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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

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Ventura City Hall

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

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

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

high-priced consultants dupe voters

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

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

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

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

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

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

RELYING ON A BAD POLL, AGAIN

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

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

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

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

HOW DID WE GET STARTED DOWN THIS PATH AGAIN?

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

A SMOKE SCREEN

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

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

Blow smoke on taxes

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

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

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

MORE TAXES ARE NOT ALWAYS THE ANSWER

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

REVENUES ARE ALREADY UP

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

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

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

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

SO WHAT IS THE ALTERNATIVE SOLUTION TO THE PROBLEM?

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

Mayor Erik Nasarenko commissioned the voter poll on taxes.

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

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

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

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

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

Editors:

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

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Last Chance To Oppose Higher Water Rates

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Ventura Water aims to increase water rates unless citizens protest.

Act Now To Prevent Higher Water Rates!

Monday June 8th is your last day to act if you want to oppose an increase in water rates.  Your protest must be filed with the City Clerk before 6 PM.

On this Monday,  Ventura City Council will decide on whether to adopt the Ventura Water report , written by the Ventura Water General Manger, Shana Epstein.  Click the Report Button to read the full report.

Water Rate Incease Report from Ventura Water

Click on the Report button to access the Water Rates Increase Report

She proposes to raise your water rates. If you use more that 6 HCF in any billing period you will pay more.  If you use over 21 HCF, which is the average residential use in Ventura then will pay a lot more.  This new rate is intended to coerce compliance.

Today we have enough water to meet the needs of our community. Nobody questions the need for all citizens to make an effort to conserve now against potential future water shortages but most however question the need for our City to adopt coercive and punitive measures.

This community will come together to meet this challenge, but never under the lash of government.  If you wish to protest click on the protest icon.

Water Rate Increase Protest Form

Click on the Protest Button to access the Water Rates Increase Form.

Editors:

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

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City Makes It Hard For Citizens To Protest Water Rates Increase

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Ventura Water Aims To Increase Water Rates Unless Citizens Protest

NOTICE OF RIGHT TO VOTE AND PROTEST WATER RATES INCREASE
[State sets Ventura Water Conservation at 16%]

If you are a property owner you have received a NOTICE REGARDING SETTING OF WATER RATES from the City of Ventura (Ventura Water). It was mailed in April.

This notice details what the new rates will be, under water shortage conditions, and provides a complicated chart so that you can determine the impact on your monthly billing rate.  The notice announces that a PUBLIC HEARING will be held before the Ventura City Council on JUNE 8, 2015, at City Hall.

If you do not favor this increase then the City notice tells you that the parcel owner, or customer of record on the water bill, must file a written protest with the City Clerk at City Hall, or at least be mailed, before the hearing date.

The City did NOT enclose a protest form (ballot) with the rate increase notice. You can find the Water Shortage Rate Protest form by going online to a link provided in the body of the letter, however the form is difficult to find from that link.   For your convenience you can find the WATER SHORTGAGE RATE PROTEST form by clicking on the Protest Button below.

Water Rate Increase Protest Form

Click on the Protest Button to access the Water Rate Increase Form.

If you do not have a computer, protesting is not as easy. You will have to go to the City Clerk’s office at City Hall. Please share this with neighbors and friends.

IF YOU DON’T PROTEST, YOU VOTE “YES” AUTOMATICALLY

Unless a majority of the property owners (51%) file a protest, these water shortage rates will go into effect.  Renters have no right to protest.  Business owners have no right to protest.  Only 32,000 people that own property with water meters have a right to vote.  The remaining 81,000 people in the City of Ventura are effectively disenfranchised. They have no vote but will have to pay.

“This city has manipulated and used fees, rates, enterprise funds to further their social and downtown improvements. When this ordinance first started it excluded the mobile home owners from participating because the mobile home communities are all listed as a one property owner, so therefore one owner per park, 10 parks, approx 2500 to 3000 residents without a yes or no vote.”

Jack Tingstrom, former Mayor of Ventura

HOW IS THIS LEGAL WITHOUT A BALLOT VOTE?

The simple answer is Proposition 218, a measure approved by a majority of California voters.  This is not the usual democratic election process.  Usually with a tax increase measure all voters are provided a ballot.  If 2/3 of the voters do not approve, the measure fails.

In this instance Proposition 218 governs.  The underlying principle is that “costs of service”, such as the cost of producing water or treating waste water is in a special category because “the cost” can be objectively determined.

But what happens when the government starts calling something a cost when it is not truly a cost of providing the service?  It is here that mischief and the potential for abuse abounds.  Who can forget the $1 million taken out of the water fund by the City Council and put into the “public art fund”, which was then used to build public housing?  You did not get to vote on that.

IMPACT OF THE PROPOSED WATER SHORTAGE RATE INCREASES

The Proposed Water Shortage Rates (PWSR) proposal must be looked at very carefully by each property owner, and compared to your most recent water bills.  This proposal changes (lowers) the tiers.  If a single family residence (SFR) now uses 0 to 14 HCF (748 gallons equals 1 HCF) you are in Tier 1.  This costs you $2.40 per HCF in addition to the base fixed cost for water of $29.28,  The fixed cost will increase over the next 3 years as well as the flow rate charges. In addition you pay a fixed cost for sewer/wastewater of $19.96 plus $2.91 per HCF flow charge up to 30 HCF.

If the PWSR is adopted and the City Council continues to declare a 20% conservation rate, notwithstanding that the State Water Board (SWRCB) has set our rate at 16%, then you will pay more.  The tier rates will be changed – Tier 1 will be lowered 0 to 6 HCF, Tier 2 will be 7-14 HCF, Tier 3 will be 15 to 30 and Tier 4 will be 30 HCF and above.   In a household of 4 people 6 HCF equals 74.8 gallons per day, or 18.7 gallons per person per day.

Using the current approved rate schedule for a single family residence, with a 3/4″ meter, using 21 HCF, which is the average residential use in Ventura according to Ventura Water Dept., and comparing it to the PWSR here is a chart comparing what you pay now versus what you will pay if the PWSR is adopted.

Ventura Water Rates Increase by 14%.

 

VENTURA IS NOT IN A STAGE 3 DROUGHT

In the fall of 2014 the City Council, in response to the Governor’s statewide drought declaration, declared that our city was in a Stage 3 drought thus requiring a 20% reduction in water consumption.

That declaration has been driving the Ventura City and Ventura Water agenda and publicity campaign.  The reality is that during the 1990 drought the citizens of this community embraced water conservation and reduced consumption by 5,000 acre feet. Thus, the State Water Resources Control Board just determined that the City of Ventura is only required to reduce water usage by 16%, not the 25% that has been widely circulated by Ventura Water over the last year.

”The Governor’s April 1st Executive Order called for the State Water Board to implement a mandatory 25% statewide conservation requirement for urban water usage.  All documents related to implementation of the Executive Order, including the Proposed Emergency Regulations released yesterday…
The City of Ventura’s (San Buenaventura) proposed conservation standard as of 4/28/15 would be 16%”
Jessica Bean, Engineering Geologist, SWRCB

Editors’ Comments

Members of VREG are concerned about several things related to the current process of putting water shortage rates in place.

• We are concerned that the estimates for our community (as shown above) are too aggressive.

• We’re concerned that the protest form was not included in the formal notification from Ventura Water. Providing a link that then leads to a lengthy document where another link to the protest form is buried is hardly calculated to provide “fair notice” under Proposition 218.

• We are concerned that all citizens who are affected by rate increases (like apartment dwellings) do not have a voice in this process.

• We’re concerned that ratepayers understand that they will need to either make a change in their water use or be willing to pay additionally for not reducing their use.

• We are concerned about our water quantity and quality for the future.  Addressing that will require courageous and transparent leadership. 25 years ago all our citizens voted for desalinization to provide a new water resource. City government then did nothing.  Further procrastination is not recommended.

Mayor Heitmann and this Council talk about creating confidence in City government and proclaim that they want citizen involvement and transparency.  This PWSR proposal and notice to our citizens do not serve that purpose. Perhaps “they” should learn to “walk their talk”.

Editors:

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

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Pension Liabilities Threaten Ventura's Financial Health

Pension Liabilities Threaten Ventura’s Financial Health

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John F. Kennedy on Fiscal Responsibility

“When written in Chinese, the word ‘crisis’ is composed of two characters. One represents danger, the other represents opportunity.” —John F. Kennedy

VENTURA’S FINANCES – HEALTHY, OR NOT ?

At the Ventura City Council meeting on February 23, 2015, our Mayor will discuss The State of the City.  It is to be expected that she will praise the accomplishments of the City, such as creation of a Water Commission to address water shortage issues and the City efforts to improve roads and basic infrastructure.  The condition of City finances will also be a major subject, building on the Ventura County Star article, published on President’s Day, with the headline “City’s Financial Outlook Healthy”.

A candid discussion of the condition of City finances is to be welcomed, but it is not the rosy picture portrayed in the Star article. The Economic reality of the current  public pension liabilities of the City of Ventura unfortunately is not receiving the attention it demands when determining our financial outlook, nor is the impact of escalating payments to CALPERS and the drain it will have on the General Fund and City services in the next 5 years getting noticed.

A.  VENTURA UNFUNDED PENSION OBLIGATIONS TRIPLE

In the fall of each year CALPERS provides financial and actuarial reports for the SAFETY PLAN OF THE CITY OF SAN BUENAVENTURA (police and fire) and MISCELLANEOUS PLAN (all other employees).  The latest report, dated October, 2014, provides a valuation of assets and liability as of June 30, 2014.

The combined City pension assets have a present value of $191,329,875. and we owe $353,756,578.  There is no money to pay the $157,993, 381 shortfall. The official calculations are based upon an assumption, projected over the actuarial life of the union participants, that CALPERS, as our pension fund administrator, will achieve an investment return of 7.5%.

What this report does not discuss in direct terms is the 50% loss our City incurred during the 2008 depression, together with the other 1600 local government agencies funds that they manage.  That money has not been replaced.  What CALPERS wants to emphasize in their report is the 18% (not net of costs) return that they received ending June 30, 2013. This is a short term gain only.

For the investment forecast CALPERS uses a rate of 7.5%. However, when CALPERS illustrates their Hypothetical Termination Liability calculations on page 28 of the report, it uses a far different and lower discount/investment rate of 3.72% instead of the 7.5% rate of return. In that event we owe $488,961,724.

In reality, in early in 2014, CALPERS admitted that it is still underfunded by 50%.  They report earnings of 18.5% last year, but a study has reported their actual earned average of 3.41% for five years, 5.36% for ten years, 6.97% for 15 years, and 8.38% for 20 years.

B.  HISTORICAL PERSPECTIVE

In August 2008, the editors of this newsletter published an analysis of the unfunded pension obligations of Ventura titled IN THE SHADOW OF VALLEJO.  We warned against the increase of the firefighters’ pension benefits by 33% (from 2% at age 55 to 3% at age  and urged the Council not to make the increase, and to require all other employees to contribute at least 5% to 10% toward their pensions.

We provided extracts from a CALPERS report of the time.

 

Funded Status–June 30, 2008 Police/Fire Misc. Plan
Present value of projected benefits $270,877,057 205,128,033
Entry Age Normal Accrued Liability $233,938,241 $167,837,616
Actuarial Value of Assets $177,314,177 $157,529,148
Unfunded Liability $46,624,064 $10,308,468

“I do not know where we are going to get the money.”

The vote was 4 to 3 in favor. Voting against the increase were then Mayor Weir and Councilmen Andrews and Morehouse.  Councilman Morehouse’s comments at the time were prophetic.  “I do not know where we are going to get the money”.

In January 2011, VREG newsletter again visited the pension issues because the City Council was considering the renewal of the labor contracts with the employees in the City.  The proposal was to require the employees to contribute 4.5% of the CALPERS pension costs. This VREG urged the Council to require greater contributions from the employees.  The article was titled HMS TITANIC  [Moving Deck Chairs to Avoid a Disaster].

The City Council vote was 5-2 in favor of the agreements (which included a requirement that employees contribute 4.5%). Councilman Andrews and Councilwoman Weir voted against approval. The decision of the other five—Brennan, Fulton, Monahan, Morehouse and Tracy—was in favor.

Councilwoman Christy Weir rejected the proposal and stating “Fiscally, the city needs more than this right now.”   Council Member Neil Andrews concurred stating, “The agreements simply don’t go far enough.”

“The agreements simply don’t go far enough.”

C. AN ESCALATING  PAYROLL CONTRIBUTION RATE THREATENS FINANCIAL HEALTH

Today the City of Ventura owes in excess of $157,993,381.  It will only increase and the drain on the General Fund will likewise increase because the required employer contribution rate for police and fire for example must be paid yearly in addition to their pay and medical costs. Here are the mandated and projected rates from CALPERS.

FISCAL YEAR           EMPLOYER CONTRIBUTION RATE (Police & Fire only)
2011/2012                   35.190%                      2012/2013                   36.4%
2013/2014                   40.6%                          2014/2015                   44.225%
2015/2016                   45.598%                      2016-2017                   50.6%
2018-2019                   52.5%                          2019/2020                   54.5%
2020/2021                   54.6%

BANKRUPTCY DEVELOPMENTS

Pension Liabiliteis Lead To Insolvency

Ventura’s Financial Health Threatened By Pension Liabiliteis

The cities of Stockton and Vallejo were forced to file chapter 9 bankruptcy proceedings.  The cities asked their creditors to take haircuts, but not CALPERS. The cities insisted that the public employee unions were exempt and entitled by law to100% on the dollar. The Federal Bankruptcy Court ruled otherwise in January, 2015.

CALPERS argued that the California Constitution guaranteed the union contracts and thereby pension benefits from cuts and/or that they enjoyed sovereign immunity and police powers as an arm of the state and/or that they have a lien on municipal assets.  In January 2015, the Federal Bankruptcy Court effectively threw them out of court saying: It is doubtful that CALPERS even has standing.   He writes “It does not bear financial risk from reductions by the City in its funding payments because state law requires CALPERS to pass along the reductions to pensioners in the form of reduced pensions”.

Judge Klein further stated:  “CALPERS has bullied its way about in this case with an iron fist” and “that their arguments are constitutionally infirm in the face of the exclusive power of Congress to enact uniform laws on the subject of bankruptcy…”.

The impact of this decision is that CALPERS cannot stop cities from modifying pensions.

EDITORS COMMENT:

The direction that Ventura is heading is insolvency and the idea that employee pensions are guaranteed and protected is wrong. Unless the City Council take steps to force public employees to pay a greater portion of their retirement and stop increasing the annual percentage of the general budget toward retirement and benefits, Ventura will collapse.

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

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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 needs a Water Commission to oversee the water and wastewater processing.

Now Is The Time To Appoint A Water Commission

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WATER – A PEARL OF GREAT PRICE
[The Right to Protest and Need for a Water Commission]

On March 12th the need for Ventura to create a Water Commission became clear. Ventura City Water/Wastewater Department mailed a notice to property owners advising that effective July 1, 2014, the rates that Venturans will pay for water and wastewater treatment will increase unless a formal written protest (vote) is received by the City Clerk by May 5, 2014.  This is the second increase in two years to be followed by increases in 2015, 2016 and 2017.

The notice details what the new rates will be, and in bold type on page 1 announces that a PUBLIC HEARING will be held on May 5, 2014.  Specifically it states that “The Ventura City Council welcomes your input during a public hearing to consider the proposed rate increases…”

This notice, in much smaller print, says that “if you wish to protest the proposed charges… you must do so in writing prior to the close of the hearing” on May 5th; and,  if not filed in the City Clerk’s office by the date of the hearing on May 5th it will not be considered.

No ballot or rate protest form is provided with the notice.  If a property owner wants to protest the increase they have to go to the City web site to download the form, or get the form from the City Clerk.  They then must fill out the form and return it to the City.  If you don’t have a computer, or are unable to travel to the Clerk’s office, you are out of luck.  If you don’t fill out the form correctly you are again out of luck; it will be rejected and considered a “Yes” vote.

In addition to the failure to provide a convenient means to protest, the notice on its face is deceptive. You are advised that that the Council will have a hearing “to consider the proposed rate increase“.  Wrong!  The council is not going to consider anything about increasing the rates because they have already done that.  The only thing they will consider on May 5th is the status of the vote.  If the Clerk reports that 51% of the “eligible voters” protested then it fails.  If 51% do not protest the increased rates go into effect.

Water Rate Increase Protest Form

Click on the Protest Button to access the Water Rate Increase Form.

The City Water Department could have easily included the one page RATE PROTEST FORM in the mailer for the convenience of the citizens. They didn’t and the omission speaks loudly.

If you fail to vote “no” by written protest your silence is considered a “yes” vote and acceptance of the increases. This is a rare instance in the California Elections process where doing nothing means yes.  If you do not own property then you have no right to vote even though you will be impacted, because such costs will be passed through as price or rent increases.

It is not the purpose of this letter to advocate for or against the water and wastewater rate increases.  That is your decision.  It is our purpose however to explain the proposition 218 processes and provide a convenient way for you to exercise your right to vote.  You will find a copy of the RATE PROTEST FORM here.

BE AWARE OF YOUR RIGHTS

Most people are not even aware of their right to vote.  A few are very aware and have gone to the Internet to urge Venturans’ to file a protest vote.  One such person had this to say:

“Attached is the form to protest the proposed water rate increases for Jul 1, 2014, July, 1, 2015, Jul 1, 2016 and July 1, 2017. In my opinion every resident getting their water from the Ventura Water Company should be filling out this form and sending it in. A quick review of these proposed rates indicates that they raise my water bill 40% from 2014 through 2017… This time I am protesting these new proposed rates. (Fool me once shame on you, fool me twice shame on me.)

         Plus I really don’t think we as subscribers should be saddled with the City’s and the Water Department’s missteps…i.e., the $55 million for the Heal the Bay lawsuit settlement related to the treated water they dump into the Santa Clara estuary, the $630,000 fine for the Water Department not meeting the required ammonia level restrictions for the water they dump into the Santa Clara estuary, the $300,000 they spent pumping water from the estuary into the ocean to lower the estuary water level to alleviate the flooding of McGrath State Park. (Note that as soon as they stopped pumping McGrath flooded once again. Sounds like a plot from a Three Stooges movie)”

Editors’ Comments

We, in our society, are not accustomed to elections being conducted in this fashion.  The normal election process is made easy for us. We receive a voter pamphlet that describes the new law, arguments in favor of the law and those against.  We then receive our written absentee ballot, or go to a polling place where we are handed a ballot and we cast our vote.  This one is different and is not made easy by a City government, which constantly asks for our trust and confidence then goes stupid and does everything to earn our distrust by sending out a notice that is not calculated to fairly and effectively enable the citizenry to vote.

HOW TO OBTAIN NEARLY HALF A BILLION DOLLARS WITHOUT AN AFFIRMATIVE VOTE

A Water Commission Helps Ventura Comply with Prop 218

A Water Commission prevents Ventura’s City Council from playing fast and loose with Prop 218.

Proposition 218, contained in California Constitution, Article XIII D, section 6, was enacted by the voters in 1996. It says that a City cannot charge a fee for a public utility that exceeds the amount necessary to provide the service – called “the cost of service”. The costs of those services are not considered a tax, but instead it is considered an expense of providing the service.

Tax increases require a 2/3-voter approval. Proposition 218 is different. The City Council must first approve the new rate in a formal hearing and then they “must notify all property owners before imposing the property-related fee”. Not less than 45 days after this notice is mailed, a hearing is to be conducted.  If written protests against the new fee are presented by a majority of owners, the fee cannot be charged.

In 2012 and again in 2014 the City Council appointed a Citizens Advisory Committee to totally immerse themselves into the cost of delivering of water and treatment of wastewater throughout Ventura.  The Committee was charged with determining the need for increased rates to meet operational costs; water capital improvement projects of $210 million and $231 million for Waste Water capital projects through 2025.

These were formal hearings conducted at the water department offices but were not televised or recorded.

This was a formidable task.  Water and Wastewater personnel sought rate increases to build financial reserves so that they could then finance and build projects. The total amount sought for Water and Wastewater capital improvement projects was $441 million.

In the end, the Committee recommended rate increases to the City Council to raise 50% of the cost so that the City of Ventura would be in a strong position to finance the balance of the cost projects over a longer period of time.

Cost to the ratepayers was of real concern. At the same time this Committee was unanimous that we, as a community, had deferred maintenance for far too long. If our community did not address aging water infrastructure, replacement water wells, pumping facilities and water/sewer lines now, the costs of financing such items would be far too great in the future.

MANAGING THE COST OF WATER—TIME TO APPOINT A WATER COMMISSION

Of major concern to this committee was the amount of money that Water and Wastewater was seeking.

$441 million is a lot of money that needed to be managed.  Programs were not yet planned. How to manage treated waste water had not been developed. The Committee was confronted with the most difficult task of making informed and reasoned decisions to determine how much money we needed. However it does not end there.

For all of the above discussed reasons, the creation of a Water Commission to monitor Ventura’s water and wastewater is fundamental to the committee recommendation. Unanswered questions and ongoing decisions are still needed in managing this $441 million commitment.

EDITORS’ COMMENTS

The City Council has many constraints on their time and numerous issues that they confront weekly.  They do not have the time to effectively monitor and mange a complex public utility involving millions of dollars annually.  A permanent CITIZENS WATER COMMISSION is a clear solution.

Such a Commission, in addition to assisting the City Council in meeting their obligations as elected officials, will bring oversight on behalf of rate payers.  Appointing former water district managers, engineers, geologists and other professional disciplines, who have the education, experience and knowledge, will serve everyone’s interests.

Editors:

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

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Budget workshop lacks financial transparency

Don’t Let A Charade Fool You Into Believing Ventura’s Financial Transparency

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Fool Me Once, financial transparencyFool me once, shame on you. Fool me twice, shame on me.

THE ILLUSION OF FINANCIAL TRANSPARENCY

Ventura is holding a Budget Workshop on Monday, March 17, 2014. It may be a meaningless exercise, however, unless the City applies integrity and common sense to the process. Otherwise, the process is rife with budget manipulations owing to a lack of financial transparency.

FORCE THE CITY COUNCIL INTO FINANCIAL TRANSPARENCY

If you have questions or concerns about what you read in this month’s newsletter, address them directly to one, or all, of the City Council members. Click on a photo to send an email:

Cheryl Heitmann, Mayor

Erik Nasarenko,
Deputy Mayor

Neal Andrews,

Jim Monahan

Carl Morehouse

Mike Tracy

Christy Weir

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Busting Ventura’s Budget Myths And Fantasies

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Winston Churchill

THE TRUTH IS IN- CONTROVERTIBLE, MALICE MAY ATTACK IT, IGNORANCE MAY DERIDE IT, BUT IN THE END THERE IT IS
—Winston Churchill

PENSIONS BUST BUDGETS
[Grappling with Money and Economic Reality]

The City Council race concluded with the reelection of Councilmen Andrews, Monahan and Tracy plus a new councilman, Eric Nasarenko.  Our new Councilman was elected as Deputy Mayor at the last Council meeting and will serve in that capacity next year.  We congratulate each member of the Council.

During the election campaign these candidates asked to be elected so that they could help to bring about changes in City policies to:

  • improve the development of business
  • create and maintain parks
  • seek to improve streets
  • finance libraries
  • find ways to provide housing for lower income citizens
  • improve the gateways to Ventura on the North and South of Highway 101
  • create a more favorable regulatory structure to encourage development of housing
  • improve services to our citizens.

One thing that stood out for all four of these Councilmen was their plea that if the voters returned them to office and elected Mr. Nasarenko then a newly constituted Council could and would be more cohesive, and bring about the promised changes.

Their promise of change is laudable, but nothing can or will be accomplished without the money and revenue to realize those changes. That objective requires sound financial planning—an accurate and realistic budget with realistic income and expense projections.

From Where Will The Money Come In This Year’s Budget?

On June 17, 2013 the old City Council was presented with a Proposed Budget for 2013-2014. They were shown a power point presentation, explained by our City Treasurer, which was based upon a printed 569 page budget book submitted by our City Manager, Mark D. Watkins, on April 23, 2013. This budget was approved on a vote of 6 to 1 after a 30 minute hearing.  Nobody from the public appeared to comment.

It’s hard to overcome a $1.6 million deficit, if this year’s budget has no new revenue items.

Council members asked few questions, but did make statements “for the benefit of the television public” concerning their views on this budget.  Nobody asked any questions about the projected income, or questioned the expenses in this complex document other than Councilman Andrews.  He voted “no” on the motion to approve a budget projecting a deficit of $1.6 million in our next fiscal year (July 1, 2013-June 30, 2014).  He explained his no vote – “We have cut too far and we need to look at public safety costs (police and fire pension benefits)”, meaning that the Council needed to look at ways to address the enormous pension costs before considering anything else such as new taxes.

Two Council members made statements that the general fund be unburdened by shifting some costs from the general fund to special tax assessment districts — taxes on real property.  Councilman Morehouse wants to shift a $500,000 public lighting cost to property owners, although conceded, when asked by Mayor Tracy, that this might also be funded by increasing sales taxes.  Councilwoman Weir commented at length about the special assessment costs imposed by other cities, such as Camarillo and Oxnard, for street repair, landscape maintenance, parks, public safety and libraries.  It was clear from these comments that their solution for our City deficit is to tax our way out of it.

Where’s The Transparency In The Budget?

This published budget is long, complex and difficult to read.  It consists of real number-clots, number slabs by department and sub-department(s) with pages of swimming line items in minute detail. It is difficult to read, interpret or understand as a financial planning document.   For example, members of VREG tried to determine how the projected income was calculated, and what the public pension costs (the largest item in the entire budget) would be for the next fiscal year.  The income information could not be found.  The pension data was sprinkled throughout all 589 pages and explained by esoteric line items and number for every department. The City Treasurer was asked about the complexity of this document.  He conceded that this was the equivalent of a “data dump”. A good management tool for a City Council it is not.

Focusing first on the income side.  The City Treasurer at the June hearing projected income of $86.7 million. This is $4.3 million more than was collected in 2012-13, an increase of 5.2%, twice the estimated U.S. Gross Domestic product estimate of 2.5%.

No explanation has been given on where this new source of revenue will come from.  That question was put to one candidate during a candidate forum in October.  A citizen asked, “What plan does the city have to grow their revenue by that amount of money?”

The answer was revealing (click on the quote to see video of his answer):

Ventura City Budget

There is a $1.6 million deficit in this year’s budget. As a higher percentage of Ventura’s General Fund is spent on police and fire pensions, less revenue is available for other services.

 

The projected deficit of $1.6 million and sagging income expectations are bad  The annual cost of  salaries and benefits  for public safety — police and fire —  is bad, and will grow to fifty-two (52%) of the total general budget  in the next fiscal year

Unfunded Pension Liability Is Staggering

Then there is the matter of how much will have to be paid to CALPERS to pay the unfunded pension obligations of City employees, police and fire personnel in addition to the annual operational costs.  In 2008 those unfunded obligations totaled $48 million.

In October, 2013, CALPERS reported that the market cost of those unfunded liabilities have increased by 360%, and  as of June 30, 2012, totaled $173,412,464.  CALPERS also added a note in that report that if the City wanted to terminate our contract with CALPERS it would cost us $600,421,434.

This is only going to get worse because CALPERS has announced it will consider adjusting (lowering) its expected rate of return in 2015 by 1/4%, and that the actuarial life of public safety personnel is not shorter than the average person, as previously assumed, but is the same.  That means these pensioners, starting at age 55, will get paid benefits over a longer period of time.

Cities nationwide are grappling with the growing retiree-benefit pension costs which are eating up more of city general funds.  That leaves less money to spend on parks, libraries, maintenance of trees and parkways, street lights and an asundry of public service projects.  Ventura is not alone. As a higher percentage of a City’s general fund is spent on police and fire pensions, less revenue is available for other services and projects.  Detroit, Stockton and San Bernardino are models of cities that refused to accept economic reality.

If the total unfunded obligation cost does not get the attention of our new City Council, then perhaps the most recent CALPERS Actuarial Valuations predicting our annual payment obligation will get their attention.  In 2013-14 the required annual contribution total will be $8,530,730.  In 2014-15 the required payment will increase to $9,489,593.  That is more than $1 million more to be paid out of the General Fund

  Editors’ Comments

Why there are no protests by the citizens of Ventura for changing the pension plan of public safety personnel?  What will it take to get Venturans excited and concerned about this problem?

When the question of pension reform was presented to our City Council members in the past the traditional answer was that this problem could only be addressed on a statewide level; Ventura will not be the “lead dog” and venture out into this new territory; and, as unfounded as it may be, that Ventura would no longer be competitive in hiring the best employees.

This unfunded obligation to public safety personnel is a budget buster.  Nobody wants to make a decision.  In the meantime, Ventura will reduce services, charge more fees (or taxes) from its citizens and ignore the obvious “train wreck” that is ahead because it either lacks the leadership or vision to act responsibly for the future of this City

All the campaign promises in the world are worthless unless and until this new Council establishes a realistic budget, and finds real solutions to our public pension obligations.  Trying to tax ourselves out of debt is not a solution. Requiring greater employee contributions to their own retirement (8 – 10%), and creating a defined contribution plan for new hires will solve the problem in time.

That is why you were elected!

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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