One of the Worst Decisions

Your Fullerton City Council majority — consisting of Fitzgerald, Chaffee, and Silva — made one of the worst decisions in recent memory last night.

Desperate to protect their pensions, and to keep pension contributions at a minimum, the Fullerton Police Officer’s Association (FPOA) approached the City about extending their contract.  They voted yes.

CalPERS pension costs are skyrocketing as a result of poor investment returns, and far too optimistic rates of return.  To “correct” this problem, CalPERS is demanding the City of Fullerton pay more in the years ahead.  The table shows pension costs for FPOA members which consist of Police Officers, Police Corporals, Police Sergeants, and a small handful of non-sworn civilian employees, such as Police Dispatchers.

The table above uses the current fiscal year as a baseline (on the bottom row) to get a feel for the pain ahead.  Beyond the current fiscal year, the projected pension costs for FPOA employees will cost Fullerton residents — at the very least — an additional $12.3 million through June 2022.

That’s $12.3 million of new money the City of Fullerton doesn’t presently have.

The timeline of the FPOA contract status is illustrated above with the agreed to “concessions” which are disingenuous at best.  As noted, the contract extension runs to 2021 at the earliest, and possibly 2022 if FPOA decides to exercise that option.

You might be thinking to yourself, wait a minute, if their current contract expires June 30, 2019, why not negotiate a new contract at that time to get a better handle on the escalating pension costs?  That’s precisely the problem.  Instead of acting in good faith for Fullerton residents, council members Fitzgerald, Chaffee, and Silva rolled over to satisfy the public safety unions that paid big money to help them get elected.

The worst part about the FPOA contract, and the extension handed out last night, is the City cannot reopen negotiations to combat rising pension costs.  The promises are now etched in stone through 2021 or 2022 regardless of what CalPERS does.

All very troubling, not just for basic principles, but because the California Supreme Court is expected to rule in 2018 on the so-called “California Rule” which prevents government agencies from reducing already promised pension benefits.  The court’s decision will carry significant implications either way.  If they overturn or modify the “California Rule,” Fullerton could have sought to renegotiate FPOA pension benefits upon the expiration of the contract in June 2019 and saved Fullerton residents millions of dollars.  Conversely, if the “California Rule” is upheld, CalPERS will likely respond by further lowering the discount rate (assumed rate of return).  A lower discount rate will cost the City of Fullerton tens of millions more in the coming years.

At last night’s meeting, the introduction of a new financial forecasting tool was presented earlier in the night, before the FPOA extension came up for a vote.  The gentleman making the presentation noted that his model predicts a U.S. recession in the year 2020 — right in the middle of the FPOA extension.  I was at the meeting and brought this up when it came time for the FPOA vote.  I also pointed out that Fullerton’s brand new City Treasurer, who started on January 8th — just eight days prior — should be given a chance to review the FPOA proposal and offer his thoughts to the City Council.  After all, the existing FPOA contract didn’t expire for another 18 months, so what’s the rush?

Council member Sebourn registered his opposition to the FPOA proposal, and then, without another council member saying a word, it passed with a 3-2 vote, Sebourn and Whitaker voting no.

Last night’s recklessness puts us a couple steps closer to municipal bankruptcy.  When the Library is forced to cut hours or close completely, when Parks and Recreation has to shutter the community center, when Public Works has to stop paving streets and repairing broken water mains, you now know exactly which three council members to thank.  It was failure on full display.  As usual.

Another bad sign

A few months ago, I pointed out bogus signs at the train station which cited non-existent instances of the Fullerton Municipal Code.  Those signs were removed a short time later.

Here we have a similar sign posted at the Wilshire Avenue parking structure.

Fullerton does not have a “No Loitering” ordinance that could be used here.

The second part, warning about confiscation of property, only comes up in Title 9, which covers parks — not parking structures, nor anywhere else in the City.

Bookmark9.12.530   Enforcement — Seizure of property.

The Director, park attendants, parking control officers and police officers are authorized to seize, confiscate and hold for the City any property, thing or device in the park used in violation of this chapter.

(Ord. 1900 (part), 1973: prior 4320.9(3) — Ord. 999 § 1, 1959).

Nowhere in 9.12.530 does it address “unattended or unsecured” items.  Even if the City wanted to play word games, and say the parking structure is part of the park and museum immediately adjacent to it, the sign doesn’t even agree with the code.  Perhaps that is why the sign makes no mention of the Fullerton Municipal Code — there’s nothing to cite because somebody made it up.

So the next time City Hall tells you such and such is the “law” you should probably take that assurance with a grain of salt.

Our Amazon.com Problem

Anyone following my recent posts knows the City has a problem with proper usage of the VISA procurement cards.

Below, we have a door opener purchased by Fire Captain Bil Gallio and shipped to the family business — Gallio Motorsports.  Given the nature of the item, this may have been a legitimate City purchase and shipped to the wrong address.

 

Fullerton doesn’t have a centralized ordering point, or a designated person, for Amazon.com purchases.  Instead, employees order items for the City using individual Amazon.com accounts, which for most people, are probably used for personal items as well.  That means home and work purchases are co-mingled together in the same account.

That could easily explain items shipped to the wrong address if the employee making the purchase forgets to override the defaults stored by Amazon.

Lest anyone think I’m constantly throwing rocks without ever offering a solution, here you go:  Amazon Business for Government  Nearly every instance of improper spending could have been prevented using that tool.

Grant Funding: No Accountability

Fullerton’s increasing reliance on grant funding comes with one consistent problem — poor or no accountability across the board.  Last week, I wrote about the Police Department’s $3900 mini-freezer and was called out in the comments section as follows:

It was paid for with money from the state from Prop 69 you morons. You can purchase items that are related to dna collection. Google is your friend.

The commenter was likely referring to this notation where Captain Siko wrote “Prop 69 grant.”

Captain Siko, and the person leaving the comment, are both wrong.

They charged the freezer to special subprogram 6188, which is the Justice Assistance Grant 2016.  The page below is from the Chart of Accounts posted to the City website.

The Justice Assistance Grant is Federal funding offered to state and local law enforcement for various purposes.  JAG awards are not at all related to Prop 69 revenues.

Fullerton’s share of the funding comes via the Orange County Sheriff’s Department, who is charged with managing compliance.  No lawyer is needed to see that Fullerton has a compliance problem.  The full agreement can be found here but I’m going to post a few snippets below.

2. SUBGRANTEE shall be reimbursed with said JAG funds only for expenditures
necessary to acquire personal property or equipment as set forth in Attachment A hereto
[hereinafter called “grant property and equipment”] or to perform such other grant functions, if
any, for which Attachment A specifies that SUBGRANTEE may utilize grant funds.

8. By executing this Agreement, SUBGRANTEE agrees to comply with and be fully
bound by this Agreement and all applicable provisions of Attachments A, B, C, D and E
hereto. SUBGRANTEE shall notify COUNTY immediately upon discovery that it has not
abided or no longer will abide by any applicable provision of this Agreement or Attachments A,
B, C, D or E hereto.

15. COUNTY may terminate this Agreement and be relieved of the payment of any
consideration to SUBGRANTEE if a) SUBGRANTEE fails to perform any of the covenants
contained in this Agreement, including the applicable terms of Attachments A, B, C, D and E
hereto, at the time and in the manner herein provided, or b) COUNTY loses funding under the
grant. In the event of termination, COUNTY may proceed with the work in any manner
deemed proper by COUNTY.

Now would be a good time (more…)

Need a pen?

Need a pen or pencil?  How about a coloring book, a fire badge sticker, or a hat to keep your head dry from the rain this weekend?

I guess it’s a good thing Fullerton is swimming in surplus cash.  Oh, wait…

Nearly $1,700 for this stuff despite it being known all year long that we’re in a budget crisis.  The entire amount was charged to General Fund accounts.

 

Useless Conferences

I love going to conferences!

 

New procurement card policies are being implemented at City Hall this week.  That’s a good start and something to be cautiously optimistic about.

Until such changes extend to the merits of things like conferences and travel, any such reform will be of limited value because it’s all interrelated.  Employees from all departments have had a reputation of being sent to conferences, staying for a couple hours, then skipping out on the rest to play tourist, play golf, or be entertained.  Some have joked about these trips being “paycations” — as in the City pays them to go on vacation.

CalNENA is the California chapter of the National Emergency Number Association, a trade organization for 911 dispatchers.  Without any consideration for the City’s bleak financial outlook, or the value of such a trip, the Police Department sent two dispatchers to the annual conference in San Diego.  That shouldn’t be too expensive, right?

$1,467 for hotel rooms and parking, $1,200 for conference registration, $93.84 for mileage reimbursement, and probably $4,000 to 6,000 in wages, benefits, and potential overtime paid out to other employees to cover their absences.  Their union agreement has a provision that considers it a full workweek if they attend training for 3+ consecutive days.  I assume that provision applies here.

Ballpark cost of attending = $6,500 to 8,500.  So what did the City of Fullerton gain from this trip?  You tell me…

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$3900 Mini Freezer

Another day, and another reason to question the fiscal insanity at the City of Fullerton.  The Police Department paid over $3900 for this freezer which is a mere 3.9 cubic feet in size.  The typical residential refrigerator-freezer holds anywhere from 18 to 25 cubic feet, so this unit is far smaller than it appears.

The police will be quick to say how essential this is to preserve forensic evidence like DNA.  I can’t fault them for buying a unit with temperature alarms, but you know what’s funny?  Medical grade freezers used by pharmacies, similar in size and features, cost anywhere from 1/4 to 1/2 the price, maybe even less.

Wasteful spending is nothing new around here, but this serves as a great opportunity to look at the City’s flawed procurement policies.

The freezer was not purchased by the City’s Purchasing Agent.  The Police Department doesn’t think the City’s procurement rules apply to them, so they bypass City Hall in most cases, and order whatever they want themselves.

“Reasonable effort shall be made to obtain three or more competitive bids for procurement of goods or services.”  This sounds like a good policy except that it allows a City employee to solicit bids for their preferred piece of equipment, and preferred manufacturer, no matter how unnecessary or overpriced.

They didn’t get bids for a small freezer sufficient to store forensic evidence.  They got bids for this specific Follett FZR4P-00-00 freezer, which was already leaps and bounds more expensive than comparable options from other manufacturers.  Basically, we acquired the Mercedes-Benz of freezers, but that’s all fine and dandy because the Police Department got three bids as specified in the procurement policy.

There’s no excuse to overpay because somebody is too lazy to research alternatives perfectly acceptable in a similar work environment, and yet, the City of Fullerton does this over and over and over again.

Our Wallets Are Getting Tased

Axon, formerly known as Taser International, is the manufacturer of tasers and body cameras worn by officers of the Fullerton Police Department.

In 2014, Felz and Hughes went before the City Council to beg for $650,534 over a five-year period to pay for body cameras from Taser International.  The actual cost will far exceed that amount, but that’s unfortunately typical of the false assurances made by those two.  You can read the agenda letter here where Dan Hughes did his best impression of a salesman for Taser International.  There was never any competitive bidding process for those body cameras, which is obscene given the large price tag.

Fast forward to this past June.  Gary Sirin of the Fullerton Police Department was sent to the Axon Accelerate Conference Fleece-A-Thon in Scottsdale, AZ.  We paid $899 for him to attend the conference, $580.87 for lodging at the Westin, and it appears another $363.19 for travel expenses.  I presume he was also on the clock and being paid for his time.

So what actually took place at this conference?  Axon did a write up themselves that talks about demonstrating new products and strategies to prevent disclosure of body camera footage to the public.  Once again, an insulting waste of City funds.

The Police Department apparently never got the memo about Fullerton having a fiscal crisis, or else they just don’t care.

I think it’s the latter, but in any event, these ridiculous conferences all over the United States and Canada on the City dime need to stop.

Lemmon Head

Wouldn’t it be nice if every City employee consistently set the bar for professionalism?

Michael Lemmon, of the Fullerton Fire Department, thought it was perfectly okay to purchase these inappropriate mugs using taxpayer money on his City-issued VISA card.

A couple months later, Michael Lemmon decided the Fire Department needed more coffee mugs, so he purchased these — again on the taxpayer’s dime:

 

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Pay The Lady: Nepotism At Its Worst

Today’s ethical lapse comes to us courtesy of the Fullerton Fire Department.  See those shirts pictured above?  Fire Captain Brian Seymour ordered nine of them for some kind of “Peer Support”.

Once the use tax is factored in, we paid about $40 per shirt.

Check out the reconciliation report.  One can clearly see the purchaser was Brian Seymour.

Below, we see the invoice from the vendor, Linksoul, where the salesperson was Mary Seymour.  Wait a minute, that must be a coincidence.  No City employee would be foolish enough to use taxpayer money to purchase unnecessary clothing from a relative’s clothing business, right?

 

Mary Seymour is the Fire Captain’s wife.  Linksoul is a clothing company started by her brother.  A couple minutes with Google was enough to locate this article from Carlsbad Magazine with a quote about nepotism that couldn’t be more ironic under the circumstances.

Hinman, W. (2014, March & April). The Man Makes The Clothes. Carlsbad Magazine, 38-43.

So while the City of Fullerton prepares to be crushed under the weight of CalPERS pension obligations, we have people like Brian Seymour not just wasting our money — he’s sending cash to his wife’s family business.

Brian Seymour made $294,761 last year in pay and benefits.  Why didn’t he pay for these shirts with his own money?

Did anyone make him reimburse the City?   Whose idea were these shirts, anyway?  Perhaps most important is why didn’t it occur to Brian Seymour that sending money to the family business was improper, and likely a violation of City policy and/or State Law?

Thanks to a certain FFD employee for bringing this to our attention.  You know who you are.