility Tax takings. I don’t have time to edit the UT figures to make it easier to read, but you can figure it out. Like the franchise fee table, it starts with 2016-17, and those first two figures are actual numbers, so I boldfaced them.
For fiscal years 2016 – 2020
40460 UUT Refunds 16-17(5,035) 17-18(6,160) 0 0 0 0 40490 Utility User Tax – Gas 2016-17 $1,155,438; 2017-18 $1,108,081 1,200,000 1,200,000 1,200,000 1,200,000 40491 Utility User Tax – Electric 2016-17 $4,490,948; 2017-18 $4,569,241 4,600,000 4,600,000 4,600,000 4,600,000 40492 Utility User Tax – Telecom 2016-17 $355,319; 2017-18 $367,465 300,000 300,000 290,000 290,000 40493 Utility User Tax – Water 2016-17 $898,519; 2017-18 $1,012,954 1,000,000 1,000,000 1,050,000 1,050,000 Total Utility Users Tax 2016-17 $6,895,189; 2017-18 $7,051,581 7,100,000 7,100,000 7,140,000 7,140,000
I know why the water figure went up ALOT – they only added the UT to my water bill a little over a year ago. They realized that Cal Water had drastically raised rates during the dry spell of 2016 and instead of filing a formal protest to the CPUC, they rubbed their sweaty little mitts together in glee and stuck it to us good! But you see they are projecting lower amounts as people simply turn off their sprinklers and kill every living thing in their yards to save money. You can see gas and electric takings were down, but of course they predict higher totals for 2019-20 because of the evacuees. We’ll see what the actual numbers look like in a year or so.
But, looking at the totals you see – they go up by about $50,000 a year, year after year.
I sent a note to Scott Dowell asking if UT figures went up along with sales tax and bed tax totals, but he informed me that he is on vacation until January 2. Well, la-tee-dah Scott, how nice for you!
Meanwhile, we should all be wondering, why are we paying a tax on our utilities? The city council instituted the tax with an ordinance, years ago. They put a 5% maximum on that, but when rolled it out at 3%. A drug and alcohol addict named Scott Gruendl proposed an increase to the full five percent when he was on council here. But when he skipped town, in a hail of turds, nobody proposed lowering the tax. Well, I’d like to propose we revisit the Utility Tax. And maybe we should just get rid of it.
I don’t know how you feel about roundabouts, but one fact we know for sure – they bring a lot of money into the city by way of grants.
From the Chico Enterprise Record, “According to senior traffic engineer Bikramjit Kahlon, the cost of the project is between $5 and $6 million. ‘It just depends when we go out to bid,’ he said Monday. The city’s match is about $1 million, with Caltrans funding the remainder amount.”
$5-6 million for one roundabout? Most of that will go into the salaries Downtown. An old contractor I know says “boots on the ground labor” and materials make up about 2% of the cost of these public jobs. This is one way Staff turns money we paid toward maintenance of our roads into their salaries and pensions.
Here’s a thought – how’d you like to see that million the city is kicking in on the street in front of your house? How far would that million go toward the streets in your neighborhood?
And again, they are using Camp Fire refugees as bait. Read these excerpts.
“Even before the Camp Fire pushedthousands more new residents into Chico, the intersection was known for commute-time traffic jams and lines of traffic out to the freeway, along with traffic accidents.”
“thousands more new residents”? I had to ask reporter Laura Urseny if she has any hard numbers on how many evacuees have settled in Chico since the fire. She had none, but asked city manager Mark Orme if he had any. “He [Orme] said he doesn’t have hard numbers from FEMA because of nonregistration, couch-living, trailers parked on streets etc. He said the city is still using the 10,000-15,000 estimate.”
So, Orme drives by your house, sees a trailer in your driveway, and assumes it’s full of evacuees? Sees somebody sitting on your couch through a front window and assumes you have a “couch liver” in your household? On this basis he assumes and reports that we have “10,000-15,000” new residents in our town?
Excuse me, this guy gets over $200,000/year in compensation, and he expects to give up this kind of crap?
Unfortunately he’s got a willing media to help him pull the wool over our eyes. Urseny skirts the truth, but keeps promoting the lie – “The project has been proposed for a long time, but has been sped up with the city’s dealings with Camp Fire impacts. However, Kahlon said there is no FEMA-related funding in the project.” If this project was truly necessitated by the Camp Fire evacuation, or any impacts, the city would be getting FEMA funding.
They started this campaign before the fire was even out. “The project was discussed during a public meeting about Camp Fire impact on Chico last year, but has been in the works much longer.” Here Urseny mentions a proposed refugee housing project that was rejected, but still includes it as a “Camp Fire impact”. “Initially, a FEMA proposal called for Camp Fire mobile homes to be placed on a vacant parcel on Eaton Road between Highway 99 and Cohasset Road, but that residential project has been abandoned. Nevertheless, the traffic on the current two-lane road is huge, impacted by Chico’s growing population, but also by residential subdivisions developing in north Chico.”
In the same edition that Urseny ran her promo piece, there was this map:
“Relocation destinations are also listed below from most to least popular, in terms of the number of households registered with FEMA now living there. FEMA only provided information about individual counties in California, not other states.”
In other words, if you had insurance on your destroyed home, and therefore did not go to the ridiculous lengths to register for something you were not eligible to receive, you were not counted.
The article said that 16,583 of the registered (and that includes entire households who live under one roof) have remained in all of Butte County. That includes Paradise, Magalia, Butte Meadows, Yankee Hill, Concow, Cohasset, Forest Ranch, Gridley, Live Oak – did I miss any? Personally, the Camp Fire victims I know are all planning to rebuild their homes in Paradise. Some have already hired private contractors to clear their lots and are already living back at their property. Some are struggling to live in unburned homes with no safe water or power, and dead/dying trees hanging over their heads. Roads are a mess, workers everywhere, and Butte County has not even started their lot-clearance program. But the folks I know are all determined to return, they have no desire to remain “stuck in Chico.”
And here’s another fact that Orme cleverly ignores – many of the folks who evacuated to Chico already worked here and drove down to town almost every day, where they also shopped and socialized.
So, the “impacts” are largely MADE UP. Staff continues to lie to get their way. Next Tuesday they will bring a revenue measure consultant to make report regarding the $25,000 survey they are planning to get us to tax ourselves to pay their pensions. They want $65,000 more for a consultant to actually run their campaign. This is illegal, but who will call them on it?
At last week’s Finance Committee meeting (Feb. 27) Mayor Randall Stone (Chair) and council members Sean Morgan and Ann Schwab heard a consultant’s pitch for a revenue measure campaign, starting with the usual “survey”. City mangler Mark Orme made some interesting comments before introducing the consultant.
Orme stated that since he came to the city in 2013 he has “resisted” revenue measures. “I think there needs to be a high level of trust within the community that those funds are going to be spent prudently.”
I always wonder about public sentiment. Do most Chico voters trust the city council and staff to use their money wisely? And here’s the scary question – what would they know about it?
Orme feels that he and staff have “created a higher level of trust.” opining, “We have learned to live within our means.”
Orme reminisced about his arrival in Chico in 2013, reminding us that the city “has been through hard times.” He talked about “lost” staffers as though they wandered away in a storm or left for better digs elsewhere. No, hit man Brian Nakamura was hired, long time staffers were fired, or in some cases, simply encouraged to take a position in another city. “Hit Man” brought in former co-workers as new management and skipped off to his next assignment. Over the next year or so staff was pared down until there were no more workers, just management. And management salaries have continued to get higher – now in excess of $200,000/year – while they only pay 11 percent of their pension cost.
So I’d really like to ask Orme just whose means he’s been living within.
He certainly did mention the pensions – “one of the big elephants that cruises through any government living room…” He acknowledges the pension deficit. But here’s where the fiction continues – “The city didn’t create it…”
I have to take exception with that last claim. Looking at Orme’s contract here, it’s not hard to see what really happened.
“WHEREAS, the Council desires to have Orme participate in CalPERS cost sharing, and pay three percent (3%) of the Employer’s cost, in addition to Orme’s contribution for CalPERS;”
On “Exhibit A” you find the employee share, Orme’s contribution, is 8%. Plus 3% of the “employer share” equals 11%. For 70% of his $207,500 salary at age 60. The city payment has been increasing every year, I believe they now pay 39% but it might be more. CalPERS is constantly demanding more. The other 50 or so percent rides on the stock market. This hasn’t worked out so far – CalPERS promises 7% return but has been lucky to see 1%. This has caused the PENSION DEFICIT, aka PENSION LIABILITY.
Not only that, but Orme, as well as other management staffers, have recently added a IRC 457 plan to their contracts. In addition to their salaries and CalPERS contributions paid, they get tax exempt “deferred” compensation.
“Plans of deferred compensation described in IRC section 457 are available for certain state and local governments and non-governmental entities tax exempt under IRC Section 501. They can be either eligible plans under IRC 457(b) or ineligible plans under IRC 457(f). Plans eligible under 457(b) allow employees of sponsoring organizations to defer income taxation on retirement savings into future years.“
“Effective from the first pay period in January 2017 considered in calculating the maximum IRC 457 plan limit and annually, City agrees to contribute nine thousand dollars ($9,000) , to Employee’s IRC 457 plan. Additionally, effective October 5, 2017 the City agrees to contribute four and fifty-two hundredths percent (4.52%) of base salary to Employee’s IRC 45 plan.”
See, the city most certainly did create the deficit, because they’ve continued to agree not only to CalPERS stipulations but to bigger and bigger salaries (and therefore PENSIONS) and more generous contracts all along. Since 2013, Orme’s salary has gone up almost $20,000. Laying off people who made $35,000 – 65,000 a year while raising management salaries by 10’s of thousands is like taking 5 steps backward and no steps forward. As Orme acknowledged last Wednesday, we now get no services.
“Now we’re a city that’s living within their means that isn’t meeting the needs of the community…”
We need to ask ourselves, what the hell is the use of a city that doesn’t meet the needs of it’s community?
Orme casually mentions the elephant in the room – he is the elephant in the room. Somebody better get him a shovel, he has a huge pile of crap to clean up.
Thanks Dude, for this recent article regarding CalPERS insolvency. Former CalPERS board member and erstwhile gubernatorial candidate (2006?) Steve Westly has been speaking up about CalPERS growing pension deficit, warning the agency will collapse if it is not bailed out or “reformed.”
I don’t know what he means by “reform” – to me, this would mean, no more 70 – 90 percent of highest year’s salary at age 50 – 65, cut employer contributions to 10 percent (based on merit and years employed), and make the employees pay their own retirement package.
Here’s an article from last year that chronicles this mess we’re in from the beginning.
Of course now everybody is screaming for “reform” because they know the system is about to collapse and they won’t get their dough. Most of these “reformers” mean, taxpayers pay more. That’s what the city of Chico is up to at tomorrow’s Finance Committee Meeting.
Chris Constantin first introduced the concept of “cost allocation” a couple of years ago. It is a process by which they transfer money out of the general fund to pay salaries, benefits and pensions for city employees. It’s very confusing, unless you are the consultant who is hired to explain it every year. That would be Chad Wolford.
Two years ago, Wolford told us we were “spending too much money on overhead” – meaning, management salaries, and particularly, management pensions.
In response, the city raised pension shares but made adjustments to ensure employees would not have to pay. Mark Orme and Chris Constantin accepted what amounts to 401K plans, which they report will not add to our pensions costs – wrong again Chris! They still got salary increases, and we will have to pay them that deferred compensation, it just routes CalPERS. To me, this is just greed. Look at their salaries:
Orme demands over $200,000 in base salary, but expects us to believe he has our best interests at heart?
Tomorrow, at an 8:30 am Finance Committee meeting, they will go about “allocating” their fancy lifestyles onto the backs of the taxpayers, taking money that should be providing street maintenance, sewer plant updates and other services for those of us who pay for them, and putting it toward their 70 – 90 percent (do the math on Orme’s salary) pensions. Read the report here:
This is sneaky stealing, if you ask me. The taxpayers are never privvy to this stuff – wonder why they hold these meetings at 8:30 in the morning while you are rushing to work?
Letter: Anxiety medication needed for new trash bills
POSTED:
I just got my new 2018 Waste Management bill for three months (32 gallons) of $59.70, up about 55 percent from previous bills of $38.55. I realize there is always a bit of inflation but 55 percent? By chance, did the city hire the negotiator from the Pentagon’s F35 program for the Waste Management contract?
I also read that pot was legal in California in 2018 but our City Council decided that a retail pot store was not appropriate for our fair city. How am I supposed to relieve the anxiety of opening my Waste Management garbage bill? I’m very unhappy with our City Council.
— Geoff Bartels, Chico
You know how I love to say “I told you so.”
That’s not really true – it drives me nuts, trying to get people to pay attention to an issue when there’s still time to stop the bulldozers, but they give me that same old tired bullshit – I’m sorry, I have a life! Why don’t you get one Juanita?
But of course, later, they get to whine and complain about it.
Somebody read one of my old posts on the subject yesterday, from 2014. At that time, Joe Matz of Recology was saying rates would triple, and the city was looking at requiring service for everybody. If you wanted to haul your own trash they wanted to inspect your vehicle, etc, which was tantamount to requiring a hauler’s permit.
When Juanita raised her scrawny little fist and said, “If you require service the city will have to provide a low-income subsidy…”
To which the consultant answered, “She’s right.” He smiled at me across the room. It wasn’t the consultant’s fault, he was very truthful about the whole thing.
OOO! The bulldozers had to stop and listen! You’ll notice, service is not required under this deal, and you can still take your trash to the dump without a hauler’s permit. Which means, neighbors/relatives/friends can still share cans to save money.
Just think if there was four more Juanitas. Or at least four more people who went to these meetings and raised a scrawny little fist?
And here’s what I’ll tell Geoff – read the Waste Management website – you can opt out of yard waste service and save almost $6 bucks a month. My family, who share service with our tenants, also opted for a smaller bin. Our son has moved away to college and our tenants don’t have much trash either – we realized we didn’t need that 96 gallon bin anymore.
Once I made those changes in our account, the rate is still about $5 more per month. No, I’m not happy about that. But I wish people who complain would educate themselves – the real problem at this point is the city wants to use the new revenue to pay down their pension deficit instead of fixing the streets like they said they would. That’s where we need to hit them, and hard.
In fact, public works director Brendon Ottoboni says the road/streets fund is tapped, and they are almost 10 years behind on necessary projects. When developer Bill Webb asked at a recent public meeting how a person could get their street on the projects list, Ottoboni again said there’s no money for fixing any more streets.
This is the “pedestrian right-of-way” down my street. Every now and then I look in that pothole, make sure there isn’t an old lady or a jogger with a stroller stuck down in there…
Want to have some fun? Write to council member Randy Stone, who recently declared the deal was working cause we have less trucks on the streets.
randall.stone@Chicoca.gov
Really Randy? On Wednesday I have a Recology truck on my street, servicing the “commercial enterprise” known as the Evangelical Free Church. On Thursday my bins are picked up by Waste Management. On Friday Waste Management picks up the bins on the street that intersects my street. So, I get a minimum of seven trucks a week running up and down the street in front of my house.
How about another picture.
The asphalt is almost completely separated from the base here.
But here’s another funny fact – my street is not considered a “feeder” by the city of Chico, because there is no new subdivision on my street, so my street will never be on the “projects” list – ask Ottoboni about that.
brendan.ottoboni@Chicoca.gov
Letters to the editor of a newspaper that reaches less than a third of local residents isn’t going to cut it. A few months ago council member Ann Schwab suggested a complaint line for garbage customers so they wouldn’t have to write to the mayor. Why not write to the mayor? He approved this deal too.
sean.morgan@Chicoca.gov
Don’t forget the chief engineer – city mangler Mark Orme
Chico Taxpayers Association 