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

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6 replies
  1. Mark
    Mark says:

    Instead of raising taxes and or forgoing maintenance throughout the city, have each employee contribute more to his/ her pension. 15-20 % would ease the financial burden on the city. Just saying……..

    Reply
    • billfrank
      billfrank says:

      That would be the preferred solution. The trouble is, Mark, that the unions representing city workers would fight that tooth-and-nail. They thought they gave major concessions when they agreed to have new employees contribute more to their retirement pensions. Unfortunately, that was too little too late. The union leaders bask in the knowledge that the taxpayers will bail out the pensions when they go belly up. They see the historical precedents in the Wall Street bailout in 2008 and the recent bankruptcies in Detroit, San Bernardino, and Vallejo.

      Reply
  2. of the City Cotime although I’ve resided in Ventura as a home owner since 1962. At that meeting, the City Council was discussing the retirement ages as related to Police and Fire personnel.
    of the City Cotime although I’ve resided in Ventura as a home owner since 1962. At that meeting, the City Council was discussing the retirement ages as related to Police and Fire personnel. says:

    I recall pointing out the fact that the “unfunded liability” related to their approval of the Police and Fireman retirement plan would be economically disastrous to the City in the not to distant future.

    Needless to say, the Council dismissed my point as not relevant to their plan. Obviously, it was already “a done deal”.

    I believe several months ago, they took the same approach on the issue of the very real possibility of future water shortages.

    Reply
    • billfrank
      billfrank says:

      Thanks for the comment, Mike. What you foresaw came true. By 2025, 51¢ of every dollar in the budget for public safety will go towards pensions. That’s untenable.

      With regard to water, though, the Council’s decision in July was an improvement. You can read about in our article: http://www.vregventura.org/with-water-the-simplest-solution-is-best/. The Council forced Ventura Water to change direction. Instead of building a wastewater treatment plant as the primary supplemental source of water for Ventura, they insisted Ventura Water hook up to state water. Ventura Water will still try to pursue Direct Potable Reuse of treated wastewater, but they will face stiff opposition because the state regulations for such water don’t exist yet. In fact, they will not exist until 2023 at the earliest.

      Reply
      • SoCalSarah
        SoCalSarah says:

        @billfrank, there’s a reason public safety employees risk their lives. Would you risk your life if you didn’t have a pension or good retirement waiting for you?
        What needs to happen is a focus on the big picture, not just 1 thing. Maybe the pensions are adding to the financial issues… but it’s definitely NOT the only reason. You cannot fix a budget JUST by dealing with pensions.

        Reply
        • billfrank
          billfrank says:

          @SoCalSarah, You’re right. Ventura’s financial situation can’t be fixed by focusing on the pensions alone. Pensions are one—very large—component of the problem. Actually, Ventura needs to look at staffing as the primary lever to restoring fiscal sanity. Over 54% of the city’s General Fund goes towards salaries. The city can start there. It will take strength and courage to examine salaries, but Ventura needs to do it. One stumbling block will be the unions: police, fire and Service Employees International. They will fight hard to preserve jobs. Union leaders would willingly sacrifice Ventura’s fiscal stability to create more union jobs. Don’t believe me? Just look at the recent initiative by Ventura Fire to add a roving fire engine. Fire Chief David Endaya publicly petitioned the City Council for that fire engine (and its crew). He did so under two unusual circumstances. First, he didn’t have his facts and figures supporting his decision to add the engine. That was unprofessional, at best. Second, he had already hired the three firemen to work on that engine BEFORE the City Council decided.

          Reply

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