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CalPERS sticks Ventura with extra unfunded pension liabilities

The Looming Catastrophe of Unfunded Pension Liabilities in Ventura

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“IT ISN’T WHAT WE DON’T KNOW THAT GIVES US TROUBLE, IT’S WHAT WE KNOW THAT AIN’T SO”
—Will Rodgers

NEGLECTING THE UNFUNDED PENSION CRISIS DOESN’T MAKE IT DISAPPEAR

For eight years Ventura has done little to remedy the unfunded pension liability. During that time, there have been three different City Councils. Yet they made only a modest effort to solve the problem. They got employees to agree to contribute toward their own retirement. Meanwhile, those same City Councils have exacerbated the problem. They granted large raises to public safety and SEIU employees. This is a case of ‘too little, too late’.

Eight years ago, we pointed out the amount of pension benefits Ventura owed. We owe these benefits to retired city employees and those about to retire. We owed $150,000,000 of unfunded liability. Two major pension plans account for the entire liability—Public Safety and Miscellaneous.  The Public Safety pension plan covers police and fire retirees.  The Miscellaneous pension plan covers all other employees.

The Ventura County Star reported the deplorable condition of Ventura’s pension plans. And, the Grand Jury labeled the plans as “out of control.”

The office of the City Manager tells us that they have everything under control. And, in 5 years things will level out. There are no records or calculations offered to support that statement.

STILL LIVING FAR BEYOND OUR MEANS

CalPERS increases unfunded pension liability costs to Ventura

CalPERS sticks Ventura with rising unfunded pension liability costs.

The problem is simple. Ventura has not set aside enough money to pay for future benefits to city employees when they retire. What’s more, the California Pension System (CalPERS) let Ventura down. It did not earn enough return on investment on the money Ventura paid into the fund.

Since 2008, the situation has gotten far worse. In the last CalPERS report published in 2016, the city’s unfunded liability totaled $169,292,212. In other words, the liability we owe grew 12.9% in eight years.

ONE CITIZEN’S ANALYSIS

The City Manager and City Council knew of this UAL increase before they campaigned for Measure O.

Proceeds from Measure O will be more than $11 million a year for the next 25 years. It may not be enough to cover the debt, though.

CalPERS recently published the projected pension costs for the City of Ventura. Taxpayers are 100 percent responsible for paying these foreseeable costs.

The CalPERS Circular Letter Dated January 19, 2017 contained these facts:

CalPERS lowers its rate of return on investments to 7% impacting Ventura’s unfunded pension liabilities.

The CalPERS Board of Administration approved lowering the CalPERS discount rate on December 21, 2016.

The long-term rate of return will now be 7.00 percent over the next three years. This will increase public agency employer contribution costs beginning in Fiscal Year 2018-19.

For the years 2017 to 2023, CalPERS actuary reports show increases to the annual Unamortized Actuarial Liability (UAL). These costs will increase 91 percent or $8.8 million.

In the CalPERS Circular Letter dated 1/19/17,  the assumed return rate decreased to 7 percent from 7.5 percent. Ventura will pay an extra $3.7 million from FY 2016-17 to FY 2022-23.

Combined, the city’s annual UAL cost will increase $12.5 million to $22.2 million over the next six years.

No other expense or revenue (tax) item will increase that fast. Left unaddressed, these increased costs may force the city to curtail basic services.

EDITORS’ COMMENTS: 

Increasing revenue or reducing expenses solves most budget problems. For Ventura, increasing revenue means more sales taxes and property taxes. And reducing expenses means service cut backs or layoffs.

Increasing revenues and cutting expenses seems like the obvious fix. Yet, a less popular third option is available. The employees must contribute more toward their own retirement. After all, they will benefit the most from these pensions.

Ventura’s long-term solution will be a combination of all three choices. Increasing revenues and reducing expenses with higher employee contributions is the right prescription.

FEEL STRONGLY ABOUT THIS? WRITE YOUR COUNCILMEMBER.

Click on the photo of a Councilmember to send him or her a direct email.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Matt LaVere, Ventura City Council

Matt LaVere

Jim Monahan

Mike Tracy

Christy Weir

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Will The Trade Desk be another real estate blunder?

Is Ventura Poised To Commit Another Real Estate Blunder With The Trade Desk?

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“ONLY THE MEDIOCRE ARE ALWAYS AT THEIR BEST”
—Jean Giroudoux

WILL VENTURA CITY GOVERNMENT EVER LEARN?

It’s déjâ vu all over again. Once again the past rears its ugly head. Only this time will the City Council be wise

The Trade Desk may not be the best deal for texpayers

Is The Trade Desk real estate deal a gift of taxpayer money to a private company?

enough to learn from its past mistakes? There are some things this Council and this city staff are not qualified to evaluate fully.

Among the first issues facing the 2017 Ventura City Council is a real estate transaction. Ventura is selling four parcels of  City-owned, prime downtown public property. The properties for sale are at 535 East Main Street.

The fact that the City is pursuing the sale of surplus land is commendable. Selling these properties should be open and transparent. To do otherwise, invites the possible perception of favoritism or mismanagement of public funds. Proper evaluations, bidding and screening needs to happen.

CITY STAFF PROPOSES A NEW DEAL 

Community Development Director, Jeff Lambert, presented a new real estate deal on November 15, 2016. He asked the City Council to approve the sale of a large, downtown city parking lot. The proposed buyer is a company called The Trade Desk. The Trade Desk wants to build a headquarters office building. The proposed offer was $1 million ($24 dollars a square foot).

City staff steered the selection of The Trade Desk as the sole qualified bidder. The City Council depended upon the recommendations of City Staff.

Four months earlier, the City Council relied on city staff’s recommendations on another deal. The city staff did an incomplete analysis before recommending the Brooks Institute project. They compounded this mistake by failing to collect deposits and rent. The Brooks Institute deal fell apart.

This time, the City Council was close to selecting The Trade Desk in another real estate deal. They almost decided without benefit of an independent financial analysis or a professional appraisal.

WHY THE TRADE DESK?

The Trade Desk is a Ventura success story. Does that entitle the company to favorable treatment from city government?

The Trade Desk is a success story many citizens do not know about. The City of Ventura funded an incubator business startup program. They used $5 million of taxpayer’s dollars to seed the fund. The Trade Desk was a beneficiary of the subsidized program. The Trade Desk is a large tech company that brought new jobs to Ventura. The company achieved early success. With their success, the Trade Desk went public and the stockholders have made millions. A true success story for Ventura.

The Trade Desk wants to enjoy the city’s largess, again. This time, they want to buy city property for their headquarters at below fair market value. Their business success should not cloud City Hall’s judgment. City Hall should not sell public property at a discounted price.

DOES THIS DEAL PASS THE SMELL TEST?

A first whiff of impropriety surfaced during the election. The Trade Desk donated $7,000 to support the successful city-backed ½¢ sales tax measure.

Another whiff arises with regards to the questions the city asked to approve The Trade Desk. A close examination of the specific judging criteria reveals the questions were subjective.

Of the three bids submitted, city staff selected The Trade Desk as the most qualified bidder. In its proposal, The Trade Desk offered $1,000,000 in cash for the properties.

The city purchased the properties for $618,000 in 1997. The city valued the properties at $1,684,000 in the original proposal. They base their estimate on a 6 year old value (10/25/10) comparable price for a city parking lot. The city’s valuation is $40 per square foot.

A QUESTION FROM THE AUDIENCE SLOWED DOWN THE PROCESS

The third impression of impropriety is how much the city valued the property. The city valued the property at $40 per square foot based on a 6-year old comparable property. In the same council meeting, city staff urged the Council to buy another parking lot for $64 per square foot. City staff recommended buying the parking lot for $64 per square foot. This established a new comparable price.  The new comp values the parcels at 535 East Main Street at more than $1,684,000.

The City Council seemed oblivious to the conflicting valuations. A citizen in the audience brought it to the Council’s attention. Only then did the City Council call for an independent appraisal.

It’s a mistake to sell The Trade Desk these downtown lots for $1 million, when the true value is closer to $2 million.

GIFT OF PUBLIC FUNDS?

You decide if The Trade Desk real estate deal is in Ventura’s best interest.

The city staff recommended to City Council to sell the property at a price below market value. This is another real estate blunder the staff made in 2016. In essence, it would be a gift of public money through the sale of property for less than market value. The sale would enrich The Trade Desk’s shareholders on the back of Ventura’s taxpayers.

The final whiff of impropriety appeared in the handling of the finances. Ventura city staff was willing to accept $50,000 in escrow from The Trade Desk. The Trade Desk estimates it will spend $15 million to develop the property. The deposit works out to 0.3% of the total value of the project. Such a small deposit amount should have concerned city staff.  One would think they would have learned from their prior mistakes. Not accepting an adequate deposit was a pitfall in the Brooks Institute situation.

EDITORS COMMENT

MOVING FORWARD RECOMMENDATIONS

Negotiations continue with The Trade Desk. Yet, the openness and transparency of this transaction remains in question.

To avoid any appearance of impropriety, Ventura should request new proposals for the property. The city must get an appraisal by an independent, certified commercial real estate appraiser. The sale price must be equal or higher than the appraised value. The city must make new bids public. And the final offer must generate a better return to Ventura’s citizens.

The successful bidder should make  a good faith, earnest deposit. In the event the transaction doesn’t move forward, a deposit protects Ventura’s citizens. The deposit would cover any loss of value or cost to return the property to its current state.          

Editors:

R. Alviani          K. Corse          T. Cook         B. Frank
J. Tingstrom    R. McCord       S. Doll          C. Kistner

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Ventura's Measure O Is Unenforceable

Oversight Of Measure O Is Untenable in Ventura

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ELECTION AFTERMATH

Measure O passed in Ventura. Now, the hard part.

Measure O passed in Ventura. Now, comes the hard part: oversight.

2016 was a fascinating and challenging election year at all levels of government.  The City of Ventura was no exception.  Voters elected a new City Council Member and passed two City Charter amendments. Most remarkable of all, Ventura voters approved an increase in the sales tax. This will impact Ventura for 25 years.

The city staff and City Council promoted an extra 1/2 percent sales tax. The increase will raise another $10.8 million per year. That amounts to $270 million for city services over the next 25 years.

THE OVERSIGHT OF A NEW TAX IS UNTENABLE

The final vote count was 28,987 yes and 20,359 no votes. Measure O promises all voters strict oversight of the new money. Measure O mandates: 1) strict accountability 2) a citizens’ oversight committee 3) annual independent financial audits and 4) a public review of expenditures. Yet, the city hasn’t revealed its plan to put this strict oversight in place. 

Cheryl Heitmann, Ventura City Council

Ventura Councilmember Cheryl Heitmann

A lack of plan contradicts one councilwoman’s official position. She stated that her reelection was a signal from the voters. She believes voters think the City Council was spending the taxpayer’s money wisely. The 20,359 citizens that remember the Brooks Institute failure might disagree.

A LONG HISTORY OF BROKEN PROMISES IN VENTURA

Ventura citizens must hold City Government to its word.  Promises are sometimes forgotten or even ignored when it comes to money.  One example happened in 1991—26 years ago . City government promised to reduce water and waste water rates after the drought. The water and waste water rate increases they imposed were temporary. The drought ended. The rates never returned to their previous levels before the drought began. Once they got your money, the promises evaporated.It was also 26 years ago that our city promised desalination as a new water source, if voter approved.  Venturans approve the city’s call for desalination, but nothing happened.  Yet, Venturans still pay for State water rights because of the city’s nonfeasance.

Ventura lacks accountability in city government

Brooks Institute exposed the cracks in the city’s procedures.

Ten months ago, the city promised economic vitality when Brooks Institute moved downtown. Brooks Institute filed for bankruptcy. The project failed.  The City Council and the city staff pointed fingers at each other for that debacle. There was plenty of blame to go around, though.   The staff failed the Council by not performing its duties completely. The Council failed to ask the right questions before approving Brooks’ long term lease.

Afterwards, some City Council members reached a difficult conclusion. They realized the city staff lacks the expertise to assess complex real estate opportunities.

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Measure O passes

Congratulations On Measure O Passing! Now Let’s See You Do Something With It.

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Yes on Measure O

Measure O proponents used yard signs like this to turn out the vote.

We congratulate the voters and the City Council on Measure O passing.

Many people voted against this measure.  That opposition was never about the extra tax money that could benefit our City. Instead, it was about the lack of trust in how this government would spend the money.

Citizens’ Oversight Committee Promised

Our opposition forced the proponents to promise that a citizens’ committee would oversee how the city spends this money.

Will city government keep that promise? Will the candidates keep their promise? Or, will the money flow toward the special interests that spent so much to get you to approve this new tax?

We’ll Monitor Measure O Closely For You

18,581 vote against Measure O

18,581 citizens voted against Measure O. Nonetheless, it passes.

Proponents promised clear accountability for how city officials spend the money.

We promise we will try to insure the city spends the money as it promised. The 18,581 people that voted against the measure deserve to know that much.

 

 

 

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Brooks Institute Is Ventura's Latest Failure

Remember Brooks Institute when you vote for Measure O in November

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“WHEN IN DOUBT, DON’T”
—Benjamin Franklin

WAVE GOODBYE TO BROOKS INSTITUTE AND OUR TAX DOLLARS

The news in the last few weeks has reported the closure of Brooks Institute.  Everyone lost from this closure.  The students hopefully will find other institutions to complete their education and their teachers may find other positions, but the Citizens of Ventura are again holding the proverbial bag.

On August 20, 2016, The Ventura Star published an editorial about the role of city government in this matter, and it sums the situations up fairly well – “The City Council and city government appear to have given preferential treatment to a small but vocal constituency – and failed the rest of Ventura”.  We cannot improve on their conclusions except that it was all avoidable.  We can provide you with specific facts and information that we have garnered thus far so that when the bureaucratic spinning and finger pointing starts, you will be able to see it for what it is.

In February the City announced with great elation and fanfare that Brooks was coming to town. Councilwoman Heitmann led the parade as well as the City Economic Development Manager, Leigh Eisen. They extolled the prospects of increased revenue for the city and that downtown business would flourish.  Same hype surrounded the WAV (See our August 2011 letter published at August 2011 Newsletter).

Brooks Institute Unfinished Office Space

Brooks Institute left unfinished classroom space when the deal unraveled.

There were three sites leased, two private owner locations downtown and one behind City Hall.  The largest was the two top floors of a 5-story city office building at 505 Poli just behind City Hall.   There may have been two other private owner locations but that as yet has not been established.

Hope and promise filled City government.   Staff rushed to execute leases for the 505 Poli property.   Brooks Institute entered into a contract with a major contractor to demolish and build tenant improvements on the two top floors of 505 Poli at a contract price of $1.2 million. Tenants of those two floors were evicted; the contractor was permitted to fast track demolition and tenant improvements started.  When hazardous materials were found on site Building & Safety again fast tracked the work, which was promptly completed by Venterra, a hazardous materials remediation company, at an additional cost of $80,000.  Demolition was completed and 2/3 of the tenant improvements were built.  Then Brooks closed its doors and the project imploded.

THE PROJECT UNRAVELS

Brooks Institute paid no money to the City for rent, no money for a security deposit and no performance bonds or guarantees were put in place.  Reportedly $70,000 in back rent is due. Future rents are lost. The tenant improvements have yet to be completed. The Assistant City Manager tells us that it will only cost our City $200,000 to complete those improvements.

Unsurprisingly, within a matter of days, the facts have proven otherwise.  The contractor has filed a lien against the City for $825,000 for the work they and the subcontractors performed on City property, including the $80,000 cost of the removal of the hazardous materials.  Add lost rent to date, future lost rents the evicted tenants would have paid, the estimated cost to complete the tenant improvements and the damages causing the losses to swell to over $1.2 million.  Then there will be the legal costs to collect these losses, if possible, and to avoid liability.

The private property owner who also signed Brooks’ leases and started the work of providing tenant improvements in the downtown area was more fortunate.  He wisely obtained guarantees to protect himself.  Brooks Institute, owned by a Chinese owned company named Gphomestay, has lawyered up with an expensive LA firm. The contractor has lawyered up too but no word yet on what lawyer will try to pull the City’s chestnuts out of the fire.

The citizens of Ventura deserve to know why the taxpayer has once again been “hornswoggled[1]“.  Dreams, hopes and ideas for healthy economic growth are wonderful, but such things must be tempered with economic reality and good business sense.  When those are ignored the phrase “a fool and his money are soon parted” is apropos.

DEMAND THE TRUTH

The City Council has a lot to explain.  They were quick to ask the citizens of Ventura to increase taxes (Measure “O”).  They spent $118,000 of our tax money to hire public relations firms to convince 51% of the voters to vote yes on that measure thereby giving them more of our money.  Will they be as quick to take responsibility for another $1 million plus dollar loss?

No Deposit on Brooks Institute

Citizens should ask, “Who approved the Brooks Institute lease without asking for rent payments upon execution?”

This Council, particularly the two candidates seeking reelection in November, Councilwomen Weir and Heitmann, need to answer questions about their ability to conduct business on our behalf.  We must have representatives that are experienced and understand business. We, as a community, cannot afford losses of this magnitude and we certainly should not be handing the City Council another $270,000,000 over the next 25 years if they are not qualified.  By this recent action, this City Council is not capable of managing our tax money.

Other than “what were they thinking” here are questions EVERY citizen should be asking?

  1. Who approved this lease without asking for rent payments upon execution?
  2. Who reviewed and approved the terms of the lease with Brooks?
  3. Who made the decision to permit construction on City property  without a guarantee or performance bond in the event of default of Brooks Institute?
  4. Who performed the due diligence and examined the financial condition of Brooks Institute to determine their ability to perform under the terms of the lease?
  5. Who recommended the approval of this lease and its terms to the city Council?
  6. Shouldn’t those who made the decisions in this matter resign or be fired?

City Government’s response thus far is that they will sue Brooks to get our money. City officials continue to say they are surprised, shocked and disappointed. They should not be any of these things. This was all foreseeable based upon the financial condition and history of Brooks Institute. 

VREG is continuing to investigate this transaction and will report our findings in subsequent issues as new facts are discovered.

EDITORS COMMENT

In the private sector, when a so-called “good deal” goes bad for lack of due diligence people lose their jobs. In the public sector, nobody is held accountable and elected officials either choose not to run again, or they run and look for a fall guy.  

Just keep the BROOKS project in mind when you are asked to vote for Measure “O” in November; and, when voting to fill the three City Council seats that are open ask yourself if they are truly qualified.

Editors:

B. Alviani       K. Corse          T. Cook         B. Frank

J. Tingstrom R. McCord       S. Doll          C. Kistner

 

[1]“Hornswoggle”, slang circa 1829.  A word to describe one who has been bamboozled.  Synonyms: dupe, fake out, fool, hoodwink, deceive, humbug, juggle, misguide, misinform, mislead, snooker, snow, spoof, string along, sucker, suck in, take in, trick

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No Sales Tax Increase, Live Within Your Means

Pet Projects Cloud Ventura City Council’s Push For A Sales Tax Increase

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Spending Problem

“We don’t have a revenue problem, we have a spending problem.” — Ronald Reagan

The Scenario

The Ventura City Council is determined to raise taxes again by putting a measure on the ballot in November to increase sales taxes by 0.5%-1%. Two previous attempts failed. As is customary, they are not completely forthcoming or transparent when they are trying to extract more money from the citizenry. On January 30, 2016, the City Council held a special meeting at the Ventura Police Department whose true purpose was to discuss raising the sales tax. The Council spent $118,000 to hire consultants to sell the voters on a tax increase. What they learned should have disappointed the Council.

These Councilmembers are pushing hard to put a sales tax increase on November’s ballot.

Confusing Messages From City Councilmen About The Sales Tax Increase

At the January 30th meeting, Deputy Mayor Andrews commented that we are currently in an economic downturn, which is exactly the right time when we as a City should be increasing capital spending.  His comment left many in the audience puzzled. If this is indeed an economic downturn, the last thing the average taxpayer wants to do is pay more taxes. More taxes reduce their ability to pay rent or their mortgage. It cuts into their food budget, their travel and vacation capability, their medical care and their own future retirement.

Mayor Nasarenko is campaigning on the premise that Ventura voters will support a locally kept and locally spent tax. He fails to understand, however, that $340 more out of a household budget is still $340, regardless of where and how it is spent. ($340 is City Council’s estimate of how much more each household will pay annually if the sales tax is increased 1%)

Both the Mayor and Deputy Mayor are ignoring nearby failures of sales tax increases, too. Neighboring Oxnard and Port Hueneme increased their sales taxes and they’re still having budget problems. Politicians in those cities failed to realize it is a spending problem, not a revenue problem. Now, Ventura’s politicians are blindly walking down the same path.

Let’s Not Forget Each Councilmember’s Pet Projects

Deputy Mayor Andrews was adamant at the January 30th meeting that Ventura needs more assistance and housing for the “homeless.” Who falls into this category was not defined which leaves it open to interpretation by city officials. It is a fair assumption, though, that one would be able to identify the beneficiaries of his largess by walking down the street. Nothing prevents spending these taxes on any special project such as this once the money goes into the General Fund.

Councilman Morehouse announced last year during a public session that a sales tax increase would just scratch the surface.  Both he and Councilwoman Weir consistently argue that an increase in the sales taxes is just a start, and that Ventura, like other cities, should also be seeking more taxes for:

  • Median maintenance tax
  • Lighting district tax
  • Fire district tax
  • Recreation district tax
  • Library tax

MORE TAXES – THE BIG PICTURE

[PENURY BY THE PENNY]

A sales tax increase is not an isolated event. To understand the full impact of the tax burden on Venturans, one must consider all the other tax increases facing voters.

The Ventura School District tax, approved in 2012, is up for renewal in 2016. Governor Brown’s “temporary” sales tax increase is also up for renewal. And, Ventura County Transportation Commission is considering a sales tax, countywide.

Then consider other recent tax increases:

Medicare tax went from 1.45% to 2.35%

Income Tax rate went from 35% to 39.6%

Payroll tax went from 37.4% to 52.2%

Capital gain tax went from 15% to 28%

Dividend tax went from 15% to 39.6%

Estate taxes went from 0% to 55%

Real Estate transaction tax of 3.5% was added

There’s An Alternative Plan The City Council Refuses To Consider

Our City government has $20 million more in real property taxes and sales taxes. Add to that the 34% water rate increase, imposed without your affirmative vote, to raise millions to fund and replace the water and wastewater infrastructure under our streets, it becomes clear that city government has enough money.

Our current City Council wants more tax money, calling for citizens to “invest” more of “your money.”  Ask yourself first how they have invested “your money” over the last 8 years, and the answer unequivocally — poorly.  How about showing us first how they manage the tax money they have before demanding more.

If you agree that Ventura should live within its existing budget, then write to your City Councilmembers to say so. Tell them not to tax Ventura citizens any more and to spend the money they have more wisely.

Click On A Councilmember’s Photo To Send Them An Email

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Jim Monahan

Carl Morehouse

Mike Tracy

Christy Weir

Editors:

R. Alviani,       K. Corse,     T. Cook,     R. Berry,
J. Tingstrom, R. McCord,  S. Doll,      C. Kistner,
W. Frank

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High Priced Consultants Selling Snake Oil

City Council Hires Consultants To “Sell” Voters On A Tax Hike

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Spending Problem

“We don’t have a revenue problem, we have a spending problem.” — Ronald Reagan

The Scenario

The Ventura City Council is determined to raise taxes again by putting a measure on the ballot in November to increase sales taxes by 0.5%-1%. Two previous attempts failed. As is customary, they are not completely forthcoming or transparent when they are trying to extract more money from the citizenry. On January 30, 2016, the City Council held a special meeting at the Ventura Police Department whose true purpose was to discuss raising the sales tax. The Council spent $118,000 to hire consultants to sell the voters on a tax increase. What they learned should have disappointed the Council.

This City Council is pushing hard for a sales tax incease.

Council hired consultants to direct them on how to sell the voters on a tax increase

 [Only 36% say Yes]

At the January 30th meeting, one paid consultant provided his interpretation of the results of a general poll on citizen’s views asked of 630 citizens. The opinions were favorable in such areas as police, fire, beaches, water, paving streets, serving veterans, and protecting the environment.

When it came to answering two questions specifically focused on the need for a sales tax increase, however, the results were remarkably different.

Question:  Does the City need additional funds for City Services?

Great need = 22%

Some need = 38%

Little/no need = 30%

Question:   If on an initial ballot you were asked to increase sales taxes by one-percent or one-half percent how would you vote?

One-percent                                                one-half percent

Definitely yes = 36%                         Definitely yes = 33%

Probably yes – 12%                           Probably yes = 22%

No/probable no = 39%                     No/probable no = 31%

Interpreting the results, fewer than one in four citizens sees a great need for additional funds and only 36% would vote definitely yes for a 1% sales tax increase.

If 630 citizens surveyed believe the City is doing a favorable job with the funds they have and only 22% believe there’s a great need for additional funds, one might conclude the citizens are content with the current situation.  But, the City Council—strongly encouraged by the consultants—continued to push the sales tax increase forward.

The inference is that voters are not smart and need to be led around

expensive consultants

Ventura spends $118,000 on consultants to “sell” voters on sales tax increase

The pollster then advised the Council that they needed to do more to “educate” the people on why they should vote for a sales tax increase to receive approval.  Without education it was a close call.  His words were – “on the one-percent measure you might have a shot.” One council member commented that the “citizens just don’t understand.”

Next, the paid political consultant outlined that of the 109,000 Ventura residents only 24,000 vote and, of that number, 61% are over the age of 50. It was his view that an intense program was needed to “educate” voters because “they need to know what the city council is going to use the money for.”

In fact, that’s the crux of the issue. If the additional sales tax revenue goes into the General Fund, nobody will know for sure how the City Council will use the money.

MONEY FOR EVERYONE AND EVERYTHING

[The Ventura Essential Services Tax Measure]

At the conclusion of the presentation, Mayor Nasarenko announced, “I have made a sales tax measure a core goal for my year as the Mayor.  I have been joined by the Deputy Mayor [Neal Andrews].”

The discussion then moved to a staff report that listed “all of the needs.”  The list of needs total $1.368 billion. That is billion with a “B.” Excluding costs for Water and Wastewater totaling $661,120,000, which the citizens will pay through a 34% increase in water bills the City Council approved in 2015, which leaves $707,734,532 in needs for the General Fund.

Here are some examples of what’s on the City of Ventura government’s shopping list. It is obvious the city council wants to overwhelm the voters with the sizable need for more taxes.

Community Enhancement $199,360,000
Technology $7,420,000
Streets $298,999,747
Public Art $557,462
Parks $112,192,823
Facilities $42,087,500
Fire $3,400,000
Police $4,853,000

This wish list illustrates the consultants’ concern about Ventura citizens, “they need to know what the city council is going to use the money for.”   But, here’s the rub.

As a General Fund Tax Measure, it is impossible to promise or earmark the new tax revenue to any specific project. To earmark funds requires a two-thirds majority vote (67%) on the ballot. To vote in a General Fund Tax Measure requires a simple majority (>50%).

Given the low interest in approving a sales tax increase cited in the survey (36%, at best), reaching a two-thirds majority will be a struggle. A simple majority seems more likely, if the sales tax increase is to pass at all.

Once in the General Fund, the City Council can spend the sales tax revenue as they choose.

No oversight committee, appointed by the city, has ever challenged spending after it has been spent

Mayor Nasarenko isn’t telling voters that no guarantee exists for the City to spend the additional tax revenue on any of the City needs once the tax receipts go into the General Fund. This Council may intend to use the funds for the projects outlined above, but Councilmembers change, city priorities change and needs change with time. In 2007-08 the signs of an economic downturn were clear yet the City government forged ahead, spending money on experts and projects as if they were immune from economic reality. Who’s to say the City won’t syphon off money intended for street repair to pay for another WAV building, for instance?

Consultants oversight committee

Consultants suggest a citizen’s oversight committee

So, the mayor is creating a smoke screen in his “let’s increase taxes” pitch by promising a Citizen’s Oversight Committee intended to give voters the false sense that “how funds are spent” will be closely monitored.

To monitor the funds that closely, however, a Citizen’s Oversight Committee would have to approve any project expenditure before the City makes it—effectively neutering the Council. It’s unlikely the City Council would approve that. And, even if they did, why would we need a City Council at all if this committee controlled the purse strings?

The truth is no post audit Citizen’s Oversight Committee will track city spending that closely, let alone have the power to reverse any spending after the fact. Once the Sales Tax Increase passes, the fact is nobody will look at it again and nobody will reverse any expenditure.

If you believe a sales tax increase will be spent unwisely, raise your voice. Write to the City Council to share your opinion. In addition, insist Council Members Heitmann, Morehouse and Weir—all up for re-election in the November 2016—thoroughly explain their position on the sales tax increase.  After all, they have a balanced budget, they increased water rates by 34% and they have revenues up $20 million to pre-2008 levels.

Click On The Councilmember’s Photo Below To Send An Email

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Jim Monahan

Carl Morehouse

Mike Tracy

Christy Weir

Editors:

R. Alviani,       K. Corse,     T. Cook,     R. Berry,
J. Tingstrom, R. McCord,  S. Doll,      C. Kistner,
W. Frank

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False state of the city for Ventura 2016

The Real Story Behind Ventura’s Proposed Sales Tax Increase

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Spending Problem

“We don’t have a revenue problem, we have a spending problem.”
—Ronald Reagan

THE CAMEL IS TRYING TO GET ITS NOSE INTO THE TENT    

Ventura City Council is looking for a permanent sales tax increase of 0.5%-1%.  It is a forever tax, despite any protestations to the contrary. Can this Council be trusted to spend the new money wisely to benefit the community, or will they waste it? Until this City Council answers this question voters should not pass the measure.

MISREPRESENTING A CITIZENS’ INVOLVEMENT MEETING

On January 30, 2016, the City Council held a special meeting at the Ventura Police Department. The announced purpose of the meeting, in the advanced notice required by the Brown Act was to conduct a working session to set the goals for the City Council for 2016.  Instead, the true purpose of the meeting was to discuss raising the sales tax.

WITH INCREASES IN SALES AND PROPERTY TAXES, THE CITY HAS RECOVERED FROM 2007

Those attending heard Ventura Chief Financial Officer, Gil Garcia, outline the current financial posture of the City. Garcia stated that the income of the City had recovered back to the level that existed prior to the 2008 recession.  In 2007, revenue totaled $93,926,316, but that dropped $20 million to $73,684,565 as the bottom fell out of the economy.

Increasing City income by $20 million dollars in a 4-year period is a positive step forward.  This 27% overall increase is comprised of a 4% increase in real property taxes and increase of 9.5% in sales tax revenue.

IF REVENUES ARE UP BY 27%, WHY TAX THE CITIZENS MORE?

At the conclusion of the presentation new Mayor Erik Nassarenko announced, ” I have made a sales tax measure a core goal for my year as the Mayor.  I have been joined by the Deputy Mayor [Neal Andrews]”.  Erik and the City Council are seeking a 0.5%-1% increase in the sales tax that would generate an additional $10.9 million dollars to $21.7 million respectively.

The mayor justifies the new tax increase because:

  • Ventura is 150 years old with a stunning “natural landscape that is costly to maintain”
  • “Ventura is an old city, our sewer systems, our water systems, our roads and sidewalks, and our buildings need costly attention”
  • “Like our historic pier, the City of Ventura has unique features that require maintenance, care and funding”
  • “Our fire stations must remain open to provide life saving paramedic response
  • We must protect our waterways from pollution”. (Source: The Breeze)

EVERY DOLLAR OF GOVERNMENT WASTE COMES DIRECTLY FROM YOUR POCKET

What was not discussed was the extent of the spending waste since 2007.

  • $2.5 million lost in funding the market condos and stores in the WAV projects.
  • $1 million spent in studying the narrowing of Victoria.
  • $5 million lost to the internal service funds because of general fund manipulation by the then City Manager Rick Cole.
  • Citizens are already paying for improvements to our water and sewer system through a 34% increase in water bills.

NO ONE WANTS IT

No one wants a sales tax increase. Outside experts hired by the City Council told them only 33-36% of the persons polled would vote in favor of a tax increase. [64%-67% of the respondents were against or ambivalent to the tax increase] Furthermore, they told the Council to achieve a majority the Council needs to wage an election person-to-person “education campaign” so that the people would understand why this money was needed.

State of the City

Propaganda Campaign To “Educate” Voters

IT’S NOT A REVENUE PROBLEM

President Reagan said, “We don’t have a revenue problem, we have a spending problem.” The answer isn’t always to tax our people more, but to spend their money more wisely. If you believe a sales tax increase will be spent unwisely, make your voice heard. Write to the City Council to share your opinion. In addition, insist all the candidates in the November 2016 election thoroughly explain his/her position on the sales tax increase. Have him/her justify why we need a sales tax at all.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Jim Monahan

Carl Morehouse

Mike Tracy

Christy Weir

There will be two more parts of this newsletter to follow in the next few weeks. 

Editors:

R. Alviani,     K. Corse,     T. Cook,     R. Berry,
J. Tingstrom, R. McCord,  S. Doll,      C. Kistner,
W. Frank

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

 

Ventura City Hall

When Spending $118,000 On A Poll Costs You More Money

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VENTURA CITY COUNCIL SPENDS $118,000 TO ASK VOTERS TO INCREASE TAXES – AGAIN

On April 14, 2015, the City Council directed the City Manager to conduct a “community survey” to gauge interest in future revenue options (government speak for  raise taxes) to support community services for a fee of $38,000.  They did that and spent your money for a poll.

high-priced consultants dupe voters

Ventura paid $38,000 to high-priced consultants to “sell” a sales tax increase to voters.

On September 28, 2015, the City Council listened to the expert concerning his interpretation of the answers in the poll, and whether the voters, in his paid opinion would support a sales tax increase of 1/2% or 1% over the present rate of 7.25%.

Given the nature of the questions in the poll (noted below) it was no surprise that he opined that six in ten “perceive the City has at least some need for additional funds for city services. However, only 22% recognized a ‘great need’ and only one-third would definitely vote yes.

One-third however does not get the Council to the required majority in an election, so the expert said that “educational statements lead to a 7% overall gain in support for the one-cent measure and an 8% overall gain in support for a one-half cent measure”. In other words, the voters need to be told (persuaded) what they need.

The paid consultant, of course, was available to provide the needed education to attract more voters at a cost of $80,000.   The Council again voted to spend your money because you need “education”.

The tax increase has not as yet been put on the ballot but the measure will be called – CITY OF VENTURA ESSENTIAL SERVICES PROTECTION MEASURE – if the Council follows the expert’s advice.

RELYING ON A BAD POLL, AGAIN

As is the case with most poorly worded surveys which include ambiguous questions or questions that are too general in their nature, our city council paid for a very misleading assessment. This poll implies that new taxes will go toward any and all of the suggested purposes in the survey, with no details or guarantees.

Interestingly enough, the poll that the City of Ventura commissioned, is quoted in the Ventura Star paper, as asking if the citizens would be willing to support a tax increase, if it provided:

  • protection of local water supplies
  • keep all fire stations open
  • protect local beaches, rivers and coastal waters from pollution
  • maintain and improve fire, police and paramedic emergency response
  • maintain essential city services
  • improve services for seniors, the disabled and veterans

Past City Councils have relied upon poor surveys before and have lost on elections both times in the past.

HOW DID WE GET STARTED DOWN THIS PATH AGAIN?

Ventura now has a new Mayor who has only been in Ventura just over 5 years, coming from Los Angeles. With him comes a desire to tax the citizens of Ventura partly because taxes are lower than Los Angeles and because the Ventura City Council can find more ways to spend more money. However, this desire to gather more tax money is once again being sold to Venturans under the disguise of “keep funds local”.

A SMOKE SCREEN

Before we get too far ahead of ourselves, several of these items, such as water supply, rivers, beaches, seniors, disabled and veterans are already being paid for by county, state and federal agencies.

Our Mayor has started a dialog to have the citizens believe this tax will help our aging water system and our pier.

Blow smoke on taxes

The mayor and Ventura City Council blow smoke about Ventura’s need for more taxes after consultants deliver voter poll findings.

This is an effort to deceive the voters into believing that more taxes are needed for our water system. Ventura Water Department, independent of the city general fund, maintains our water system to the tune of a recent 34% increase in water rates over that last two years. After a 34% increase in water rates, Ventura has the funds for our aging water system.

With regard to the pier, there is over one million dollars in the “pier fund” to repair the pier. The community needs to understand that the pier is protected with an insurance policy that will have it repaired. The policy calls for a onetime occurrence insurance with a $100,000 deductible for each major occurrence. The $1.0 million in the fund, which is money that came from the community, not the city budget, is available to pay this $100,000 deductible each time it is needed. Therefore, no part of the sales tax dollars is needed for the pier.

MORE TAXES ARE NOT ALWAYS THE ANSWER

The other argument most often used to increase Sales Tax rates is that Ventura is lower than other cities, implying that Ventura is falling behind. The only two cities in Ventura County with an 8% sales tax rate are Oxnard and Port Hueneme. Aren’t both of these cities struggling with budget deficits? Los Angeles is at 9.00% for their sales tax. We cannot compare our needs to Los Angeles.

REVENUES ARE ALREADY UP

So let’s first discuss the need for more funds. The truth is that over the last 2 years, the City of Ventura property taxes have increased by 4.0% ($18,479,513 to $19,235,000). Also over the same two years, the City of Ventura sales tax revenue has increased by 9.5% ($16,134,075 to $17, 674,715). Therefore, revenues for the City of Ventura have continued to rise and as our new Mayor has said “we are living within our means and we have a balanced budget”.

WE HAVE THE REVENUE. IT’S A SPENDING PROBLEM.

Now let’s point to the real reason more taxes are being suggested. In 2015/2016, even after the employees’ contributions have been made, the employers’ contributions for the SEIU and Public Safety employees have increased from $15,061,523 to $16,079,104 for a net increase of $1,017,581. And, it is going to get worse.

Therefore, it does not look like the amount that the employees are contributing is keeping up with the cost, investment and the demand by the current and future retirees. Therefore, the percentage of the total city budget is continually going towards increased retirement costs and not services. Employees need to contribute a higher percentage toward their own retirement.

SO WHAT IS THE ALTERNATIVE SOLUTION TO THE PROBLEM?

Using our Mayor’s own words from his 2013 campaign:

Mayor Erik Nasarenko commissioned the voter poll on taxes.

1) When asked how you plan to pay for to improve streets, public safety, water resources, attracting new business, parks, schools and city services his answer was: “By growing the economy… the city must attract and retain businesses that will increase its sales tax base.”

2) When asked what the role of the city is to attract a better economic vitality and his answer was: “The city can bring economic vitality to Ventura by keeping it safe and clean, creating a business-friendly culture at city hall, making sensible, cost-effective loans to businesses, and by promoting trade and tourism both locally and globally”. There is nothing said here about increasing taxes upon the citizens further.

3) When asked whom he would represent, his answer was: “City residents.  Without whom, there would be no tax base—property, sales or otherwise—to provide the core services necessary to support the city”. You shouldn’t be promoting to increasing taxes upon your existing tax base when you have not first tried to introduce your plan for attracting and retaining business that will increase its sales tax base.

4) Where is the action that he promised such as: “As Councilmember, I would like to make Focus Area 1 a top priority, bringing to the Auto Center area a destination retail establishment, like a Bass Pro Shop, and possibly a hotel to support the Players Club casino.”

In our new Mayor’s own words, economic vitality through increasing the business base is the top priority. He led voters to believe that his position was to expand the tax base as a better alternative than increasing the tax rate. We should keep him to his word.

Editors:

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

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