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2017 Ventura City Councilmembers

How To Contact Your 2017 Ventura City Councilmembers

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Louis L'Amour

To make democracy work, we must be a nation of participants, not simply observers.
—Louis L’Amour

Our federalist system gives us many opportunities to participate in our democracy. Some forms of participation are more common than others. And some citizens participate more than others, but almost everyone has a voice in government.

Meet Your 2017 City Councilmembers

We have a new Ventura City Council for 2017. We have one new Councilmember and six incumbents. Each of them has an email account with the city. Not everyone knows how to contact them, though.

Click On A Councilmembers Photo To Email

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 then know what you’re thinking. Tell them what they’re doing right and what they could improve upon. No matter what you write, however, share your opinion. Not participating in government makes us worse because our city government isn’t working for all of us.

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Matt LaVere, Ventura City Council

Matt LaVere

Jim Monahan

Mike Tracy

Christy Weir

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

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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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's water shortage

Ventura’s Water Crisis Is A Study In Procrastination

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Water, water, everywhere

“Water, water, everywhere, Nor any drop to drink.” —Samuel Taylor Coleridge                       The Rime of the Ancient Mariner

THE CHICKENS MAY HAVE COME HOME TO ROOST OVER WATER ISSUES
 [A STUDY IN PROCRASTINATION]

We’re in the worst drought in 100 years. The State of California, the City of Ventura and everyone else is concerned about water.  Lake Cachuma is almost dry, Santa Barbara decides to finance and build a desalinization plant and Montecito is in such bad shape it asks Ventura to build a pipeline through our City to wheel water from sources to the South.

Alarms were sounded.  Nobody thought about water until it was almost gone.  The question on everyone’s mind was how the 93,568 citizens in Ventura were going to obtain their drinking water.  The City Council held meetings and asked for citizens to reduce water use.

Ventura's drinking water

Venturans are concerned over where their drinking water will come from.

On the supply side the Council looks for new sources of water: importing water by tanker, hauling an iceberg off the coast to use melt water, building a pipeline to import the 10,000 acre feet of State water or building a desalinization plant to convert sea water to potable uses.

It was 1992. It was not raining and the community was divided.

The Association for Water Quality Alternatives (AQWA) formed and urged the Council to make a decision – build a reverse osmosis plant to remove dissolved solids and treat brackish water from the Mound ground water basin in the eastern part of the City, or import the 10,000 acre feet of State water by piping it from Lake Pyramid into Lake Piru then to Ventura by pipe line.  This group urged state water because the community had, since 1973, invested millions of dollars for the right to import the water, and would continue to pay $1.5 M per year until 2035. Spending $25 M to build a pipeline was the least costly option.

The City Council would not decide. Instead they voted to put a measure on the ballot asking the citizenry to vote on whether we should build a reverse osmosis plant.  The vote was 52% in favor of a desalinization (membrane filtration/reverse osmosis) plant and 48% to build the pipeline.

Once the election was over everything stopped. No effort was or has been made to develop, finance AND build an alternative water resource. The Water Department has spent millions since 2008  “studying” and they are “still studying” the options.

Ventura’s Water Crisis Is Nothing New.

Notwithstanding the malaise of local government Mother Nature took control.  Between 1992 and 2011 it rained prodigiously. The Ventura County hydrology data for the Casitas dam gauge reflects an average rainfall of 24.10 inches per year in that period.  In 1998 it rained 49.68 inches and Casitas dam overflowed. 2005 was another banner year with 42.86 inches followed by 2011 with 30.83 inches. In 2012 rainfall started moving downward – went to 12.01 inches, then 10.72 inches in 2013 and in 2014 it dropped to 8.02 inches.

EDITORS’ COMMENTS:

History has an  uncanny way of repeating itself.  After 20 plus years of great rainfall could we expect 3 to 5 years of low rainfall in Ventura?  The answer is unequivocally yes!  This pattern has occurred consistently since we began tracking rainfall in 1880.  Human nature is equally predictable – when it is raining why develop and build alternative water resources?

[A WATER EXPERT’S VIEW]

Ventura's drinking water sources

Sources of Ventura’s drinking water

On July 21, 2014, the Ventura City Council appointed a 13 member “Water Supply Strategy Task Force” to hold public meetings and develop a strategy to address potential water shortages in the City of Ventura. This was in response to Governor Brown’s proclamation declaring a statewide water emergency.  There have been three meetings, the most recent on September 9, 2014. This public meeting was well attended, and many members of our community spoke, but one in particular deserves mention.  With his permission we have printed his letter:

“I bring these comments to the board in an effort to make their job easier. Decisions this group has undertaken to make are decisions that were ALREADY made by the public and city government of the City of Ventura back in November of 1992.

I speak to you based on having been the Production Supervisor of the City of Ventura water dept from 1985 till 1992.  Further as the plant operator of the Brackish Water Reclamation Demonstration facility of the Bureau of Reclamation in the City of Port Hueneme from 1997 till 2002.  And lastly as the State licenses Water Treatment and Water Distribution instructor for Water Science Dept at Ventura Community College from 1989 til 2013, training and preparing individuals to acquire their State of California licenses to legally work in the water/wastewater industry.

 In 1992 the city of Ventura was recovering from a major drought.  Part of the dialog going on was that the City should avail itself of State imported water by constructing a pipeline from Ventura to Castaic.

This would have provided the City access to water it would need but as history has shown was and is NOT available.  The State imported water system has historically NOT been able to provide the water contracted for, as the system was never finished and is not capable of meeting those contract levels EVEN when water is available and when in a drought that water is NOT available.  Further, connection to that water supply would take ANY control of amounts or costs AWAY from local control, i.e. Sacramento declaring water emergencies and applying mandatory cutbacks.

That commitment is what this body should be working to see HAVE HAPPEN.  It makes no sense to discuss or study the local water situation thinking or including State mandates when the State plays no part in the City of Ventura’s water supply situation.

It also makes no sense to request the public of this city to further reduce their water usage as the historical records indicate that our citizens have already reduced their consumption of water per capita by more than 50% since the 90’s.  Requesting our citizens to further reduce their water use so that water will be available for the ADDITIONAL population that is being allowed with continued grown is NOT a productive avenue.

The productive avenue and manner to address the current water shortage in our City is to build the treatment facilities that were recognized would be REQUIRED nearly two decades ago.

The City owns and has available water sources already in existence that are NOT being used as the water quality did not meet (drinking water) standards WITHOUT treatment.  But those existing facilities (expensive ones we already own like Victoria Well 1or any of a least three other wells the city owns but is not using ) can and should be utilized as the raw water source to a membrane treatment plant that could provide better quality water that we are getting now from surface water and at a price significantly cheaper than what State imported water is costing our neighboring cities.  Those cost benefits were documented and fully recognized at the Demonstration facility a decade ago.

Membrane treated water from a plant utilizing ground water TOTALLY under the control of the CITY of Ventura makes significantly more sense than asking our citizens to lower the value of their property, accept reductions in use that are set by the state, (which has NOTHING to do with our water supply), is capable of providing HIGHER quality water than we have now, at CHEAPER prices than what our neighbors are paying the state, and follows the directives and sensible decisions made by our citizens and political bodies more than 22 years ago”

—JOSEPH RICHARDSON
Ventura, California

EDITORS’ COMMENTS

 Municipal government has declined to make any decision to develop an alternative water supply for the City of Ventura in the last 23 years.  Waiting another 20 plus years would be an absurdity.  Our current Council can, and must, make a decision. In the words of baseball great Yogi Berra, “When you come to a fork in the road take it.” 

Post Script

VREG is closely watching the Water Supply Task Force Committee’s work on how “our” water conservation program will be designed, monitored and implemented in our community. It was not lost on the VREG committee that shortly after the first of a 3-year rate increase in water rates went into effect in July 2014, additional administrative personnel was hired.

 

Update on County Pension Reform

After months of signature gathering to qualify as a ballot initiative for the County of Ventura, a Ventura County Superior court judge decided that this initiative was not a valid because the County of Ventura cannot elect to withdraw from a system that it first elected to join. That ruling stated that any needed reform for the Ventura County pension plan must come from the state level.  It does not seem to be the political will of the State Assembly or State Senate to tackle this ongoing problem.

Future VREG topic- Ventura City Budget

The June 2014 annual General Budget is in and is being reviewed.

Editors:

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

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Ventura's bad economic policy

Economic Illiteracy, Indifference And Denial Plague Ventura Finances

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IF SOMETHING CANNOT GO ON FOREVER IT WILL STOP
—Herb Stein, Economics Professor

DETROIT – A HAUNTING SPECTRE

[The Consequences of Ignoring Economic Reality]

Most people are now well aware of the economic news. The City of Detroit filed bankruptcy under a cloud of $18 billion in debt. Crippling problems with corruption, unfunded benefits and pension liabilities, nepotism, and cozy political relationships between public unions and elected officials served to bring about their demise.

Detroit's bad economic policy

Detroit’s bad economic policy led to bankruptcy

These problems were enormous, but it was allowed to happen because of an attitude of denial.  Elected officials and citizens continued year after year to look the other way despite mounting evidence that their City was rushing towards bankruptcy – the debt continued to mount and the income continued to dwindle.    The official cause of death – no money.

How would you feel if you learned that someone you know was spending more than he was earning and having to dip into savings to keep going?  You might think at first blush that it’s because of the Great Recession.  But, what if you then learned that in the 4 years since the Great Recession the same person had not changed his spending habits as well as not earning enough income to support their profligate spending?  To explain this as being due to anything other than bad judgment, or reckless fiscal mismanagement, is to engage in the same type of denial that led the citizens of Detroit into bankruptcy.

California Cities In Bankruptcy. Will Ventura Follow?

San Bernardino went bankrupt because of bad economic practices

This news follows the similar fate of cities closer to home like Stockton, Vallejo and San Bernardino.  The City Council in San Bernardino decided to file a Chapter 9 municipal bankruptcy.  That city was running a $5 million deficit on a $130 million budget and did not have enough cash to pay its vendors, workers and retirees.  In the last 4 years the tide has gone out and were are now finding out who was swimming naked.

So, good reader you ask – “What do the financial problems in Detroit or these other California Cities have to do with Ventura?”  The answer lies in the fact that over the last 4 years City Government has used “budget gimmickry” to make it appear as if the City Council had balanced our budget each year.  Solvency was the stuff of fiction for our then City Manager, Rick Cole and Mayor Bill Fulton.  They are gone and we are left with economic reality – not enough money to pay our obligations, an economy that is not recovering and unfunded public pension obligations that have doubled.

CANARY IN THE COAL MINE

[Bad Economic Policy In Practice]

On June 17, 2013, our new City Manager presented a Budget for 2013-14 to the City Council for approval.    The budget is not balanced.  In the last 4 years revenue decreased from $94.1 million to $82.4.  The Council was presented with the following historical and projected income and expense comparisons (numbers in millions of dollars):

Fiscal Year Income

(millions)

 Expenses

(millions)

 Shortfall/Gap

(millions)
2008-09 $94.1 $94.1 0
2009-10 $85.1  $96.5 $11.4
2010-11 $88.1 $80.4 $7.7
2011-12 $ 81.0 $81.5 $0.5
2012-13 $82.4 $84.4 $2.0
2013-14 $86.7

(est.)

 $88.3

(est.)

 $1.6 

(est.)

 

Our new City Manager outlined, in a kindly manner, the efforts that had been made in the past to try to “balance the budget”, which had not been successful:

“In the past 5 years the City of Ventura has experience a decrease in general fund revenues of $16 million dollars.  During the same period, budget and service cutbacks have eliminated more than 100 positions, increased employee contributions of both medical costs and retirement costs, reduced landscape  maintenance and park service levels, reduced street repairs and resurfacing, discontinued the Crime Prevention Program, and reduced the Police Department Gang Unit, eliminated the Neighborhood Traffic Calming Program, temporarily closed Fire Station 4,  reduced sidewalk repair program, reduced hours at the Senior Centers…just to name a few.  While these efforts were extensive, they simply have not been enough to balance our budget.  This is evidenced by the continuing decline of our fund balances, which have been decreased by approximately $10 million dollars over the past 5 years.

“Utilizing fund balances, or living off your savings accounts, is not an uncommon practice for municipalities during times of economic challenge but it is only a short term solution that is undertaken with the optimistic view that economic conditions will soon change for the better.”
—Mark D. Watkins, new City Manager

Too Much Data, Not Enough Information Muddles Economic Policy

This 569 page budget provides detailed expenses of $89.5 million dollars, but it totally lacks any information on how this year’s revenue of $82.4 million dollars can be increased to meet our projected expenses of 88.3 million dollars in 2013-14.  Where will that additional $7,100,000 be generated?   If true we are asked to accept that our City will increase our income by 8.6% next year, more than twice the U.S. Gross Domestic Product of 2.5%.  What makes our City officials believe our rate of growth will be more than twice the national average?

On the liability side the facts frightfully demonstrate that we are on a financial cliff.  Not only are we facing a deficit of at least $1.6 million or more in our General Fund Budget, there are the off the books debts.  First, there is the matter of the unfunded pension obligations to City employees, policemen and firemen.  In 2008 those obligations totaled $48 million.  In our August, 2008, edition we argued that the Council should take steps to change the pension structure because those benefits were not sustainable.  Today those obligations total a minimum of $96 million upward of $350 million, depending on the assumed rate of investment from CALPERS.

“If we do not find a way to restore these funds in the next 5 years we will have serious financial difficulty.”

In spite of these looming long term commitments and with an urging that the City Council not increase the Firefighters pension entitlements to 3% at age 55, the Council did it anyway.  Nobody on the City council could identity where the funds would come from to pay for this increase.

Second, there is the $12 million in reserve that we have had since 1992.  Not only was the income from this reserve used by the City Council as a source of income for the General Budget over the last 20 years, but we learned in March, 2013, from our interim City Manager, Johnny Johnson that $7.5 million dollars in the Public Liability Fund, Workers’ Compensation Fund and Information Technology Fund had been moved to other areas in the budget to make it appear as if our budget was balanced.  In his words, “if we do not find a way to restore these funds in the next 5 years we will have serious financial difficulty.”

POST SCRIPT
INCLUSIONARY HOUSING ORDINANCE

Inclusionary housing bad economic practice

Inclusionary housing continues Ventura’s bad economic practices

In our last issue we reported that the City Council, on July 15, 2013, would consider a request from the Community Development Director to cancel the Ventura ordinance requiring builders and developers to donate a percentage of their development to low income people. His reasons were clear, there is no housing being built in the City of Ventura.  His view was shared by the State Department of Housing and Community Development, which had concluded that such ordinances “are a constraint to the development of housing”.

The Council room was flooded with the homeless, low income folks and their children, all prepared to tell their story and urge denial of the request to cancel the ordinance.  This was orchestrated by CAUSE. Their organizers were in the hallway handing out bottles of water and signs that read ‘HOMES FOR EVERYONE”.  A group organizer actively moved in an out of the group with clip board in hand.

Councilman Andrews quickly presented a motion to defer a decision on the measure and for the appointment of a Blue Ribbon Committee to study the matter further.  Councilman Brennan, joined by Councilman Morehouse, pointed out that when they came up with this idea for this ordinance in 2006 “we knew we were going to have to massage it because we did not know where it was going.  We expected we would have to come back and look at alternatives”.   The three of them voted to table the matter and appoint a special committee of “experts” to make recommendations.

“This 2006 ordinance was a half baked idea”

Councilwoman Weir painted a more candid view of this ordinance.  In her words “this 2006 ordinance was a half baked idea”, and that “it was no surprise to anyone it is not working”.  She also observed that a lot of those people in the audience who spoke against cancellation were homeless and would never qualify under the program anyway.  Ms. Weir favored an “in-lieu” fee to help the homeless transition.  Mayor Tracy and Councilman Monahan joined her in urging an “in-lieu” fee.  They voted against the motion by Councilman Andrews to postpone and appoint a committee.

Deputy Mayor Heitmann provided the decisive vote to table and appoint a Blue Ribbon Committee.  She seemed somewhat confused by the discussion, did not profess to have any knowledge on the subject thus voted to table the matter because there were “a lot of unanswered questions”.  A perplexing comment given that the Council and been provided with a lengthy and detailed report from the Director of Community Development explaining why this ordinance had failed.

Nobody knows who will be on the Blue Ribbon Committee.

Editors’ Comments

Economic illiteracy is not recommended as a qualification for the Ventura City Council. We urge you to choose your Council Members wisely come next November.

Editors:

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

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WAV Building subject of article

The WAV Project & 2011 City Council Candidates Forum

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Sad commentary on Ventura's City Council election

A DEMOCRACY WILL CONTINUE TO EXIST UP UNTIL THE TIME THE VOTERS DISCOVER THAT THEY CAN VOTE THEMSELVES GENEROUS GIFTS FROM THE PUBLIC TREASURY. FROM THAT MOMENT ON, THE MAJORITY WILL ALWAYS VOTE FOR THE CANDIDATES WHO PROMISE THE MOST BENEFITS FROM THE PUBLIC TREASURY, AND EVENTUALLY THIS DEMOCRACY BECOMES A DICTATORSHIP
—ALEXANDER TYLER (1887) Scottish history professor

CANDIDATES FORUM

NOVEMBER COUNCIL ELECTION

(MARRIOTT HOTEL – THURSDAY, AUGUST 25, 2011, 6 P.M.)

The Political Action Committee (PAC) of the Ventura Chamber of Commerce will present a candidates forum to the citizens of Ventura, at the Marriott Beach Hotel, located at 2055 East Harbor Boulevard, Ventura, commencing at 7 P.M.

A City Council election is set for November 8, 2011.  Three council seats will be open in this election.  The council members up for reelection are Councilwoman Christy Weir and Councilman Carl Morehouse.  Mayor Bill Fulton has announced that he will not stand for election.

The candidates for this election, and who will be appearing at this forum to speak and answer a series of questions are:

START CANDIDATE START CANDIDATE
6:00 Melody Baker 7:00 15-minute Break
6:10 Brian Lee Rencher 7:15 Martin Armstrong
6:20 Danny Carrillo 7:25 William Knox
6:30 Ed Alamillo 7:35 Cheryl Heitmann
6:40 Ken Cozzens 7:45 Carl Morehouse
6:50 Carla Bonney 7:55 Christy Weir

This is the second time that the Chamber PAC has presented this event, and all citizens are encouraged to attend.  It is probably the only time when you will be able to compare the candidates and compare their answers to set questions about their platform.

THE WAV

[HORNSWOGGELED  AND  SKINNED AGAIN ?]

“Hornswoggle”, slang circa 1829.  A word to describe one who has been bamboozled.  Synonyms: beguile, bluff, buffalo, burn, catch, con, cozen, delude, dupe, fake out, fool, gaff, gammon, gull, have, have on [chiefly British], hoax, hoodwink, deceive, humbug, juggle, misguide, misinform, mislead, snooker, snow, spoof, string along, sucker, suck in, take in, trick

Were Ventura taxpayers hornswoggeled by the WAV Building?

On your next walk go to the corner of Thompson boulevard and Ventura Avenue to view the WAV, a Ventura City Redevelopment project located at 175 S. Ventura Avenue.  You can also go on line and conduct a virtual tour by going here.

The advertisements from the City folks, and its developer, is that this WAV project  represents “the vanguard of innovative, sustainable, cultural facilities.  The Working Artists of Ventura will be a $57 million, state-of-the-art community designed for artists and creative businesses”.  This project, according to Mayor Fulton and the City Council, acting as the Redevelopment Agency, was built without the use of taxpayer money, would produce 25,000 visitors a year and would stimulate the local economy resulting in  $75,000,000 in new investments.

WAV Building History

The WAV Building has convoluted financing that puts Ventura taxpayers at risk.

The project planning began in 2005, and was completed in October, 2009.  It was built on a 1.62 acre site at the corner of Thompson Boulevard and Ventura.  The land was purchased by the City RDA at a cost of $1.5 million using tax (RDA) money.  The concept was the “revitalization of underutilized sites and the construction of  affordable housing” through the Ventura Redevelopment Agency.  The project was to consist of 54 residential units for low income artists, 15 units for the homeless, 13 market rate condominiums and 6,000 square feet of commercial space determined by the developer to be “arts-friendly”.   In addition to the land cost of $1.5 million the City loaned the “developer” $1.5.  The total project ended up costing $ 68,000,000.

Planning started with a $400,000 loan to a company called Arts Space Inc.  A person named Chris Velasco was the project manager for that company, however he left that company and formed his own Minnesota corporation called Projects Linking Arts, Community and Environment (PLACE), with himself as the owner.  The other stockholders in that company have not been determined.

The Convoluted Path That Started the WAV Project

The first step was the preparation of a Disposition and Development Agreement, which was executed by PLACE and the Redevelopment Agency of the City of San Buenaventura (RDA) on November 20, 2006.  This contract was amended on October 4, 2007 and again on February 1, 2008.  To start the project the RDA committed to give and/or loan the Developer $4,358,000.  A summary of the financial details of that contract is as follows:

  1. The RDA agreed to sell the land they purchased at a cost of $1,500,000 to the developer for $1.
  2. The RDA would loan the Developer (PLACE) $1,500,000 (including the $400,000 originally loaned to Arts Space) for development costs.
  3. The RDA would loan another $1,358,000 to the Developer so that they could  pay the RDA rent to itself for a parking facility adjacent to the WAV project. A  lease was then executed providing for a 35-year lease at a rental value of $1  per year.
  4. The Developer was to start the project by March 31, 2008.
  5. The City agreed to transfer the transfer of the 13 condominiums from PLACE to WAV CONDOMINIUMS, a California Limited Liability Company, whose  members are Crest of WAV Partners LLC and JSCO WAV Homes LLC .

*  The San Buenaventura Redevelopment (RDA) agency is a political entity separate and apart from the City of San Buena Ventura.  The City Council and the people who run the City are the same people that run the RDA.

PLACE is a Minnesota corporation, owned by Chris Velasco, with an address at 300 Lumber Exchange 10 South 5th, Minneapolis, Minnesota.  WAV CONDOMINIUMS LLC and WAV APARTMENTS, a limited partnership owned by WAV CONDOMINIUMS LLC are all located at the same address and are operated by Chris Velasco.   The other partner in this is JSCO VENTURA, LLC, a California limited liability company operated by John Stewart Company, another California Corporation,  with offices in San Francisco.

WAV Building Repayment Plan, As We Know It Now

The identity of these various business entities becomes relevant because to get some of our tax money back the RDA obtained a promissory note for $2,858,000 dated February 1, 2008, by the terms of which WAV PARTNERS and JSCO VENTURA, LLC, would pay the money back in 55 years and bear 3% simple interest.  Of course the ability to recover that money depends upon the ability of these new  business entities to pay the debt.

The principal and accrued interest on this loan is to be paid by 2063, but the amount to be paid depends on whether these companies have any “surplus cash” as that is defined in the contract.  That sum consists of all of the income these companies receive for the WAV housing project less their operating costs annually, a property management fee of $30,000 a year, which will  increase annually by 3%, reasonable developer fees and any principal and interest payments approved by the RDA.  This promissory note was not signed by Chris Velasco as an individual nor by The John Stewart Company.   There are no individuals responsible for this note, nor any company, such as John Stewart Company ( a potential  deep pocket) to guarantee repayment.  What money will be paid in 55 years, if any, is impossible to predict.  If there is no profit they do not have to pay the money back.

Still Much To Be Uncovered

The list of principal contributors to the WAV Building. It’s political spin to think these groups financed it all.

RES PUBLICA is in the process of trying to obtain a current income and expense statement in order to determine if the low income housing project is working financially. What is known at this stage is: (1) none of the 6000 square foot  business space has been leased; (2) none of the 13 condominiums have been sold; (3) the RDA loan of $2.4 million, secured by a second trust deed on the condominium part of the project only, had to be renegotiated with JP MORGAN CHASE and CITI BANK last month because the banks’ $4.2 million construction loans, secured by a 1st trust deed, which are senior to the RDA loan, were about to be foreclosed. That did not happen fortunately because the banks’ agreed to extend the loan for another 5 years. The RDA is still in a second trust deed position and will lose this money through foreclosure if the condominiums do not sell.

As for the claim that this project was built without using tax money it is political spinning at best. All that can be said is that the money spent by the RDA  (our City Council and City Manger) did not come from the City general fund. For those who prefer “plain-speak”,  the reality is that with the exception of the bank loans, all of this money came from money paid by the citizens to  Federal, State and local governments,  and from a $25,000,000 Federal tax credit purchased  by Union Bank of California.

EDITORS COMMENT

The City Manger, City Council and people at City Hall running this project might argue that it is very easy to “Monday morning quarterback” on a project that began 6 years ago, or wring their hands and despair that nobody could have anticipated the situation with this economy? 

The answer is that even in a good economy, this situation was bad from the beginning. It was predicable, regardless of the timing, that citizens would not spend over $1.0 million for a condominium with a view of the freeway to the South, the Strong Steel building to the East and located on the top floor of a low income housing project.  The cost per unit was too great and the desirability was questionable.  The City Manger and members of city council acting as the RDA were either grossly negligent or they were hornswoggeled.  The taxpayers were skinned.

In the private sector, when a so-called “good deal” goes bad, people lose their jobs. In the public sector, nobody is held accountable and elected officials either choose not to  run again, or they run but blame their fellow council members. 

CHOOSE YOUR NEW COUNCIL MEMBERS CAREFULLY !

Editors:

B. Alviani          K. Corse        T. Cook

J. Tingstrom    R. Mccord     S. Doll

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Ventura Police pension mistake

Pension Spiking Approved in Police Retirement Contract

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” We Must Hand Together Or Surely We Shall Hang Separately” —Thomas Paine

COUNCIL APPROVES PENSION SPIKING

[Fleecing Time – Again!]

At the Ventura City Council meeting on Monday, May 16, 2011, on a vote of 5 to 2 the Council approved to an employment contract amendment to the Ventura Police Officers Association (VPOA) and Ventura Police Management Association (VPMA) employment contracts.  Mayor Fulton and Councilmen Tracy, Brennan and Morehouse voted for the amendment.  Councilwoman Weir and Councilman Andrews voted against the measure.

Ventura Police negotiate with City Council to get pension “spiking”

New employment contracts for the VPOA and VPMA were approved on January 16, 2011. However, in May it was pointed out that a correction (amendment) was needed because  an important detail had not been treated. “They” forgot to include essential terms in the contract concerning who was going to pay the 4 ½% pension contributions.

Recall, good reader, that this contract was hailed as a masterful accomplishment, unique in California, and that it would save the community money in the long run (Mayor Fulton and City Manger Cole) because our policemen were now  going to have to pay something toward their own pension just like everybody else in the private sector.

A Pension Deal Too Good To Be True

At first blush this step was positive, albeit anemic, because in past years this Council had entered into employment contracts with the policeman whereby they entire 9% pension contribution would be paid by the taxpayer.   Our Mayor Fulton and City Manger Rick Cole extolled the virtues of this new employment contract because  the City of Ventura had tilled new ground by requiring the policemen to pay something toward their own retirement – 4 ½% we were told.  Councilman Andrews, Councilwoman Weir and fiscal conservatives in the community argued forcefully for a 9% contribution particularly in light of an unfunded pension liability of $250 million, but we digress.

Now we learn that with this amendment of the contract terms, unlike the SEIU employees contract, the VPOA and VPMA will be paying their 4 1/2% retirement contribution toward the employers’ portion (taxpayers portion) of that is sent to the CALPERS retirement plan. This accounting maneuver is specifically done to increase the total compensation of the employee, making the retirement payout amount higher for their lifetime.

The employee’s goal is to get one year of the highest possible salary so that his retirement for life is higher – called “spiking”.

Giving Context To The Problem The City Council Created With Police Pensions

To help put this into perspective, the employers’ portion of the total  annual retirement payment paid to CALPERS by the city (taxpayer) is counted as income to the employee for purpose of calculating the employees retirement benefit when they retire. The employee’s goal is to get one year of the highest possible salary so that his retirement for life is higher – called “spiking”.  Until now the city has been paying the taxpayers portion (100%) plus the employee’s portion (9%) toward the CALPERS retirement for a total of 109% yearly.  Now, with this contract amendment, we learn that while the 4 ½ % will be contributed by the police officer, from his salary each year, but it will be shown as a payment made by the employer (taxpayer)  to CALPERS.  The reality is that the employee’s annual salary will be shown as higher by 4 ½ % for purposes of calculating that police officer’s gross salary when they retire.  The policeman gives up 4 ½% as his contribution now but recovers it all at the time of retirement.  The taxpayer is in effect still paying 109% of what is required to be paid.

Ventura Police pension mistake

Ventura Police Officers put one over on the City Council in pension negotiations.

While some may define “spiking” as adding benefits to salaries in the last year of employment to boost up the retirement amount, this additional 9% accomplishes the same results, an inflated income for retirement formula purposes. It will even compound to a higher amount, should a three highest years plan ever be adopted.

So, why was this fact not made known publicly 4 months ago? Why was it not questioned or challenged at the May 18th meeting by any council member?  Why was the CALPERS representative not questioned about the effect of this decision at the time of the January meeting? There were no questions and there was no discussion about the long-term impact to the city.

Specious Defense Of The Pension Contract

City Manager, Rick Cole, defends the contract amendment by saying that the payment by the employee  into the employers’ portion of the retirement, which is then sent to CALPERS, was a non-negotiable item with the VPOA and VPMA. He also said it would make no difference because the current officers would receive retirement benefits based upon their “highest level” of compensation. That statement is true for the current workforce but what he failed to address, nor was he questioned, was how this would have affected officers hired in the future.

While the City Council remains concerned about the long-term effect of taking more general funds for street lighting, they continue to ignore the paying of 9% higher retirement benefits, which also comes from general funds in the form of payments to CALPERS, for years into the future. We can thank soon up for re-election Mayor Bill Fulton and Councilmember Carl Morehouse for this gracious contract approval.

EDITORS COMMENT

 If the City Manger concedes that this 4 ½% contribution, paid  through the employer’s contribution to CALPERS,  was not negotiable with the police officer unions (his words not ours), then what about the taxpayer’s non-negotiable rights not to overpay and provide lavish retirement benefits to these public servants?  Who then is protecting the interests of the taxpayer in this City when sitting at the negotiating table?  Better to reach impasse and let these folks scramble for a new job then render the community hostage to the potential of bankruptcy.  This unfunded obligation can and should be laid squarely at the feet of the council members who voted for this amendment; but, of course when it comes time to pay the bill they will be over the hill and the taxpayer will get the bill.

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Volunteer fire depertment may help Ventura's pension costs

Time To Consider A Volunteer Fire Department For Ventura

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

PUBLIC EMPLOYEE PENSION TRANSPARENCY ACT

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

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

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

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

THE FIREFIGHTER BENEFITS CONTRACT

Volunteer fire fighters may help Ventura's pension problem

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

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

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

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

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

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

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

ANOTHER POINT OF VIEW

[The case for a volunteer Fire Department program]

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

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

Solutions for Ventura’s Fire Department

[The Case For A Volunteer Fire Department]

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

Response Times

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

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

Lack of Funds

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

Volunteers

Volunteer fire department similar to Volunteers in Police

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

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

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

Most US Fire Departments Use Volunteer Fire Fighters

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

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

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

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

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

 Editors’ Comments:

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

Editors:

B. Alviani           K. Corse        T. Cook

J. Tingstrom     R. McCord    S. Doll

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

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CalPERS costs Ventura piles of cash

CALPERS Increases on City Out of Control

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Winston Churchill

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

HMS TITANIC

[Moving Deck Chairs to Avoid a Disaster over Pensions]

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

Police salary negotiation victory jacks CalPERS

Ventura Police unions extracted concessions to pay for CalPERS contributions.

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

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

The City Manager’s “Victory Lap” Over Pensions

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

Active citizens,

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

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

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

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

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

Respectfully,

—Rick Cole, City Manager

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

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

CalPERS extracts piles of money

New police salaries will cost Ventura taxpayers piles of money.

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

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

 

FISCAL YEAR          EMPLOYER CONTRIBUTION RATE (Police & Fire only)

2011/2012                   35.190%

2012/2013                   36.4%

2013/2014                   40.6%

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

CALPERS, report of 10-10-10

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

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

 

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

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

A 47.6% increase in unfunded liabilities in one year.

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

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

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

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

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

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

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

EDITORS COMMENT:

Bad negotiating increases CalPERS contributions

Bad salary negotiating increases Ventura’s CalPERS contributions

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

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

Editors:

B. Alviani           K. Corse          T. Cook

J. Tingstrom     R. McCord      S. Doll

 

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

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

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2011 Election Results

The 2011 Election Brought Mixed Outcomes for Ventura

/in /by

It’s an Ill Wind That Blows Nobody Any Good
—English Proverb

THE VENTURA UNIFIED SCHOOL TAX MEASURE

[MEASURE H – SOUR GRAPES IN BUNCHES]

In the November 2, 2010 election, voters in the City of Ventura were asked by the Ventura Unified School District (VUSD) to approve Measure H, a parcel tax, which if approved, would have imposed a cost of $96 per year per single family residence — unless you were over 60 and claimed an exemption.  Those with multiple housing units faced paying far more with no exemption.

The tax proposal failed to receive the 66.67% (2/3rds) majority required for passage.  There were 24,491 in favor (59.3%), and 16,767 opposed (40.6%).  The VUSD Board of Trustees might want to reflect on this result because the outcome was predictable.

Measure H For Against
Votes 24,491 (59.3%) 16,767 (40.6%)

On May 25, 2010, the Dale Scott & Company presented their commissioned survey results for a Parcel Tax Measure to the VUSD Board. The reported poll results were that the Parcel Tax Measure would receive 56.5% support. It was further reported that after a “push/pull” series of 15 more questions with this captive audience, the approval percentage rose to 62%, still 5% short of passage.

The Superintendent’s and proponents cry of foul amounts to sour grapes.

There are many positive steps this board can take notwithstanding this result:

  1. Negotiate to have the VUSD employees pay a portion of their health care cost(s).
  2. Reduce non-classroom personnel as much as possible.
  3. Reflect true health care cost in the annual budget, not costs padded by 11.5%.

The proponents now cry foul about the system .The VUSD superintendent and proponents were quick to point out that the vote was 59.3% for passage, indicating support from a majority of the voters, and from this result feel that the 2/3rds majority vote requirement is unfair and should be changed. That conclusion is ill conceived and would amount to an unreeling budget crisis that would make these current economic times appear minor. The Superintendent’s and proponents cry of foul amounts to sour grapes.

The public reaction to this result should be heard.  A letter to the Ventura County Star Editor on Nov. 5 suggested that the 24,491 who voted yes should donate the $96, thus giving the VUSD $2,351,136.

Editors’ Comment: 

The idea posited by the November 5th letter writer is a super idea and that should be where the VUSD should focus its next campaign.  The question remains—would those same voters contribute to an educational trust fund for defined purposes?  Hard not to be cynical and suggest that it is easy to vote for something when you are spending someone else’s hard earned money.

MORE ELECTION STUFF

[TYRANNY OF THE MAJORITY?]

California voters went rogue on November 2nd, bucking the national and Ventura trend toward electing fiscally responsible candidates.  Sadly, those working under the Sacramento Capitol dome will behave very much as those who preceded them.

In the Legislature, three-fifths of the members will continue to dance to the tune of their government employee union sponsors.  California government workers have become the highest paid in all 50 states, without much effort in electing candidates who will support their requests for ever higher pay and benefits.  This will spill over onto the City of Ventura.  Count on the Sacramento types to pursue all manner of fiscal mischief.

First the “Ill Wind” for Ventura citizens.  The passage of the government employee union sponsored Proposition 25 will have negative consequences for those who pay our state’s bills.  Proposition 25 lowers the threshold to approve a budget to a simple majority, down from the two-thirds vote requirement that has been in place since 1933.  Now it remains to be seen whether or not lawmakers will try to take the next step and try to impose a myriad of new taxes in the state budget with a simple 51% majority vote.  If history is any indicator they will try. Senate President Pro Tem Darrell Steinberg as well as government employee union leaders have stated that reducing the two-thirds vote for the budget is the first of a one-two punch that is designed to soften up taxpayers on the issue of the current requirement or two-thirds vote before taxes can be raised.

Proposition 22 For Against
Votes 5,709,050 (60.7%) 3,709,292 (39.3%)

But for Ventura and other municipalities this election has blown in a “lot of good”.  Proposition 22, the measure to stop Sacramento from taking City funds and tax revenue in the guise of “borrowing” passed  with a yes vote of 5,709,050 (60.7%) and no vote of 3,709,292 (39.3%). This taking by an out of control state bureaucracy has been stopped thanks to the efforts of our City Council, as a member of the California League of Cities, and in particular our own City Councilman, Neal Andrews.

 

Editors:

B. Alviani           K. Corse     T. Cook

J. Tingstrom     R. McCord

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