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Recession challenges Ventura budget

Budget and Pension Crises Throughout California Inflict Harm

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“If there must be trouble, let it be in my day, that my child may have peace”—THOMAS JEFFERSON

CALIFORNIA – A FAILED STATE

[THE “TERRITORY OF CALIFORNIA”]

You can watch the stock market successes, listen to the pundits braying out messages like “we have turned the corner”, but the  reality is that the State of California and the municipalities nationwide, including  the City Ventura, are in trouble.

Recession creates budget crises

The recession caused budget and pension crises throughout California.

The fortunes of the State of California are grim.  The S&P and Fitch Investors lowered the debt rating on General Obligation bonds to BBB. This rating  means that California bonds now are “speculative with major risk exposure”.   It is projected that the rating will be lowered to B (junk bond), which means “adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal”.

During a VREG  forum at the Ventura Beach Marriott on February 24, 2010, the guest speaker, Chriss Street, of Orange County whistle blower fame, currently  serving as the Orange County Treasurer and Tax Collector,  put the State of California  with the debt problems of Greece, which imploded because of their governments “credit default swap” ventures.  They and the State of California are broke, but our state does not have a Eurozone to bail us out.  It is so bad that the Governor’s office is looking at bankruptcy.   By law, a state cannot file bankruptcy, but state government has been advised that bankruptcy is an option if they convert to a “territory”.

Mr. Street also was of the opinion that between July 21 and July 24 of 2010 the State of California will be in the position of being unable to obtain any financing to continue operations. Is he right?  We do not know but we have marked it on our calendars.

VENTURA’S CUPBOARD –ALMOST BARE?

[IN THEN JUST OUT OF THE  PICKLE BARREL]

The economic failure of the State will have a direct effect on municipalities including the City of Ventura.  Recall, that last year our state government, pursuant to Proposition 1A decided to “borrow” [take] our real property tax money. They can do that for two years with a promise to pay it back.  This served as a major argument by Mayor Weir, Councilman Fulton and the “TAX ‘EM” bunch to convince Venturans to raise the sales tax.  Didn’t work the first time in 2006 and it cost the citizens a bunch of money again in 2009.

budget crises created by recession

California withholds property tax revenue from Ventura to close budget gap.

Then, after the November election we learned that the City did get the real property tax money through a concept of “securitization”. Here is a hopefully simple explanation.  As part of the 2009-2010 budget, the California Legislature suspended the local agency protections of Proposition 1A and passed a provision to withhold more than $2 billion of property tax revenue from cities, counties and special districts.  Ventura’s share of that was $2,718,041.  So, in a plan equivalent to a “forced loan”, the State exercised the right to hold those funds to close the budget gap, with the intent to repay the money in three years. As an alternative, the legislature also permitted the establishment of a third-party securitization program for cities to use to avoid the loss of revenue.  A group called the California Communities Development Authority (aka California Communities) was appointed as the exclusive authority to offer a program to purchase the receivables due to local government agencies from the State.  They did that, $2 billion in bonds were sold in the market place and the property tax money due to each municipality was paid with all interest and costs paid by the State. View the amount taken from each city/county here.

The City of Ventura again faces the specter of losing this same amount of money in the 2010-11 budget. Given the deplorable condition of the State finances one wonders who would again loan the State another $2 billion.  On a positive note the City of Ventura has joined with the California League of Cities in signing a referendum petition to prevent the State of California from taking the real property tax money in the future.  Our city is sitting on the edge of the proverbial pickle barrel.

THE $11 MILLION PROJECTED BUDGET LOSS

employees largest budget item in Ventura

City employees are the largest budget expense in Ventura.

On March 15, 2010 Mayor Fulton invited community leaders to attend a BUDGET WORKSHOP to help decide where to make cuts in the 2010-11 budget to compensate for an $11,000,000 PROJECTED LOSS.    Liberally attended by policemen and fireman, due to invitations extended, by our Chiefs of Police and Fire, to “Friends of the Fire Department” and “Friends of the Police Department”, the participants came up with a variety of proposals.  The giddy report from Mayor Fulton was that it was a resounding success, with proposed solutions like – “muddle through”, “strategic layoffs”, “use of volunteers”, “delay projects” and “shift funds”.

One participant reported that during this conference the major budget item that needed to be addressed was all but ignored, which is the cost of people.  At least 80% of our expected income of $85 million will be spent for people and pension costs. Police and fire consume 56% of the total budget cost.

EDITORS’ COMMENTS: 

The original budget was based on a prediction that the City would have income of $97 million to cover their expenses.  It was a bad bit of guess work.   Realistically, the City could never have expected  more than $85 million in the first place, however now they want the citizens of the community to believe they have an $11 million shortfall.  Not true.  What they have is long-term expenses of $11 million more than their income.

THE PENSION DEBACLE

A few months before the November 3rd  election the City Council proudly announced that the City Council, in an effort to address serious budget woes, had appointed  a special committee to investigate potential reform of the salary and benefits paid to the City public employees, and particularly police and fire.   They did that and here are the folks appointed to come up with a recommendation:

Vern Alstot Fire Management
Neal Andrews Councilmember
Bart Bleuel Public Member
Eric Burton Code Enforcement officer
Benny Davis Fire Department
Ramon De La Rosa Maintenance Department
Quinn Fenwick Police Management
Randy Hinton Public Member
Sylvia Lopez City employee union representative
Frank Maxim City employee and supervisor
Ed McCombs Public Member (former City Manger)
Jim Monahan Councilmember
Richard Newsham Union representative
John Snowling Police officer
Mike Tracy Councilmember

This group did not come up with a recommendation. On Monday, March 22, 2009, they disbanded and submitted a report to the Ventura City Council. The report consists of a compilation of different views including position statements of the nine (9) union and employee representatives.

To their credit the City Council received the “report” then unanimously voted to adopt a  “policy” whereby in all future salary and benefit negotiations with the unions and employees the City Council would seek a two tier retirement  benefits system, plus ask the policemen, firemen and other employees to pay one-half of the pension contribution requirement.   Nothing was accomplished other than to state publicly that in future contract negotiations the City would seek to establish a two tier system.

THE  PUBLIC EMPOLYEE PENSION DEBACLE

[THREE CANARIES IN THE MINE]

 

A reporter named Ed Mendel wrote an article on January 25, 2010 for the San Diego Tribune. Here are few of his comments:

“A wave of higher pension costs is hitting California’s three major coastal cities, prompting proposals to shore up future budgets with ballot measures in Los Angeles and San Francisco and eroding progress in San Diego, once dubbed “Enron by the sea.”

The surge from an historic stock market crash, which punched big holes in pension investment funds, is creating concern that pension benefits approved in better economic times are not “sustainable” and need to be cut for new hires.

City council members in Los Angeles and San Diego have mentioned the possibility of “bankruptcy” in remarks to reporters this month, a path taken by the city of Vallejo two years ago when labor costs consumed most of its budget.

Labor unions, agreeing to benefit cuts in some cases, are trying to figure out whether current pension levels are unaffordable and should be reduced, or if city officials are overstating the problem to use the economic downturn as leverage for givebacks.”

bad budget management in Vallejo

Vallejo, CA delcares bankruptcy following bad budget management

The City of Vallejo filed bankruptcy because 70-80% of their general budget was devoted to paying police, fire and other public employee salaries and benefits.  When the old port city on the far side of San Francisco Bay filed a rare municipal bankruptcy in May 2008, there was speculation about whether bankruptcy would become a way for deficit-ridden cities to shed crushing retirement debts.  In a precedent setting ruling in the Vallejo case, U.S. Bankruptcy Judge Michael McManus in Sacramento decided that city labor contracts can be overturned in bankruptcy, and then dissolved the contract.

In the shadow of this decision the Vallejo firefighter union agreed to cut pensions for new hires to 2 percent of final pay for each year served at age 50, down from the current 3 percent at 50, a previous trend advanced by state legislation a decade ago.  They also agreed to a new two-year contract with no pay raise and increased their pension contribution to 13.4 percent of their pay, up from 9 percent..

EDITORS’ COMMENTS: 

Given the serious budget issues we hope the Ventura police, fire and public employee unions are paying attention, and do not continue to believe that they have found the golden goose. 

Editors:

B. Alviani        S. Doll           J. Tingstrom

K. Corse          B. McCord     T. Cook

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Ventura asks for more money in Measure A

Shameless Politicians Propose Measure A For More Money

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

911 TAX – POSTMORTEM

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

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

Refunded only part of the money

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

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

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

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

Money from 911 tax never returned

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

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

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

Editors Comment:

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

THE NEW SALES TAX- “MEASURE A”

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

Masure A takes more money

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

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

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

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

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

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

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

Police and Fire want more money

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

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

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

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

Editors’ comments: 

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

THE STATE STRIKES

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

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

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

CITY COUNCIL USES A SMOKESCREEN

[NEVER LET A GOOD CRISIS GO TO WASTE]

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

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

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

Editors’ Comments: 

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

Editors:

B. Alviani        S. Doll          J.Tingstrom

K. Corse          B.McCord    T. Cook

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

Pension reform needed

Grand Jury Exposes City Pension Out of Control

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

THE FLEECING OF VENTURA

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

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

(c) THE FIREFIGHTER PENSION

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

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

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

ed summers pension blunder

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

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

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

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

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

Police Chief, Pat Miller

Mike Lavery pension out of control

Fire Chief Mike Lavery

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

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

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

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

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

—Neal Andrews

Editors’ Comments:   

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

Editors:

B. Alviani      S. Doll            J. Tingstrom

K. Corse        B. McCord     T. Cook

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

Ventura government needs constant watching

Update on Ventura’s City Government Policy Issues

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

SUMMARY UPDATE

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

(A) The 911 Fee

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

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

(B) CITY GOVERNMENT IMPOSES MORE INCREASED FEES

[Economics 101]

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

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

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

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

Another 911 fiasco in the making?

(c) THE FIREFIGHTER PENSION

[CITY GOVERNMENT NEGOTIATIONS GONE AWRY]

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

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

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

We quote:

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

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

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

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

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

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

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

(D) RATE INCREASE FOR WATER AND SEWER

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

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

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

(E) THE “CRIME FREE RENTAL HOUSING PROGRAM”

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

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

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

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

RENTAL HOUSING PRESERVATION PROGRAM WORKING GROUP MEETING

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

 

THE STATE OF THE CITY TREASURY

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

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

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

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

EDITORS’ COMMENTS

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

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

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

Editors:

B. Alviani          S. Doll               J. Tingstrom

K. Corse             B. McCord        T. Cook

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Keeping track of the City Council

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

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SUMMARY UPDATE OF CITY COUNCIL DECISIONS

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

(A) The 911 Fee

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

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

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

(B) Increased Fees

[A Quest — “Who’s got the soap”?]

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

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

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

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

(C) The Firefighters’ Pension

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

Editors Comment:

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

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

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

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

(D) The Sale Of State Water Options

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

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

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

Editors’ Comment:

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

WHAT’S ON THE HORIZON FROM THE CITY COUNCIL

(A) Rate Increase For Water and Sewer

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

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

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

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

 

WATER RATES

CITY CLERK’S OFFICE

City of Ventura

P.O. Box 99

Ventura, CA 93002-0099

 

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

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

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

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

 

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

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

Editors Comment:

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

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

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

 

Editors:

B. Alviani          S. Doll               J. Tingstrom

K. Corse            B. McCord         T. Cook

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