Thursday, October 8, 2015

Robert Fellner: Full-career Los Angeles-area city retirees earn 42% more than residents' average salary - Average Los Angeles-area CalPERS payout highest statewide

(Mod: There seems to be some confusion in certain quarters about why utility taxes in Sierra Madre are being pushed all the way to 12% by three members of the City Council. If approved by the voters, a 12% UUT would be the highest ever in California history. The story being put out there is that this tax hike is needed to maintain such services as the Library and the Paramedics. But is this entirely true? As the following post by Robert Fellner clearly indicates, a lot of this would have more to do with salaries, benefits and especially CalPERS than keeping the lights on in city buildings.)

Full-career retirees of Los Angeles County municipalities received an average CalPERS pension worth 42 percent more than the average salary of area workers, according to just-released 2014 pension payout data from Transparent Full-career police and fire retirees took home an average pension worth nearly twice what area residents earned last year.

Just in case you ever wanted the actual reason for a UUT rate of 12%. For every dollar of pay, the City of Sierra Madre pays 24 cents to CalPERS for miscellaneous and 35 cents for safety employees. These amounts are above the median for LA County.

You can read the entire CalPERS plan for Sierra Madre by clicking here. As stated in the inset above, CalPERS rates are projected to increase substantially over the next few years. Increases that will require a lot more of your utility tax money.

The over 600,000 records — obtained through a series of public records requests to the California Public Employees’ Retirement System (CalPERS) — reveals an average full-career pension of $75,266 for miscellaneous retirees, which includes all non-safety employees, and $100,657 for safety retirees for all Los Angeles County cities enrolled in CalPERS.

By contrast, the average full-time worker in the Los Angeles area earned $53,000 last year, according to the Bureau of Labor and Statistics.

Cities in Los Angeles County had the highest average full-career pensions of any CalPERS agency statewide:

The City of Santa Fe Springs had the highest average for non-safety retirees at $113,040.

The City of El Segundo had the highest average for safety retirees at $124,254.

The cities of El Monte, Santa Fe Springs, Santa Monica and Pasadena each had average safety pensions over $118,000 each, placing them in the top 10 statewide.

The 3 largest CalPERS payouts to retirees from Los Angeles County agencies went to:

Joaquin Fuster, UCLA retiree: $325,278,
Stephen R. Maguin, former chief engineer and GM of the Los Angeles County Sanitation Districts: $304,661, and
James F. Stahl, former chief engineer and GM of the Los Angeles County Sanitation Districts: $291,482.

“Average full-career pensions that significantly exceed the wages of most full-time workers shatters the myth that CalPERS only provides a modest level of retirement income,” said Robert Fellner, research director for Transparent California.

Fellner said such exorbitant benefits are the reason pension contributions are skyrocketing, “Retirement costs are directly related to the generosity of the benefits promised, and unfortunately, taxpayers are now being required to pay an equally exorbitant sum to help fund them.

“The City of El Monte, for example, pays a staggering 57 percent of pay to fund average $120,653 pensions for full-career safety retirees, an amount that is nearly five times greater than the median earnings of City residents.”

Fellner noted that the median contribution rate for all Los Angeles County cities — 20 percent for miscellaneous and 32 percent for safety employees — is significantly higher than the 6.3 percent that private employers pay for their employees’ retirement benefits, according to the Bureau of Labor and Statistics.

Fellner warned that, “As high as the current rates are, CalPERS is projecting significant rate hikes over the next few years, which threatens to break already cash-strapped municipalities. What’s worse, weakening market conditions means rates will rise even further than anticipated.”


The 2014 report contained 19,728 recipients with a monthly allowance of $8,333.34 or more — representing an annualized benefit of at least $100,000 — a nearly 35% increase from 2012’s report.

The average pension for full-career miscellaneous and safety CalPERS retirees was $65,148 and $85,724, respectively.

The top three 2014 CalPERS pension payouts went to:

Michael D Johnson, former Solano County administrator: $375,990,
Joaquin Fuster, UCLA retiree: $325,278, and
Donald Gerth, former Cal State at Sacramento president: $305,002.

The top 10 CalPERS agencies with the highest average pensions reveals retirement income that can more than double the earnings of full-time, working residents:

A full-career for miscellaneous retirees is defined as at least 35 years of service, the minimum required to qualify for Social Security benefits without penalty, while a full-career for safety employees is defined as 30 years or more.

Despite accounting for only 11 percent of service retirees, it is necessary to look at full-career pensions to accurately gauge the system, according to Fellner.

“Just as one assumes a 40-hour work week when comparing salaries, any discussion of pensions implicitly assumes a full-career.

“Furthermore, the disproportionally greater pensions for those who work a full-career reveal an inequity within CalPERS. Part of the generosity of the full-career benefits comes at the expense of partial-career retirees, who receive disproportionally smaller benefits.”

Fellner concluded, “With retirement costs expanding to as much as ten times what private employers are paying, maintaining the status quo is extremely irresponsible. It’s particularly indefensible to force taxpayers to bear the entire cost for the recklessness of union-backed officials who gambled on sky-high investment returns, lost, and now expect taxpayers to bail them out.

(Mod: Which is what a 12% UUT would be in large part designed to do. Help bail out Sierra Madre's portion of CalPERS.)

Wednesday, October 7, 2015

John Wuo Resigns. Few At Last Night's Arcadia City Council Meeting Seemed To Care Very Much.

Photo courtesy Terry Miller

So we won't have Johnny GemCoins to kick around any more. Apparently we are now required to pass him on to the FBI, SEC, FPPC and all of those various other alphabet soup government law enforcement agencies. Places stocked with officials well-prepared to process and then package him off to someplace deep within the criminal justice system.

Unless he cuts some kind of a deal with the Feds we have probably pretty much seen the last of Mr. Wuo for a while. Except as a forlorn figure in occasional news stories detailing his experiences in Court, and then after that prison. Quite an abysmal end to a 12 year political career that included three terms as Mayor of Arcadia.

Even in resigning John Wuo could not bring himself to confess or admit to the real reasons for his departure and disgrace. Here is his goodbye statement to both the City Council and people of Arcadia, as transcribed on the Behind MLM blog (link).

I am resigned due to person(al) and health reasons. For the past 12 years I have enjoyed serving on the council with you. It has been an experience that I thank you for and will treasure. I love Arcadia and it is time to say goodbye. Best regards, best wishes, John Wuo.

No indication of what those health problems might be, though I suspect it may have been an overdose of FBI. Or perhaps the effects of a high speed collision with the SEC.

In many ways John Wuo had already left the building. Out of all the residents who spoke at public comment last night, not a single one said anything about his resignation. No thanks for the years of service, no goodbyes, regrets or any what might have beens. It was like the guy no longer existed, and had already been forgotten. A non-person. The people and government of Arcadia did not even bat an eye.

All anyone seemed to want to do was quickly move on. The now former City Councilmember and Mayor had already become irrelevant. Maybe even before he resigned.

If the development interests thought Wuo's resignation would somehow provide the public with what they really wanted, the sight of a disgraced and humiliated corrupt official resigning in shame, and then slinking off defeated into the night, I am afraid they were wrong. Nobody cared that much. Nobody celebrated. Nobody said a word. It was like nothing had happened.

And maybe it didn't. The endlessly colorful Arcadia development and land use debate will now go on as if John Wuo never even existed. The only question now being who will occupy the seat next, and will that person favor McMansions or something a bit more modest.

One thing that I found particularly disheartening last night was the unthinking rejection of democratic processes by those residents who spoke on behalf of mansionization. The concept of direct citizen participation in the pressing land use and development deliberations of their government, or putting something on the ballot so the people could vote and decide for themselves, all that seemed strangely abhorrent to them.

Like it was something no decent person would ever want to do.

Instead they appeared to demand that everyone just stop talking about it and let "the government and experts" handle everything. Even though it was the glaring failures of their government and its so-called experts to do anything about these very matters that led to so much citizen discontent in the first place.

To me that kind of unquestioning acceptance of government authority, no matter how bad or incompetent, was pretty disheartening.

Bonus Coverage: The Pasadena Star News Version

For the rest of this article click here.

Tuesday, October 6, 2015

Tonight's Arcadia City Council Meeting Looks Like It Will Be Off The Chain And Out In The Streets

Things apparently are getting quite heated over at the home of the Prancing Peacock. Protect Arcadia's Future, which is basically the McMansion crowd funded by some of the fattest developers in Los Angeles County, is planning a protest demonstration at tonight's city council meeting against Saving Arcadia. The reason for this rancorous slice of street circus? They claim, apparently with no attribution, that Saving Arcadia is racist.

Now I haven't seen any evidence of such a thing. Or at least no one has sent me anything proving it. If I had seen something I'd certainly have called it out. Personally I cannot imagine anyone could be quite that stupid. Why would anyone be dumb enough bring racial politics into a municipal land use dispute?

You can never underestimate stupidity, I guess. My shot in the dark theory is that this is just standard political jabberwocky designed to demoralize and darken the reputation of the slow growth folks in Arcadia. It is an old and nasty trick that has probably been used a thousand times before. Kind of like what happened in Sierra Madre when the Reelect Joe Mosca campaign claimed that the opposition to his candidacy wasn't based on his having flip-flopped on each and every one of his past campaign promises, rather it was fueled by homophobia.

Like anybody cared.

However, considering some of the individuals running the opposition to Saving Arcadia's efforts to stop further McMansion driven architectural degradation and property devaluation, it does look like a case of "Old Dogs - Old Tricks" syndrome. That and some flat-out butt kissing by certain marginal realty and media folks because they think there will be some money in it for them.

All that said, there is one place where I have seen a little bit of racial animosity. And that is on the We Chat site. In case you are not aware, We Chat is kind of like Twitter for people who speak Mandarin. Apparently Arcadia City Councilmember Sho Tay enjoys swapping posts with his fans there, most of whom are in the real estate trade.

Now I have had the item posted below for a little while, and until now did not believe I should be posting it here. But now? What the hell, I'll let it rip.

Apparently Sho Tay and his fans were upset over the Saving Arcadia lawn signs they had seen. Check out Sho Tay's weird comment on "white people," followed by a smiley face. Translations are included.

Could this be a case of the pot calling the kettle black? A privileged majority having an entitlement tantrum? Whatever the case, it could be a wild one in Arcadia tonight.

Wear your helmet.

Arcadia Vs. Sierra Madre Real Estate Trends

Somebody posted the following observations today. I thought it would be best to answer the commenter here. This actually is fair criticism.

The two graphs in this article are comparing two different things. It is comparing Arcadia's Median Sales Prices to Sierra Madre's Zillow Home Value Index, which is based on the Zillow Zestimate Price. The Zestimate Price is calculated from public and user-submitted data, taking into account special features, location, and market conditions.

For a more accurate comparison, one must compare Arcadias Median Sales Price with Sierra Madres Median Sales Price, OR Arcadias Zillow Zestimate Price with Sierra Madres Zillow Zestimate Price.

If anyone is interested in the actual comparison here is the Zillow Home Value Index Price and Median Sales Price for Arcadia and Sierra Madre:

Zillow Home Value Index Price checked on on 10/06/2015:

Arcadia = $1,090,000 Current 
Sierra Madre = $869,000 Current

Zillow Median Sales Price check on on 10/06/2015:

Arcadia = $938,000 Current
Sierra Madre = $821,000 Current

Here is the link to Zillow Home Prices and Values for everyone to use for themselves:

OK, point taken. Here are the Sierra Madre and Arcadia graphs showing median sales prices only. Doesn't change that much, though. Sierra Madre is still trending way up, while Arcadia continues to tank.

There you go. As always, I aim to please.

Last Night's Sheriff Contracting Proposal Committee Continued The 12% UUT Astroturfing Process Begun By The UUT Oversight Committee

No surprises here. Last evening the 12% UUT Astroturfing Process (link) continued on its merry and predetermined way with a meeting of the Sheriff Contract Proposal Committee held at City Hall. As you likely know, the UUT Oversight Committee has already concluded that a 12% UUT is absolutely essential. Now this committee will decide that the largest consumer of those UUT taxes, the Sierra Madre Police Department, must remain both in place and untouched in any possible way.

As with most political astroturfing operations this effort is designed to give certain members of the City Council the ability to claim that the decision to maintain law enforcement services in Sierra Madre as they are, and at an inevitable higher cost, is the will of others besides themselves. The message being that they're just going along with what the residents want. And as anyone familiar with the folks on this committee can attest, the chances of this bunch deciding to go with the much less expensive Sheriff's Department is zero.

Which is, of course, why they were chosen. Getting the highest utility taxes in California history on the ballot and passed by the voters will be no easy task. It takes a village. Or at least a select part of it.

In other words, this darling deck was carefully stacked. Throw in that merry maxi-taxer Gene Goss, along with the 30 or so residents who attended last night (the majority of whom were apparently veterans of that tax happy astroturfing outreach gathering held at the Fire Station last June and still don't have the faintest clue about the underlying financial aspects of the issues at hand), and the cupcake is complete.

A disappointed and skeptical Tattler stringer was on hand, and filed the following report.

I have to come to the conclusion that most of these people are not well informed about the cost of the police unions and CALPERS. Increase of $300,000 last year alone. I can't tell from the committee what they think. A couple of these people are really uninformed.

No one on the committee brought up the cost of the PD alone.  I am led to believe that the whole city is for the highest UUT in the state, that can be done plus donate all you can with no questions asked about what about next year and the next.

I watched the camaraderie among some at the end of the meeting. One man who spoke is a husband of a commissioner and called Goss Gene and Lambdin Glenn. Goss as the advisor may have made some calls. You know about Gene and his calls.

The Chief's questions to the Sheriff bordered on ridiculous. And he just finished them tonight?

The committee seems not to have been motivated to get things done in a timely manner. No one wants to write this report. Coburn keeps looking for help.

Other then Caroline Brown, Marguerite Shuster, Michael Paris and the Alcorns I have never seen any of these people at a meeting before. Nor have I ever seen anyone but Lambdin on the committee.

It sounded like the firehouse meeting-all of those people who were there and backed everything the CC wanted. All thousand of them right? Sure. Same thing tonight.

It was a really odd group of people. The committee kept referring to all of the audience wanting to save their Police Department.

Also, never really talked about in a year or two what would change? Would we still be asking for donations and a higher UUT? One other thing. Goss, who has always been for the library, seemed to have no problem throwing them under the bus if the UUT didn't pass.

On October 26, the Los Angeles Sheriff Department will be here to answer questions.

Of course, the real reason that any of this has come up is because City Hall was instructed by the residents to cut back on its spending. A message that was delivered by the voters in the most recent two elections, 2012 and 2014. Ballot measure votes where proposals to raise utility taxes were rejected. This is something the maxi-taxer City Hall crowd and the municipal employee unions calling the shots are loathe to accept.

Here is the actual reason why law enforcement costs in Sierra Madre need to be reformed (link). These are 2013 numbers, which are the most recent released by City Hall. It is a shame this committee did not care to discuss any of it.

When you have so many members of the Sierra Madre Police Department making well over six figures in total compensation, and in a small town of around 11,000 people no less, you are going to have to tax the hell out of the residents. And as we have pointed out before, the 12% utility tax rate the cop union subservient majority on the City Council wants to dun the citizens would be the highest in California history.

By the way, according to the Los Angeles Times (link), the median income for Sierra Madre residents is $88,000. Why does the Police Department have to be compensated at a much higher rate than the people whose taxes pay them?

We covered a lot of this a few weeks back in an article titled "So Who Are These People That Want Sierra Madre To Pay The Highest Utility Taxes In California History?" You can link to it here.

It seems obvious that City Hall lacks the will or desire to institute the kinds of financial reforms that are needed. Nor do they see any reason why they should adhere to the will of the voters.

Perhaps the only way this will ever be accomplished is if the voters take away the City's utility tax funding altogether.

So maybe Earl Richey was right after all.

Johnny GemCoins is being investigated by the FPPC

Wuo's woes continue. This from today's edition of the Pasadena Star News:

Feel free to check out the rest by clicking here.

Monday, October 5, 2015

Preservation Vs. Mansionization II: Arcadia Real Estate Prices Are Tanking

Repetitive Council Comment Syndrome Sufferer
One of the big dumb myths being peddled by those opposed to a voter measure designed to curtail mansionization in Arcadia is that real estate prices there continue to rise, and that this is something enriching many of the residents there. And should big bumpin' starter castles somehow be prevented from being built, nice retired people and their patient though perhaps less provident progeny would somehow be denied the right to the enjoyment of handsome profits on the family home when they decide to sell the joint to some predatory McMansion developer and move someplace else. Hopefully as far away as humanly possible.

While this might have been true at one point, it now appears that is no longer the case. With the reason quite possibly being that buyers no longer see much value in paying premium prices to live in a community choked with mausoleum looking monuments to nouveau riche gaucherie known as McMansions. Even in a place oxymoronically known as the "Beverly Hills of the San Gabriel Valley." Kardashian-style bloated excess and all.

While there could be other contributory factors (the collapsing economy of the Peoples Republic of China comes to mind), the "Preservation Versus Mansionization" dichotomy that we discussed yesterday is certainly playing an important role.

But don't tell the Arcadia "size matters" crowd that.

The following interesting though poorly informed document comes from a handout that was passed around at a Councilmember Sho "Way" Tay sponsored McMansion outreach event that went down recently.

Nicely written and all I suppose, but is it actually true? The available data would tell us that no, it isn't. At least not when you are talking about the resale value of homes both behind the Peacock Veil and in Sierra Madre. And isn't that what people really care about?

There are currently 250 homes for sale in Arcadia, including condos and townhouses. This is around double the normal inventory of homes for sale considered normal in a market of this size, and at any given time. It almost seems like everyone wants to get out of Arcadia at the same time, causing the real estate market there to dissipate rapidly.

Things are now approaching the panic level. People seem to want to get out of there while the getting is good, and prices are now falling fast.

Price reductions have become the new norm for getting a home sold in Arcadia. All while folks in the surrounding communities often experience price bumping multiple offers on their homes from competing hopeful buyers. It is interesting to note why so many existing home owners now want out of Arcadia, which has pushed up the inventory of homes on the market to historic double the normal inventory levels.

Could Johnny GemCoin’s bizarre and embarrassing antics, along with those other two City Council members (Jolly Roger and Way Tay, gents who have obviously sold their teensy souls to development interests), be the straws that broke the camel's back for long time Arcadia home owners? Residents who have now had enough of this city and its corruption and want to get out? Now? Before the next McMansion goes up next door to their single level ranch house?

Is Arcadia really that desirable a place to live anymore? Is it still worth the money?

There are currently 44 brand new homes for sale in the city of Arcadia, each with an average of 123 days on the market. After over 4 months of market time the average brand new (McMansion) home still sits empty and unsold.

The average asking price for these unsold homes, which average 5 bedrooms, 6 baths (paging Dr. Freud) and over 5,000 SQFt., is $3,033,331. Some are much more. 123 on average days on the market (and still unsold) seems to be a long time to sell a home that is supposedly what all of those purported new Arcadia homebuyers are clambering to buy.

As of today, the average time for Arcadia homes of any year (new and older homes) to find a buyer and open escrow is a full 3 months. And the current pending sales of all Arcadia homes now takes 3 months just to find the buyer, not 3 months to close the deal. That takes even longer. Add 30 to 45 days more to finally close and transfer such properties to a new owner.

Compare this to the Sierra Madre average of under 2 months on the market to find a buyer and open escrow. This really is quite a contrast.

This first graphic is the current Zillow data showing the median home sale price in Arcadia over the last several years. In Mid Year 2014 the median Arcadia home sale price was around $1,200,000. Today, and again according to Zillow, the median home sale price there has tumbled to $938,000. A stunning 22% decrease in value for all Arcadia homes.

Here is that Arcadia chart. This is a median chart, and was available on October 3rd.

For an easy contrast, here is the Zillow home value chart for Sierra Madre that we posted yesterday. This is a regular chart, and not a median one. As you can see it is conceivable that, should current trends hold, Sierra Madre home prices could overtake those of Arcadia in the not that distant future. Something that many would have believed inconceivable just a short year or two ago.

Preservation Vs. Mansionization. Think about it. It is a term that should be on the minds of everyone these days.

We'll wrap this up with one more mighty burst of data. What you will see next is homes sold that were built in the years 1900 to 2010. No brand new homes are included in this data. Just existing homes that current homeowners have sold. Not contractor/builder or developer homes built recently with only a profit motive in mind.

The current year 2015 data sheet shows that existing homeowners got an average of $1,554,448 for their homes. We're talking about homes sold between 1/01/15 and 10/04/2015. This represents a stunning $161,309 reduction in Arcadia's existing home values.

Here is the 2014 data.

And here is the 2015 data.

Any questions?

Sunday, October 4, 2015

Preservation Vs. Mansionization: Sierra Madre Home Values Post-Measure V

One of the big arguments those opposed to a ballot measure to control mass mansionization in Arcadia is that it would harm home values and cause people to lose money. This is, of course, pretty much the same specious argument put out in 2007 by those who opposed Measure V in Sierra Madre. And from some of the same people, I might add. Their point being that if entire downtown areas of Sierra Madre weren't turned into something approaching what you can see today in some of the more ersatz looking mixed use neighborhoods of Rancho Cucamonga, the town would suffer irreparable financial damage and the value of real estate here would suffer badly.

As the data we're supplying today will clearly show, this anti-Measure V argument turned out to be pernicious nonsense. What follows is a graph of the average market values from 2006 to 2015. The last peak in that market was 2006-2007. The nationwide market crash happened after that, driving down all real estate in the United States beginning in 2008 and lasting through 2012.

Somewhere around the middle of 2013 Sierra Madre recovered to its market value peak of 2006 & 2007. Since 2013 Sierra Madre has skyrocketed up to an average home sale price of $885,000 today. In the last 5 months Sierra Madre has been incredibly hot while Arcadia, dependent as it is on a constant supply of funny money being pumped into that market from a now economically unstable Peoples Republic of China, is actually tanking with all but the most elite housing demographics losing value.

Since the Sierra Madre City Council passed all of its new building regulations over the past year we have seen an incredible increase in the desire for Sierra Madre homes by buyers, driving up real estate prices here. Clearly showing that Preservation is far more attractive to home purchasers than Mansionization. This is taken from Zillow and includes condos and townhomes.

To break this down for you a little bit further, here is some more data disproving the anti-Measure V arguments from back in the day. The average 2007 SFR home sale price was $941,527. Today in 2015 the average SFR home sale price is $1,019,959

Please note that what follows are single family homes, and does not include condos or townhouses.

First here is 2007.

Here is 2015.

So if you were a homeowner concerned about the value of your home, based on what you see here which would you want to choose? Preservation or Mansionization?

Despite what you are hearing from certain parities in Arcadia these days, McMansion development does nothing for actual homeowners. It is only of value to certain individual fat cat developers, many of whom are actively opposed to any voter initiative that would curb their vast monuments to doofus gaucherie.

Remember, behind all the smoke, mirrors and dishonest accusations in Arcadia, the real issue is money. Just not your money.