Tuesday, September 12, 2017

Getting A Grip On Sierra Madre's CalPERS Debt Problem

Mod: I got a loaner Apple while my MacBook Pro is in the shop. Feels weird, but I am dealing with it. I've been told that my computer had the equivalent of a cyber stroke, but it might survive. I have my hopes to keep me strong. Anyway, as you probably recall, 22% of the cash Sierra Madre's water enterprise gets goes to pay for debt. OK? Not an especially good number. But what percentage of this city's tax money goes to pay for CalPERS? If I told you a whole bunch, would you believe me? Unless you were part of the 2002 "Caligula" City Council, you'd likely admit you do. Here is how City Manager Gabriel Engeland responded to my recent PRA request on that troubling CalPERS tip. 

Hi John,
I was able to confirm the pension payments for utility employees (water and sewer) are paid from each respective enterprise fund.  This is true of the CalPERs payments ($551,400) as well as the UAL (Unfunded Accrued Liability) payments ($727,510).

It is likely there are restricted funds that cannot be used to pay for pensions or other benefits, but Sewer and Water Funds are “enterprise” funds, meaning the revenues pay for the operational cost of each entity, respectively, including the cost of benefits (pensions, healthcare, insurance, etc). This means the pension payment for Water employees comes from the Water fund, Sewer employees from the Sewer fund, and General Fund employees from the General Fund.

In order to calculate a percentage of benefits to expenses I would still use the total expenditures as I did below ($24,830,600). However, I could also see an argument being made to only use specific Fund expenditures - Water ($5,015,900), Sewer ($1,123,000), and General Fund ($10,865,900) - for total fund expenditures of $17,004,800, which would make the CalPERS payments of $1,278,910 equal to 7.52% of total Water Fund, Sewer Fund, and General Fund expenditures.

As we discussed last week total salary could also be a way to look at this, as it strips out all other benefits, but the UAL is not a benefit to current employees. The UAL is the liability for current pensioners and represents the “gap” between what CalPERS projected to receive in investment returns and what they actually received.  If we are looking at salary only, and CalPERS payments only, the percentage would be 11.33% of total salary, if you include the UAL payment, along with the CalPERS payment, the percentage would be 26.3% of salary.  As you know this last calculation would include a benefit for past employees in a payroll/salary number for current employees.

In the end pension payment as a percent of salary is probably the easiest way to look at this, but for me, the total expenditure is the most compelling figure.

In 2016-17 we paid more than $1.2M to CalPERS, regardless of how it is analyzed.  This number will increase in the coming years and UAL is in addition to the CalPERS payment.  Here are the current calculations for the UAL payments:

2016-17:          $727,510
2017-18:          $829,860
2018-19:          $973,160
2019-20:          $1,124,297
2020-21:          $1,220,651
2021-22:          $1,122,952
2022-23:          $1,030,422

Assuming the annual CalPERS payments holds steady you would have to add more than $500,000 to each of the above UAL numbers for the total pension payments the City will make.  Also, we should assume the CalPERS payment will increase, and not hold steady.

I hope this makes sense.  There are a lot of different ways to look at the numbers as a ratio, but the bottom-line is payments are high already, and they are increasing at rate that is much quicker than most people realize.

Thanks, Gabe

Mod: I suppose you could put Sierra Madre's debt problem into perspective by adding total CalPERS payments to that of the Water Bond debt for each year.


Mod: As an example, in the year 2020 you would add $640,595 from the water bond debt plus that $1,720,651 in CalPERS Cash for a grand total of $2,361,246. Or just around what the city could realize by selling the Library property. Get the picture? Just in case you're wondering why the city may soon no longer be able afford to pay for nice things, and instead strictly focus on its survival.

sierramadretattler.blogspot.com

66 comments:

  1. I laugh at the Friends of the Library. If they are really going for the new Library at the YAC what a joke. Fewer books and fewer parking spots. We tax payers are really not getting a deal and the lies that leads up to this sale are unbelievable. Selling off our assets is never a good thing for the city. If the city tries to sell off the water department that would get my attention. When you look at cities that did sell off the water department and just a few short years later buy it back you will get the picture.
    Going to the present Library is a peaceful serene place to take the kids, something the new location cannot offer.

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  2. It will be nice when the city moves the Library. Gives us a chance to help the kids of Arcadia by providing a Library closer to the Highlands.

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  3. Getting rid of the present library for a newer smaller place is just a big sales job by the inner workings of those in a position to make some money. I hope when it comes up for a vote of the people that they choose to preserve what we have. I am so sad about this, wish I could help. It will be very difficult attending a meeting at the park house with a small capacity and poor air circulation.

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    1. Correct me if I'm wrong, but there is NO VOTE from the people. The City Council represents the people and their vote is the final decision. The only vote a person has is to attend the Council Meeting and PROTEST!

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    2. Are you kidding me? You mean the City Council can sell the Library property without the residents knowing about it? Sounds like the Council was planning a slam dunk!

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    3. Of course they can sell city property you fool. The can also raise rates, fees, and sell bonds without your approval. Know who you vote for. That is your only vote.

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    4. They can do as they wish. Smiling all the while. And most people will believe everything they tell them. Even when it is not true.

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  4. Welcome to the "new" Sierra Madre-Arcadia Regional Library at 611 E. Sierra Madre Blvd.

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    1. Arizmendi's City of the Foothills Bulldozing BureauSeptember 12, 2017 at 8:30 AM

      6:51. Here's a new advert for you I just saw on a City of Sierra Madre Facebook Page.

      "Join your fellow citizens at the new and improved Peacock Place at Sierra Vista! Parking rates are by the hour, but please validate at any check-in kiosk for a free half hour. Flash your UUT stub for complementary water fountain/bathroom access, household utility payees only. All other library use, book rental, and media loans are subject to the fee schedule as determined by City Council. Updated quarterly.*

      Wifi cards are also available for purchase at the newly refurbished Capoccia computer Coral. All major credit, debit, and Gemcoin payments accepted.**

      Our city council, especially Johnny Harabedian and Johnny Wuo, very much appreciate your continued support. We look forward to your frequent visits."

      *Baby Rhyme Time and the Teen Summer Reading Program subject to cancellation. Refer to the Mtn View News for further information (subject to availability).
      **Half off Dapper dogs with 3 day DVD rentals also available for purchase.

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    2. What does a Dapper Dog come with?

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    3. Relished opportunities and greasy palms.

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  5. Debt is a giant black hole that is sucking everything into it. Library, UUT, everything. Anybody who tells you otherwise is not telling the truth. Measure UUT proponents all have long noses.

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  6. Walking distances:
    Sierra Madre Elementary School to "central" library=# of blocks? Does SM Elementary provide an in-school library?
    Other schools: Bethany (K-6?), Gooden (K-8) in town distance to "Central" library? Distance to YAC Library?
    Middle School to YAC library=#of blocks? Does Middle School have own library?
    Alverno High School to "Central" library? To YAC Library?
    All needs to be taken into account.

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    Replies
    1. The schools should provide their own libraries. Stop using General Fund $$ for class time field trips.

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    2. A lot of time PUSD schools have trouble providing school text books. Regular old reading books can only be found at the Public Library.

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    3. Students don't use physical libraries much.
      Any of the local libraries don't have 1/100000000 of the texts available online.

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    4. Community library spaces augment school libraries. Community libraries are an indication of the community will to support literacy and education. The big hole in Sierra Madre has always been that we do not have a public high school in our city. You may not value public education and think that the public should not have to bear these costs, but I value free access to education for all. Sure electronic materials are more and more in use yet many still prefer the printed page.

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    5. 8:14. Just because schools don't spend our tax dollars on book, why should city dollars provide this. Why should we fund school field trips to the library. Let kids go after school....walk, bike, or parent.

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    6. Don't forget the preschools like Hastings Ranch and Sunnyside. Those are walking field trips! Kids love to go to story time at the Library.

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  7. The question of selling the water department has been discussed over the year.
    The debths that have racked up; nothing new.
    Why not hold future meetings regarding the Library, at the Library?
    The air conditioning is great.

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    Replies
    1. Because people might start yelling and you're not supposed to yell in the library. duh.

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    2. I think the fear some have is if it is held in the library it will create sympathy for the place.

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  8. 7:05 a good idea. I vote for that.

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  9. Secret answer in Gabe's response to the library debacle? Make the library sale funds restricted. That way they can only go to library needs, and make sure pension debts for old employees do not count. Elaine and her cronies would argue that tax and sale funds were too fungible, so it was impossible to every know where the money went. Yeah right. If people ask the hard questions, and if all else fails make the sale funds restricted, I bet you things will turn around. That or the crooks will run away and the city will get even more transparent than it has been. Time to open the blinds, fellow citizens, and let some disinfecting sunshine in.

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    1. So the argument is to sell the library land for high density development in order to get the funds we need?

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    2. That is how I see it. The Library is just the diversion.

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    3. I'm facetiously arguing that if the city is trying to bully their way into this sale, what with all their off-site meetings and rushed limited public debate city council meetings, we should push for restricted funds. First try to stop the sale, and if that isn't successful the first time around, then restrict the money-go-round gravy train. Either way it stops the city BS, that and the cockroaches will run away faster than last time.

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  10. This terrible mess with CalPERS is just the tip of the ice-berg and growing in size and shape no loner can we ignore the ELEPHANT in the room, this is the classic kick the can down the road fix or sweeping it under the carpet since tomorrow will bring a better day and here it is folks the number one answer is: Be Happy ?

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  11. Thanks Jerry Brown and all of the law makers in Sacramento busy creating new taxes, then having the audacity to say; its for the people, environment, for infrastructure and quality of life!
    Your creation of CalPERS and various trickle down voodoo taxes for the betterment of voters are a joke.
    Wait a minute; y'all continue to get voted into office...
    The jokes on the voters that keep and put you in your positions!

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    Replies
    1. True fact: Did you know that Los Angeles has more registered voters than people who are of voting age? I wonder if that is why Sacramento politicians keep being re-elected?

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  12. I'm curious, you call the city council crooks for suggesting the move of the library. Crooks for the bond debt. Crooks for calpers. I can surely respect that you disagree with the each of these decisions. But why is it not just that. A disagreement as to the solution to a problem. What makes you think their motives were one of profit? They are neither paid, or endowed. I could respect the accusation if you did it publicly with evidence and your names attached to the accusation. But what does it cost you to anonymously destroy someone's character on a blog. This is not community. And by the way, how about some solutions to our problems rather than pointing out the failures. If any of you troglodytes are so inclined and have the cajones, feel free to approach the podium tonight and make your accusations.

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    1. Hi. I'm Johnny Harabedian and I approve this message.

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    2. The water bond debt was tied to the DSP. It is suspected that each of the City Councilmembers who approved these destructive bonds also invested in the DSP. This is why each of them still works hard to suppress this story. It may very well be they engaged in criminal behavior. Forensic audit now!

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    3. The dsp is not an investment. It is a framework for the development of downtown. Unless you are suggesting they own many properties downtown, and or businesses, your statement is once again myopic, unfounded, and of the tinfoil hat variety.

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    4. Hair splitting. Interesting LLCs lurking on the DSP reservation. How many of them have former city officials names on them?

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    5. Yet another reason why a forensic audit is required.

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  13. Get a grip commenter 9:49am. and put the coffee down!
    You mentioned the local community City Council; I stand by my position of Progressive Sacramento lawmakers.
    Poor management put Sierra Madre into debth and the lack of it's citizens following through with keeping it all in check.
    Nothing happens overnight; you must be a newcomer to town and therefore missed the majoriety of town hall meetings.
    If you elect lawmakers that just shake their heads, but don't listen to the community voices when it comes time to vote on expenditures; then yes, "you" have a problem.

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    1. If you are suggesting that the "tattler" is a community, then I'd rather listen to a pack of hyenas humping. At least they are doing something constructive.

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    2. Sounds like a description of your house when you are off on business trips.

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    3. I would say right back at ya, but I tend to not make assumptions about other people's wives, nor am I so optimistic that you have one that isn't locked in your basement.

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    4. Everyone involved is grateful for your lack of inquisitiveness.

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    5. That's some imagination you have dinglberry. But I'm afraid the only thing in your league is the plaster cow on grand view, but you may want to buy her a couple drinks first. A roofy may help your cause also.

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    6. You have so little to be proud of.

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    7. Interesting, and I suppose you are convinced the moon is made of cheese.

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  14. If the sale of the City owned property where the Library is located moves ahead, then the monies are earmarked for Library.

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    1. How do you know? Measure UUT was earmarked for the library also, but much of it is going to pay for the city's debts.

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  15. Get a grip! Library, property owned by city.
    Apples & Oranges.
    UUT, voters chose to pay higher taxes.

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    1. Revenue raised from selling the library property would go for the same thing Measure UUT are being spent on. Bond and CalPERS debt. Go sand down your nose.

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  16. Had a conversation with a library volunteer, who says the biggest problem with the old building is lack of storage. Everything, all the archives, are crammed into the basement, which is vulnerable to complete collapse in earthquakes.
    So if there could be a storage solution worked out, and the building made earthquake resistant, would that be enough?
    How about storage at the Rec center, and let the library building alone to just be a library?

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  17. Ah no. The sale of city property cannot be spent on employees; unless a Bankruptcy Judge is settling finances on a broke town swallowed up and being run by the County.

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    1. Oh. I'm sure it will free up other funds.

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  18. Lack of storage. Move everything back into City Hall basement, or into storage bins on the Library vacant lot.
    But, then you have the ADA compliances and repairs.
    If the costs of repairs can be made with the money the "Friends of the Library" have raised, then I'm sure that's how the Library Board will vote.

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  19. One main drawback to the exchange of the large open space of the rec center to library stacks is the loss of a place to shelter people in case of natural disaster and emergency.

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    1. several houses of worship in town that can provide shelter
      unlike creepy greedy houston guy...

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  20. But will they shelter non-magical thinkers?

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  21. The Rec Center Community Room will be large enough to schelter in place and it will also accommodate Library material. You afraid that a book may fall into your lap?
    Are you the anti Semitic creepy guy that posted twice? 1:27pm & 2:58pm?
    Are you the guy that mailed out flyers supporting the UUT and are thinking about running for a volunteer position on a Commission or Council seat.
    Yes, this is the better community blog; fearless in it's research.

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    1. Not me 4:12. I'm just a rationalist and empiricist.

      Your post does, however, illustrate how quickly magical thinkers jump to conclusions without evidence.

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    2. Anti Semitic?
      Say wha?

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  22. Ok library lovers, since you all seem to want to save the old building, how about 1000 of you each chip in A $1000 each and get the schools that use it to chip in $50000 each put that money to up grades? Plus there is the $100,000 from the Friends. Then you can SAVE your library. If you don't want to fork over some dollars...then shut up your pie hole.

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    1. I'd rather the city fix the library than use our tax money to pay off Bart Doyle's old water bonds debts.

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    2. Have to pay the piper for Bart's and Doug's bad decision. Thanks to all you that voted for them.

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    3. The 2002 Wrecking Crew
      1) Interest payments only on $6.75 million worth of water bonds.
      2) One Carter. 15 years later and not one house built.
      3) The "downtown specific plan." A disastrous boondoggle that haunts this town right up until today.

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  23. I have been forking over library $$ for about 40+ years that I have lived here. Asking people to shut up is not something I think you would have learned while quietly enjoying the pleasures of reading/computing/e-studying at the library. No matter what the "savings" is thought to be had by reassembling the library at the YAC you can just about guarantee cost overruns.

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