Tag Archives: CalPERS

Will Fullerton’s Pensions Eat the Library and More?

Fullerton Hunt Library

You think we’re full of it when we warn you about the severity of the pension problem in Fullerton (and elsewhere). You think we’re joking about the pension crisis that threatens to eat our city budget whole.

You ignore when Fitzgerald laughs off structural deficits and joins our council in voting for every pay/benefits package our heroes demand.

Well it is a crisis. A crisis of math and a crisis of ethics.

How bad is it?

It’s so bad our City Manager is actively considering giving away property we can’t readily sell to pay what we owe on the pensions.

Here’s an except from an email forwarded by CM Ken Domer to now-former Administrative Services Director Michael B. O’Kelly, CPA asking for his feedback (emphasis added):

I wanted to share information about fairly new alternative funding concept in public pension – funding using “assets-in-kind”.

Followed by:

The concept of using assets-in-kind for pension and OPEB funding is currently being considered by the State of CT. Attached is one of the presentations made during the hearings of the CT Pension Sustainability Commission that explains the approach (PDF document). I thought it may be interesting for you to review. Of course, the approach is not specifically designed for the states, but can be implemented by the local government as well.

Assets for Pensions

Essentially, the pension fund is ready to foreclose on Fullerton.

First we’ll lose worthless assets like the poisoned park, the bridge & stairs to nowhere, some undeveloped land. Then council will vote for some more hero benefits and CalPERS will change the discount rate again and we’ll move on the hunt branch library, the main branch library, the community center, Hillcrest and so forth. At some point we’ll sell City Hall and Council Chambers to the pension fund which would be fitting considering the heroes and their pensions already own our council and staff.

We’ll do all of this because, according to our council majority the budget is balanced.

And because we’re in excellent financial shape.

nothing to see here more along

Office Space - Bobs

Community Stakeholder Survey Says

Tonight the Fullerton city council will pretend to go over the results of the Community Stakeholder Survey that just recently wrapped up. Remember that survey? It’s where the city is going to, and I quote:

For the next strategic planning session, the City will conduct a community stakeholder survey prior to working with the City Council to develop Mission and Vision statements, and ultimately set goals to implement the Priority Policy Statements.

We don’t have nice roads but at least we’ll have mission and vision statements.

The whole reason for this dog and pony show is to pretend to do something productive while our roads literally crumble around us each day. We’re in a structural deficit and only balance our budgets by selling capital assets (city owned property) and by not filling vacant positions.

So when people complain that we’re understaffed the current and retired staff are entirely to blame for this problem because they’re eating all of our general fund.

As to the survey itself, how engaged were the people of Fullerton in regards to this important mission of vision questing?

Vision

Super engaged, so responsive. The whole city was interested in giving their two cents… Oh. No. Nevermind. Almost nobody even knew this things existed and fewer participated.

706 people responded and 9 sent in written statements via email. That’s it.

It was a truly terrible turnout.

But the city, using that whopping return of 706 survey responses and 9 written statements will march ahead ever ready as a city to talk about what our local government’s priorities should be going forward in an open and honest fashion.

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Hero Pay

A Fullerton Staffing Question

Hero Pay

The Fullerton Firefighters are pushing a narrative that they’re understaffed and underpaid on social media, so let’s talk about it.

We constantly hear about how underfunded, unpaid, underappreciated, undereverything our Police and Fire Depts are from the “Hero Deserve” crowd and the opposite side likes to point to pay rates, pension spiking, double dipping, medical presumptive, lies about early death, OT abuse, CalPERS costs and other fiscal rebuttals.

But what we almost never talk about is how we actually implement service and if we do things in a smart, fiscally sound or even common sense way in our departments. Our City Council won’t touch these issues because they’re petrified of the unions spending campaign money against them or they’re colluding with the unions in order to get those sweet, sweet endorsements.

Since council won’t discuss these things openly I figured we can do it ourselves before dropping numerous records requests.

Therefore for the sake of starting discussions I’ll drop two topics;

  1. If our fire engines, with a crew of 4, have a max of 2 Paramedics on board and 85% (per their statements) of their calls are medical then what do the other 2+ crew members do during the majority of these calls? Are they glorified Uber just taxiing the paramedics around? What do they do at the hospital? How much time do these non-paramedics spend doing crowd control and the like?
  2. Every time I see a police stop or call where the police department is at a scene I see multiple vehicles on scene. To the casual observer it seems that there are multiple units at every stop seen. I understand the premise of needing or wanting backup but why not drive around in pairs so you have backup with you at all times instead of needing to wait for it and waste the resources (gas, etc) on another vehicle?

Does anybody have stats on these things? How many calls for FFD are actually medical? How many calls does each crew actually respond to and what do they do on scene? How much OT is accumulated for passive activities?

How many calls does FPD respond to and how many of those calls require backup? How much backup typically responds? What’s the response time for this backup? How is this different for traffic stops versus calls for service?

I think as the city prepares for budget meetings with so much of our budget going towards salaries and pensions these numbers should be discussed and be as transparent as possible. If we need to pay people more to retain them we need to make sure we’re getting the most bang for our buck and the best, most logical and fiscally sound, service possible.

Anybody want to dive into these questions?

City Lies While Attempting Hostile Takeover of Library

Odds are that the Fullerton City Council will vote tonight to fire the Library Board and replace it with themselves in a cynical attempt to steal property to offset some Police & Fire Pensions. Fitzgerald wants to do it, Chaffee wants to do it and it likely won’t take much effort to convince Silva to do it.

Why? Because the city needs to pad the budget to fill holes left by Public Safety Pensions and totally predictable but avoided CALPers issues.

Thus the City is planning, under Ken Domer’s guidance, to take property donated to the library to plug General Fund budget holes.

Donated. As in stealing charity. Love Fullerton, indeed.

This is the brainchild of Councilwoman Fitzgerald despite her original campaign rhetoric about libraries being a “core service”. I guess we can just add this to the long list of lies Jennifer Fitzgerald said to get elected. We’ll put this one right up there with her promise not to take a salary and to desire to implement zero based budgeting.

Oops.  Fooled you!

 

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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.

Budget Proposals Call for Elimination of City Positions

FFFF was just sent a few pages from the latest budget proposals, which the Fullerton City Council will soon vote on. The true costs of Fullerton’s pension debt are coming to bear, as the proposals call for the elimination for firefighters, police corporals, maintenance workers and security guard services.

These reductions will be necessary in order to offset significant increases in CalPERS pension payments for existing employees. Most of the budget is allocated to staffing, so city staff claims there are very few non-staffing cuts to be made.


From here, it will only get worse. CalPERS will continue to lower its discount rate, triggering higher bills for cities across the state. We are looking at many more reductions in services and increases in taxes and fees over the next few years.

I’d like to get out now.

Will our council have the guts to pull the trigger and start making severe cuts now? Or will they postpone action until insolvency becomes inevitable?

Fitzgerald’s 5 Year Deception

https://youtu.be/69Wp9PSn_S8

At last night’s Fullerton City Council meeting (21 March 2017) I spoke on Agenda Item 3 regarding budget strategies. Amongst other comments I asked for clarification on what was meant by “Structural Deficit” considering that both Fitzgerald and former Councilwoman Jan Flory constantly claimed we have/had a balanced budget. I asked what changed overnight to take us from a balanced budget on 08 November 2016 into a “Structural deficit” today.

Structural Deficit Evidence

What I got regarding an answer was Councilwoman Fitzgerald dodging the question and blaming Sacramento and the CalPERS rate change. And I quote:

“And I will go ahead and answer the question that was brought up over balanced budgets and what happened overnight and I will tell you, I mean, for former Council member Flory and I, when we talked about balanced budgets. Our 5 year projections, every year showed a balanced budget and what happened overnight is CalPERS decreased the amount of returns that they assumed that we were going to receive. So, that is what happened to those 5 year projections to change them.”

There’s a lot to unpack so strap in kiddos.

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Tomorrow: Joe Nation Addresses Fullerton’s Pension Problems

Joe Nation of the Stanford Institute for Economic Policy Research will be visiting Fullerton tomorrow for a special presentation on Fullerton’s public pension and retiree medical liabilities.

Back in July I asked the city council to hire Joe Nation and the SIEPR to produce a comprehensive, independent report on Fullerton’s substantial pension debt and its projected impact on Fullerton’s financial future. While the full report won’t be available for a few more weeks, Joe has agreed to make a special presentation to the council at the Fullerton Public Library on Tuesday at 4:00 pm. The presentation will be recorded and posted online in a day or two. An agent of CalPERS will be on hand to present his viewpoint, as well.

With skyrocketing pension debt affecting cities throughout California and the nation, it’s important for Fullerton to understand where we are headed and what this city will lose if we don’t address these issues head-on. This independent analysis will be an important step towards the goal of reining in our debt and ensuring the city’s financial stability over the long haul.

Ballot Challenge: Does Fullerton Really Have $500,000,000 in Pension Debt?

The city clerk called me tonight to let me know that someone had come in to protest my sample ballot statement.  She says this person took issue with the following claim:

Has Fullerton’s pension debt really risen to half a billion dollars?

Yes.  According to the CalPERS pension system’s own analysis in this OCRegister article, the lump-sum payment to close out all of Fullerton’s pension liabilities (debt) right now is somewhere between $456,000,000 and $540,000,000.

It’s hard to blame anyone for doubting this figure, as the number is simply unbelievable. But it’s 100% true. That’s half a billion dollars which must somehow be paid off by my children and yours, all thanks to the unchecked generosity of union-backed councilmen like Don Bankhead and Dick Jones.

Fullerton’s $100,000 Pension Club Increases Girth by 41%

Here’s a republication of a post from early November. It details the extravagant pension payouts bestowed upon Fullerton employees. Of particular note are the number of rank and file cops and firemen on the list. How did they get there? Courtesy of enormous salaries and of course the disastrous [email protected] formula approved by Council barnacles Bankhead and Jones. That single decision created a massive unfunded actuarial liability that is the legal responsibility of every citizen of Fullerton.

And there’s Pat McPension, the architect of the FPD Culture of Corruption, who makes $121K off of us each year for doing nothing.

This list will no doubt receive a lot of attention during the recall campaign

– Joe Sipowicz

Originally published November 4, 2011

Another year has passed and another set of City of Fullerton retirees have added to the growing unfunded pension liability that will plague us for generations. In fact, membership has swelled by a startling 41% this year alone.

The most notable new member is retired City Manager Chris Meyer, who has plopped himself in the second spot with a $170,984.52 per year reward for all the time he spent carefully overlooking the mismanagement of the Fullerton PD and the vast expansion of the city’s pension debt.

Meyer was spotted at yesterday’s anti-recall fundraiser, too. That’s no surprise to us, since Bankhead and Jones did attempt a retroactive pension spike in 2008 that would have sent Meyer’s own pension into orbit just a few years before his exit.

Name  Annual  Position
JAMES “JIM” REED  $  173,524.32 Fire
CHRISTOPHE “CHRIS” G MEYER  $  170,984.52 City Manager
KAREN LINDSEY-MACDONALD  $  165,285.48 Police
GREGORY E MAYES  $  156,047.40 Police
JOHN T PETROPULOS  $  152,784.60 Police
GEOFFREY L SPALDING  $  151,770.96 Police
JOHN S GODLEWSKI  $  145,499.04 Community Development Director
DANIEL F CHIDESTER  $  145,049.28 Fire
MICHAEL C MAYNARD  $  144,678.00 Police
GARY M DOMINGUEZ  $  143,618.76 Fire
ALLEN W BURKS  $  139,186.44 Police
FRANK P DUDLEY  $  139,120.44 Development Services Director
DOUGLAS L CAVE  $  136,626.96 Police
ANTONIO H HERNANDEZ  $  132,549.36 Police
H S HUNT  $  131,591.40 Parks and Rec Director
STEVEN M MATSON  $  130,359.84 Police
RONNY T ROWELL  $  130,225.32 Police
GLENN L STEINBRINK  $  129,608.16 Administrative Director
MARK H FLANNERY  $  125,723.64 Director of Personnel
RICHARD W RILEY  $  125,304.00 Fire
DAVID J STANKO  $  125,147.04 Police
TERRY W STRINGHAM  $  125,062.80 Fire
ROBERT E HODSON  $  124,810.08 Director of Engineering
ROBERT “BOB” B RICHARDSON  $  123,441.48 Police
GEORGE E NEWMAN  $  122,964.60
DANIEL R BECERRA  $  121,643.64 Police
NEAL R BALDWIN  $  121,363.80 Police
DAVID M DUNCAN  $  121,131.96 Fire
ALFRED R CASAS  $  120,549.96 Police
PATRICK E MCKINLEY  $  120,381.96 Chief of Police
PHILIP A GOEHRING  $  119,719.92 Police
TERRENCE L SCHULZ  $  118,629.84 Fire
BRAD A HOCKERSMITH  $  118,629.48 Fire
BONNIE J CLANIN  $  118,302.12 Police
JEFFREY E ROOP  $  118,198.20 Police
DONALD R PEARCE  $  112,341.96 Police
CAROLYN E JOHNSON  $  111,509.88 Library Director
TIMOTHY JANOVICK  $  111,069.12
KURT J BERTUZZI  $  110,653.56 Fire
PAUL C TURNEY  $  110,022.00
RONALD B GILLETT  $  109,764.48 Police
LINDA J KING  $  109,553.40 Police
ARTHUR D WIECHMANN  $  108,368.40 Police
JONATHON E MCAULAY  $  106,163.76 Fire
JOHN W PIERSON  $  105,626.04 Police
VICKI L MAGLIOCCO  $  105,533.40 Fire
GREGORY E ABERCROMBIE  $  105,351.00 Police
WILLIAM D KENDRICK  $  105,310.92 Police
RICHARD A HUTCHINSON  $  104,986.56 Fire
HUGH L BERRY  $  104,544.12 Assistant City Manager
MARVIN B WILDER  $  102,941.64
MICHAEL L BURGES  $  101,931.00
MICHAEL L FIELDS  $  101,318.52 Police
CHRIS P HARRIS  $  100,730.64 Fire
KENNETH R HEAD  $  100,526.40 Police
Total Monthly $568,146.80
Total Annually $6,817,761.60

Source: CFFR Pension Database