Cities throughout the state are ‘gravely concerned’ about ‘unsustainable’ pension costs

By Ed MendelThe city manager of once-bankrupt Vallejo expects soaring police pension costs to reach 98 percent of pay in a decade. Lodi employees dropped from 490 to 390 in the last decade. And Oroville, after cutting a third of its staff, recently cut police pay 10 percent.

Eight cities struggling with rising pension costs urged the CalPERS board yesterday to analyze two ways to reduce the cost of pensions, even though the proposals were said by the CalPERS attorney to be unconstitutional under current law.

Sen. John Moorlach, R-Costa Mesa, asked the CalPERS board to analyze the cost of suspending cost-of-living adjustments and giving current employees, for work done in the future, the lower pension for employees hired after Jan. 1, 2013, under reform legislation.

John MoorlachThe chairman of the League of California Cities pension committee, Bruce Channing, Laguna Hills city manager, told the CalPERS board that cities throughout the state are “gravely concerned” about “unsustainable” pension costs and all options should be considered.

“Cutting staff, as we have done in my city, is becoming a recurring pattern,” Channing said.

Five unions and retiree groups urged rejection of Moorlach’s request, saying a COLA cut would harm retirees with small pensions. They said Moorlach wants to do away with pensions and should do his own analysis, rather than pass the cost to CalPERS.

The CalPERS board president, Rob Feckner, said he won’t repeat what he said on first seeing the Moorlach letter. He said the request did not come from the entire Legislature, and if Moorlach really believes in his “pet project” he should find another way to fund it.

Vallejo filed for bankruptcy in 2008 and did not cut pensions, a trend followed by the Stockton and San Bernardino bankruptcies in 2012. Vallejo said CalPERS threatened a long legal battle. The other two cities said they needed to be job competitive, particularly for police.

There was speculation several years ago that Vallejo, which had higher costs than the other two cities, may be headed for a second bankruptcy. The Vallejo city manager, Daniel Keen, said he took office three months after Vallejo exited bankruptcy in 2011.

Keen told the CalPERS board yesterday that Vallejo has the same gradual erosion of services that the other seven cities talked about, despite an increase in the sales tax and a tax on medical marijuana.

“We are facing dramatic increases in our pension rates, as are many cities,” Keen said. “We will be looking at 98 percent rates for public safety by ’27-28 and 55 percent rates for our miscellaneous employees in that time frame.”

The Lodi city manager, Steve Schwabaurer, thanked the board for its courage in acknowledging there is a “crisis” and taking some steps. But he said he has not seen a discussion of options other than asking the cities for more money.

He gave examples of Lodi’s reduced services and employees: “In 2008 we had 490, today we have 390. In 2008 we had 78 police officers, today we have 71. In 2008 we had five active fire stations, today we have four and a quarter.”

Schwabaurer said CalPERS is projecting that Lodi’s pension rates will increase to 38 percent of pay and 78 percent of pay. He said the projected rates will burn up the general fund reserve and the pension stabilization fund.

To give union representatives in the board audience a sense of what that means, he said: “That is one of my police officers 24 hours a day. It’s a fire station. It’s all of my parks and rec, and all of my library. It’s not a choice we can make.”

The Oroville finance director, Ruth Wright, said the city’s workforce was cut by a third two years ago to balance the budget. A recent 10 percent pay cut negotiated for police was “very hard, very sad,” she said, and now pension rates are projected to double in seven years.

“In three to four years our cash flow is going to be gone,” Wright said. “We don’t even know how we are going to operate past four years. We have been saying the bankruptcy word, which is not very popular.”

West Sacramento’s assistant city manager, Phil Wright, said the city was able to successfully bargain with unions to get through the financial difficulty after the recession began in 2008.

“Now I’m sitting at the table telling them there is no money after they have taken 5 percent cuts, paid all of their PERS, and it’s because we can’t afford any money,” Wright said. “Every penny that has been returned to our general fund in property tax and sales tax is going to pay for our PERS benefit.”

Others urging CalPERS to do the cost analysis requested by Moorlach were Concord, Santa Rosa, Chico, Yuba City, and the California Special Districts Association.

To read the rest of Ed Mendel’s column, please click here.

Posted in CalPERS, John Moorlach, Pensions | Leave a comment

Watch last night’s city council meeting

Posted in Video of council meetings | Leave a comment

Tonight’s city council meeting agenda

To read or download tonight’s detailed council meeting agenda, click here or download it here (pdf).

The public participation portion of the meeting begins at 6:30 with presentations and awards. Actual city business normally doesn’t start until 7:00 or thereafter.

And you can always watch it on cable Channel 3 (Spectrum — formerly Time Warner).

Posted in Council Meeting Agendas | Leave a comment

Today is Constitution Day. What’s your favorite part?

For more information on Constitution Day, click here.

Posted in John Stossel, Uncategorized | Leave a comment

California Legislature abandons middle class

By Jon Coupal | Does anyone honestly think that the California Legislature’s complete abandonment of the middle class is unrelated to the state’s highest-in-the-nation poverty rate?

A weekly column by Jon CoupalThis past week presented a stark contrast in the Golden State. First, the controller reported state tax proceeds from all categories are exceeding budget projections. Specifically, the state brought in almost $9 billion in August, exceeding projections in the state budget by over $340 million. All three of the major sources of state revenue — personal and corporate income tax plus sales tax — were up over last year. While a substantial portion of this uptick in economic activity can be attributed to the Trump recovery, there is no denying that California remains an economic powerhouse in its own right.

However, about the same time as we were getting cheery news about state revenue, the U.S. Census Bureau reported that over 20 percent of Californians live in poverty. The “Supplemental Poverty Measure,” which takes into account California’s absurdly high cost of living, gives us the highest poverty rate in the country while the rest of the nation has shown improvement.

So how is it that the most economically powerful state in the union has a poverty level that would make even Mississippi blush? In large part, the answer lies in California’s toxic mix of crony capitalism with mindless pursuit of progressive policies. And both were on full display in the final week of this year’s legislative session.

To read the entire column, please click here.

Posted in Howard Jarvis Taxpayers Association, Jon Coupal | Leave a comment

SB 2 passed by Assembly with a Yes vote by Quirk-Silva

The vote in the Assembly late last night was 54-25. Read the details in this story in the San Jose Mercury News.

Posted in Josh Newman, SB 2, Sharon Quirk-Silva | Leave a comment

Call Assembly Member Sharon Quirk-Silva and urge her to vote No on SB 2

The Howard Jarvis Taxpayers Association has sent out a call-to-action email alert regarding Senate Bill 2 (SB 2) by State Senator Toni Atkins (D-San Diego). SB 2 would add a new tax on every real estate instrument, paper, or notice requirement negatively impacting refinances, construction loans, loan modifications, lien holders, lot line adjustments and death of a spouse for homeowners. This additional fee is per document recorded, which may consist of several documents for one transaction, up to a cap of $225. For more background on SB 2, see this recent column by Jon Coupal.

SB 2 is currently awaiting a vote in the Assembly either today or tomorrow.

[NOTE: Fullerton's State Senator Josh Newman already voted Yes on SB 2.]

HJTA explains just how costly Senate Bill 2 will make recording these documents:

TaxTransfer upon death deed: This document is commonly used to ensure that individuals avoid a costly probate situation following the death of a loved one. Under SB 2, filing this will cost an additional $150.

Estate planning documents: Placing deeds into a trust is a multiple document process and will now cost at least an additional $150.

Creating a reverse mortgage: Another multiple document process, this will cost an additional $225.

Death of a spouse: Beyond the emotional pain of losing a loved one, it will now cost an additional $225 to record this.

Homesteads: Creating a homestead to protect some of your equity from creditors will cost an additional $75.

Additionally, recorded transactions common to homeowners including modifying a loan to avoid foreclosure, refinancing a home loan, and taking out a construction loan all will cost an additional $225. Ultimately there are 450 transactions that could be subject to this tax.

Call Sharon Quirk-Silva’s Sacramento office now at 916-319-2065 and urge her to vote No on SB 2.

Posted in 29th State Senate District, 65th Assembly District, Howard Jarvis Taxpayers Association, Josh Newman, SB 2, Sharon Quirk-Silva | Leave a comment

Bill would revive California’s redevelopment agencies

By Steven Greenhut | California’s redevelopment agencies were a fixture on the local political landscape for six decades, as they guided development policies and grabbed “tax increment financing” that localities used to pay for infrastructure improvements, downtown renovations and affordable-housing projects. They had some notable successes but generated enormous controversy before Gov. Jerry Brown shuttered them in 2011.

Steven GreenhutThey were designed in the 1940s to fight urban blight. But the agencies were criticized for their use of eminent domain on behalf of private companies; for running up debt without a vote; for the subsidies they ladled out to developers; and for financing big-box stores and auto malls rather than helping inner cities spruce up. The governor ultimately killed them because these agencies had become a drain on the state’s general-fund budget, consuming 12 percent of the budget.

It was a shock to see such a powerful sector dry up, as local agencies morphed into “successor agencies” that had nothing left to do other than pay off existing debt. But the redevelopment industry – the developers, lobbyists, city officials and low-income housing advocates – never really went away. Each year since 2011, lawmakers have proposed and sometimes passed measures that incrementally bring back the redevelopment process.

The way that complex process worked in the past involved city councils essentially creating agencies that target “project areas” for subsidy. The agencies would float debt to fund infrastructure and pay subsidies to developers who build things within those areas. Cities often would subsidize retail projects because of the sales taxes they provided. The gain in the property taxes from the new development was designed to pay off the debt.

But those taxes often come out of the hide of other public services, such as schools and public safety. The state budget had to backfill the losses and the result was the budgetary drain that the governor plugged. But with the state’s fiscal situation having improved markedly since 2011, legislators have been less concerned about any financial impact of revived agencies.

To read the entire column, click here.

Posted in Redevelopment, Steve Greenhut | Leave a comment

In California, accountability depends on transparency, which is under siege

By Dan Walters | If we – the California public – are to hold politicians and other government officials accountable, we must first know what they are doing or not doing.

Thus, the first point of conflict is always access to records of official action or inaction.

Dan WaltersThe current legislative session is the first one affected by a 2016 ballot measure (Proposition 54) that requires final versions of bills to be in print for 72 hours before lawmakers vote on them. They – particularly the dominant Democrats – don’t like it because it makes sneaking legislation through the process more difficult.

They’ve devised some hide-the-pea ways around the 72-hour rule, such as making private deals that are not written into the affected measures but are enacted later in separate bits of legislation. The Senate is being relatively respectful of the voters’ overwhelming vote for Proposition 54, but the Assembly is thumbing its nose at them with procedural rules that allow some bills to evade the 72-hour regulation.

And then there’s the Public Records Act, California’s landmark law giving the public, mostly via news media, access to official documents, with some exceptions.

Unfortunately, the list of PRA exceptions seems to be growing as legislators, who are not inclined toward openness in the first place, protect their fellow officials and/or do the bidding of powerful interests.

The current session has had 79 bills involving the PRA. While most of the proposals amount to innocuous boilerplate, the Legislature is moving those that create more exceptions and blocking those that would expand access.

A prime example is Assembly Bill 1455, which would prohibit access to local government documents relating to collective bargaining negotiations between local officials and their unions, mirroring the blackout on records of state and higher education bargaining.

To read the entire column in the Sacramento Bee, click here.


Posted in AB 1455, Dan Walters, Transparency | Leave a comment

Democratic governor hopefuls genuflect to unions

By Sal Rodriguez | Democratic candidates for governor flocked to Riverside last week to pay their respects to the most important constituency of the Democratic Party: public employee unions.

On Wednesday and Thursday, John Chiang, Gavin Newsom and Antonio Villaraigosa decided it was necessary for the sake of photo ops and fostering goodwill to their future donors to join striking members of Service Employees International Union Local 721.

The union, which represents public employees in Southern California, is currently throwing a fit over not getting its way in negotiations with Riverside County.

Since 2012, members of the union have seen average salary increases of 38 percent, according to county spokesman Ray Smith. But of course, the idea of not getting more has prompted SEIU 721 to turn up the histrionics, typical for SEIU during negotiation time.

Officially, the union’s strike on Wednesday and Thursday has to do with allegedly unfair labor practices by the county, not necessarily pay, but of course it’s no coincidence the strike is occurring amid negotiations that aren’t going as desired.

Riverside County’s finances, like those of governments across California, have been drained by its public sector unions, which see themselves as more important than the taxpaying public.

To read the entire column in the Press-Enterprise, please click here.

Posted in Public employee pay, Public Employee Unions | Leave a comment