Tuesday, April 11, 2017

A Topic That Will Not Be Discussed At Tonight's Sierra Madre City Council Meeting

On April 7 (link) we ran a piece that detailed Pasadena's $1.5 billion dollars in pension debt. Sierra Madre also has a vast amount of such debt. And while it is nowhere near as large as that suffered by Pasadena, at over $40 million dollars, with pension debt per household at $8,472, it is proportionally significant. Below is how Sierra Madre's pension woes are laid out by a site called California Pension Tracker, a site put together by Dr. Joe Nation, Project Director at the Stanford Institute for Economic Policy Research. Link here.


Here are some definitions that will help make this a little more clear.

Market Liability: Present Value of future benefits for current members, discounted at a market rate of return, ranging from 2.82% to 4.82%.

Actuarial Liability: Present Value of future benefits for current members, using discount rates reported by most systems, typically 7.5%.

Value of Assets: Market Value of Assets, as reflected by the current market price.

Market Pension Debt: Market Liability minus Value of Assets.

Acturial Pension Debt: Actuarial Liability minus Value of Assets.

Actuarial Liability minus Value of Assets: Discount rate for terminating CalPERS agencies, based on 10- and 30-year Treasury yields, ranging from 2.82% to 4.82%.

This, of course, is the real reason why Measure UUT was on the ballot and pushed so fiercely in 2016. Trust me, it wasn't really about the Library.

It is also why the City of Sierra Madre will be pushing for additional tax increases in 2018. Again, and despite what you will be told, it won't really be about the Library, the Fire Department, Paramedics, the Huck Finn Fishing Derby or Baby Rhyme Time.

This is also something the city government here adamantly refuses to agendize and discuss at City Council meetings with those who are actually paying the bills. Why this city won't level with its constituents is baffling.

sierramadretattler.blogspot.com

26 comments:

  1. High speed internet must be so expensive, burglars are breaking into SM homes in the wee hours to steal WiFi for porn. And shame on kitty for not closing the blinds. (I shudder to think about the calls the SMPD puts up with from some of the residents around here...too bad they're not after real criminals like those hiding things in our government...keep up the good work, Mod).

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  2. Does anyone have the total amount of money paid to or collected by the city of Sierra Madre. Would be interesting to see the last 10 years of total money collected by city hall.

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  3. In our household, when money is tight we forego entertainment. It's a pretty simple formula - sometimes you can have parties, sometimes not.
    Our city obviously can't afford any parties, or other luxuries.

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  4. This is serious bad news folks! Debit cannot be swept under the rug. It's going to get ugly at some point. The bills will not be paid, it's going to bust, and we're going to be left without public service. People reaping the benefits of this money do not want to change. There's going to have to be a forcible revolution sorry to say. It honestly scares me. Those of you that don't have guns should go buy them for when the police stop coming to work.

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    Replies
    1. You're a maniac.

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    2. You're a maniacophobe.

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    3. Hey, you might be trump troll #2 the paranoid guy who sleeps with his gun.

      Super creepy.

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    4. I would like the responses to this post to speak to the salient points and ignore the last two sentences ending with the "get a gun" suggestion. Maybe not a maniac but an exaggerator. Important to consider what will happen to Sierra Madre if we go broke. I don't think the city can raise the UUT or pass a parcel tax that will even come close to covering these costs.

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    5. I personally think that if the City Council would level with the people of Sierra Madre and told them just how bad this situation is the city could be spared bankruptcy. People would step up to save their city and undo the damage by paying a parcel tax. But this would involve explaining how things got so bad and pointing out the people responsible. They are afraid to do that. An independent forensic auditor would be best because he/she wouldn't have any ties to the past and could deliver the facts.

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    6. 'Forcible revolution'? That's maniacal.

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    7. It won't take a revolution. CalPERS is going to drive a lot of cities in bankruptcy. Pasadena owes a billion and a half. Much smaller Sierra Madre $40 million. Pasadena's Mayor is out talking about this to the residents in his city. Sierra Madre's Mayor didn't even mention it in his "State of the City" address. Our leaders should be more forthcoming.

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  5. Good News Today, Russia is on the verge of taking control of a US oil company. This isn't a direct takeover. Instead, it hinges on the ability of Venezuela's state-run oil company to pay back its Russian loan. The Venezuelan company owns Citgo, which was used as collateral for the loan. Full article here, http://money.cnn.com/2017/04/10/news/economy/russia-us-oil-company-citgo/index.html

    I'm sure Trump will take care of us.

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    Replies
    1. Time to get an electric car.

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  6. Time to get a few electric chairs for some leaders.

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    Replies
    1. Nice. A death threat. How "CalPERS."

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  7. There is a bill (written by one of the few Republicans), being introduced in Sacramento, that addresses CalPERS Pension Reform.
    "You" can Google and do more research.

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  8. The pension gap
    It was a deal that wasn’t supposed to cost taxpayers an extra dime. Now the state’s annual tab is in the billions, and the cost keeps climbing.
    http://www.latimes.com/projects/la-me-pension-crisis-davis-deal/

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  9. The pension crisis is a slow-moving train wreck that will likely cause huge problems for many municipalities and their retirees that are banking on pension income to supplement their retirement spending needs.

    Total state employee pension liabilities are estimated in the range of $3 trillion to $5 trillion, while the average funded status of the 50 state pension plans is just 40 percent to 60 percent, depending on the discount rate used to value plan assets.

    https://www.bloomberg.com/view/articles/2017-04-10/pension-plans-risky-flirtation-with-private-equity

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  10. White House Press Secretary Sean Spicer is under fire for saying Hitler didn't use chemical weapons
    http://www.latimes.com/politics/washington/la-na-essential-washington-updates-white-house-press-secretary-ignores-1491936525-htmlstory.html

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  11. Raising taxes will never solve this problem because it doesn't get to the root of the problem which is the corrupt relationship between public employee unions and elected and appointed officials. As long as the unions control these people they will continue writingever larger checks to themselves until either we stop them or we are all bankrupt. Which will it be?

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  12. To troll #1, who's always whining about the cost of Obama's travel- you got trumped, fool!

    After racking up an estimated $22 million travel tab in less than three months, Donald Trump is well on his way to spending more in a single year than Barack Obama spent on travel during all eight years of his presidency.

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    Replies
    1. That's misleading 3:41. Obama spent the money on travel during a presidency.

      Trump's traveling carnival costs far more to operate.

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    2. The Trump Circus. Heavy on the clowns.

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  13. if you run the numbers, percentage wise based on population versus CalPERS debt, Sierra Madre per capita is in worse shape than Pasadena.

    CalPERS has been and will always be a Ponzi scheme at taxpayer expense

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    Replies
    1. The people who run the government and raise taxes are the ones who also receive the platinum benefits CalPERS offers. Pretty sweet little situation to find yourself in.

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