Tag Archives: Scott Dowell City of Chico CA

A budget surplus generated by the Camp Fire influx should go toward the roads – instead $taff wants to put it in the Pension Stabilization Trust and “Homeless Solutions”

15 Mar

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.

http://chico-ca.granicus.com/GeneratedAgendaViewer.php?view_id=2&event_id=332

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!

 

 

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Getting public information out of city staff is like pulling teeth

26 Sep

Bob sent the article below the other day – it’s a good read for Halloween.

About 7 years ago, short-lived city manager Brian Nakamura told us about the pension liability, and he briefly mentioned the “benefits liability”, but that second topic never came up again. Here below, George Russell talks about the  “OPEB” liability – “other post employment benefits”.

 

George Russell: Marin County public pensions are due for reform

So, the League of California Cities, and city management all over the state are looking out over the back of the boat, the cigarettes are falling out of their mouths, and they’re saying, “You taxpayers are going to need a bigger boat...” 

Here in Chico, they have never told us point-blank about OPEB, but I’m sure it comes up at those small, daytime meetings that nobody attends. So I asked city finance manager Scott Dowell – he’d recently given me a figure for the “unfunded accrued liability” – I didn’t know if that figure was just pensions or included the OPEB. His response, simply, “No, OPEB is separate.” But no figure, I had to ask for that in a separate email. Cause they just don’t want to tell us this stuff, it’s counter to their best interests.

I call this “willful insubordination,” but I went ahead and sent a separate e-mail asking him for the figure. I try to be nice, I apologize for bothering this guy.  I’ll get back to you with his response. 

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City exploring pre-funding of pensions – do they ever do anything Downtown besides figure out ways to pay themselves?

16 May

Finance Committee meeting Wednesday, May 23, 2018 – 8:30 a.m. to 10:30 a.m.  Council Chamber Building, Conference Room 1

Committee members – Councilmembers Morgan (sean.morgan@chicoca.gov), Stone (randall.stone@chicoca.gov) and Chair Sorensen (mark.sorensen@chicoca.gov)

Next Wednesday the committee will hear reports regarding a fairly new scheme for skimming money off the taxpayers to fund employee pensions. Below is an article from Public Agency Retirement Services (another public retirement agency?) describing the benefits of this program. 

http://www.pars.org/2016/03/a-new-tool-for-pension-budgeting/

With our maturing public pension plans, we know that we should expect greater fluctuations in required contributions from year to year. And since we know big fluctuations are coming, our actuaries are warning employers to plan for it in order to ease the burden when big contribution increases do arrive. But how exactly does one do that? It’s not like big portions of your annual budget are discretionary spending.

If you’ve been in the position of sitting on extra cash, you will have quickly learned that there’s little you can do with that money to “prepare” your agency for fluctuating contribution requirements. If you give that extra money to CalPERS, CalPERS will apply it toward your unfunded liabilities, and it will probably make only a small dent in your annual required contributions due to their amortization rules. While paying down unfunded liabilities is always worthwhile, it won’t help you manage future year-to-year changes in required contributions. You could stash some cash in a rainy day fund, but that has its drawbacks as well. The good news is: we’ve got an answer for you. Duh, dah, dah, duh…. The Section 115 trust!

Here’s something funny – “ If you give that extra money to CalPERS, CalPERS will apply it toward your unfunded liabilities, and it will probably make only a small dent in your annual required contributions due to their amortization rules.”

Current city finance wizard Scott Dowell worked for Chico Area Rec Dist before he got the job with the city. He made those “small dent” payments toward their pension deficit – a “side fund payment” as he described it, of $400,000 in one year. That money could have gone toward badly needed repairs at Shapiro Pool – a consultant said the pool could have been brought up to code for less than $500,000 – but Dowell told me the agency saved a lot of money! by making that side fund payment instead. That’s like making interest only payments on your credit card.

This man gets paid almost $200,000/year, in salary alone, to make decisions like this. And when they’re bad decisions, well, gee, he just changes his MO!  And gets a raise and more for his benefits package.

So you have almost a week to write to the fellows on this committee – that’s Seanny, Randy, and Mark-e-Mark – and tell them what you think of Dowell’s little schemes to fund his own pension. 

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City financial officer gives a much different figure for utility franchise fees – ???

16 Feb

City of Chico “Chief Administrative Officer” Scott Dowell finally gave Presson an answer to my question – how much money does the city of Chico receive in franchise fees from PG&E. 

I had found an article from Ch 7 news in Redding:

http://krcrtv.com/archive/pge-pays-millions-to-northstate-counties

detailing payments to Chico, Butte County, and other local cities and counties, it  reported a much larger figure – in fact, three figures that added up to over a million dollars for fiscal year 2011-12.

 Chico$ 407,735.25 $ 201,282.46 $ 609,017.71 

Dowell came back to me with $690,768. 

Hmmm. Not sure what to think, I responded with the figures from Ch 7 and asked him where I could find this information in the budget.

Look Scott, I’m not calling you a liar, I’m just asking, why the difference in figures? Maybe he’ll come back and tell me how these franchise fees are based. The article indicates local agencies collect more in franchise fees every year, but maybe that was some kind of sunset thing, and the sun went down on it. I’m willing to give a person the benefit of the doubt.

Gee willikers –  maybe Ch 7 screwed up and gave three years’ figures? 

We’ll see what he says – I’m not expecting an answer before next Tuesday. 

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