Chico Taxpayers Association

I’m sorry, I’m just now digging out this report from the October Finance Committee meeting. I missed it, and the clerk has just recently posted the report, or minutes, for that meeting. The clerk’s office is getting faster at posting these minutes, they’re more complete, at least, better than before, and easier to read.

That is, if you have your dictionary handy. These people are experts at the legal lingo that’s intended to keep the rest of us out of the discussion. But, if you’re patient, persistent, and maybe throw down a trail of breadcrumbs, you’ll maybe come out of it with your head twisted on straight.

The blob below is cut and pasted right out of the report. It’s like one of those steaks – if you eat the whole thing, you get it free?  NO!

 I’d recommend, take an aspirin before you start reading these reports, but that’s up to your doctor.

These people use obtuse language to hide the truth. Here you see, “internal operational obligations” means workers comp, sick leave and vacation accruals. By “accruals” they mean, these people don’t use their sick or vacation time, and they get a cash pay-out for it later. They worked those days, and got paid, and then they get paid again for the vacation or sick days they didn’t take.  In other words, they get paid twice for the same block of time, just one of the scams these people use to jack their salaries up from a reasonable range to over $100,000 a year.

And, if you look into it, you’ll find study after study that links over work and excessive overtime directly to excessive workman’s comp payout. Twice I’ve heard Jennifer Hennessy report that the city has been over budget on workman’s comp, so they’ve just raised the budget projections to cover it.

If your child goes “overbudget” on their texting, do you pay more on your plan, or do you take the kid’s cell phone away?  My son was told that if he wants to text, he needs to get a job and pay for it himself. Being a taxpayer living in the City of Chico is like being tied to a chair while somebody goes crazy with your credit cards. 

“External operational obligations” are CalPERS and health care. How many of you are without insurance? How many of you have NO retirement fund? In the real world, it’s all fine and good to talk about saving away for the future – well, how do you do that with excessive taxes on your home, excessive fees for sending your kid to college, excessive fees on your small business? Most people are struggling just to make ends meet. I know I’ve had to make more than one foray on my “retirement fund”.   My new plan is, DIE BY 65! I’ll let you know how that’s going!

FROM THE OCTOBER FINANCE COMMITTEE MEETING – available at this link, under “2012 Minutes”:

http://www.chico.ca.us/government/minutes_agendas/finance_committee.asp

C. Discussion of Unfunded Obligations – The City Manager asked the Committee to begin discussion of
Unfunded Obligations. Discussion from this meeting will provide the framework for future discussions on
this item. (Verbal Report – Brian Nakamura, City Manager and Jennifer Hennessy, Finance Director)
City Manager Nakamura has been working with Finance Director Hennessy on creating a draft table of
unfunded obligations. She has been able to divide the unfunded obligations into three general categories:
internal and external operational and capital. This is more commonly termed unfunded liabilities, which
means these are items that the City may be responsible for in the future in terms of what could be paid
for PERS or workers comp. Examples of internal operational obligations include workers compensation,
sick leave and vacation accruals. External operational obligations include PERS and health care. Capital
obligations include infrastructure improvements and maintenance, vehicle replacements and facilities
expansions and development.
City Manager Nakamura noted in the table there is approximately $63 million for unfunded liabilities for
CalPERS. This is difficult to get your hands around because it relates to employees who are either retired,
are going to retire or who are currently with the City. However, that amount would only be incurred if all
employees retired at once. With pension reform happening, we know that number will start to shrink. We
can also be hopeful that CalPERS investments start to increase and we start to see a more positive
adjustment.
Committee Member Sorensen stated he would like to have a better understanding of fleet and technology
replacement and find out where we are versus where we ought to be, knowing that we shorted these funds
in previous years. Chair Gruendl added to also find out if there is a budget policy that says where the
funds ought to be.
Finance Director Hennessy replied that there is a fleet replacement schedule, however staff hasn’t
prepared a full update since implementing a lot of the budget reduction strategies along with the new ways
staff is managing the fleet. On technology replacement, in 09/10, staff put together a schedule related to
hardware replacement. Staff has not quantified what it would be to replace all the software systems, such
as financial accounting software and the police department system.
Chair Gruendl noted that the fleet replacement fund is down $500,000. He asked if this is a result of
purchases that have already occurred and we have failed to put an adequate amount in to cover it, have
we put nothing in there since 07/08 and are we not meeting a budget obligation for what should be going
in there.
Finance Director Hennessy replied that the obligation of the budget policy is not being met. Prior to 07/08,
we were putting around $600,000 in annually and the fund balance was around $4 million. After 07/08, we
felt it would be okay to reduce that annual amount due to the fleet optimization implemented by GSD.
There is currently $2.7 million in the fund.

Tags: Brian Nakamura Chico Ca, CalPERS going broke, City of Chico, Mayor Mary Goloff Chico Ca, unfunded pension liabilities