Tag Archives: Mark Orme City of Chico Ca

Mark Orme’s personal pension deficit is over $70,000 – hey little Piggy! Pay it yourself!

16 Oct

Dave (thanks Dave) put the numbers on the 1% sales tax measure proposed by Staff and Council –

“That 180 million is going to cost us over a quarter billion. In other words, we will have to pay over 73 million in interest to get 180 million. In other words, the interest will cost us over 40% of the bond.”

“That’s over 73 million that won’t go to roads, won’t even go for cops or fire or even the crazy pensions. It goes right to Wall Street. And not the Wall Street in Chico.“

Dave added later, “One of those consulting firms the last city council hired said for an average family of four the 1% tax increase would cost them $800 in additional tax a year.“

I’ll add, at the present time, the city has no other real debt except the pension deficit, also known as, the Unfunded Actuarial Liability (UAL). They have leases on equipment and vehicles, but nothing approaching the UAL. Last time I asked the Finance Dept for that figure, it was over $145 million. And growing, despite increasing “stabilization” payments.

Those “stabilization” payments are funded by “allocations” from every department, a percentage of payroll. The last payment was over $11.5 million, and the Finance Dept. and various consultants have said that payment will keep going up, projecting $18 million by 2026.

Staff has brought in paid consultants to talk about a Pension Obligation Bond, leasing city infrastructure such as streets – Sean Morgan wanted to lease the airport. They’ve discussed every jackass notion that skitters across their shallow brain pans, but they refuse to discuss raising the employee contributions.

Here are the topics that need further discussion: The California Rule, and Defined Contributions vs Defined Benefits.

The California Rule states that our public employees have been guaranteed certain benefits, and that we can’t go back on those agreements. But here’s the thing – the California Rule doesn’t say we can’t require higher contributions out of employees.

Defined Benefits are the current agreement. That means, no matter what happens with our city finances, we have to pay the pensions – 70-90% of the employees’ highest year’s earnings. A good laywer could easily make the argument that WE didn’t promise these benefits, CalPERS did. They told us they’d make enough on the market to cover the insane pensions. Instead, we keep getting reports of malfeasance and mismanagement – including bribe taking and self-serving investments. They’ve failed to make their target year after year, and raised the city’s contributions as a consequence. Right now, the taxpayers are footing over 30% of the pensions, with the employees limping along at 15% or less. Management, with the highest salaries, pays only 9%.

Defined Contributions – that is what it sounds like. That’s what private sector employees get – if anything. That means, wthe employer (us) promises to contribute a set amount, based on a percentage of their salary. And then they can contribute as much as they want. That’s how 401K’s work.

They have special 401K’s for public employees, called a 457 Plan. Are you ready to be pissed off? In addition to his CalPERS pension, our city manager Mark Orme has negotiated himself a 457 Plan. According to publicpay.ca.gov , in 2020, the city put over $18,000 into Orme’s 457, in addition to over $22,000 toward his CalPERS pension. According to Transparent California, even with Orme’s 9% contribution to CalPERS, that leaves a deficit, just for Orme, of over $70,000. Plus interest fees.

I feel Orme owns that deficit, and should pay it. Or just take less in benefits. With a total salary of over $220,000/year, and a $62,000 benefits package, this guy is greedy pig.

Which will be the subject of my next letter to the editor, stay tuned.

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We need to dump CalPERS – and the first employee we need to throw out is City Manager Mark Orme

29 Jan

I’m not the only person who is anxious about the Pension Obligation Bond currently being shoved through the process by Chico City Manager Mark Orme. Here’s a note from Joe Azzarito: 

With that said, I wish to concentrate on something much closer to home – Chico city counsel’s effort to “restructure our city’s debt” with a much disclaimed process – that being pension obligation bonds, without people’s consent to boot.. 

To put this complicated action to address Chico’s unfunded pension debt of some $146 million and growing in perspective, a comparison can be made to refinancing one’s residence and using the funds to invest in the stock market, with the hope of making a killing. Financial planners will tell you to never do this. The risk of losing both the invested capital and one’s home is enormous. This is what city counselors hope to do to satisfy a need that should never have happened in the first place. Compelled to honor a salary structure and benefits to the detriment of all, except the few, is unconscionable. Contracts can be rewritten to right past wrongs. No one in a city our size needs the excessive compensation when so many more compelling needs are ongoing in this pandemic economy. Strongly urge all city employees to offer, if not forced, either pay cuts or submit to benefit payment increases as a means of paying their own way to the promised land of retirement. 

Joe is right – these contracts can be rewritten, they come up before council for consideration every year. Council has the right, under contract, to either adjust agreements with consent of employees or terminate the contract and hire somebody else.

Here’s a letter to the Marin Independent Journal that reminds us how risky these POB’s are.

(January 28, 2021 at 12:12 p.m.)

Corte Madera plan gambles taxpayer money

I am writing in regard to the article published Jan. 21 with the headline, “Corte Madera moves to refinance pension obligation.” Town Manager Todd Cusimano is incorrect by stating the issuance of pension obligation bonds is like refinancing a 20-year mortgage at 7% with a 3% rate and the difference being “savings.”

In substance, Corte Madera is gambling with taxpayer money in the stock market using margin (leverage). On Wall Street this is called the “carry trade” and is a rudimentary form of arbitrage. On Main Street, it is akin to taking out a home equity line of credit and buying stocks.

The entire reason Corte Madera has an unfunded pension liability is because CalPERS uses extremely aggressive assumed plan returns. If CalPERS fails to earn 7% going forward, then Corte Madera’s debt will grow and the forecast “savings” will evaporate.

Until citizens force pension reform, debt will continue to accumulate quietly in the background and encumber the next generation.

The past is literally devouring the future.

— Ken Broad, Mill Valley

That’s right, CalPERS assumes a high rate of return on their investments, despite years of poor returns. Read this article from Bloomberg that attempts to explain why CalPERS ends up on the shit-end of the stick, along with retirement systems all over the United States.

https://www.bloomberg.com/opinion/articles/2021-01-29/bond-yield-slump-market-madness-puts-pension-funds-in-a-risky-bind?sref=zJTivdEs

Because of an overcompetitive market, “pension funds will struggle to find assets that generate sufficient cash flows to fulfil their obligations to retirees.”

This article leaves me feeling that gambling retirement assets on the market is just an unacceptable practice. But Mark Orme continues to tell us we can’t get out of CalPERS. 

It wouldn’t be so bad if the employees were willing to share in the risks, but they expect their pensions no matter what, while making completely unrealistic contributions on their end.  Public employees expect the taxpayers to double-pay them – they expect their overgenerous salary, and then they expect it again as retirees, without chipping in Jack Shit. Like Joe says, “Compelled to honor a salary structure and benefits to the detriment of all, except the few, is unconscionable.”

The first contract that needs to be thrown out and rewritten is Mark Orme’s. 

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The pension deficit is the difference between what public employees expect to get and what they are willing to pay into it

5 Apr

Well, anybody who saw my last post and then saw my letter in the News and Review can see that I had to edit dramatically to get my letter in.  When I sent my original letter to the address I’ve used for years, it was sent back, rejected for size? And I was told to use the form letter mechanism on the N&R website, which only allows 150 words. Snip, snip, snip – I still got my point across, and it was a good exercise. 

Write those letters folks! When do I find the time? When I’m so pissed off I can’t sleep. Writing letters to the editor will save your teeth, believe me!

I sent the following letter to the Enterprise Record two days ago, watch for it, and write your letters too. Just yesterday Dan Walters ran a column about the spending of taxpayer money to pass revenue measures that will only end up being squandered on the pension deficit –

https://www.sacbee.com/opinion/op-ed/article228799774.html

so people are thinking about this subject. Write now!

And don’t just write to the papers, forward to the city manager mark.orme@chicoca.gov and CARD general manager Ann Willmann annw@chicorec.com

Chico Area Recreation District board and staff have spent over $100,000 on consultants to help them pass a revenue measure  but have yet to show the taxpayers that they can be trusted with money.

In 2014, CARD staff reported a pension deficit of $1,700,721 .  Only five years later, that deficit has ballooned to $2,800,000, despite nearly $1,000,000 in “side fund payoffs”.  

CARD staff announced they have “set aside” another $1,700,000 for payment toward the  deficit, having admitted they have deferred maintenance to various facilities for years, including Shapiro Pool, which was closed permanently last year.

CARD only started asking employees to pay toward their own pensions in 2013, but management staffers pay 6% or less, with the general manager paying only 2 percent of an $108,500 salary.

CARD staff describe the pension/unfunded liability as “What we owe to CalPERS because of the difference in their guesses.”

Wrong.  The pension deficit is the difference between what employees expect to get (70 percent of their highest year’s salary at age 55) and what they want to pay for it (less than 10 percent of their salary). For example, the general manager pays $2170/year toward a pension of  more than $75,000.  That is not sustainable.

CARD staff have used taxpayer revenues to enrich themselves while ignoring their mission. Now they tell us we need to pass a revenue measure, or they will further defer maintenance, close facilities, and cut programs. At the same time offering a grandiose new sports facility south of town? Let the board of directors know how you feel about that, at annw@chicorec.com

 

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Dan Walter: School officials and school unions are teaching students that it’s all right to run up credit card bills, blame others for overspending and then cross their fingers that someone will bail them out

11 Feb

After I wrote my analysis of CARD’s use of their expensive Cal Park Lakeside Pavilion facility, I read this piece by Dan Walter:

https://calmatters.org/articles/commentary/school-districts-set-poor-example-for-students/

Walters is talking about various California school districts, but what he says also applies to our local recreation district – ” it’s all right to run up credit card bills, blame others for overspending and then cross their fingers that someone will bail them out.”

That’s becoming standard public agency policy these days, and it’s not just the pensions, but poor spending decisions by policy makers. I mean, blatant decisions, like spend $385,000 on a remodel for council chambers, or paying a million borrowed dollars on a crapped out old building and then several hundred thousand fixing it. 

But most poor spending decisions seem to involve public salaries and benefits. Walter reports ” In 2017, when Sacramento Unified’s teachers were threatening to strike, Sacramento Mayor Darrell Steinberg mediated a new contract that gave teachers an 11 percent raise. Later, it emerged that the salary increases would come from a reserve set aside for pension fund payments.”

In Chico, both the city and CARD have set up “pension trust” funds, allocating money from other city funds, to pay down their pension deficit. this is in addition to what taxpayers already pay toward pensions on a monthly basis. We pay their payments monthly, and then we’re on the hook for an annual payment that increases every year – this year, $7,598,561.  Former CARD finance director Scott Dowell now runs the city finances, so he set up both funds. He says these funds save money by avoiding penalties from CalPERS. What it amounts to is embezzling money from one fund to another so you can spend it any way you want. 

In Sacramento, contrary to the  rules for one of these “trusts”, they spent the money to give their teachers an 11 percent raise. Of course, you know what those raises are going to do to those teachers’ pensions, right?

As soon as Chico Unified passed Measure K in 2016, district finance mangler Kevin Bultema told the board they were still looking at deficits caused by raises given teachers. He told me in an e-mail that if they didn’t get more money they’d cut programs. 

Walter’s point in this piece is that the schools are setting a poor example for the kids. I’d say,  government in general is setting a poor example for everybody. 

 

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Camping in Bidwell Park is a crime – report it!

31 Dec

Yesterday, having reported an illegal camp in Middle Bidwell Park to city of Chico officials, my husband and I walked over to the site to find that the campers seemed to be gone but had left mounds of trash behind. In fact, we encountered more trash yesterday than we’d seen the day before.

These pictures were taken yesterday morning. 

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Here’s the pile we encountered Thursday December 29, still there – notice the dismantled bikes. Somebody had added – a real estate sign? – to the pile.

We noticed new piles, clothes,  trash bags,  kipple of all kinds.

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I wonder if they steal from each other, and here’s somebody’s stuff that has been rifled and left.

 

This is located about a block or two from my home, my tenant’s home. We’ve always locked everything up – Chico was never that nice of a town that you could leave your valuables unlocked, that’s been known for some time.  

But lately we’ve been hearing about weird stuff, stuff that goes beyond home security.  One guy was caught stealing a woman’s panties off her back yard clothesline, in broad daylight. Her husband  caught him in the garage, having broken in through a back door to steal a bike.

A man on the  website Nextdoor reported someone had torn the door off a storage shed in his side yard, but said there was nothing of value, so nothing was taken. Lucky him!  I had been bothering my husband to buy one of those metal  sheds at Home Depot for our tenant’s bikes, so she wouldn’t have to keep them in her laundry room. He laughed  and told me, “that’s like telling the transients, ‘look, here’s some stuff for you…'”  He’s right, these people can just rip the door off a shed, hidden in your back  yard, you and  all your neighbors gone off to work. 

As I’ve said, Chico is not a nice little town anymore. How do we fight this? Report it, report it, report it. Demand action.  I’ll e-mail city manager Mark Orme and ask him who is responsible for cleaning up this mess and when that will be done.  I’ll cc both news editors as well as my third district supervisor Maureen Kirk. I may cc the entire council, but Reanette Fillmer is the one who has shown the most interest in this issue.

Please join me in reporting illegal campers. Follow up – if you still see the problem the next day, politely ask what has been done or why nothing has been done. Don’t be intimidated by their polite refusal to do anything – send your e-mail conversation  here, and I’ll print it verbatim. 

  • Mark Orme, city manager – mark.orme@chicoca.gov
  • Sean Morgan, mayor – sean.morgan@chicoca.gov
  • Reanette Fillmer, vice mayor – reanette.fillmer@chicoca.gov
  • Maureen Kirk, Butte County Supervisor District 3 – mkirk@buttecounty.net
  • Larry Wahl, Butte County Supervisor District 2 – lwahl@buttecounty.net
  • David Little, editor Chico Enterprise Record – dlittle@chicoer.com

NOTE: As of Sunday Jan 1 the trash is gone.  I don’t know who picked it up but will thank Orme for staff’s response. 

 

 

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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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