Sunday, December 27, 2015

Will The Two City Council Candidates Be Discussing Sierra Madre's #1 Debt Problem This Election?

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When you have just two incumbent City Council candidates running for two seats, you're not going to get much in the way of any wide ranging discussions on the issues. In Sierra Madre it appears that among those things not being talked about this election is the city's largest debt problem, its mandated contributions to employee CalPERS accounts.

Of course, it would help if Sierra Madre actually had a more forthcoming adjudicated newspaper. According to this weekend's Mountain Views News, and despite much evidence to the contrary, everything is getting better in Sierra Madre. The article bases its claims on campaign press releases put out by John Capoccia and John Harabedian. Both of whom take full credit for what are essentially fantasy claims of increased City Hall financial viability.

Here is how this one went.

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Softball journalism at its best. Apparently what the City of Sierra Madre can look forward to this political season is something along the lines of a coronation. And as is usually the case with royal society, you won't get much of a chance to question the motives of those who will continue to rule no matter what the verdict at the polls.

The real situation is obviously quite different from what these two candidates are so far presenting to the public. Here is how the actual pension liability numbers looked in an article we posted here on December 8 (link) called "The Reckoning: Is Sierra Madre Close To Insolvency?"

Sierra Madre has a fiscal year ending June 30. That means that under Governmental Accounting Standards Board No. 68, Sierra Madre will be required this year (for the first time) to record a “net pension liability” on its balance sheet.  The liability is the difference between the total pension liability and the value of the assets that have been set aside to pay benefits to current employees, retirees and their beneficiaries.

It also requires the recording of interest on the liability. Sierra Madre’s financial statements are typically completed by mid-January so it is likely that the amount of the liability has already been calculated. It could be more than $9 million.

For June 30, 2014, Sierra Madre had a total fund balance in its governmental funds of $11,131,838. So if the adjustment is large enough it’s possible that by recording this liability for this fiscal year (the first year it is required), Sierra Madre will be nearly insolvent in its governmental funds.

The city would still own approximately $200 million in hard assets like roads and sewers / etc, but you can’t pay a pension with asphalt.

Again, I doubt either of the Two Johns, Harabedian or Capoccia, will be talking about "net pension liability" too much. While they certainly will be pushing the UUT increase ballot measure with everything they got, the real reason for it, CalPERS obligations to the tune of $9 million dollars, will not likely be part of any discussions they'll be having.

Why is that? Because they don't want you to know too much about the actual reasons for the 10% utility tax ballot initiative they're pushing. It isn't a politically expedient vote getter. As the above blurb in the MVN states, the Two Johns are addressing financial stability, the needs of badly neglected city infrastructure and "water issues."

However, none of those have very much to do with the 10% UUT ballot measure. Despite the inferences, neither the Water Department, or any infrastructure for that matter, will be receiving any significant increased funding from the UUT initiative.

Instead that money will be going to CalPERS. But do not tell anybody. It isn't part of the message.

sierramadretattler.blogspot.com 

28 comments:

  1. FACT. Ciy Hall has a yearly income of $24,000,000 Million Dollars a Year and has continued to missapprop rite the taxpayers monies, WHY? We still contend that the taxpayers are due a forensic audit to determine where all of the taxpayers money has been spent ( $24 Million is being spent? ) The city of Bell mismanaged its taxpayers monies, look what it got them, they kept demanding pensions and raises also $$$$

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  2. Why are these two fine gents the only two running? Aren't the issues big enough?

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    1. How many people understand the issues? The misinformation coming from City Hall has been pretty widely accepted.

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    2. The ballot initiatives will be where the real action takes place.

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    3. The unfunded pension liability will lead us to bankruptcy unless we reform our public employee pension system and move to a defined contribution pension plan rather than an defined benefit pension plan. We also need to rein in salaries and not base our pay on what neighboring cities pay. That's why the salaries keep spiraling upward. All it takes is for one city to play fast and loose with the taxpayers money and now every City Manager points to that city as the new "going rate" that we now have to pay in order to be "competitive". The public employee unions have figured all this stuff and follow the same playbook in every city. You always here that vital city services will be cut or police response times will increase unless you increase the UUT. They always point to things that will scare the public the most. Nothing ever changes. All the unions do this. The politicians vote for the increases because the unions contribute to their political campaigns. The whole process has been corrupted. So no to any tax increase and perhaps get rid of the UUT entirely and force the city to live within its means.

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    4. Why don't decent people run?
      Just remember the way Mary Ann MacGillivray was treated.It was awful. Tattler defended her but it was too late to erase the last minute dirty politics that corrodes Sierra Madre.The nasty people won .
      So the nasty,weak candidates still run. We have 2 exceptions to that dismal assessment on the current CC but they are our only hope.
      Eventually this will all be resolved .But not by the electorate. Courts will declare us bankrupt and we'll start over.It will be horrid.Unless we get good people to stand- and support them 110%.

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    5. This council has done more for preservation than any council in the last 50 years. There may some warts (Harbedian photo shopped police badges out of campaign materials!), but on balance, no group of 5 people has done so much to institutionalize preservation. That's enough to keep them around.

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    6. True. And credit to them. But I wish they would be more on the level about Sierra Madre's debt. Especially CalPERS. All they need to do is acknowledge it. If Sierra Madre goes belly up, then all those codes and ordinances won;t mean a thing.

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    7. 8:46 - kinda moot, right? They're the only two real candidates running. I just wish they'd level with us on the city's finances.

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    8. 8:27, am I right? Did you not just answer your own question? Why don't decent people run? Look at the way Mary Ann was treated, how John Crawford was treated, how any number of good and decent people have been treated and I think we know why folks don't run for City Council in a small town where candidates are vilified, mistreated, slandered and subject to mayhem. And for what? A non paying Council seat that takes up 48 weeks a year rewarded with a mediocre dinner, that's why.

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    9. 8:27 has a good point. The bankruptcy court can decide to do what ever. That could include setting aside a moratorium and preservation statutes.

      We could avoid BK if the current CC would go to LA Sheriff NOW and cut the CalPERS assessments significantly.

      Whether Capoccia, Harabedian and Goss have the sells to do it remains to be seen. I'm not hopeful.

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    10. 6:25here. Should've typed "balls to do it".

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  3. http://www.the-american-interest.com/2015/12/24/oregon-wrestles-with-public-pension-costs/

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  4. You can't handle the truth!

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  5. 8.27 you can not handle the truth. Vote No regarding All city taxes,

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  6. If the johnnns can't manage 24 million CORRECTLY, they been to step down, we do not want you. Go live with your buddy, modca!!! Encinitas has an open dog catchers job for you with pensions!!!

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  7. This is a much better story than wasting time and space on Joe Mosca

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    1. Joe Mosca posts get lots of comments.

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  8. 9.40 Good post, is it OK to change the wood been to "need to step down," move on to another city

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  9. since it only takes 191 valid signatures why don't we put a ballot measure on the ballot requiring the city to abandon defined benefit pension plans (CALPERS) and require that the city can only pay for 401k plans.

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    1. It would have to be on the November ballot. Not necessarily a bad thing.

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  10. Beware of Incumbents seeking reelection as they are the servants of a hooved master far below the earths crust. Residents who can vote should cast a vote against them all..

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    1. Hooved master? Are you referring to the Big Horse?

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    2. Unicorns have hooves.

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    3. So do goats. Pigs, on the other hand, have trotters.

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  11. This is a first: two seats open, two incumbents running and only one challenger (of modest electability). Why?
    It is pretty obvious to any of us who have voted in each and every election, campagned for some who have won and some who have lost. Of the current City Council I did vote for Capoccia but will not this next time. I did vote for the two women. There have been years when of the five city council members I could proudly, and sadly, say I did not vote for any of them. Who took out papers to run for Treasurer and City Clerk?

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  12. Harabedian and Capoccia are afraid to leave the city in the hands of Mayor Goss.

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  13. This comment has been removed by a blog administrator.

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