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council candidates

Latest Exclusive Insider Advice For Council Candidates

 

council candidates“If you don’t know where you are going, any road will get you there.”

—Lewis Carroll

Details filling in for Council Candidates

Ask anyone what the pressing issues are facing Ventura; you’ll get a variety of answers. With the unprecedented departure of three serving City Councilmembers, this is an excellent time to get the perspectives of those who have served. Having interviewed the retiring Councilmembers and some former Council candidates, all point to several significant issues facing Ventura’s next City Council in the next few years.

For the first time in Ventura’s history, voting districts divide the city. The districting forced Mayor Neal Andrews and Councilmember Mike Tracy to retire. Councilmember Jim Monahan decided to retire after forty years of service. New Councilmembers will bring fresh perspective and energy to the Council. They also will face a steep learning curve to be effective.

Governing By Districts

City Council Candidates will serve by district

As citizens expect their elected officials to represent their district’s interests, concern for the city as a whole may take a backseat to districtwide issues. That can be a problem when the demands regarding traffic, housing, crime and services of the districts don’t mesh with the other districts’ views.

Nowhere was this more evident than in the first forum for District 1 candidates. Citizens expressed concern for a Westside pool, learning how governing by districts will work, affordable housing and labor force opportunities. Very few of these issues aligned with what the outgoing politicians thought was most important: 1) growth 2) water 3)homelessness and 4) staff accountability.

Governing by districts means inexperienced new Councilmembers will lead the city. Inexperience means two things. First, existing Councilmembers and city staff may marginalize them until they gain experience and knowledge. Second, the new City Manager and the city staff may take more control without voter accountability. Neither of these is good.

More distressing may be the loss of a citywide perspective on the Council. Wrangling for projects will probably intensify. It is likely that Westside swimming pool proponents will battle the Kimball Park proponents over who gets funding, for instance.

Re: Growth

council candidates

Growth meant different things to each interviewee. All agreed Ventura needed to grow. They also concurred that growth and water availability are inseparable. Each acknowledged the need for affordable housing but recognized the opposition to more houses (the NIMBYs). Forward progress on growth means accommodating, integrating and compromise.

The Solution is Sensible Growth

Growth and water are inseparable—you can’t have one without the other. The next City Council must forge a reasonable growth plan. The new Council will also have to convince the “no-growth” citizens that the city needs to grow to be vital. The Council should also call for the city staff to streamline current fees and permits practices.

Re: Water

Everyone acknowledged water was a concern. The specifics on how to address the issue varied widely, however. The solutions offered by those interviewed included the Heal the Bay Consent Decree, state water, direct and indirect potable reuse and drilling new wells. There was no clear direction.

Solutions for Better Water Management

water, council candidatesThe new City Council can take three steps to address water. First, they must request a modification to the Heal the Bay Consent Decree to extend the deadline for extracting wastewater from the estuary. Extending the deadline requires the Council to direct the City Attorney to act if Ventura is to avoid penalties for not complying.

Second, The Council must force Ventura Water to table Direct Potable Reuse (DPR). It is an expensive gamble. No State approved testing exists for DPR today and may not for 4-8 years. California anticipates establishing safe drinking water standards for DPR in 2024, but there are no guarantees they will meet that deadline. There’s no reason to proceed with an untested and unproven method that risks the public’s health.

Third, the Council must make Ventura Water more transparent. The goal is two-fold. Increase accountability within the department and increase communication to the public. As an example of poor communications, most of Ventura did not know of September’s safe drinking water breach. Ventura Water exceeded the Federal Total Trihalomethanes (TTHM) levels. Bear in mind that elevated TTHM levels were the cause of the water issues in Flint, MI. Ventura Water met the minimum requirements for reporting the violation. They contacted the residents in the affected area but did not explain it to the rest of the city. They fulfilled the letter of the law but not the spirit of it. To date, they have not notified the public whether the TTHM levels have returned to acceptable levels.

Re: Homelessness

council candidatesHousing Ventura’s homeless was a high priority. Some thought affordable housing was the solution. Others mentioned the homeless shelter. Some interviewees distinguished between the mentally ill living on the streets and the vagrants. Each saw it as a countywide problem with Ventura as its nexus. The county jail and the psychiatric hospital are in Ventura, making the city a natural final destination for the homeless to stay. One interviewee described it as a “catch and release” program by the other cities into Ventura.

Consideration Toward Addressing Homelessness

The new Council should distinguish between criminal vagrants and those willing to accept help. We should be willing to help those who help themselves.

Re: City Staff Accountability

All the interviewees wanted more accountability from the city employees. Often the City Council gives the staff too much power to drive the dialog about, and the outcomes of, important issues. Several pointed to the lack of a City Manager contributing to the problem. Incoming City Manager, Alex MacIntyre, will need to address this issue.

Improving City Staff Accountability

council candidatesThe new Council needs to apply critical thinking and be willing to question all city staff reports and recommendations. To do so requires financial literacy. Each Councilmember must study the city budget and Comprehensive Annual Financial Report (CAFR).

Second, the Council should stop accepting mediocre performance from the staff. Stop praising the employees even when they don’t perform. In private, two of the three outgoing Councilmembers say low staff morale is the reason for the gratuitous praise. False praise is not an antidote for low morale, in any case. It may be detrimental to the top performers by cheapening the value of the kudos. The new City Manager should confront the staff morale issue.

Third, the new Council should scrutinize the expenditures on outside contractors. Last year, Ventura spent $30 million. They should be fiscally responsible and look for ways to cut these costs.

What Was Not On the List of Issues?

Pensions were surprisingly not on the list by any of those interviewed. Either they don’t understand the issue, or they feel it is a problem they cannot change, or the fallout from ignoring it is too far into the future.

How to Address Pensions

Pensions are the ticking time bomb nobody wants to discuss. They’re the political third rail issue that candidates ignore. Two years into this new administration, the CalPERS payments are going to balloon. It’s time for the city to acknowledge and admit that pensions will consume the Measure O tax increase by 2023. Forecast the anticipated CalPERS increases objectively. Provide the Council with the necessary information to make financial decisions.

Editors’ Comments

Pensions, council candidatesMany complex issues face Ventura. All City Council candidates need to be aware of the problems and have a plan to address them. We can’t rely on the candidates alone to be knowledgeable. It’s each person’s responsibility to be aware of the challenges before us. It’s equally important that each voter be confident that the candidates understand them. Only then do our elected officials represent us

Even though voting districts divide the city, our elected Councilmembers must represent the entire community. When deciding on issues, they must think about the city at large. The tendency will be to think about each Councilmember’s district first and the city second. Such a practice is unacceptable to a town of only 109,000 people. We must always remind our elected officials to think of the city before his or her district.

Keep these points in mind as you go to the polls in November

New Council Candidates Will Replace Departing Councilmembers

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Let them know what you’re thinking. Tell them what they’re doing right and what they could improve upon. Share your opinion. Not participating in government weakens our democracy because our city government isn’t working for all of us.

Neal Andrews, Mayor

Matt LaVere, Ventura City Council

Matt LaVere, Deputy Mayor

Cheryl Heitmann

Jim Monahan

Erik Nasarenko

Mike Tracy

Christy Weir

For more information like this, subscribe to our newsletter, Res Publica. Click here to enter your name and email address.

You Have Reasons To Be Concerned About Ventura’s Pensions

“Courage Cannot Be Counterfeited. It Is One Virtue That Escapes Hypocrisy”

—Napoleon Bonaparte

Pensions

The City of Ventura has a spending problem, and it’s time for an intervention. The fiscal crisis is not widely understood. At its core are the promised unfunded pensions for public employees.

Ventura’s pension contributions for 2018 are $17,410,000. The annual contributions will balloon to $32,630,000 by 2025. That’s a compound annual growth of 9.4%. No other expense item in the US economy is growing that fast. As of 6-30-15, the entire unfunded liability for the City of Ventura is over $169.2 Million ($169,292,212). It is not possible to get out of the CalPERS retirement plan. As of 6-30-15, to terminate the CalPERS plan would costs $1.2 Billion ($1,197,537,902).

Ventura is not alone. Cities up and down the state must face up to the problem. However, Ventura’s pensions are a debt time bomb.

PensionsVentura is already paying 34 cents to CalPERS for every dollar it pays its active employees. In six years, that amount will go up to an unsustainable 51 cents for every dollar of payroll—more than any city in Ventura County. Pensions are already crowding out other essential city services like filling potholes, fixing infrastructure and even hiring more police officers and firefighters.

How Pensions Affect You Directly

Pensions

Pensions Will Crowd Out Needed City Services

Expect senior programs and after-school activities to disappear first. Next, the city will defer maintenance and capital

expenditures. The city will extend service contracts for police cruisers, city vehicles, and equipment. These things represent only a fraction of Ventura’s budget. Reductions in services will never be enough to stop the detonation of the pension debt bomb.

Ventura can only fix the problem by raising taxes, cutting needed services, or both. There is a direct correlation between the money Ventura spends on pensions and the city’s ability to pave streets and repair sewers.

Reckless Spending Continues

Despite knowing this, Ventura’s City Councilmembers increase spending without regard to the long-term consequences.

Pensions

The Roving Fire Truck Crew Adds To Ventura’s Pensions

Last month, the Council voted 4-2 to give the fire department $600,000 for a roving paramedic fire engine. City staff, the fire department and the fire union proudly pointed out grants and budget manipulation will pay the first year expense. No one on the Council asked what happens in year two and beyond. Fire Chief David Endaya asserted Ventura needs the engine because of an increase in calls. Yet he lacked specifics about whether there are more cost-effective ways to deliver the services.

To their credit, Councilmembers Mike Tracy and Christy Weir voted “No.” They wanted more details. Nonetheless, the Ventura Fire Department got its new engine, even though no one gave adequate data to support the decision.

Interim City Manager Dan Paranick did not recommend funding the roving engine for this year. Paranick worked with Fire Chief Endaya, but in the end, he said, “I haven’t gotten myself to a place where I’ve been comfortable yet, where I could sit here and justify the need based on the demand. That’s why I did not recommend it.”

Days later, he announced his resignation to accept a position closer to his home in Simi Valley.

The Fire Department isn’t the only group benefiting from the spendthrift City Council. Earlier this year, the police received pay increases of 5% adding to the city’s future pension liability.

In 2017, 90 of the top 100 salaries on the city payroll are police officers and firefighters. Every one of the Top 100 earns more than $198,800 in pay and benefits. For perspective, the average family in Ventura earns $66,000 per year with two wage earners.

Pensions

In reality, Ventura pays pensions for 3.3 retired police and fire employees for every two public safety employees on the job. That’s untenable.

So how is the Ventura City Council managing spending, and considering the long-term financial effect of their decisions? In short, they’re not.

Elected officials first believed the extra $10.8 million collected from Measure O would afford them the ability to meet new programs. But, Measure O is now a supplement to existing projects. Councilmembers frequently discuss the need for tax increases.

Moreover, it is not only about pensions.

  • According to the Capital Improvement Plan (CPI), Ventura Water Department insists on spending $538 million to convert wastewater into drinkable tap water. There remains the probability that water rates will increase by 200%.
  • Ventura’s golf courses lose $1.7 million annually on the debt they incurred.

When the money runs out, it has forced other cities to find solutions. They turn to the only tools they have at their disposal: raising taxes, cutting needed services, or both. Some even filed bankruptcy.

Economist Herbert Stein once said, “If something can’t go on forever, it won’t.” Ventura is on a trajectory that cannot go on forever.

Your Chance To Make Ventura Better

PensionsThis November, Ventura has an unprecedented opportunity to tell the City Council, “No more new spending.” There are three open seats on the Council in this November’s election.

Past financial overspending must stop. New Council Members with an economic understanding of operating a city must prevail. Voters need to look past the individual candidates’ popularity to carefully consider their ability to understand and manage city finances.

Desirable candidates will:

  • Treat city money as if it was coming out of their pocket, which it is
  • Understand the Comprehensive Annual Financial Report (CAFR) before taking office
  • Understand the city budget and capital expenditure projects
  • Hold city staff accountable to present successful projects to the Council
  • Hold the City Manager accountable for results
  • Make difficult decisions knowing their decisions will anger some constituents
  • Do the right thing, not the same old, easier thing
  • Represent of the citizens of Ventura, not be a cheerleader for city staff recommendations

Editors Comments

You have the opportunity to make Ventura better this November. Voter turnout needs to be high for this crucial City Council election if Ventura is to improve. Decisions these new Councilmembers make will immediately impact the city’s economic vitality. We mustn’t leave this election to chance.

Encourage people to vote. Educate everyone on the grave crises facing the city today. Ask candidates how they plan to address these crises. Listen to their answers. Hold them accountable after they’re elected. If we do all these things, we’ll improve the chances Ventura will remain fiscally sound now and in the future.

Hold These Councilmembers Accountable For Their Past Spending

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program so you can write directly to that Councilmember.

Let them know what you’re thinking. Tell them what they’re doing right and what they could improve upon. Share your opinion. Not participating in government weakens our democracy because our city government isn’t working for all of us.

Neal Andrews, Mayor

Matt LaVere, Ventura City Council

Matt LaVere, Deputy Mayor

Cheryl Heitmann

Jim Monahan

Erik Nasarenko

Mike Tracy

Christy Weir

For more information like this, subscribe to our newsletter, Res Publica. Click here to enter your name and email address.

How To Make The Most Powerful Job In Ventura Government More Accountable.

Local Ventura Politics

Those who do not remember the past are condemned to repeat it.
—George Santayana

Here we go again. Ventura is hiring its fourth City Manager since 2000.

You’ve undoubtedly told our children or grandchildren, “Haste makes waste.” It’s sound advice; especially when you want to prevent them from making a mistake. The same advice holds true for Ventura’s City Council when hiring our next City Manager. A hasty decision now leads to adverse consequences in the future.

The City Manager is the most powerful role in Ventura’s city government. He controls millions of dollars and impacts Ventura for years to come. He does this with little oversight by a part-time City Council. And history shows the Council lacks sound financial judgment when overseeing him. Voters know even less about how the City Manager does his job.

A Chance For The Council To Start Fresh

This City Council faces its most important decision—selecting the next City Manager. It’s no easy task. The new manager will be responsible for healing Ventura after the Thomas Fire. No prior City Manager has faced such a daunting task.

The Council should act slowly, boldly and thoughtfully when hiring. They should think creatively and progressively as they make their selection.

Balancing these goals will not be easy. The Council will feel internal and external pressure to act quickly. They’ll want to fill the vacant position right away to provide leadership at City Hall. And, citizens will demand someone to manage the Thomas Fire recovery. The search firm Ventura hired will add to the external pressure, too. Ventura pays the search firm when the new City Manager accepts the job. Typically, the fee is three months of the City Manager’s starting salary. In this case, it’s $60,500. The search firm will want the City Council to act quickly, so it gets paid.

The Council must resist the urge to succumb to the pressure.

We Know Poor Choices Lead To Financial Disaster

 

The tenure of the past three city managers keeps getting shorter.

The City Council does a poor job overseeing the City Manager. Former City Manager Rick Cole moved $7.5 million from the Public Liability Fund, Workers’ Compensation Fund and Information Technology Fund to other areas in the budget to make it appear as if the city’s budget was balanced. Either the Council didn’t catch the manipulation or was unwilling to investigate further.

A city manager could confuse the city council in the past.

Former City Manager Donna Landeros reallocated $9 million earmarked for the proposed Convention Center for various city programs, and nobody knows what happened to the money.

And, most recently, retiring City Manager Mark Watkins acted as the chief cheerleader on Measure O. He touted the money was for city services when the truth is it will eventually go towards employees’ pensions.

Even the City Council’s most recent hiring decision costs taxpayers money. The Council erred in the transition to Mark Watkins from Rick Cole. Cole received total salary and benefits of $189,341 along with a housing allowance to move to the city. When Watkins came in, he didn’t need a housing allowance because he already lived in Ventura. Rather than save that money, the Council chose to increase his salary and bonus to $242,059. The $52,718 increase impacts the city’s future financial condition negatively. At the time, Councilmember Christy Weir claimed hiring Mr. Watkins would save the city more money than the rise in his salary. The figures don’t bear that out over the four years he served in the role.

What’s more, Mr. Watkins is to receive his retirement pension based on his highest salary. At 56 years old, Watkins will receive retirement pension based on his $242,059 salary.

Greater Transparency Is The Key

Past City Managers had a bureaucratic background. Some argue requiring bureaucratic experience makes sense. Bureaucrats are the antithesis of transparent, though. They operate out of sight of the voters. This lack of transparency was disastrous for Ventura. Here’s why.

The city manager would be more accountable with published standards of performance.

A bureaucrat measures success by how large a team he manages. He’s driven to increase budgets to protect that organization. A more massive government usually equates to increased regulation. Rarely is that beneficial to citizens.

Also, a bureaucrat that is friendly towards and advocates for the city staff is not impartial. He will be reluctant to reduce expenses, eliminate unnecessary work, redirect work to private entities or minimize long-term staff costs. Bloated staff costs taxpayers money.

Finally, a bureaucrat negotiates his retirement when negotiating for the staff because he participates in the same plan. Human nature being what it is, the City Manager will likely bargain less vigorously, creating a conflict of interest.

Transparency begins with knowing how the City Manager is performing. The city should use Standards of Performance (SOPs) to measure achievement. Currently, the City Manager doesn’t have SOPs listed on its website. The Council should prepare SOPs, and the city should post them for the public to review. What’s more, the City Manager’s accomplishments should be in the public record. Citizens deserve a yardstick to measure if the city is meeting the City Council’s directives.

How to be more transparent when selecting the next City Manager:

  • Publish the screening criteria the City Council gave to the search firm to select candidates
  • Reevaluate the job qualifications and look outside of municipal government.
  • Post the Standards of Performance. Establish measurable performance levels on a regular review schedule.
  • Establish a Blue-ribbon committee to provide the Council strict salary and bonus guidelines.
  • Verify a candidate’s financial management expertise. The candidate must provide clear and incontrovertible evidence.
  • Insist on community outreach success from the candidates. The job description doesn’t list this as one of the primary duties.

Editors’ Comments

Hiring the next City Manager is paramount, and citizen input is a must.

 

Tell The City Council Not To Act Hastily

Below you’ll find the photos of our current City Council. Click on any Councilmember’s photo and you’ll open your email program ready to write directly to that Councilmember.

Let them know what you’re thinking. Tell them what they’re doing right and what they could improve upon. Share your opinion. Not participating in government makes us worse because our city government isn’t working for all of us.

Neal Andrews, Mayor

Matt LaVere, Ventura City Council

Matt LaVere, Deputy Mayor

Cheryl Heitmann

Jim Monahan

Erik Nasarenko

Mike Tracy

Christy Weir

For more information like this, subscribe to our newsletter, Res Publica. Click here to enter your name and email address.

Pension Redux

“Stupidity is also a gift of God but one mustn’t misuse it.”
—Pope John Paul II

PENSION OBLIGATIONS REVISITED

On March 11th the City Council was informed that the $12 million reserve that we have had since 1992 isn’t available as we had been led to believe. Although the General Fund has about $28 million, including this $12 million dollar reserve, by the end of the 2012-13 fiscal year had been “committed” or “promised” to someone or something. This includes such things as a $5.4 million dollar loan to the Ventura Redevelopment Agency or the $2.4 million set aside for the Jobs Investment Fund.

These promises are in fact liabilities, money we that we owe. If all of the promises are fulfilled and the RDA successor agency is unable to pay back their loan, the General Fund would only have $4.3 million. Not discussed or mentioned at this Council meeting were the other debts and liabilities, in particular the unfunded public pension debts. Those obligations have increased 97.4%. since our report to you 4 years ago.

The Comprehensive Annual Financial Report (CAFR) is an annual financial report detailing the financial condition of our City.

We start with the Comprehensive Annual Financial Report (CAFR). This is an annual financial report detailing the financial condition of our City. These numbers are accurate, but bear in mind that by the time we see the reports the data is 18 months after the fact. Further, you have to look in the footnotes to discover those debts which are “off the books” like the City pension program, which is administered by CALPERS.

What follows is an extract from the 2008 CAFR, as it related to the status of the City pension plan then. The third column reflected how much we owed to employees and retired employees as of the date of the report. The category of “safety” covers police and fire pensions and all other employees are carried in the “Miscellaneous Employees group”. Our unfunded liability totaled $48,673,594.

In the same year the revenue collected by the general fund totaled $88.7 million, of which $47.1 million (53.1%) was spent exclusively on police and fire departments. The percentage of our general budget paid to police and fire has increased dramatically whereas other employee costs have remained relatively stable. In 2009 59.9% of our total budget was allocated to public safety, 57.7% in 2010 and 53% in 2011. That did not include the “unfunded pension obligations”.

CalPERS increases unfunded pension liability costs to Ventura

In 4 years UNFUNDED PENSION OBLIGATIONS INCREASED 97.4% and now total $96,099,169.00.

These unfunded obligations accrued interest year after year, at the rate of 7.75%. CALPERS did not recover the substantial losses (reported by some news sources as 50% )as a result of the 2008 recession. They also did not earn the 7.75% annual projected investment returns until just recently. On the Legislative side efforts at the State and local level to move from a defined benefit plan to a 401(k) plan for new hires failed. Our City did try to address the problem by requiring current employees to contribute 4% of their compensation toward their own retirement plan, but it was piteously short. In 4 years UNFUNDED OBLIGATIONS INCREASED 97.4% and now total $96,099,169.00.

CALPERS is quick to point out that over a 20 year period the” return for each fiscal year ranged from -24% to +21.7%., and if we let them continue to manage our pension plan they “assume” we will get a return of 7.50%. But, if we want out and want to run our own program they use a 4.82% rate of return. We really owe $350,848,292. (See attached Hypothetical Termination liability for each plan).

 

PUBLIC PENSIONS OR BOND HOLDERS – AT RISK

[WHAT IS GOOD FOR THE GOOSE IS GOOD FOR THE GANDER]

Last year the Governor’s office and legislature announced that they had achieved “pension reform”. The reality is that they did not change any of the current pension benefits. They did this mainly for political reasons, but also because it is widely assumed that employees in the public pension system are protected by the constitutional ban on “impairing the obligations of contracts”.

Public employee unions have stridently asserted that they are different and thus bullet proof. This attitude was displayed clearly when the City of Stockton filed bankruptcy. That City told their bond holders and/or their insurers to take less, but refused to reduce the $29 million it pays each year to CALPERS for the employee benefits.

Assured Guaranty Ltd, which insured the Stockton bonds, stood to lose $100 million. They filed a complaint in the bankruptcy court claiming that Stockton had targeted the bondholders to take a loss, but continued to pay CALPERS without any reduction or did not seek any benefit reductions from the public labor unions.

Another insurer, National Public Finance, added their voice to the controversy, supported the Assured Guaranty position, but also alleged that the City of Stockton “rather than face the hard realities imposed by its unbearable liability to CALPERS (decided) to take a pass” – in short, that it was easier to sacrifice the bond holders than face the political wrath of the public employees or CALPERS.

So, the bond insurers asked the bankruptcy judge, Christopher Klein, to declare the City’s bankruptcy plan as inadequate because it ignores the pension debt, and they seek to compel the City to reduce its pension payments. The CALPERS reaction was to argue to Judge Klein that the pension payments have a higher priority over bonds. CALPERS lost.

In December, 2012, Judge Klein rejected the CALPERS constitutional inviolability of contract argument and ruled:

“While a state cannot make a law impairing the obligations of contract, Congress can…the goal of the bankruptcy code is adjusting the debtor-creditor relationship. Every discharge impairs contracts”.

So, what will happen to the benefits of the public pension contracts or the bond holders? CALPERS, those in the Stockton pension plan and the bond holders may both lose. This chapter is soon to be written.

EDITORS’ COMMENTS:

A 97.4% increase in unfunded liabilities over a 4 year period is setting Ventura up for failure. Most citizens don’t realize that Ventura will pay $13.3 million to CALPERS for 2012-2013. This is over and above salaries and other benefits. As more employees choose to retire early (50-60 years of age) this only gets worse.

Call it what you will, but the City Council thus far has adopted a profligate fiscal plan of doing nothing to pay this unfunded obligation. Hoping that the economy will rev up, that inflation will chip away at the obligation, or that somehow our pension assets will produce magnificent returns is foolish.

When the Council considers its new budget in June we urge them to set aside a percentage of our annual revenue to add to our reserve and/or apply to the unfunded pension obligations, and to release some of the commitments it has made to the General fund cash balance.

 

Editors:

B. Alviani         K. Corse             T. Cook

J. Tingstrom    R. McCord        S. Doll

For more information like this, subscribe to our newsletter, Res Publica. Click here to enter your name and email address.

City Government Clueless About What Citizens Need

“The characteristic complaint of our time seems to be not that government provides no reasons, but that its reasons seem remote from human beings who must live with the consequences”—William Brennan, U.S. Supreme Court Justice

THE END OF THE FIRST DECADE

It is the end of the first decade of the 21st century.  This first ten years have been marred by war, scandal, fraud, economic failure and government malfeasance at all levels. Venturans will also be happy to turn the page and try to rebuild.  The questions is whether local government can provide the insight and leadership to achieve prosperity, or will be mired in the failed policies and decisions of the past.

THE NOVEMBER 3RD ELECTION – BEFORE AND AFTER

[THOSE WITH INTEGRITY AND THOSE WITHOUT]

We start with glimpse of the events leading to the last election. It was not pretty and hopefully is not an indicator of how the politics of city government will perform in the next ten years.

Police Association Smears Candidate Andrews

Prior to the last election the Ventura Police Association commissioned a telephone poll (push poll) for the specific purpose of trying to eliminate Councilman Neil Andrews.  A push pole is a seemingly unbiased telephone survey that is actually conducted by opponents of a particular candidate in order to smear or disseminate negative information about that candidate.

Police in city government

Police Association interjects itself into city government

Then immediately prior to the election came the mother of all polished and salacious brochures. You know, the one about Neal Andrews taking public money to the tune of $20,000.  None of it was true, but the policemen in charge didn’t care about that. They too have a right of free speech, even rotten speech and fraudulent utterances.

It didn’t work. The voters wisely returned Mr. Andrews to office.  He was elected to his third term of office, and was the next highest vote getter [9,246] next to our newbie retired chief Mike Tracy [9,777].

Councilman Andrews. of course, was punished for his position when the majority of the Council at their December meeting. The Council refused to elect him as the mayor of this fine city or even the position of Deputy Mayor.  Councilmen Andrews and Morehouse were in the minority.   The Ventura County Star published an editorial castigating the members of the council who condoned this miserable spectacle.

THE UNFUNDED PENSION PROBLEM PLAGUES GOVERNMENT

The unfunded pension liability of this city is the biggest problem facing this community, and will be the focus of VREG in the first quarter of 2010.

CalPERS increases unfunded pension liability costs to Ventura

Councilmember Andrews believes city government should bear all the cost of police and fire pensions.

Councilman Andrews is  the only elected official  who has not lost focus on this enormous issue.  His public position, and one that he has espoused for years, is that the benefits of the members of the public unions, particularly police and fire,  are excessive and must be changed from a defined benefit plan to a defined contribution plan.  That of course is not to the benefit of the union members because they want all they can get — FROM YOU.

This is real.  If you do not believe this City has a serious debt problem you are not paying attention.  Attached is a letter which VREG published in April 2009, titled “THE SPECTRE OF BANKRUPTCY”. The unfunded liability for the City of Ventura,  as of June, 2007, totaled  $294,673,595.  We believe the 2008 Comprehensive Annual Financial Report will reveal that the debt picture  has improved somewhat and will report on that analysis in our next issue. VREG will also sponsor a public forum and speaker on this issue in the first quarter of 2010.  We will announce the time and place.

A MESSAGE FROM A CITIZEN

[WHAT OUR CITIZENS WANT FROM GOVERNMENT— PAY ATTENTION CITY COUNCIL]

Just before Christmas the Ventura County Star published a letter from one of our citizens.  With his permission we publish that letter as a message to start the new year:

WHAT CITIZENS WANT

Re: Your Dec. 12 editorial, “Council’s Action a slight to voters”:

I concur with the editorial that called the selection of Mike Tracy as deputy mayor as a slight to voters.  I have no problem with Tracy and feel he will do a great job, but as a brand-new, untested councilman he hardly deserves to be appointed deputy mayor.

Skipping the popular, at least with the public,  not electing Neal Andrews [as Deputy Mayor] is truly an insult to the people who voted.  What the City Council and city manger do not understand is that there’s a reason no new tax measures have been passed.  The voters are unhappy with the way things are going.

I was particularly irked by Councilman Brian Brennan’s comments after Measure A failed.  He basically said the public wants more city services, but doesn’t want to pay for them.  I think he is wrong.  I believe the public wants basic services and is willing to pay for them.  Those services, in my opinion are:

  • Well-maintained streets and storm drainage.
  • Library services at the Helen Wright Library.
  • Adequate police and fire protection.
  • Safe neighborhood parks.
  • Being able to move about the city without harassment by professional bums.
  • A city that encourages a Walmart, which would provide tax revenue and jobs.
city government should stop wasting money

One reader wants city government to stop wasting money.

What I believe citizens do not want are:

  • Large, expensive sports complexes.
  • Expensive housing projects for “struggling artists”.
  • Worthless and expensive bus-stop art at the mall.
  • Exorbitant pensions.
  • City leadership that seems to enjoy punishing the public for not going along with their agenda.
  • And, finally, a city leadership that thinks residents who do not agree with them are just ignorant.

I feel better now.

—Ray Holzer

Editors’ comments:

          Thank you Mr. Holzer.  Could not have said it any better.

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

“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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living dead because Ventura has no money

The Ghost of No Money Haunts Pensions and Cemetery Park

‘Take some more tea,” the March Hare said to Alice, very earnestly. I’ve had nothing yet, “Alice replied in an offended tone: “so I can’t take more.” “You mean you can’t take less, “ said the Hatter: “it’s very easy to take more than nothing” —Lewis Carroll, Alice’s Adventures in Wonderland.

THE SPECTRE OF BANKRUPTCY

[T.E.A. PARTY ANYONE?]

In the August 2008 edition of this newsletter, we suggested that Ventura “may” be following the missteps of the City of Vallejo right into bankruptcy court. After you read this you will realize that our unfunded pension debt and contractual obligations are staggering.  We as a community owe $150,000,000 alone on the City’s pension debt, which is $1,500 per person in a community of 100,000.  Incredulous?   We’ll explain.

no money in the CAFR

The 2008 CAFR shows Ventura has no money to pay unfunded liabilities.

Start with the Comprehensive Annual Financial Report (CAFR), ending June 30, 2008.

Remember, the pension statistics are based on numbers as they existed on June 30, 2007, These CAFR reports are published 18 months after the fact. At page 15 it reflects that our long term debt, labeled “total non current liabilities” totals $135 million dollars ($134,984,820).

You might recall that the City financial types reported to the Blue Ribbon Tax Committee that we have $10,000,000 in our general operating fund — that’s our reserve, which has not changed since 1992.  All investment  income from that reserve was spent. They also reported that we have $145,000,000 in other investments (after marking down the $10,000,000 lost to WAMU and Lehman Bros. investments), but we can’t touch this money because the funds are committed due to previous contractual commitments of the City Council.  So we owe $135,000,000 and have $155,000,000 in investments, ignoring the contractual obligations for the moment. On the face of it we have $20 million more in assets than debts, so we are looking good right?

Wrong!

Let us take a closer look at the City of Ventura’s Pension Plan. Turn to page 70 of the CAFR (page 102 of the PDF file) of the City’s 6-30-08 Comprehensive Annual Financial Report, which lists the “off the income statement” underfunded obligations — money we owe as of June 30, 2007, for which we have no money.  The total Actuarial Asset value for the City pension plan investments is stated as being $313,847,955, the actuarial accrued liability is $362,521,549.   The  unfunded accrued liability for regular employees is $5,176,721 and for Safety Employees (Police and Fire)  is $43,496,873, or a total of  $48,673,594.

This liability ($48.7 million) accrues interest at the rate of 7.75% per year on the amount that is owed as an “unfunded liability”. Remember again this was 18 months ago. Then move to the end of 2008 and add to this the fact that CALPERS devalued our actuarial asset value by 35%.  The result is that the actuarial asset value went down by $109,846,784 ( $110,000,000), thereby increasing our liability by the same amount thereby reducing the value of our pension assets to $204,001,171. —we lost the  money in the market. The following is the real financial picture right now:

True Financial Picture
(1)  June 20, 2007 unfunded debt $48,673,594
(2)  Interest 6-30-07 to 12-31-07 @7.5% $ 1,825,259
(3)  Interest 1-1-08 to 12-31-08 @7.5% $ 3,650,519
(4)  Loss of pension value 35% $110,000,000
Total Unfunded Liability of City $164,149,372*

Now go back and add in what IS shown on the Comprehensive Annual Financial Report(CAFR) for 2007 (page 15 of the document, page 33 of the PDF). This is what is owed by the Citizens of this community — right now, and getting worse each year!

(1) Long Term “noncurrent” Debt $135,000,000
(2) Unfunded pension benefits $ 164,149, 372
Total debt $294,673,595

How would you view our current financial posture?  We owe $294,673,595 and we have $10,000,000 in the bank.  Any suggestions for our City Manger or City Council?

Consider that the City of Vallejo decided to file bankruptcy when their obligations amounted to $730 per person. To further add to your perspective, Orange County, California filed the largest municipal bankruptcy in the history of the U.S. at a cost of  $600 per resident.  Ventura’s obligation is approximately $1,500 per person.

If you were in charge, what would you do?

THE CEMETERY PARK PROPOSAL

no money for Cemetery Park

Cemetery Park will remain a ghost town because Ventura has no money for a Memorial.

[FINDING THE MONEY IS A DEAD ISSUE]

The City has spent $40,000 for the architectural renditions of  a plan to create a memorial place at Cemetery Park..  This $4,000,000 Plan includes a memorial to commemorate those buried at the cemetery, memorial gardens, refurbished landscaping, veterans’ memorial walk and flagpole, and repairs to the historic WPA rock wall, 3,000 bronze grave site markers, and the retrieval and display of existing headstones. The City acknowledges there is no money, but assures the proponents that over time, with a combination of city funds and outside grants, perhaps they can find the $4,000,000 million dollars.

Then there are the opponents. One group, the restoration folks, want the park restored as a cemetery, and claim the City plan does not go far enough.   They want it like it was headstones and all.  Another group contends that the decision to make this into a park was made forty years ago when the City  was forced to do something because those responsible did not maintain the cemetery. The park has been serving the community as a passive park and a memorial since and is used daily by local residents. This is a 7-acre park serving the mid-town community.

As an interesting aside  the City code enforcement folks have stepped up a campaign to issue expensive citations to owners of dogs that are not on a leash in Cemetery Park.

Editors’ observation:

Perhaps the question we all should be asking instead is why our City Council  is so willing to spend $40,000 to placate a vocal minority by voting to pay for a study to formulate a plan to restore an old cemetery site when we have so many other pressing priorities.  How about – No!

THIS FROM A READER

We receive many emails from our readers which have been very positive. This concerning our March issue:

Thank you so much for this current issue. One of the many things I  like about your report is that it stays on course and is not distracted by all the non-issues brought up by the City for dodging the bullet. The concept of public employee’s being exempt from the reality’s of this economy really, is the height of arrogance”.

—R.M.

EDITORS’ COMMENTS

 Until the Citizens of this community solve the systemic problem, by electing city leaders who are “qualified” to manage a municipal corporation, with a operating budge approaching $500,000,000, and in electing leaders who will make the hard (not political) decisions to solve the pension and unfunded debt issue, the taxpayers and citizens of this community will always be at risk and a target for more taxes and more fees.

 

Editors:

B. Alviani        S. Doll           J. Tingstrom

K. Corse          R. McCord    T. Cook

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