Tag Archives: Orme needs to go

Will HJTA’s C&D be the end of the POB? Wait and see!

25 Jun

I heard about “Pension Obligation Bonds” years ago, and the name seemed to be pretty clear – a bond that obligates the taxpayers to pay the pensions.

When I started this blog in 2012, we had just got a new city manager, Brian Nakamura. As I recall, he was the first person to mention the pension deficit – Unfunded Actuarial Liability – in front of the public. At that time, he gave two figures – one about $168 million, another about $193 million. I think the second figure included something else Nakamura brought up briefly – the benefits deficit, or “Other Post Employment Benefits”.

Nakamura didn’t stay long, he brought in his former assistant manager from Hemet CA, Mark Orme, and another co-worker from Hemet, Chris Constantin, to replace departing Finance Director Jennifer Hennessy. Nakamura was obviously setting us up for his quick departure to his next job in the town of Rancho Cordova, CA. When Nakamura left, Orme became City Manager, and promoted his friend Chris Constantin to Asst City mgr. Scott Dowell moved over from Chico Area Recreation District to take up the job of Finance Director, now called, “Administrative Services Director.”

These three immediately embarked on a plan to pay down the UAL with “allocations” from every fund in the city treasury. They brought in a consultant, Chad Wolford, who explained the process by which they could legally embezzle money from the streets, parks, sewer, and other infrastructure funds, to pay their own pensions. Allocations were institutionalized, with nothing more than a rubber stamp from council. A percentage of each department payroll is taken into the new “Pension Stabilization Trust,” from which Dowell makes investments, and then once a year, an increasing payment to CalPERS. At one point, they’d beaten the UAL down to about $138 million.

So, how has the UAL actually increased to $146 million? Plus another $140 million interest? Here’s how – Orme is not controlling employee costs. Instead he’s handing out raises, to himself and other management employees. Furthermore he’s added new management positions, three in the last year, at over $100,000 in salary.

Furthermore, management employees are only paying 9% of the cost of their own pensions. Do the math on that – 70% of their highest year’s salary at retirement, for a contribution of 9%? Meanwhile, Orme and several others have wangled themselves a special 401K fund for public employees – a 457 Fund. The city (the taxpayers) put $20,000 a year into that fund. Were you asked to rubberstamp this? Nobody was – I found it in his contract. People, you have to read stuff. I love it when the union lovers and the badge bunnies call me a liar but you ask and NO, they haven’t read shit.

Under this kind of strain, the PST is not supporting the payments. Dowell’s investments are coming in at less than 3%. Every month Dowell has to ask council to rubberstamp more allocations to meet CalPERS’ demands – look at the agendas before you call me names, okay? The annual payment gets bigger every year – this year, $11.5 million. Dowell says we’ll be paying $13 million within a few years. So, how, oh how, does that UAL figure keep getting bigger?

I’m glad to say, people are starting to ask questions. Staff wants to bury the whole thing, like it never happened. So, very quietly, behind closed doors (latest Finance Committee cancelled until August), Staff and council have been pushing forward with a tax measure they don’t want to put on the ballot – the Pension Obligation Bond. This bond will take front and center – the payments on this bond must be made ahead of all the city’s other obligations.

What are the city’s other obligations? Your streets, your sewer, your cops and firefighters, your park. All that has, as you can see, gone along the wayside while Staff has stuffed our money, hand over fist, into their own pockets.

Some people, including myself, believe a tax is a tax, and it needs to go to the ballot. Since this POB would be a “special” tax dedicated to the purpose of stuffing employees’ pockets (or whatever they want to call it), it’s a 2/3’s measure. When this point was brought up, Staff closed down the meetings and the planned “work shop” and went underground with it.

A local gadfly told me, “the POB is dead.” He cited the “cease and desist” order filed by the Howard Jarvis Taxpayers Association and the cancellation of the workshop. I’m afraid that’s not true. A quick search on “cease and desist order” told me what I already suspected. The city can ignore it, and HJTA has to SUE. The filing date is this coming Monday, June 28. If nobody challenges the POB at Butte Superior Court, it will be approved automatically, cease and desist order be damned. A cease and desist order is just a line in the dirt, if the city steps over it and HJTA doesn’t do anything, it’s done.

If I had a lawyer, I’d file it myself, but I’ll have to wait and see what HJTA will do.