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Budget Manipulation Using Fiscal Sleight Of Hand

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Fair is foul, and foul is fair: Hover through the fog and filthy air”
—Shakespeare, Macbeth

STATE OF THE CITY TREASURY

[TRANSPARENCY THROUGH FOUL AND FILTHY AIR]

History continues to remind us that to get to the root of any act of wrongdoing, malfeasance or wrongdoing, you need only follow the money to find the culprit(s). Eventually the truth and they are revealed. That again proved true at the City Council meeting on March 11, 2013.

Shell game balanced budget

Balancing the budget through financial sleight of hand

Our acting City Manager, Johnnie Johnson, in collaboration with the Chief Financial Officer, informed the City Council that those in charge of the budget in our City had adjusted [manipulated?] the GENERAL BUDGET to make it appear that we had achieved a balanced budget. In fact just the opposite was true.

The previous City Manager, Rick Cole together with Mayor Bill Fulton continuously publicized the fact that “we were living within our means”, that “we had balanced our budget” and that our “financial affairs were transparent”. On this Monday night the Council learned otherwise.

What the Council learned is that the $12,000,000 in financial reserves, created in 1992, and still in existence as of 2007, was now in fact only worth $4,300,000. The explanation provided is that Internal Service Funds (noted below), which contained money budgeted and set aside to meet real and specific future costs and potential liabilities, had been reduced so as to make it appear as if the budget had been balanced:

  • ($2m) Unassigned.
  • ($2m) Unfunded Workers Compensation liability
  • ($3m) Potential liability claims reserve Information
  • ($700,000) Technology

The explanation offered is that this was a way to make it appear as if our budget was balanced. As stated by Mr. Johnson, “we have not borrowed it from strangers, but we did borrow it from ourselves… (and) if we do not fund this within five years we will be broke”.

Mayor Tracy, at the conclusion of the presentation stated:

“Based on the way I look on the information we received here tonight we have probably been deceiving ourselves and therefore the general public. There is nothing illegal done here, we did not participate in any conspiracy, but I don’t think it (this) was clear to us”.

—Mike Tracy, Mayor and Retired Chief of Police

He then added that that the Council needed to put more oversight controls in place to prevent this from happening in the future. A new budget will be presented to the Council on May 1, 2013.

Editors Comments

Mayor Tracy and Councilman Heitmann were not on the City Council when these budget “adjustments” were made. For those council members and supporters of the former City Manager, this should be a lesson that the public was deceived and there was not total transparency during Mr. Cole’s administration. To have an interim City Manager, in 6 months time, bring to light that the $12.0M reserve was really $4.3M shows how gullible our leadership has been.

THE NEW CITY MANAGER BUSTS THE BUDGET

Mark Watkins’ higher salary and benefits strain Ventrua’s budget

On March 4, 20013, the City Council met to consider the employment contract for the new City Manager, Mark Watkins. On a vote of 4 to 3 the Council approved the employment contract. He will receive the following salary and benefits plus 6 weeks paid leave:

Base Salary $222,000.00
Annual Cost of Living Increases (1/2% of annual CPI)
Annual Performance Bonuses (3%-7%) $15,540.00
Auto Allowance $6,000.00
City Contribution to 401(K) $12,000.00
Employer Pension Pickup (2.5%) $5,500.00
Total Before Benefits $261,090.00

When invitations for applicants were first published the City Council set the salary rate range of $160,000 to $214,000. The previous City Manager received a salary of $174,000.

The Ventura County Taxpayers Association spoke against approval of the contract because the starting salary was simply too high for an entry level Manager, that the salary should be started lower and then increased to provide performance incentives and the contract provided automatic annual Cost of Living Adjustments (COLA) during the 3 year term of the contract. They also warned against the COLA adjustment because of the precedent it would set when other public union contracts came up for renewal.

Mayor Tracy, Councilman Monahan, Councilwomen Weir and Heitmann approved the contract. They stated that Mr. Watkins was a long time resident of Ventura, that he had worked in the City during his career, that he was an Assistant City Manager in Thousand Oaks and that this was what needed to be paid to attract a qualified City Manager who would focus on the basics of operations of city government. Councilwoman Weir commented that any increase in the salary level could also be justified because “that we have already found savings in the City Manager’s budget to make up the difference”.

Our present acting City Manager commented that Mr. Watkins was a good choice, that this pay increase really only involved “pennies” in the total scheme of things, and that if he did not work out he could just be terminated and given a severance package.

Councilmen Andrews voted against the contract. Councilmen Brennan and Morehouse, after extolling the virtues and accomplishments of the former City Manager, Rick Cole, also voted no.

Editors Comments

Mr. Watkins will cost us an additional 26,102,700 pennies per year. He will earn all of that in dealing with our budgetary issues. We hope that the majority of the Council is right in saying that the additional expense can be justified by the savings that this new Manager will bring to our City.

In the meantime we must be diligent and continue to remind our elected representatives that if they we do not watch how they spend our pennies “we” will have no dollars left.

Editors:


R. Alviani K. Corse T. Cook J. Tingstrom R. McCord S. Doll

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Volunteer fire depertment may help Ventura's pension costs

Time To Consider A Volunteer Fire Department For Ventura

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“Politicians in America exploit economic illiteracy” —Walter Williams, Professor Economics

PUBLIC EMPLOYEE PENSION TRANSPARENCY ACT

We previously reported that there is a bill is currently pending in Congress (HR567) and the Senate (S347) encouraging governments at all levels to switch from a “defined benefit” plan to a “defined contribution” plan by requiring public entities to reveal to the voters the true magnitude of the unfunded liabilities of the public pension plans.

In California CALPERS continues to portray a rosy investment return.  The staff at CALPERS recommended a change in the assumption of how much our City pensions investments will make in the future from 7.75% to 7.5%.  This went to committee on March 15, 2011.  This new direction, had it been adopted would have moved the pension fund on a path to solvency and economic reality. It didn’t happen. The CALPERS committee did not want to pass on the annual increased expenses to the cities that such a modification would cause given their current budget strains.  Ventura is of course content to ignore this. You know, “What is a poor mother to do”. In the City of Ventura we owe $67,488,000.  Twice that if a more realistic investment return of 3.50% is used.

These Federal bills, called the PUBLIC EMPLOYEE PENSION TRANSPARENCY ACT, would require States and municipalities to report their liabilities to the United States Treasury. The HR bill was sponsored by Representative Darin Nunes, Darrell Issa, and Paul Ryan with Congressman Elton Gallegly acting as a co-sponsor.

If adopted state and local governments will be “encouraged” to switch to defined contribution plans.  While they are being “encouraged” they will have to reveal the true magnitude of their unfunded liabilities to their citizens. No more off the balance sheet reporting.  This new legislation will require that they report liabilities to the U.S. Treasury using their own glowing investment forecasts as well as a more realistic Treasury bond rate.  If the City of Ventura is forced to use a Treasury bond rate of 3.5% our unfunded pension obligation would double to $134,976,000.

THE FIREFIGHTER BENEFITS CONTRACT

Volunteer fire fighters may help Ventura's pension problem

Considering a volunteer fire department hybrid may help Ventura’s rising pension costs.

In the fall of 2008 that Ventura fire fighter benefits and pension contract was modified by the City Council.  This was treated in our September, 2008 issue. 

  “In a vote of 4 to 3 the council  approved the Memorandum of Agreement and the new pension contract with the firefighters of this city giving them a pension equal to 3% of their highest salary  times the number of years in service plus all medical, dental.  The yeas were Councilmen Fulton, Brennan, Summers and Monahan.  The neighs were Mayor Weir, Councilmen Andrews and Morehouse.  It should be of grave concern to all when one councilman says, before he cast his “NO” vote — “I HAVE GRAVE CONCERNS TO COMMIT WHEN WE DON’T KNOW WHERE THE FUNDS WILL COME FROM”.

“I Have Grave Concerns To Commit When We Don’t Know Where The Funds Will Come From”.

Mayor Fulton and Councilmembers Brennan, Monahan and Summers were thus responsible for increasing the firefighter pension in the fall of 2008 so that these folks could retire with 3% at age 55[1]. Their actions increase our unfunded pension debt by $1.2 million or more annually.

Since then the pension contracts for all City employees have come up for renewal.  On Tuesday January 16, 2011, the Ventura City Council approved new labor contracts with the Ventura Police Officers, Police Management and the employees represented by the SEIU. The vote was 5-2 in favor of the agreements. Councilman Andrews and Councilwoman Weir voted against approval. The decision of the other five – Brennan, Fulton, Monahan, Morehouse and Tracy was in favor.

The agreement with the Fire Department union is still in closed negotiations, which, of course, are not made public.  Many criticized the past decision of the Council in approving the employment contracts for the Ventura Police Officers and Police Management, not the least of which was Council Member Weir, who rejected the proposal and stated “Fiscally, the city needs more than this right now.” and  Council Member Neil Andrews said the agreements “simply don’t go far enough.”  The SEIU, who agreed to a lower 2nd tier retirement plan (2% @ 60) also agreed to a salary average of the three highest years in calculating their pension entitlement for all new hires.  The Ventura Police Officers and Police Management stuck to 3% @ 55 and the single highest year for all new hires.

ANOTHER POINT OF VIEW

[The case for a volunteer Fire Department program]

Due to the present Firefighter negotiations, this next article is timely and worth greater consideration.

Municipal governments in other states are beginning to come to grips with bloated payroll and pension demands of public employee — fire unions and have handed these folks their walking papers in favor of a volunteer fire department.  There is a persuasive argument to be made in favor of such a step, or some hybrid of that concept so that the community becomes more involved and vested in community safety.  The following is summary of study performed by Bill Knox, former candidate for the Ventura City Council.  The complete 10-page report, complete with comparison charts and footnote links, is available upon request. (Simply email vregventura@gmail.com)

Solutions for Ventura’s Fire Department

[The Case For A Volunteer Fire Department]

Ventura is in the midst of an unprecedented reduction in public safety services.  Mounting overtime costs, enormous pension liabilities and shrinking revenue streams have resulted in the closing of a fire station and elimination of firefighter positions.  Using volunteer firefighters to assist professionals could save the city millions annually and dramatically improve public safety.

Response Times

Understaffing at Ventura’s fire stations has resulted in substandard emergency response times.  According to national standards, firefighters should respond to emergency calls within five minutes.  This time frame is critical in that resuscitation from cardiac arrest after five minutes typically results in brain injury, coma or death.  As a result of inadequate staffing, the department fails, on average, to meet the response standard over 62% of the time.  With the elimination of three firefighter positions and the fire’s department’s plan aimed at reducing sworn staff positions by nine, response times are anticipated to increase by an additional 30%.

As a result of inadequate staffing, the department fails, on average, to meet the response standard over 62% of the time.

Lack of Funds

The fire department’s budget for 2010-2011 is $14.5 million.  The city closed station No. 4 in hopes of reducing costly overtime pay. In 2009, the city paid $1,700,000, (nearly 12% of this year’s budget) in overtime payments.  Employees with one year of experience receive a compensation package well in excess of $98,000.  Senior-level employees cost exponentially more.  In addition, the city of Ventura has an unfunded pension obligation of more than $50,000,000.  Taken together, the fire department’s budget is stretched to the limit and the city simply cannot afford to maintain, much less expand, the professional force.

Volunteers

Volunteer fire department similar to Volunteers in Police

Ventura should consider a volunteer fire department program similar to Volunteer policing.

The Ventura Police Department uses 44 volunteers to supplement the professional force.  Volunteers have donated over 40,000 hours of their time to serve the city.  If 44 volunteers each donated 48 hours per month to the fire department the city could save more than $1.06 million in basic compensation costs.  If overtime was eliminated, the savings would amount to nearly $3 million annually!  If law enforcement supplements its professional force with volunteers to improve public safety, reduce costs and partially compensate for reductions in its budget, there is no reason that the fire department cannot achieve similar if not better results with a well crafted and executed plan.

If law enforcement supplements its professional force with volunteers why can’t the fire department achieve similar results?

Most US Fire Departments Use Volunteer Fire Fighters

According to the Federal Emergency Management Agency (FEMA), over 92% of fire departments in the United States use volunteer firefighters, either exclusively or on a supplemental basis.  California cities such as Chico, Fillmore, Santa Ana, Santa Clara, Santa Paula, Stockton, Compton, Rohnert Park, Turlock and many more successfully use volunteers to supplement their professional forces.  These communities receive outstanding results and substantial cost savings with their highly trained and dedicated volunteer forces.  If Ventura created a supplemental volunteer fire fighting force modeled after any one of these communities, it would save between $2.5 and $3 million annually. 

If Ventura created a supplemental volunteer fire fighting force, it would save between $2.5 and $3 million annually. 

Volunteer firefighters do come with a minor cost, but not a salary or massive pension obligation. The city would still need to cover costs of training and equipment; costs already incurred by the city for its professional firefighters.  To protect the city’s investment, the volunteer should be required to serve a minimum term or pay back the costs associated with certification and training.

Volunteers are a viable option to ensure a timely response to emergency calls, to reopen station No. 4 and possibly staff additional stations, like a much need station in Ventura’s harbor. Volunteers, like professionals, must complete mandatory training comparable to beginning professional firefighters.  Having more well trained first responders in our community will provide a broader measure of safety to the population in times of emergency. Furthermore, a well trained volunteer force will provide a quality pool of applicants from which to pick when the time comes to add additional professionals to our force.  By training and utilizing volunteers now, the professional department would have in-depth personal knowledge of a person’s character and fitness to serve as a member of our truly honorable and professional force.

The use of a volunteer force will help alleviate some of the burden on our professionals and allow them to reduce the amount of overtime currently required.  In addition, creating a volunteer force would provide adequate staffing and help reduce response times to emergency calls.  Not only will this help save lives but it may increase Ventura’s ISO rating (a figure used to determine the cost of homeowner’s insurance).  This could help lower the cost of homeowner’s insurance citywide.  A supplemental volunteer force is the right answer for Ventura.

 Editors’ Comments:

We all need to consider viable alternatives to what we have been doing in the past. Ventura’s police department has its Volunteers in Policing program.  It is time we gave a much needed hand to our fire department and help them to do what they do best: serve the public interest through ensuring public safety.

Editors:

B. Alviani           K. Corse        T. Cook

J. Tingstrom     R. McCord    S. Doll

[1] 3% at age 55 means 3% of a policeman’s or firefighter’s highest annual salary times the number years of employment.  For example, a 20year old works 35 years and in his last year his salary is raised to $80,000.  He will be paid $84,000 a year for the rest of his life.

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CalPERS costs Ventura piles of cash

CALPERS Increases on City Out of Control

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Winston Churchill

“Americans always get it right, after they have tried everything else”
—Winston Churchill

HMS TITANIC

[Moving Deck Chairs to Avoid a Disaster over Pensions]

The story of the sinking of the HMS Titanic and the causes are known to all.  Had the ship not been traveling too fast, or had the officer on the bridge ordered a change of course earlier the collision with the iceberg  would not have occurred  The courses of action to avoid disaster were clear, but ordering the crew to move deck chairs to avoid  a cataclysmic event was not one of them.

Police salary negotiation victory jacks CalPERS

Ventura Police unions extracted concessions to pay for CalPERS contributions.

So it was on Tuesday January 16, 2011, when the Ventura City Council approved new labor contracts with the Ventura Police Officers, Police Management and the employees represented by the SEIU. The City Council vote was 5-2 in favor of the agreements. Councilman Andrews and Councilwoman Weir voted against approval. The decision of the other five — Brennan, Fulton, Monahan, Morehouse and Tracy was in favor.

The agreement with the Fire Department union is not due for another 6 months, but results are likely to be similar.  Recall that Mayor Fulton and Council members Brennan, Monahan and Summers were responsible for increasing the firefighter pension in the fall of 2008 so that these folks could retire with 3% at age 55[1], thus increasing our unfunded pension debt by $1.2 million or more annually.  Mr. Summers is gone but Councilman Tracy (retired police chief) will predictably follow in his footsteps on this pension issue. (See Res Publica, August, 2008 for a complete summary)

The City Manager’s “Victory Lap” Over Pensions

Below is an email from City Manager, Rick Cole, recently proclaimed by Mayor Fulton, conveying the news of this purported accomplishment. The email is upbeat and congratulatory for their success of having the employees start to pay towards their own retirement and the establishment of a two-tier system, where new employees will have to be older before they may receive full retirement.

Active citizens,

This week the Ventura City Council approved new labor contracts with employee bargaining units that will move the City toward a more sustainable pension program. The agreements are expected to save a net of $250,000 during the remainder of this fiscal year, $1.0 million in fiscal year 2011/12 and $1.3 million in fiscal year 2012/13, for an estimated savings of $2.6 million over the three fiscal years.

The new employee contracts require employees to pay 4.5% of CalPERS pension costs, resulting in a higher percentage saving for Ventura taxpayers than any other city or county labor agreement in Ventura or Santa Barbara County since the beginning of the economic crisis.

The agreements will also implement a second tier CalPERS retirement formula, based on a later retirement age for newly hired employees. Ventura is the first to do so in the two County regions for either safety or miscellaneous employees. The agreements approved by the City Council cover both.

Concessions were made on both sides to reach agreements that safeguard the delivery of quality services to our community. For the first time in several years, employees will receive additional employer contribution to optional benefits to cover a portion of the rapid rise in health care costs. A key part of the package was an increase of three days in paid leave time for employees who have been forced to take unpaid leave time during the City’s winter shutdown. Executives and managers are not eligible for the additional leave time.

Pension reform has been the subject of public debate across the State and beyond. Last year, the City Council set the goal of raising the retirement age for new employees and returning to employees paying their share of pension costs. Both goals were achieved in the agreements ratified by the Council this week.

Respectfully,

—Rick Cole, City Manager

Our City Manger and Mayor Fulton hail their accomplishment as a milestone and enormous accomplishment.  Or was it? Councilwoman Christy Weir did not think so.  She rejected the proposal and stated “Fiscally, the city needs more than this right now.”   Council Member Neil Andrews said the agreements “simply don’t go far enough.”

“Fiscally, the city needs more than this right now.”—Christy Weir, Councilmember

CalPERS extracts piles of money

New police salaries will cost Ventura taxpayers piles of money.

Here are some extracts from the reports of CALPERS, the folks who manage our pension money (or losses) dated October 10, 2010, based on data as of June 30, 2009. The Council members had these reports when they voted on these pension contracts.

First, the “employer contribution rate”, which is the percentage of total payroll that must be paid yearly to fund the pension plans. The rate for police and fire for example must be paid for policemen and firemen yearly in addition to their pay and medical costs:

 

FISCAL YEAR          EMPLOYER CONTRIBUTION RATE (Police & Fire only)

2011/2012                   35.190%

2012/2013                   36.4%

2013/2014                   40.6%

“The estimated rate for 2012/2014 uses the valuation assumption of 7.75% as the investment return. Member contributions are in addition to the above rates”.

CALPERS, report of 10-10-10

We next turned to page 5 of the CALPERS report which provides the following data about the police and fire retirement:

Funded Status June 30, 2008 June 30, 2009
Present Value of Projected Benefits $ 270,877,057 $303,536,023
Entry Age Normal Accrued Liability $ 223,938,241 $248,929,746
Actuarial Value of Assets $177,314,177 $184,660,390
Unfunded Liability $  46,624,064 $  64,269,356

 

An identical report was provided for all other employees with the following results:

Funded Status June 30, 2008 June 30, 2009
Present Value of Projected Benefits $ 205,128,033 $217,940,958
Entry Age Normal Accrued Liability $ 167,837,616 $184,806,501
Actuarial Value of Assets $157,529,148 $165,040,339
Unfunded Liability $  10,308,468 $  19,766,162

A 47.6% increase in unfunded liabilities in one year.

 What is to be gleaned from these statistics is that as of June 30, 2008, we as a City owed $ 56,932,532, and that as of June 30, 2009, we owed $84,035,518.  This represents an increase of $27,102,986 or 47.6%.   The data however gets worse when you look at the projected employer contribution rate between 2011 and 2013.  Apply those percentages against the current police and fire payroll of $48,000,000 and the losses are staggering.  In 2014 for example we will have to pay CALPERS another $19,488,000 on top of a payroll cost of $48,000,000, for a total of $67,488,000.

Discrepancy Between What CalPERS Reports And What The City Manager Reports On Pensions

Compare those numbers to the City Manager’s email about how much we will save in the same period.  The opportunity to achieve true reform and to attain a sustainable pension plan was now. The City Council was negotiating from a position of “impasse”. This means that if no agreement were reached, the Council would have been able to insist upon more reasonable terms to correct the lavish and excessive benefits conferred upon the public employees in the last ten years and achieve sustainability. The advantage was in the City Council’s favor of getting a “three year average salary” as the basis for calculating the amount of retirement, or lowering the percentage of retirement and/or increasing the age of retirement, or moving from a defined benefit to a defined contribution plan. Instead, the management team and the City Council settled for far less than what was fair to the taxpayers of this City. The SEIU contract was a good step forward.

The management team and the City Council settled for far less than what was fair to the taxpayers of this City.

A spreadsheet is attached to allow you to evaluate the decision.  These are real numbers.  Please note that the pension entitlements and amounts are fixed, but that the General Fund Revenue is not.  The income projection is based solely upon educated “guesses” by City officials.  The other assumption is that CALPERS is correct in projecting that the investment of City of Ventura pension dollars will yield 7.75%.  If our investment does not yield that return on our investment the losses get far worse.  If you want to determine how certain entries were calculated, such as percentage calculations, place your cursor over the number and left click once.  The formula for the calculation will appear at the top of the form.  For those who want the bottom line here you go:

  1. In 2008 income was $94,100,000 and the City sent CALPERS a check for $11,948,759.  This was 12% of our total income on top of the payroll cost of $48,087,281. Total spent on people and pension benefits totaled $60,036,040 or 63% of our actual income.
  2. In 2011 income is budgeted at $80,400,000 and the City will send CALPERS a check for $13,142,936. This is 16% of our total income on top of a payroll of $47,056,848. Total that will be spent on payroll and pension benefits will total $70,199,784, or 87% of our budgeted income.
  3. In 2013 income is budgeted at $82,000,000 and the City will send CALPERS a check for $13,929,524. This is 16.9% of our total income (*) on top of a payroll of $47,056,848. Total that will be spent on payroll and pension benefits will total $70,199,784, or 85.6%% of our budgeted income.

*The budgeted income (projected) for the City in 2012 is $80,800,000 and in 2013 $82,000,000.  If their guess at income is wrong then the percentage of payroll and benefits gets larger.

EDITORS COMMENT:

Bad negotiating increases CalPERS contributions

Bad salary negotiating increases Ventura’s CalPERS contributions

Had all of the agreements mirrored the SEIU contract this might have been a positive step toward solvency.  Instead Councilmen Fulton, Brennan, Morehouse, Monahan and Tracy decided to move the deck chairs on our ship of state in a token effort to avoid a looming financial disaster.  Such votes cause one to reflect and ask how this simple majority can continue to float above economic reality.   Are these five elected officials reading the financial reports? Do they truly believe and hope our local economy will rise out of the ashes like a phoenix in a nation with $15 trillion in Federal debt and a State that is broke?

Do not mistake, the SEIU contract was a positive step, however the police unions and this council majority used lavish benefits and entitlements as their starting point in negotiations rather than economic reality.    

Editors:

B. Alviani           K. Corse          T. Cook

J. Tingstrom     R. McCord      S. Doll

 

CALPERS 2008 2009 2010 2011 2012 2013 3 year net gain from employee contribution to CalPers increase
*Total Employee Payroll       48,087,281      51,240,487      48,940,168    47,056,848      46,685,947     47,287,512
* Percentage of Contribution by Employer 17.08% 17.88% 18.65% 21.31% 22.61% 25.78%
* Dollars of Contribution by Employer         8,211,264        9,162,430        9,128,522    10,026,168      10,555,745     12,190,178
* Percentage of Contribution for Employee Portion paid by City 7.77% 7.74% 7.89% 6.62% 4.57% 3.68%
* Dollars of Contribution for Employee Portion paid by City         3,737,495        3,967,333        3,863,616      3,116,768        2,131,282       1,739,346
* Percentage of Contribution by Employee 1.04% 3.16% 3.97%
*Dollars of Contribution by Employee         488,063        1,477,236       1,877,308
*Total General Fund Revenue       94,100,000      94,100,000      85,100,000    80,400,000      80,800,000     82,000,000
*Source is City of Ventura Finance Staff
Percentage of CalPers to Total General Fund 12.70% 13.95% 15.27% 16.95% 17.53% 19.28%
Total of CalPers Payment       11,948,759      13,129,763      12,992,138    13,630,999      14,164,263     15,806,832
Percentage of City’s payment to CalPers                   100                  100                  100 96.42% 89.57% 88.12%
Dollar Increase, year over year, to CalPers        1,181,003          (137,625)         638,861           533,264       1,642,569
$ of Contribution by Employee         488,063        1,477,236       1,877,308
Employee Portion over City’s increase        (150,798)           943,972          234,739            1,027,913

[1] 3% at age 55 means 3% of a policeman’s or firefighter’s highest annual salary times the number years of employment.  For example, a 20year old works 35 years and in his last year his salary is raised to $80,000.  He will be paid $84,000 a year for the rest of his life.

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Fleecing taxpayers costs Ventura money

A Little Here. A Little There. Pretty Soon It Adds Up To Real Money.

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For and Against the Parcel Tax

Bellwether: “A male sheep which leads the flock, with a bell on its neck. A leader of a thoughtless crowd” —Webster’s New Collegiate Dictionary

THE  SOUND OF THE BELL

[SHEARING TIME?]

Three years ago nobody in city government would pay attention to the voices of caution who warned the City Council about the money excessive public employee salaries cost and the unfunded pensions of public employees. Now, thanks to the City of Bell perhaps the citizens of this community will pay attention to their role in government, and the need for serious and drastic reform.

Everything went wrong in Bell.  It was greed in all of its glory, and it illustrated what is wrong with the arcane public pension system in this State, and in every city in this state, including Ventura.    Bell City Manager, Robert Rizzo, resigned after it was revealed he was being paid $800,000 to oversee a town with a population of 40,000.  Now the LA Times reports that the records actually show that he was paid $1,500,000 a year.  Included in that was 28 weeks of vacation and sick time at a cost of $386,000.  Well he is gone but he is not out because he will collect $600,000 yearly from his pension benefits with CALPERS.

fleecing taxpayers costs Ventura money

Ventura taxpayers get fleeced in Bell disaster. We will pay money to Randy Adams for life.

This example however is even closer to home.  Two people in the City of Bell used to work for the City of Ventura.  Angela Spaccia, Assistant City Manger for Bell was paid  $376,000 a year before she quit, and moved over to work for the City of Maywood.   She used to work for the City of Ventura. Then there is Officer Randy Adams who worked in Ventura for 23 years as a police officer.  He then gravitated through various jobs until he became the Chief of Police for the City of Bell.  He too resigned after it was revealed that he was earning $457,000 a year.  He can retire, as will Ms. Spaccia eventually, but whose money pays the pension?

Not the City of Bell.  They escape nearly all the costs of Chief Adams $411,300-a-year pension. Under CALPERS rules, the city is responsible for just 3% of that because he only worked there for one year. Taxpayers in Glendale, Simi Valley and Ventura would have to pick up the tab.

This happened because Bell hired Adams at more than double the money he was making as Chief in the City Glendale. That salary spike doubled his eligible pension amount under CALPERS, the state’s public employee retirement plan.  Add the state’s permissive pension laws and a host of variables that can dramatically affect retirement pay and we find a system that leaves you in a bleary daze

Other cities will be on the hook for Adams’ pensions costs even though their salaries were relatively modest. until he landed in Bell. When he resigned Chief Adams was making $457,000.  He will now get  approximately 90% of that sum.  Glendale will have to pay around 16% of Simi Valley 18%, and Ventura 63%. Ventura alone will have to pay this guy $259,119 per year for life. Remember, none of this has ever been funded.

CITY OF VENTURA’S RESPONSE

Ventura’s mayor, Bill Fulton, has written several articles on the subject.  You can go view the articles here.  He, like everybody else, condemns the excesses by employees and officials in the City of Bell.  His articles are well written and deserve a read, but how transparent is our city government?  Mayor Fulton answered this question in one article:

“…democracy only works, even in small cities, if people pay attention, and oftentimes people aren’t paying attention. But one of the most disturbing aspects of the Bell situation … is how hard it is to figure out what’s happening even if you are paying attention. In spite of the state’s vaunted Brown Act open-meetings law, California governments are still not particularly transparent”. 

HOW MUCH MONEY DOES THE COUNCIL MAKE?

The City Charter limits council members to $600 per month and the mayor to $700 per month, plus members are paid for participating on certain boards and commissions.  Here is the yearly total:

Councilmember Salary Boards Travel
Fulton, Mayor $ 8,800 $2,000 $1,200
Monahan $7,200 $3,800 $1,200
Tracy $7,200 $0 $1,200
Morehouse $7,200 $1,440 $1,200
Weir  $7,200 $0  $1,200
Brennan $7,200 $0 $1,200
Andrews $7,200 $0 $1,200

 

CITY EMPLOYEE COMPENSATION

Employee Salary Medical Pension Contribution Car
Ken Corney, Police Chief $195,153
Quinn Fenwick, Asst. Police Chief $160,012
Kevin Rennie, Fire Chief $187,000
Don McPherson, Asst. Fire Chief $170,014
Ron Calkins, Public Works Director $175,547
Jay Panzica, Chief Financial Officer $171,265
Rick Cole, City Manager $174,158
Mary Walsh, Asst. City Manager $171,265
Ariel Colonne, City Attorney $194,909
Jeff Lambert, Community Dev. Dir. $171,265
Elena Brokaw, Director, Parks & Rec. $167,088
Jenny Romey, Human Resources Dir. $159,037
Total $2,096,713

*In response to a VREG request for the full cost of each of these employees the City Manager, on August 10, 2010, provided the following response:

“Within the next few days, we (will) have calculations on the cost  of employees over and above regular salary (we’ve just posted those earning over $100,000 including gross pay and overtime) to be followed by the Box 5 W2 calculations (which also includes city paid deferred comp and the value of life insurance) to be followed by a total all-in of that plus city paid benefits and CalPERS contributions”—Rick Cole, City Manager

Editor’s note:

For detailed information on past or present Ventura city employees’ salaries, visit transparentCalifornia.com.

As for Ventura’s exposure to the Randy Adams pension claims, purportedly the City has sent a letter of protest and/or legal challenge to CalPERS to try and stop payment.  Good luck with that one!  Even Chief Adams will lawyer-up and argue we are a nation of laws and not men.

Editors’ Comments:

How many more Randy Adams types do we have out there? How much more  do we owe, over the amount funded through CalPERS, to those who are retired or about to retire in the future?  It is time for government to become proactive instead of reactive in the management of our tax money and find out before we end up in the shearing shed. Stop listening to the bellwether !

Editors:

B. Alviani           S. Doll

J. Tingstrom     K. Corse

B. McCord          T. Cook

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City Council Lacks Financial Literacy

City Council Lacks Expertise On Pension And Budget Matters

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Insanity: doing the same thing over and over again and expecting different results.
—Albert Einstein,

THE FIREFIGHERS PENSION INCREASE – A CONTRACT?

[ NOT!]

In previous editions we informed you that in 2008 the City Council, on a vote of 4 to 3, increased the Firefighters salary and retirement benefits.  They voted to increase those benefits from 2% to 3% even though they knew (were told) they did not have the money to fund it.  The vote resulted in an approval of a Memorandum of Understanding (MOU) with the union.

bad city council contract

City Council approves an 11% increase in firefighters’ pension.

The issue had to be revisited because of the failure of the City Council to obtain an actuarial report from CALPERS on what it would cost to increase these benefits.   To “try” to fix the problem the Council, at their regular meeting on April 26, 2010, was presented with a report from the CALPERS actuary, Bill Karch.  He informed the council that the “present value” of the cost of the increased benefits (in addition to what we are already obligated to pay) would be $5,047,760,  that the city would have to pay $548,271 this year, and a sum yearly thereafter to fund the $5.4 million increase.  He didn’t say how much we would have to pay beyond 2010.

An actuary is a specialized, mathematical expert trained to compute values for present and future events. Actuarial “present value” calculations convert future occurrences, such as retirement payments, to a present dollar value.   The “present value” of benefits represents the total dollars needed today at an estimated investment rate of return to fund future benefits for members of the pension plan.  The lower the rate of return (say 4.5%) the more you have to pay up front now to meet the future payment demands.  The higher the rate of return (say 7.75%) the less you have to pay now.

The CALPERS actuary used a rate of return of 7.75%.  Interesting choice given that CALPERS lost $55.2 billion (25% of its value) in 2008-09, and just billed the State of California f $600,000,000 this year to pay for unfunded pension liabilities, but we digress.  None of the Council members asked about the investment rate of return that was used to make his calculations and/or whether the 7.75% rate of return of interest was a reliable dollar estimate in today’s market, and/or whether we should use a lower rate of return, to predict how much our present pension obligations would have to be increased in order to fund and pay future pension obligations.

Subsequent to the Council meeting Mr. Karch was asked in an email from VREG if he could calculate what the present value of the increased obligation if 4.50% was used, and how much more Ventura would have to pay this year. That number was selected because actuaries today conservatively use 3% to 5% as the investment rate of return in making such calculations. Mr. Karch declined.  His response was that we could get that the data if VREG made a Freedom of Information Act request through formal channels; and, by-the-by send a large check to pay for the voluminous computerized report.  Well Bubba I guess we know who that fella works for!

So in a state of blissful ignorance Council members Fulton, Brennan, Monahan and Tracy voted yes.  Council members Andrews, Morehouse and Weir voted no.  The deciding vote was that of Deputy Mayor Tracy, who in casting his yes vote stated:

“…what is clear tonight is that we are not deciding on whether or not we give our firefighters an enhanced retirement program.  That decision was made two years ago.  We have received (a) very competent legal opinion that frankly we have no choice but to honor that contract…”

Bad city council contract

City Council negotiates questionable contract with Ventura firefighters.

What the Deputy Mayor was referring to was a letter from a law firm named Liebert Cassidy Whitmore of San Francisco, attached to the Administrative report for Agenda item #8, which concluded – “Once approved by the City Council, the memoranda of understanding (MOU) between the City and the Association (firefighters) became a binding and legally enforceable agreement…”.

Just prior to the vote the City Manger, Rick Cole, advised the Council that the reason for the public hearing on the actuarial valuation was to let the public know about the cost of the increase, referring everyone to Government Code section 7507.  Connect this reference with the Deputy Mayor Tracy’s statement and we arrive at the crux of the problem — was there a valid contract?

Read Government Code § 7507 and you decide.  That code provides:

“The legislature and local legislative bodies shall secure the services of an enrolled actuary to provide a statement of the actuarial impact upon future annual costs before authorizing increases in public retirement plan benefits…”

The future annual costs as determined by the actuary shall be made public at a public meeting at least two weeks prior to the adoption of any increases in public retirement plan benefits”.

The letter written by the San Francisco attorneys, LIEBERT, CASSIDY WHITMORE does not address this error. For reasons that are not apparent, these high priced legal types did not even discuss this issue.

A mutual mistake of law and/or fact is always a good defense to breach of contract action.  If both parties to a contract operate under a mutual mistake of fact that there has been compliance with the law, and in fact there has been no compliance with the law, there is no contract

Questions for our readers:

  • Why a letter, bearing the legend “CONFIDENTIAL—ATTORNEY CLIENT PRIVILEGED”, which does not discuss a critical legal defense, would be attached to a public document?
  • Why not a single firefighter asked to speak in support of the measure when the room was packed with the fire folk, who were straining at the bit to get more benefits?

Curious that , but we leave “that” to your speculation.

Editors Comments:  

An actuary report was NOT presented prior to the decision to increase benefits in August and October of 2009, thus was not enacted as required by the California Government Code. The attempt to finesse this critical error, by pretending it could be presented after the fact, on April 26, 2010,  ignores the underlying issue – THE RIGHT OF THE CITIZENS OF THIS CITY TO KNOW IN ADVANCE WHAT AN INCREASED PENSION BENEFIT WILL COST BEFORE THE CITY COUNCIL MAKES A DECISION.   The firefighters’ will of course dismiss this as a mere formality.   This contract should be rescinded and an accurate and reliable actuarial report provided to the citizens of this community.

 

FROM READERS OF THE MARCH EDITION OF RES PUBLICA

[THE PIPER WOULD PLAY A FAR DIFFERENT TUNE IF THREATENED WITH THE LOSS OF HIS PIPE]

This regarding the Pension Reform Committee appointed by the Ventura City Council:

“Very interesting news letter this time as always.  Only one public member appointed to the “ad hoc” committee. All the rest have a vested interested in the system. What would happen if the no guts council just plain and simple told the unions that from now on the fire and police will have to pay at least 1/2 of their contribution. Would the fire and police walk off?  If so I am sure they can replace the lot.  The problem as I see it is that all the cities have to ban together so that there will be a closed door to bouncing around of personnel.”

—K. Weber

THE COUNCIL ACCEPTS VENTURA’S NEW BUDGET

[A SORRY EXCUSE, AT BEST]

            Another letter concerning the current budget format mandated by the City Manger for use in 2009-2001 (called a Budget Book).  We mentioned in our last issue that the current “Budget Book” looked useless and appealed to you for help.

“Regarding the City’s budgeting process and the budget document itself, I spent some time looking at it after reading your latest publication and you hit the nail right on the head.  It is most assuredly not a decipherable budget document.  It lacks clarity and the detail required for the average lay person to begin to understand it, much less a person with a financial background.  I’m not even sure that it meets the minimum legal requirements, as promulgated by the State Controller’s Office.

I am a C.P.A., have a Masters degree in Public Administration, and have worked in government finance and budgeting for the past 29 years and, without a doubt, this is the most sorry excuse for a budget document that I have seen in my life.

In Santa Barbara County, we have developed a true program/performance-based budget that actually links dollar amounts with stated goals and performance measures.  Not only can you clearly and easily see the amount of money, staffing, and other resources allocated to each program area within each department of the County, but you can also see the performance and outcome measures associated with each individual program area.  In other words, as a taxpayer, you can actually see what you’re getting for your dollars.

The firefighter pension increase is just another example of the arrogance and disconnect with reality coming out of City Hall these days.  I certainly hope we can make some changes in the next election.  We definitely cannot continue down this path or bankruptcy becomes an inevitability”

—M. Gibson, CPA and 2009 candidate for Ventura City Council

 

EDITORS’ CORRECTION

Last month we reported that the Firefighters pension increase was 50% (2% to 3%). The City Manager corrected us and pointed out that it was ONLY 11%. .  After his response we received the CALPERS actuary report and confirmed that our report was in error. Under the current pension plan it is a 20% increase if the Firefighter retires at age 50, and an 11% increase if the Firefighter retires at 55.  That aside, this correction does not excuse the ridiculous statement by former Councilmember Ed Summers that it was only a 1% increase. It is still hard to believe he wants to be the County Treasurer.

 

EDITORIAL

The City Council is called upon to make many difficult and complex decisions concerning the financial welfare of this community, but one of the greatest decisions they will have to make concern the pension contracts with the public employee unions now and in the future.   Except for members of the public employee unions there is not a single informed individual in this society that would disagree with the conclusion that our pension system is bankrupt and unsustainable. The collective decisions of our City Council are costing the citizen’s of Ventura for decades in the future. Not to ask the hard questions, when asked to approve a new liability of $5.4 million dollars, such as the interest rate used for the assumptions of a pension increase, or to discuss if the right questions were asked and answered in a legal opinion statement, borders on malfeasance. It is not enough to say, “the report was too lengthy” or “we didn’t have enough time”. If decisions need to be delayed and other opinions sought, the City Council needs to control that process and remember the admonition of Jean-Jacques Rousseau to ”keep your experts on tap and not on top”.

 

Editors:

B. Alviani       S. Doll           J. Tingstrom

K. Corse         B. McCord    T. Cook

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Ventura Budget Lacks Transparency

As Ventura’s Budget Losses Grow, Budget Transparency Is Questioned

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“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.” —CICERO – 55 BC

VENTURA’S CUPBOARD –IS BARE

[THE $15 MILLION PROJECTED BUDGET LOSS]

On March 15, 2010 Mayor Fulton invited community leaders to attend a BUDGET WORKSHOP to help decide where to make cuts in the 2010-11 budget to compensate for an $11,000,000 PROJECTED LOSS.   This statement was predicated on an estimate by the City Council that the City would face fixed expenses of $96 million with income of $85 million.  Well, it turns out that the income figures were wrong.  Revenues are below normal and the City will receive less than $81,000,000 for the fiscal year 2010-11 according to estimates provided by the Finance and Technology Department and the Deputy Mayor.

bad city council contract

City Council approves an 11% increase in firefighters’ pension.

Please recall good reader the words of Councilman Summers in the fall of 2008, when he, together with councilman Monahan, Brennan and Fulton voted to increase the fire department pensions from 2% to 3% at age 55, and stated “We are only increasing it by 1%”, and “we will only be paying 50% of our budget to the police and fire departments”.    An increase from 2% to 3% is really a 50% increase in retirement pay.

Here is a comparison of the 2008-09 adopted budget with the 2009-10 adopted budget as published.  Assuming we receive $81 million in revenue, which is improbable, 58.7% of the general fund revenue is spent on public safety, without factoring in the cost of the other employees.

2008-09 2009-10
Revenue $94,084,228 $85,489,560
Police Dept. Cost $31,478,979 $ 29,528,499
Fire Dept. Cost $19,259,971 $18,036,231

Editors note: 

Former Councilmember Summers lost his re-election bid to the City Council, and  now wants to be your County Treasurer?

MORE ON THE FIREFIGHERS PENSION INCREASE

[OOPS]

As mentioned above the City Council, on a vote of 4 to 3,  increased the fire fighters pension benefits from 2% to 3% even though they knew they did not have the money to fund it.  The vote resulted in an approval of a Memorandum of Understanding (MOU) with the union.  They received their increase, but nobody knew what it would cost.

city council bad conract

Firefighters receive a whopping increase in pension benefits from the City Council.

Then budget problems arose, negotiations began and the Firefighters agreed to postpone their increase for 15 months.  Of course, two of the Council members running for reelection (Monahan and Summers) acted as though pension increase had not been created, or did not exist, because it was not yet implemented.  Not implementing something is not the same as deferring it.   That deferral is up on July 1, 2010, at which time the increase will go into effect.

Now CALPERS steps into the picture.  They take the position that this MOU is not binding upon them, because there was no actuarial report on the cost of increasing the pension benefits when it was adopted by the City Council.  Somehow four Councilmen (Monahan, Fulton, Summers and Brennan) felt they could increase the benefits, which they knew were not funded, and push the cost of those benefits onto CALPERS without contributing any more money to the pension fund. Well, Duhhh!

This issue will be on the City Council Agenda on April 26, 2010, at which time it is expected that an actuarial cost report will be presented in order to meet the CALPERS requirements.  It is predictable that the City will have to increase their contributions significantly to meet the new cost of this increase, or figure how  to back out of the MOU with the firefighters.

EDITORS COMMENTS: 

Another fine mess you’ve gotten us into Ollie!  Are there ever any consequences when these costly errors happen?  Does anyone ever lose their job, or do the taxpayers just keep paying  the legal expenses to fix these problems ?

THE VENTURA BUDGET PROCESS

[CLEAR AS MUD]

            If you are a person interested in analyzing the budget for the City of Ventura you are in for a real experience in frustration.  Up until the fiscal year 2008-09 the budget prepared by Finance & Technology was in a classic format – a real income and expense statement – with supporting schedules and line item detail so that you could  make a reasonable determination of where we stood financially –  where our income was derived and where we spent the money.

Not anymore. The format for the fiscal years 2009-10 and 2010-11 is now different.   Starting with the Budgeting for Outcomes program, instigated by the City Manger, the Finance & Technology (F&T) department published a Budget Book which you can view on-line.  The format for that document, euphemistically called a “budget”, was a result of a directive to F&T to prepare an “All Funds Summary”.  Difficult now to determine what is in fact happening financially.  It is perplexing and confusing when the city mixes the general fund income and expenses with the enterprise funds and expenses.                 If you want to know the general fund income and expenses in detail for the current fiscal year, such as the specific costs of  public safety employees you cannot obtain that information. Perhaps our readers can help us interpret this “budget book”.

EDITORS’ COMMENTS:    

What happened to transparency?

Editors:

B. Alviani       S. Doll           J. Tingstrom

K. Corse         B. McCord    T. Cook

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Ventura asks for more money in Measure A

Shameless Politicians Propose Measure A For More Money

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“No creature smarts so little as a fool. Destroy his fib, or sophistry – in vain! The creature’s at his dirty work again.”—Alexander Pope

911 TAX – POSTMORTEM

[THE GREAT BOONDOGLE. WHERE DID THE MONEY GO?]

The City Council keeps saying they do not understand why the citizens of this community have such distrust for city government.  They are not likely to understand if they are not listening.

Refunded only part of the money

Ventura refunded only part of the money collected in the 911 Tax.

No need to again examine the history and the woof of the pathetic effort of the City Council to tax 911 calls, but it does serve to examine the aftermath.

This idea, spawned by our City Manger, Rick Cole, followed on the heals of the defeat of his Measure P6.  Of course he has no public exposure and can duck any critics’ comments because he was not elected to office, and did not vote for the tax.   Councilmen Monahan, Summers and Brennan, currently up for re-election, however were elected to office, and they did vote for the 911 tax.

Citizens protested, but did so in vain. Lawsuits followed, and only then did the Council take steps to set this all aside to avoid being tagged with a huge bill for attorneys’ fees if they lost.  Make no mistake, they were going to lose. It would then be logical, and reasonable, to assume that the money collected under this concocted scheme would be refunded to the people who were FORCED to pay into the program, right?  Au contraire!

Money from 911 tax never returned

Citizens left hanging for refund of over $1.2 million from 911 tax.

Our fine City government collected $1,220,005 during FY 08-09, representing 54.2% of the hoped for annual revenue of $2,250,000.   Once the law was cancelled you were then offered a refund, if you could prove you paid, only if you had “opted out”, and only then if you attached the necessary documents, and jumped through the required administrative hoops to get your money. Why only if you “opted out”?  Because the City Manager surmised that if you did not “opt out”, you must have chosen to “opt in”, meaning that you wanted the city to have this money, and it was your intention for the city to keep the funds all along.

Only $17,096 was refunded. The City kept over a million dollars, used $800,000 to balance the 2008-09 budget and  kept $402,909 in the general fund for use this year.  Having bilked the citizens of this community,  and having failed to refund the money to those who paid,  it would seem that at least the Council would have the decency to do the right thing and use the money for its declared purpose – fund the 911 system!  That did not happen. Instead the money was stuffed down the proverbial rabbit hole. [okay! used for other expenses like?]

Editors Comment:

Are we hoping in vain that this Council may exhibit some shame, and do the right thing?

THE NEW SALES TAX- “MEASURE A”

[COUNCIL ASKS VOTERS FOR MORE MONEY TO FINANCE FAILED POLICIES]

Masure A takes more money

Ventura politicians are shamelessly asking for more money with Measure A.

It has been clear, since Measure P-6 was defeated at the polls,  that this Council would attempt a new sales tax measure.  This new measure to raise the city sales tax by ½% was put on the ballot for November, 2009, on a vote of 6 to 1.  Councilman Neal Andrews opposed that measure.

In the process of approving Measure A the Council referred constantly to the fact that a “Blue Ribbon Committee”, appointed to consider this proposal, had recommended that a sales tax increase be put on the ballot for public approval, and that the tax be automatically cancelled after  4 years.    This was something to behold — that this Council would have our good citizens believe that the Council really needed a Blue Ribbon Committee’s approval in order to place a new tax measure on the November ballot.  Members of the Council appointed a majority of the blue committee because they were “friends of the Council” (FOC), so the result was always a foregone conclusion.  Former Mayors Jim Friedman and Sandy Smith were on that committee, and each was heard to smirk that they thought “the Council was just trying to seek political cover”.

Now the spinning and fact distortions begin anew.  As you are reading you will recall what happened when P6 was proposed.  The Council wanted a  1/4% special tax for police and fire.  That measure failed, as well as the lawsuit filed by “the City” ( Actually, it was filed by a political action committee headed by Assistant Police Chief Corney, to which each Council member contributed money) against citizens who opposed the tax.  They lost that too after paying their Santa Monica lawyers $30,000.

The Council and the City Manager vowed to come back at the citizenry with a new tax.  Thus Measure A was put on the ballot seeking double the amount of money sought by P6, but this time as a general tax, which only requires a 50%+1 voter approval.  Their hope is that since they received 61.95% of the vote on P6, ergo the voters will approve a ½% general tax increase.

So the rhetoric and distortion begins by the cabal controlling “the City”. To avoid the label of being a “special tax”, requiring a 2/3 vote, the Council decided to promise to spend any new sales taxes in certain ways, but without telling the voters at the same time that they were not obligated to do so [ one could almost see a sly grin and wink from the 6 Council members  as this statement was made]. Their promise of how they will spend this $10,000,000 in new sales tax money may prove to be their undoing.

If approved by the voters it will be interesting to see how Measure A survives a legal challenge, and it will be challenged under Proposition 218.  That state proposition requires a 2/3 voter approval for any tax devoted to

Police and Fire want more money

Police and Fire departments would receive 40% of the money collected from Measure A.

a special purpose as opposed to general tax, which is collected and placed in the general fund. The Council hopes to avoid this problem by saying the funds are “not required” to be used for any specific purpose, yet they announce that the funds will be used for a specific purpose as in inducement to get voters to approve the measure.

Interestingly one of the specific promises made by this Council, as an inducement to voters to approve the measure is that they will spend 40% of the new tax on police and fire — the exact sum they sought to raise in the failed P-6 measure.

Today it’s hard to know what the City is really doing, except that most of the individual Council members are campaigning hard to convince you that you should ignore the waste and spendthrift policies of the past and impose the new tax.  They do not want to address the underlying economic malady – overpaid public employee unions and the millions wasted in ill advised decisions like the plan to narrow Victoria, or the ill-fated 911 tax or increasing the fire department retirement programs by 50%.  Councilman Fulton, who is also campaigning hard for the incumbents advised one contender that he could not approve of their candidacy because they (the Council ) would lose “consensus”  – he really means control.  He also stated in a public meeting that we should forget the past and move on. So how, again, was the 911 tax money spent?

Editors’ comments: 

Only a fool does not learn from the mistakes of the past.

THE STATE STRIKES

It is now official.  Remember that money that you sent in for property taxes, and which is supposed to be returned, in part, to our community? Well our fine state government has decided that to correct their mismanagement and budget deficiencies by taking the money that is supposed to be returned to the cities. Thus our City will not receive $2,760,358 that would be normally  returned. We have been  forced to loan to a state government that has achieved junk bond status in the market place.

The money is not gone, just delayed in delivery.  Of course the State promises to pay this back in 3 years.  How about interest?  The answer we get is that this will be set by someone and sometime in the future — you know the line — “trust us”.

It gets worse.  In addition to the loss to the general fund, the Redevelopment agency has lost $1.2 million, and that will never be repaid.  It is gone.  Makes you wonder if Ventura had spent some more Redevelopment agency funds in the last 2-3 years, whether there would have been any funds to raid?

CITY COUNCIL USES A SMOKESCREEN

[NEVER LET A GOOD CRISIS GO TO WASTE]

This City Council again has to scramble to adjust their budget to allow for this loss.  The hyperbole and spin from City Hall, and the proponents of this tax is that we really need the new sales tax because they have adjusted the budget as much as they can, employees have taken a 5% pay reduction and our State Government has taken our money.  What is a poor City Council to do?  Long before the state did its most recent raid on City funds the die had been cast.  The ½% sales tax was already in the plan.  The City Council members are campaigning hard for the new tax as if the problem is all due to the State and they had some great insight – in short playing the fear game as a reason for the voters to approve the new tax.

Opponents point out that such a tax is regressive, that business has never prospered in such in an environment, that even though there is a 4-year sunset provision the Council proposes to use the new tax money to make long term commitments to police and fire (40% of the new tax money), and that when the 4-year period is up the Council will go back to the voters arguing that if we do not extend the tax there will be cuts in services — you know the old saw — crime, untimely emergency responses to medical emergencies, etc. The opponents also point to the spendthrift policies of this council over the last 6 years, for example $1,000,000 alone was spent to narrow Victoria Avenue.  That should be money in the bank, but instead is sitting in the pockets of City employees and Los Angeles consultants.  There are $13,000,000 of such expenditures, which should be in the bank, but is not  because of unrealistic planning and spending by a liberal out of touch Council.

Mayor Weir is campaigning for the new tax and has stated publicly “we will not spend any money we don’t have”.

Editors’ Comments: 

We hope each citizen will reflect on whether the past should matter in deciding how to vote.

Editors:

B. Alviani        S. Doll          J.Tingstrom

K. Corse          B.McCord    T. Cook

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Pension reform needed

Grand Jury Exposes City Pension Out of Control

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“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not” —Thomas Jefferson

THE FLEECING OF VENTURA

The Ventura County Star reports the Grand Jury finds Ventura’s Pension Out Of Control

On July 26th the Ventura County Star published an article about the deplorable conditions of the public pension plans in Ventura.   The Ventura Grand Jury labeled these city pension plans as headed for disaster — an out of control cost [They actually said “uncontrollable cost”].  To see how out of control the one in Ventura is see the October, 2008 issue of Res Publica, which  provided an in depth analysis of just how much unfunded debt exists because of the lavish pension plans given to public employees by the City Council.  We republish some of that article here as a reminder to our citizens when they go to the polls in November.

(c) THE FIREFIGHTER PENSION

In a vote of 4 to 3 the council  approved the Memorandum of Agreement and the new pension contract with the firefighters of this city giving them a pension equal to 3% of their highest salary times the number of years in service plus all medical, dental, the same plan received by policemen.  The yeas were Councilmen Fulton, Brennan, Summers and Monahan.  The neighs were Mayor Weir, Councilmen Andrews and Morehouse who stated just before his “NO” vote — “I HAVE GRAVE CONCERNS TO COMMIT WHEN WE DON’T KNOW WHERE THE FUNDS WILL COME FROM”.

I have grave concerns to commit when we don’t know where the funds will come from.

In our August 2008 letter and postscript letter titled “IN THE SHADOW OF VALLEJO”. We posed a hypothetical retirement scenario — a fireman goes to work for the department at age 20, works 35 years and retires at the age of 55 earning a salary of $100,000 per year.  The adopted increase now provides that he/she will receive 3% of their salary in their last year of employment multiplied by the number of years of service.  So he/she will retire earning $105,000. [$100,000 x 3% = $3,000 x. 35 = $105,000].

ed summers pension blunder

Councilmember Ed Summers voted for pension increase because city employees only live 7 years past retirement.

Since that publication Councilman Summers, who is up for reelection in November, pointed out that we need to make some “minor corrections”.  We quote from his letter:

In the example it indicates that an employee has the ability to retire and receive 105% of their annual salary.  Regardless of the time of service and age at retirement, the program is capped at 90% of the eligible salary.  The example also includes add-back for accrued sick leave and vacation.  The City’s formula does not include any add backs, the formula uses only the base salary.  It is the County’s formula that includes add backs…(in addition)…unfortunately the assumption of a 30-year future obligation per employee is incorrect, the average life expectancy of a public safety employee is 7 years from retirement”. 

          We do not know what source Councilman Summers uses for this remarkable revelation that firefighters retiring at age 55 are projected to live only 7 years. His assertion is nonsense and not supported by any credible source.   Further, when he and the other profligate four argued that “the increase was only 1%, it in fact was an increase from 2% to 3%, which is a 33 1/3% increase in the retirement plan.   So what is the reality? We have less money now than we did in October, 2008.  This City Council has led us into a sea of red ink — $294,673,595 as of April, 2009, yet our Council and the public safety unions ask us to pretend that this not a problem.  Instead they want more money in the form of new taxes.  Here is an example of what we now have to pay just 15 retired folks yearly for the rest of their lives — $1,707,086.

Mike Tracy* $ 186,902
Gary McCaskill $140,602
Neil Gedney $129,856
Brian Gordon $132,548
Carl Handy $122,022
Douglas Aldridge $124,396
Bill Rigg $121,333
Robert Boehm $120,494
Donald Davis $112,735
Jim Walker $ 110,570
Everett Millais $105,245
Shelley Jones $105,013
Roger Nustad $101,836
Gail Bogner $100,515
* Retired Chief of Police. Running for City Council
Pat Miller pension out of control

Police Chief, Pat Miller

Mike Lavery pension out of control

Fire Chief Mike Lavery

More recently we learned that our present Chief of Police, Pat Miller and Fire Chief Mike Lavery would retire. Why did they push so hard for an increase in the retirement benefits in October, 2008 ?  Well  Duhh ! Thank you Councilmen  Fulton, Brennan, Summers and Monahan.

More recently Councilman Fulton announced that the City was going to appoint a committee to examine the public pension plan.  Let us hope against hope that they don’t pack it with FOCs like they did the Blue Ribbon Committee, and that they read the Res Publica analysis of April 2009, which concluded that the pension plan is headed on the same path as the City of Vallejo – Federal Bankruptcy.      

Councilman Neal Andrews has advocated for a change. in this area, and has published a lengthy memo on the subject:

“Immediately abandon the compensation formula that essentially forces us to mimic the weakest and most incompetent policymakers in other communities. Today we promise to compensate our employees at approximately the average level of other communities, though we sometimes count the highest paid three times as heavily as others. This is an artificial and arbitrary benchmark. We should instead adopt a clear policy of compensating at a level adequate to provide a sufficient workforce with the high level of competence we want in them.

Adopt a two-tier retirement system that provides a guaranteed contribution to the retirement plan for all new employees, instead of the current guaranteed benefit program. This would not change a thing for current employees, but over time it would significantly reduce the volatility of our budgets by stabilizing a major element of our financial liability. This is the same type of retirement program offered today by most of the private sector.”

—Neal Andrews

Editors’ Comments:   

Councilmembers FULTON and MONAHAN deflect any criticism and defend the retirement plan by saying the decision to raise pension benefits was deferred. When questioned,  they cannot recall when the motion or official action was made, do not recall who recommended delaying the firefighters retirement plan increase or just what happened.  They act as if this is a non-issue.  For your information councilmen, the pension increase which you approved in October 2008, has NOT been rescinded or modified.

Editors:

B. Alviani      S. Doll            J. Tingstrom

K. Corse        B. McCord     T. Cook

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Ventura government needs constant watching

Update on Ventura’s City Government Policy Issues

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“Government, in its best state, is but a necessary evil, in its worst state an intolerable one”  —THOMAS PAINE

SUMMARY UPDATE

In previous editions we treated issues that are important to our community. We now provide updates on those issues as they have evolved and as information has become available from our city government:

(A) The 911 Fee

The Howard Jarvis Taxpayers Association (HJTA) has undertaken the task of prosecuting this action on behalf of several citizens that have volunteered to be named as plaintiffs. So, what is the status?

Their lawyers are preparing claims for refunds, which must then be rejected by the City before a lawsuit can be filed.   It is clear that a suit is soon to be filed. When it is over attorney’s fees and costs will be requested. California Code of Civil Procedure § 1021.5 provides that a court may award attorneys’ fees to a successful party against one or more opposing parties in any action which has resulted in a significant benefit to the general public. A finding that the 911 fee is in fact a tax invalidates the 911 ordinance enacted by the Ventura City Council because a 2/3 vote of the voters is required. Sadly the citizens of this community will pay again for this misadventure

(B) CITY GOVERNMENT IMPOSES MORE INCREASED FEES

[Economics 101]

Economic stress brings legislators and government employees out of their offices looking for more revenue. The State is broke and the Feds are oiling the money presses. All a result of colossal malfeasance and incompetence at all levels of government. We can also add a good measure of greed for our fine friends on Wall Street. Will our governments stop, take a breath and get back to basic economic reality? Every family and every business know that given such circumstances you have two choices – seek more income or decrease costs. The narrow paradigm for politicians is that they always see new taxes and fees on the citizens as the principal, if not the only solution. Can’t blame them entirely for this because voters insist on more government for less, and voters continue to approve massive bond measures that draw on the treasury we don’t have. The problem with this approach is that the only ones who have money to tax are those that did not spend and live foolishly in the first instance and who in the final analysis are those that create the jobs for society.

In our last three monthlies we reported to you that the City Council is seeking to increase fees to raise another $2.6 million dollars, and that at the early June Council meeting the issue was tabled when Councilmen Fulton and Summers commented that there had not been sufficient time for the community to address this issue.  Another important factor was the inability of anyone to obtain and read the MAXIMUS REPORT(s) (the experts hired by the City), which was designed to be the “legal basis” for the fee increases in the first place. This was perplexing because the Council, adopting an attitude of “don’t confuse me with facts”, increased fees in 2006 and 2007. So good reader you ask yourself how an elected official can vote to increase fees based on a report that they don’t have?

In July, VREG received the MAXIMUS 2004 AND 2007 reports. These reports provide conclusions and some basic financial data that led to those conclusions, but not the “Cost Plan”. That plan is not available.

Officials at the City have been most cooperative and helpful. They too want accurate data so that a logical decision can be made. If increased fees are justified then increase them, but let’s not play games and pretend we are out 2.6 million dollars that City government was never entitled to in the first place. Councilman Fulton wants to hurry into this and make a decision. Now that we finally have all eleven (11) appendices to the MAXIMUS Report he may want to so some reading, deliberate and wait to make sure that when a decision is made it is truly “legally defensible”.

Another 911 fiasco in the making?

(c) THE FIREFIGHTER PENSION

[CITY GOVERNMENT NEGOTIATIONS GONE AWRY]

In a vote of 4 to 3 the council approved the Memorandum of Agreement and the new pension contract with the firefighters of this city giving them a pension equal to 3% of their highest salary times the number of years in service plus all medical, dental. The yeas were Councilmen Fulton, Brennan, Summers and Monahan. The neighs were Mayor Weir, Councilmen Andrews and Morehouse. It should be of grave concern to all when one councilman says, before he cast his “NO” vote – “I HAVE GRAVE CONCERNS TO COMMIT WHEN WE DON’T KNOW WHERE THE FUNDS WILL COME FROM”.

In our August letter we posed a hypothetical retirement scenario – a fireman goes to work for the department at age 20, works 35 years and retires at the age of 55 earning a salary of $100,000 per year. The proposal is that he will receive 3% of his salary in his last year of employment multiplied by the number of years of service. So he will retire earning $105,000. [$100,000 x 3% = $3,000 x. 35 = $105,000].

Since that publication one Councilman has been very kind to point out that we need to make some “minor corrections”.

We quote:

In the example it indicates that an employee has the ability to retire and receive 105% of their annual salary. Regardless of the time of service and age at retirement, the program is capped at 90% of the eligible salary. The example also includes add-back for accrued sick leave and vacation. The City’s formula does not include any add backs, the formula uses only the base salary. It is the County’s formula that includes add backs…(in addition)…unfortunately the assumption of a 30-year future obligation per employee is incorrect, the average life expectancy of a public safety employee is 7 years from retirement”. We don’t know what source Councilman Summers is using for this surprising statistical justification for his supportive vote.

We thank Councilman Ed Summers for his thoughtful letter and correction, but when he and others argued that “the increase was only 1%, it in fact was an increase from 2% to 3%, which is a 33 1/3% increase in the retirement plan.

Our hypothetical 55 year old fireman will now only get $105,000 with no add backs to the base salary calculations. As for his 7-year life expectancy, we await the data from the Councilman and pray that our fireman lives longer than that.

Counter point– the judiciary and life insurance companies use annuity tables that tell us that our hypothetical firefighter at age 55 will live 23.7 more years so will still be kicking at age 78.7. That calculates to $8,263,500 over the life span of this firefighter.

The question to our citizenry remains. How much do we as citizens want to pay for police and fire?

The reason given for not being able to fill open vacancies is that Ventura requires all firefighter to be trained paramedics. By raising the bar, is it too expensive and causing Ventura to have a “garage full of Cadillac’s when a Ford will do? Do we want all of our firemen to be trained paramedics? Please send your answers to us.

[Consider: you are now paying 51 cents for police and fire. That leaves 49 cents for general government purposes. However, it is estimated that 70% of that (34 cents) is spent on people. That leaves us with 15 cents for all other purposes]

(D) RATE INCREASE FOR WATER AND SEWER

Enclosed with your last bill was a notice that you will be paying more unless you object by SEPTEMBER 22, 2008. We reported the proposal in the last letter. As an ordinance the City Council approved the first reading. The final reading and the final step for approval was set for October 6, 2008.

The City Clerk only received 353 letters ostensibly objecting to the increase.

Critics of this process protest the reverse approval process that is used in the City. Good arguments can be made that no fees should be imposed unless a majority of the water users agree to a 14% increase for water rates. Is it good public policy to increase fees and taxes based upon sending out a notice and requiring a written reply to avoid a new increase ? As it stands the fee is increased unless a large percentage protest. Can silence be construed as acceptance of this 14% increase of water rate? Is it good public policy to increase fees and taxes based upon sending out a notice that requires a written reply to avoid the increase? You be the judge.  

(E) THE “CRIME FREE RENTAL HOUSING PROGRAM”

The City Council has asked its staff to appear at the council meeting on October 20, 2008, to consider implementation of a new program called the ”Crime Free Rental Housing Program”. That hearing has been postponed to November 3, 2008.

The original ordinance that was requested by the Ventura City Council, and which was reported to you in the last news letter, may be abandoned but apparently will morph into something we know not what.

The individual charged with developing this ordinance, at the request of the Council, Andrew Stuffler, has compiled data on this proposal, and is reaching out to interest groups to determine the viability of this program. The data he developed reveals that 93% of the rental property owners are doing it right and that 7% are the problem, but 7 % of what problem? Further analysis indicates that of this 7% all but 10% of those complaints relate to issues unrelated to code enforcement issues, such as dog barking, parking, loud party etc.   So a major program is being developed with major fees to deal with a problem that involve less than 0.7% of the rental property owners.

Draw your own conclusions. If you want to contact the working group here are their addresses:

RENTAL HOUSING PRESERVATION PROGRAM WORKING GROUP MEETING

Apartment Owners:
Tara Bannister Executive Director California Apartment Association tbannister@caanet.org
Tenants Rights:
Karina Arabolaza Director Housing Rights Center karabolaza@hrc-la.org
Local Tenant:
Nori De la O Housing Authority Inspector Renter ndelao@hacityventura.org
Local Landlord:
Bob Chatenever (Back-up to Tag Gilbert) Local Landlord chatenever@yahoo.com
City Attorney:
Rebeca Mendoza Assistant City Attorney City of Ventura rmendoza@ci.ventura.ca.us
City Staff:
Andrew Stuffler Chief Building Official City of Ventura astuffler@ci.ventura.ca.us
Business Community:
Niels Nyborg, (Back-up to Dennis Goldstein) Local Business Person Aptlife@pacbell.net

 

THE STATE OF THE CITY TREASURY

Early in 2008, a task force was created concerning the City budget for the 2007-2008 fiscal year. This was a good effort. As a result $4 million dollars were saved through cost cutting.  The process involved income projections that required a reduction of $4 million in expenses to avoid going into red ink territory. This worked well but the real unknown was what the income would really total on June 30, 2008 [fiscal year is July 1 to June 30]

In the Budget Summary Overview published by the City Manger the following comment was made concerning the reliability of the income stream that could be expected for 200708. Property taxes were forecasted to increase by 5%, sales tax to increase by 5% [from sale of autos, dept. stores and restaurants] and “all other taxes … by 4% due to a healthier economy”. What actually happened was that property taxes were up by 4.3%, sales taxes down by 5% and other taxes up by 1.6%. Well so much for projections and the predictions of the experts hired by the City – MuniServices !

Notwithstanding the failure of the “healthier economy” projection our City money mangers have done well under difficult circumstances. Unlike Sacramento or Washington costs have been adjusted by the Council to stay within our income stream (what a refreshing concept). A few facts for you to consider:

  • Total revenue for 2007-08 was $88,728,000. Total expenses $88,392,735. This left $335,730 in the bank.
  • City portfolio of investments totals $160 million in the bank and earning interest. Included in this number is $35 million in corporate paper. Unfortunately $5 million was invested in WAMU and $5 million in Lehman Bros. This may prove to be a loss but in this economy a loss of 6% is an accomplishment.
  • For FY 2008-09 income projections are on track. Expenses are below projected expenses and the income projection is accurate for the period of July 1 through September 30th.   A copy of the income/expense graph is attached.
  • The $5 million set aside by the Council to invest for the purpose of attracting new start up businesses is pretty much intact. Called “growth funding”   $3 million was segregated for Southern California businesses (Santa Barbara south to Camarillo). $600,000 has been requested from this fund. The other $2 million was allocated for Ventura business development. $400,000 was spent to create a business incubator (I think they mean offices and tenant improvements) in the building behind City Hall. We have $4 million left in the bank.

EDITORS’ COMMENTS

This is our community and we should have a voice in what happens in our community, but there is great mistrust between the citizenry, those elected to office and the office of the City Manager. The citizens demand that government do its job based on the revenues from existing taxes, that they manage costs and stay within a budget. The City Council on the other hand makes decisions seeking more money for more programs regardless of the taxpayers’ wishes.

How often we have heard one Councilman say “the citizens of this community do not understand the cost of government”. Au contraire Councilman. The citizens do understand what it costs to run government. What they do not understand, or share, is the Council’s desire for more and greater government which in turn requires more and more and greater taxes and fees. So when our citizens’ vote against tax increases what they are really saying is we do not want more government – just stop. The City Council goes around the voters, do what they want to do, create more programs, hire more consultants and then impose more fees (taxes).

A deep seated mistrust now exists. This widening gap of distrust between the government and the governed, at all levels, is very dangerous if history teaches us anything.

Editors:

B. Alviani          S. Doll               J. Tingstrom

K. Corse             B. McCord        T. Cook

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Keeping track of the City Council

Keeping You Up-to-Date On The City Council Decisions

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SUMMARY UPDATE OF CITY COUNCIL DECISIONS

In our last several publications we treated issues that are important to our community. We now provide updates on those issues as they have evolved and as information has become available:

(A) The 911 Fee

You refused to pay, filled out the forms and opted out, but you are being charged monthly. What more could happen? Out of town residents have been ensnared in the program. Those who purchased their cell phones in Ventura are being billed. The City has no jurisdiction over them but they are being charged the fee. The official response of the City is “we are working on it, or it is the fault of the telephone company”.

If you are one of the 27,000 that opted out you should check your bill and write a letter to the Council.   At $1.49 a month, the City is collecting approximately $40,000 per month from you and they are not entitled to it. What a mess!

There is light at the end of this dark tunnel. The Howard Jarvis Taxpayers Association has drafted a civil complaint to determine that this ordinance is a tax under Proposition 218 and therefore illegal. The complaint is to be filed in the next two weeks.  Reported in today’s Ventura County Star another lawsuit is planned to compete with this one.

(B) Increased Fees

[A Quest — “Who’s got the soap”?]

In our last three monthlies we reported to you that the City Council is seeking to increase fees and raise another $2.6 million dollars, and that the early June Council meeting the issue was tabled after Councilmen Fulton and Summers commented that there had not been sufficient time for the community to address this issue.  Another important point was the inability of anyone to obtain and read the MAXIMUS REPORT(s) [the experts hired by the City), which was designed to be the “legal” for the fee increases in the first place. These reports could not be found.

Somehow that lack of critical financial data did not stop the Council from increasing fees in 2006 and 2007. So, good reader, ask yourself how an elected official can vote to increase fees based on a report that they don’t have? Or, you ask rhetorically how an elected official can ask the community to pay another 2.6 million dollars if they are not able to provide logical answers?

In July VREG received the MAXIMUS 2004 AND 2007 reports. These reports only provide conclusions and none of the basic financial data that led to those conclusions. For example, the 2007 report incorporates a “Cost Plan which has been provided as a separate document”. That plan is not available. Another example, the 2004 report says that MAXIMUS “used the standard methodology that we have employed for hundreds of similar studies: MAXFEE”. At page 29 the reports says “MAXIMUS provided the voluminous detail and background materials behind all of the calculations and analysis to the City under separate cover. Appendix 5 of this report contains the summarized results (potential fees)”.

VREG has not been able to locate the basic cost report that served as the foundation for the MAXIMUS reports. Officials at the City have been helpful, and now have provided all eleven (11) appendices. The cost report has not surfaced. It is hoped that the Council will not race to judgment until all parties have a chance to evaluate the data.

(C) The Firefighters’ Pension

In a vote of 4 to 3. the Council approved the Memorandum of Agreement and the new pension contract with the firefighters of this city giving them a pension equal to 3% of their highest salary times the number of years in service plus all medical, dental. The yeas were Councilmen Fulton, Brennan, Summers and Monahan. The neighs were Mayor Weir, Councilmen Andrews and Morehouse. It should be of grave concern to all when one councilman says, before he cast his “NO” vote – “I HAVE GRAVE CONCERNS TO COMMIT WHEN WE DON’T KNOW WHERE THE FUNDS WILL COME FROM”.

Editors Comment:

Councilmen this was an increase of 33 1/3%!

The councilmen casting the yea votes and our fire chief, Mike Lavery, defend their position by saying that they need more benefits because they must remain competitive with other cities and counties, using as a current example the fact that they have unfilled openings. When asked why they are not filled, the answer is that the Chief REQUIRES all firefighters to be trained paramedics.

We all want qualified firemen and police officers and certainly want Councilman Summers “to sleep well at night knowing that he has the best public safety officers” (quote from his speech on August 4th) but somewhere a limit must be established on how much of our general revenues will be devoted to this purpose. The City of Vallejo is in bankruptcy because they devoted 80% of their budget to this purpose compared to Ventura at 51%.

How much of your tax dollar do you want to pay out for police and fire? You only have 49 cents left to pay for streets, recreation, other employees and widgets, so what are your priorities? We at VREG would like to hear from you.

(D) The Sale Of State Water Options

 As previously reported we annually pay $950,000 to the State Water Project for the option to obtain 10,000 acre feet. Since 1972, we have paid $22,582,371. We are committed to pay another $25,650,000 through 2035.      The reality is that we will never build a pipeline, and that as a category A user we will only get a fraction of the entitlement because there is not enough water to meet all entitlements under drought conditions. Make no mistake – the Governator has declared a drought.

Since 1972, we have paid $22,582,371.

VREG last year proposed that the rights be marketed to meet our annual cost AND put money in the bank to help defer our water costs, and/or to hopefully fund and build a desalination/filtration plant. We are happy to report that the Council has commissioned Kennedy-Jenks Consultants to assist in an attempt to market Ventura’s contractual rights. There is precedent for such a step. Butte County recently received approval of the sale of their water rights on a one year plus one year option basis to Palmdale Water District. This was accomplished over the objection of the Los Angeles Metropolitan Water District, which charges $425 am acre foot for untreated water. This 800 pound gorilla objected to the Butte-Palmdale contract and you can expect them to object to any sale by the City of Ventura in any sum below that which is charged by the MWD.

Editors’ Comment:

Doesn’t take a lot to grasp the market opportunity here so we encourage the City Council to forge ahead with “viga”, all due dispatch and total disregard for the MWD.

WHAT’S ON THE HORIZON FROM THE CITY COUNCIL

(A) Rate Increase For Water and Sewer

Enclosed with your last bill was a notice that you will be paying more unless you object by SEPTEMBER 22, 2008. The following is a summary and what it will mean to you as an owner or renter:

SINGLE FAMILY HOME
Current FY2008-09 FS2009-10 Increase/%
Water Bill $59.46 $63.66 $68.63
Wastewater bill $64.16 $68.52 $73.27
Total 2 month bill $123.62 $132.18 $141.90 $18.28 = 14.7%
MULTI-FAMILY DWELLING (10 UNITS) -89,700 GALLONS
Water Bill $282.10 $300.38 $321.96
Wastewater bill $437.80 $467.50 $500.00
Total 2 month bill $719.90 $ 767.88 $821.96 $102.06=14.1%
COMMERCIAL OFFICE – 29,920 GALLONS
Water Bill $137.03 $142.85 $154.16
Wastewater Bill $83.71 $ 92.98 $100.23
Total 2-month Bill $216.74 $235.83 $254.39 $ 37.65/17.4%

* Rates include assessment for the contractual right to obtain water from the State Water Project. If that entitlement is sold to another user that income would go a long ways in lessening the impact of water costs on this community.

If you oppose the rate increase then by SEPTEMBER 22, 2008, you must mail your name, property address or parcel number to:

 

WATER RATES

CITY CLERK’S OFFICE

City of Ventura

P.O. Box 99

Ventura, CA 93002-0099

 

If you object you can also attend the City Council meeting on September 22, 2008, and/or can obtain information from Gary Lee at (805) 652-4253, or email him at glee@cityofventura.net.

(B) The “Crime-Free Rental Housing Program”

[Specter of Aldous Huxley‘s “Brave New World” of

The City Council has asked its staff to appear at the council meeting on October 20, 2008, to consider implementation of a new program called the ”Crime Free Rental Housing Program”. The draft proposal seeks more fees, purportedly revenue neutral – meaning it will only cost what it costs to enforce – projected at $400,000 from our citizens who own rental housing. The proposal seeks to force owners to have all of their apartments or rental home inspected to make sure there is no criminal activity and/or to make sure that all buildings are in compliance with building codes and all City regulations. Here’s the proposal:

 

  1. The owners of apartment will have to pay an annual fee for each apartment in order to raise $400,000. The fee is for inspecting each apartment to make sure it is crime free. The City has not said how much the fee will be, and they don’t know how many rental units there are in the City.
  2. The owners will have to attend formal training on how to prevent crime and to show them how they can manage their property and rental agreements.
  3. Initially and every 47 months afterward each apartment is required to be inspected (searched) by the Fire Department and/or the Police Department and/or Code Enforcement Officer [all law enforcement] to determine if any crime is being committed or to determine if there are any building code violations.
  4. If you don’t get the certificate you can’t operate your apartments and penalties will be imposed. If you get the certificate the City Manager is given the power to revoke your certificate, along guidelines that his office is to develop, you will suffer penalties The penalties that can be imposed:
    1. You may be cited for a misdemeanor, jailed and/or fined
    2. The property, summarily declared a public nuisance by this ordinance if it does not have a certificate, can be sold, the nuisance abated at the owners expense or destroyed at the owner’s expense
    3. If your certificate is not timely renewed you will receive an Administrative Citation, and penalties will be imposed for each day beyond the expiration.

A large number of owners have expressed strong objections to this program, and a committee has now been established to try to determine if such a program should be modified or abandoned as a bad idea. Initial indications are that some type of enforcement is being considered but it is not clear what form this will take. Information can be obtained from Andrew Stuffler (654-7837), the lead person for the City. He has stated that since the initial proposal their data has shown that 93% of owners with rental units have not had any code enforcement or law enforcement issues.

Editors Comment:

Another 911 fee fiasco? This proposal seeks to impose new fees for police, fire and code enforcement, the costs of which by law are paid by general tax revenue. New “taxes” require a citizens 2/3 vote, whereas “fees” don’t. Now the city wants to re-label the police, fire and code enforcement officer’s inspections as a service to prevent crime and/or enforce the law against wrongdoers (7%) by imposing the costs (fees) of enforcement on citizens (93%) who are law abiding. Just who comes up with these ideas in the first place?

In case they haven’t thought about it our new city attorney might review California Code of Civil Procedure 1822.5, which requires Inspection Warrants before a residence can be searched to enforce regulations, and the decision of CURRIER v. CITY OF PASADENA (1975) 48 C.A. 3d 810, which held a similar regulatory scheme unconstitutional.

If passed as presented we predict that the lawsuits will fly. We citizens will have to pay for the attorneys fees and costs on both sides.

 

Editors:

B. Alviani          S. Doll               J. Tingstrom

K. Corse            B. McCord         T. Cook

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