CaliforniaCityNews.org

More than 1 in 5 Cities Implemented New Pension Tier According to League Survey

The League of CA Cities has released the results of its 2011 City Manager Pension Survey, which was used to determine trends in pension changes across the state. Around 296 cities participated in the survey, and the results show that over the past two years many public safety workers and general government employees have experienced reduced benefits. Highlights from the report include the following:

• “22% or cities responding have adopted a new pension tier and it appears that most of the new tiers were adopted in the last two years.
• 73% of the new tiers adopted are for miscellaneous employees.
• Most cities that negotiated changes to their fire plans reduced benefit levels. Most cities that provided the 3% at 50 plan adopted a lower benefit of 3% at 55 plan. The 2% at 50 plan is the second most commonly adopted new formula.
• Most cities that negotiated changes to their fire plans reduced benefit levels. Most cities that provided the 3% at 50 plan adopted a lower benefit of 3% at 55 plan.
• 38% of cities responding have adopted some form of cost sharing with many of those changes occurring over the last two years.
• 12% of cities responding have negotiated changes to their final compensation calculations.

The survey concludes that further changes are expected when it comes to pension benefits at the local level, as reportedly 62% of cities are currently considering negotiating changes to their pension offerings. Read the full report here. Other retirement info can be found at the League’s Pension Information Center here.

Fiscal Crisis in Montebello as Cash Poor City Frets Over Paying Bills; Bankruptcy on Horizon?

Financial mismanagement and accounting maneuvers have come back to bite the city of Montebello, as officials warned this week that the city could be heading toward bankruptcy due to its precarious financial position. Case in point: It has been reported that the cash poor city will only be able to pay its bills through one more month and then it will have trouble covering payroll and its debts. To address the major fiscal woes, interim city administrator Peter Cosentini requested that officials convene a special (and immediate) City Council meeting on Wednesday night. According to Cosentini, the true nature of the city’s deficit was never entirely clear due to poor transparency and the moving of funds from various sources. Cosentini has called for “immediate corrective action," as well as the creation of a plan for recovery. The San Gabriel Valley Tribune reports:

“Cosentini released a written statement Tuesday afternoon announcing the city's financial situation. In it he said the city has for years been shifting cash around to cover deficits in various funds, making it difficult to determine the community's actual financial standing. Some of the money was illegally taken from restricted sources like special revenue and debt service funds, Cosentini said. ‘Figuring out the math has been challenging given the lack of sufficient documentation provided as well as the lack of transparency of individuals who prepared (and/or) gave direction to the many transactions described above,’ he wrote.”

The city’s Community Redevelopment Agency already loaned the city $14.8 million so that it could cover its costs and Cosentini noted that the CRA simply has no more money to provide as it is also cash poor now. And commenting on the news of the city’s financial position, Mayor Art Barajas stated that “I was as surprised and shocked as the next person. We're certainly not going to continue with practices that are unacceptable.” For more, see here.

Rizzo and Assistant Indicted By Grand Jury on New Corruption Charges

Former Bell City Administrator Robert Rizzo and his assistant, Angela Spaccia, are facing new corruption charges related to their retirement benefits after a Los Angeles County grand jury unsealed indictments on Wednesday. Both Spaccia and Rizzo have pleaded not guilty to the new charges, which were the first to be released by a grand jury that was convened to look into corruption in the small city. We’ve already relayed previously that Rizzo is facing a bevy of criminal charges. The LA Times reports the following on the latest charges:

“The newest charges -- unsealed Wednesday -- are related to Rizzo and Spaccia's roles in creating generous supplemental retirement packages for themselves. An early letter from the grand jury to the defendants suggested that the package benefited the two officials more than any other city employees and constituted a conflict of interest. […]The grand jury also indicted the pair on charges of creating false documents to hide the true salary of Bell Police Chief Randy Adams. Adams became the highest paid police official in the nation when he was hired by Bell, earning an annual salary of $457,000. He has not been charged in the corruption case.”

Both Rizzo and Spaccia face a new court date on May 3. As for Rizzo’s defense, his attorney has indicated that it’s likely he cannot get a fair trial in Los Angeles and may request a change in venue. For more, see here.

Cudahy Cleans House: City Manager and Attorney Fired; Clerk and HR Director on Leave

It seems cities in Southeastern Los Angeles County are no stranger to political upheaval when you take into account scandals in Bell and Vernon, not to mention Maywood’s position of struggle after it contracted out services to Bell and shelved its police force. Now the city of Cudahy can be added to the upheaval list, as the city council recently fired longtime City Manager George Perez. City Atty. David Olivas was also fired and City Clerk Larry Galvan and Human Resources Director Crystal Hernandez have been placed on administrative leave. These personnel decisions were made in closed sessions and with unanimous votes. According to Cudahy Mayor Josue Barrios, CM Perez was fired with “cause” and due to the “general direction” of the city, but specifics were lacking. It has also been reported that the newly appointed mayor has been reviewing the city’s financial records. Notably, Perez is leaving at a time when the city has a strong budget surplus of $7.5 million. Commenting on his firing, Perez stated the following:

“I fully respect the City Council’s decision. I understand how these things work. I enjoyed a very long run as city manager – 10½ years. I wish them all the best in taking the city of Cudahy in the direction they feel it needs to go and I feel they’re fully capable of doing that.”

A reporter for KCET says there is far more than meets the eye when it comes to the firings and that the city can be compared to Bell. The article states: “Those of you recently made acquainted with the scandal-plagued city of Bell and its high-paid city administrator Robert Rizzo, let me assure you, Cudahy makes Bell look like a model Jeffersonian democracy.” You can read the reporter’s take on background info behind the firings here. More coverage can be seen here:

Governor Declares Budget Talks Dead; Redevelopment Agencies Safe for Now?

Now that Governor Brown has called budget talks dead, questions remain about the fate of redevelopment. Since the gulf between the two parties has only widened in recent days, the governor is clearly still without the votes he needs to eliminate redevelopment agencies because he needed Republican votes for the proposal’s passage. We relayed previously that in the Assembly the proposal fell one vote short, as a Republican lawmaker would not offer his or her support, and the plan was also a few votes short in the Senate. While the governor and Democrats have said they don’t want to place tax hikes on the ballot with a majority vote, it is possible that they could try to use a majority vote to pass the redevelopment proposal, according to the Bee. So far Brown has not been receptive to alternatives that have been offered.

Speaking of alternatives, California Redevelopment Association Executive Director John Shirey recently took to the pages of the Sacramento Bee to explain the compromise proposal the CRA has put forth for consideration. An excerpt of the op-ed can be read here:

“This proposal provides the state of California and schools with about $2.7 billion over the next 10 years to help reduce the budget deficit. It also retains redevelopment in California while instituting tough reforms that increase accountability and ensure redevelopment is being used responsibly to maximize job creation, revitalize run-down communities, clean up contaminated properties, finance infrastructure improvements and build affordable housing.  Already, a bipartisan coalition of legislators has come together in support of this alternative package. There are two elements to the package: revenues and reform.”

Read the whole article here. The Board of the League of California Cities has voted to support the CRA’s alternative proposal. Mayors and council members were survey prior to the board’s vote, and 66 percent of survey respondents agreed with the CRA proposal. You can read more about the League’s support and the proposal here.

Turning toward the breakdown in the overall budget process, the following statement was released by the governor:

“[Tuesday], I stopped the discussions that I had been conducting with various members of the Republican party regarding our state's massive deficit. The budget plan that I put forth is balanced between deep cuts and extensions of currently existing taxes and I believe it is in the best interest of California. Under our constitution, however, two Republicans from the Assembly and two from the Senate must agree before this matter can be put to the people. Each and every Republican legislator I've spoken to believes that voters should not have this right to vote unless I agree to an ever changing list of collateral demands.”

The governor also released the following video about his decision to call talks dead:

Download Video as MP4

 

Water Conservation Rate Calculations: How Complex Could It Be? Webinar Provides Answers

Advanced Utility Systems is set to host an informative webinar on tackling water conservation rate initiatives. The session will take place on April 7th at 10 a.m. and will last one hour. Background information is as follows:

“Please join us for an informational session on methods used to help calculate complex water rates, based on a well adopted methodology used in California. Hear how two well-known water agencies have tackled water conservation rate initiatives and how Advanced Utility Systems have lent a helping hand.
 
This webinar may well provide the answers to questions you have been searching for.
We will show a brief demonstration on how our solution may assist in your efforts through an overview of CIS Infinity. Best of all, you can listen to, or be a part of the discussion when you attend this webinar.”

Register here.

Other details include:

Featured Guest Speakers
Stacie Sheek
City of San Juan Capistrano
Bronwyn Weygandt
City of Boulder Colorado

Demonstration by:
Greg Roberts
Product Development Manager
Advanced Utility Systems

Register here.

Anaheim Council Approves Bond Package to Set Table for Kings Arrival; Move More Likely?

Is the city of Anaheim one step closer to luring the NBA team the Sacramento Kings down to Southern California? That appears to be the case, as on Tuesday the SoCal city’s council voted 5-0 to approve a $75 million incentive plan. While many Sacramento officials voiced strong criticism of the moving plans earlier this week, it now appears that the city has slowly come around to accepting that the team is ever more likely to pack its bags. Mayor Kevin Johnson (and former NBA player) has even said that he accepts the move if the owners of the Kings pay back millions in debt to Sacramento. At the end of the day, it now comes down to the decision of the owners. And notably Sacramento officials may have not done themselves any favors with Kings owners the Maloofs by issuing a harsh letter to Anaheim officials over negotiations, as co-owner Joe Maloof called the letter “a shot below the belt” and improper interference in the team’s business.  You can read the full letter here. Capital Public Radio reports the following on Anaheim’s recent vote:

“Anaheim officials say the bond deal won't put taxpayer dollars at risk. Instead, it allows private investors to foot the bill for an NBA team to move to Honda Center in Anaheim. The bonds would be paid off with revenue from the arena. Anaheim Mayor Tom Tait says this doesn't mean it's a sure thing that Anaheim will be the new home of the Sacramento Kings. ‘We're waiting for the vote of the NBA owners. So we set the table for the Kings, or in theory another NBA team, to come to Anaheim. But of course, we have to wait for the vote of the NBA owners.’”

If the Kings doe come to Anaheim, funding is primarily coming from Henry Samueli, the Orange County billionaire who already manages the Honda Center. April 18th is the deadline for the Maloof brothers to request a move, and then that request will have to be approved by the NBA board of governors. While many Anaheim officials expressed sympathy with Sacramento fans, they also said that they need to look out for their city’s interests and that Anaheim has been looking to attract an NBA team for years. As for Sacramento, plans for a new arena aren’t dead, even though the Kings might be moving. See more here.

Union Launches Attack Ad Against Costa Mesa Mayor; Group Calls for New Leadership

The Orange County Employees Association has paid for an attack ad against Costa Mesa Mayor Gary Monahan, which is being shown on local television in the Orange County city. The ad was launched and promoted by a new group called “Repair Costa Mesa,” as the ad advocates for new leadership and criticizes the mayor’s responsiveness in the aftermath of an employee’s death. We’ve relayed previously that more than 200 city workers are set to be laid off in Costa Mesa, and one employee jumped to his death upon being given a pink slip. Text of the ad reads as follows: “After Mayor Monahan and the City Council fired over 200 city workers, tragedy struck Costa Mesa City Hall. But instead of managing the crisis, Mayor Monahan's priority was St. Patrick's Day.” You can view the whole ad here:

Based on the tone of the attack ad, it’s conceivable that the group “Repair Costa Mesa” is planning more ads or even a recall campaign. The ad has also received national coverage, as Politico wrote the following: “Another public sector union fight is brewing -- and labor is already on the offensive in a small California city, where the municipal government is preparing to layoff swaths of the city's workforce.” The OC Register reported that the mayor did not answer questions about not appearing at City Hall after the employee’s death for the following reasons:

“[Mayor's statement:] 'Before I was informed of yesterday's incident, the union decided to take despicable advantage of this tragic situation to advance their agenda.' A union representative had snapped a picture Thursday of a red-faced Monahan dressed in a kilt outside his bar and distributed it to the media. Monahan said that he had contacted two fellow council members – Jim Righeimer and Steve Mensinger – and ‘realized my presence could further inflame and escalate the situation, and decided not to visit City Hall.’"

More can be read here. Repair Costa Mesa’s website can be seen here. Finally, Costa Mesa’s CEO has indicated to all city workers that plans for outsourcing are continuing to move forward, as are talks with unions. Over the weekend, an email was sent to all employees, an excerpt of which can be read here:

“My goal is to give you as much information as I can to eliminate some of the uncertainty. We reached out to leaders of the employee associations this week (next week as well) and talked very informally. Nothing to report but there was good healthy, frank conversations. As we all would expect that with so much uncertainty, some distrust, some anger and with everything moving so quickly, further cooperative solutions may be extremely difficult but always worth talking about.”

Oakland City Attorney John Russo Presumed to be Alameda’s Next City Manager

The rumor mill has been churning in recent months that Oakland City Attorney John Russo was intent on resigning from his position due to poor relations between Mayor Jean Quan and Russo, as the mayor once stated that the city could do without a city attorney. We relayed previously that these rumors were proven to be true when it was revealed that Russo threw his hat in the ring to become the city of Alameda’s next City Manager. Russo was considered one of three finalists, and new reports indicate that Russo will in fact become Alameda’s City Manager, though the appointment is not yet official. Russo’s application was reviewed in a closed session by the city council on Tuesday, and after a background check, it is believed that the attorney will be offered the job. The Oakland Tribune reports:

“Though he has often clashed with his colleagues at Oakland City Hall, several council members wished him well Tuesday, saying he'd make a great fit in the new role. ‘I would be sorry to see John go,’ said Councilmember Libby Schaaf (Montclair-Laurel). ‘He's done great work, for example, with the Neighborhood Law Corps,’ a program Russo created in 2002 that brings first-year lawyers into neighborhoods to help residents tackle local problems. […] Councilmember Desley Brooks, who has been leading the marijuana regulation effort, took a different view, saying, ‘He was not our attorney: He wasn't serving us.’”

Alameda’s interim city manager is Ann Marie Gallant, whose two-year contract expires at the end of March. As for replacing Russo, Russo's chief assistant city attorney Barbara Parker has been raised as a possibility and Councilmember Jane Brunner has also said she has interest in the job. It’s likely that many candidates will be vying for the position. Oakland officials will have to select a replacement to finish out Russo’s term, which is set to last another two years. If the council does not select a replacement within 60 days, then an election will take place to fill the role. For more, see here.

Budget Negotiations Stalled as Gulf Widens Between Parties; GOP Demands Met w/ Anger

Budget negotiations currently seem to be at a standstill, so is Gov. Brown closer to circumventing the minority party by pursuing other methods for a tax vote in June (or the fall)? Based on the outcome of events on Friday (and the lack of news over the weekend), that could be the case as Assembly Speaker John Perez recently stated that “I am dubious of our ability to reach resolution with Republicans right now.” Why the more explicit and new-found lack of faith from top Democrats? Well, during budget negotiations on Friday, Republican leaders offered the governor a so-called term sheet, which is what Brown mentioned was lacking from across the aisle. Notably, those Republican terms didn’t go over so well, as the GOP had a long list of demands (53) and Democrats met the proposals with anger and said that the ideas only served to widen the gulf between the two parties in a budget process that seems to grow more frustrating by the day. 

Senate GOP Leader Bob Dutton and Sen. Bob Huff, R-Diamond Bar, vice chairman of the Senate Budget Committee, released the list of 53 requests for Republican cooperation. Some of the proposals include pension reform, a tough spending cap, and teacher tenure changes, among others. The two Republican senators released the following statement:

“Governor Brown challenged Republicans to be engaged in the budget process. Republicans have been engaged for months. Today he was presented with a thorough outline, which reiterates our priorities, including: getting our state back on track by reining in runaway spending; controlling unsustainable public employee pensions; getting people back to work; protecting and improving our state's public education system; and making critical adjustments to the governor's flawed budget."

Curious about what the list of 53 demands entails? You can find all the details at Capitol Alert here. As for that June election that seems increasingly unlikely as the clock ticks, Republican lawmakers mention in their term-sheet that they would support an 18-month tax hike, but not the 5 years the Gov. Brown is seeking. 

The Assembly and the Senate had no floor sessions scheduled on Monday and there was little in the way of news about progress, but sessions are slated for Tuesday. If the Democrats and the Governor opt to go around the GOP, they could resort to an initiative campaign for a fall ballot or try to put taxes on the ballot through a simple majority. Senate President Pro Tem Darrell Steinberg, D-Sacramento, has already said that if a deal is not reached in the next few days, he is prepared to bypass the GOP and pursue a vote on a June election. More on the budget can be read here.