Great work as usual Bonnie, very informative. Sounds like the city is drowning in red ink. The city deficit is one thing, but when you add unfunded pension liabilities of the County of $1 Billion and the State $1 Trillion it adds an extra sense of urgency. Also, adding sales tax is again one thing, but the issue of repealing Prop 13 is of even more concern and if some activists have their way, will become reality. If Prop 13 is ever repealed, it’s game over for California and will be the final nail in the coffin.
I fear the pension doomsday scenario is just beginning and is a ticking time bomb waiting to go off on the taxpayers.
The root cause? I think we all know, it’s been from years of mismanagement by the one party state at managing costs, and colluding with the public sector unions. Both resulting in unrealistic city wages and pensions. When a city pension is more than what the employee would normally make, or in excess of $200-$300k annually, you know you’re in trouble. Further, when negotiations happen between the unions and city government, both parties are seemingly to be on the same side of the bargaining table…surprise!
As pension cost rises as does servicing the debt, levels of service (LOS) decreases. There is a tipping point when the cost of pensions are the single highest line item in the budget. How close are we?
Very informative response JL. Sadly, everything you pointed out is true. In my view, going over a financial cliff is now eminent. CA Bond rating will tank. It’s like pigs eating from a trough, impossible to pull them off.
Many other companies that had defined Benefit for decades made the change to defined Contrubtuon - for new hires. So it has been done. Perhaps offering buy outs for early retirement pencils out, or what about managing ee to get dead beaks off payroll , or even privatize whole departments It is unsustainable and irresponsible to all citizens , especially lower income
I hope you noticed that the finance department only looked for ways to increase revenue!! They weren’t looking for any way to decrease spending.
The responsible thing is to limit unnecessary expenses instead of exacting money money from citizens who are already experiencing record high prices due to the Federal Government’s reckless policies
Thank you, Bonnie. Would you consider writing a book about this? There must be countless cities across the country that are going through this. You are so smart, so honest and so clear.
Great article Bonnie. I'm tired of ALL levels of government. They ALL are a bunch of crooks stealing our tax money to buy votes or pay off cronies. If we were to look into these elected criminals, we would find that most of them have debt up to their own ears and owe back taxes or other money owed to loan sharks. It is a way of life for these people.
Government workers I am very sad to say, that most (not all) think they are underpaid, under benefited, and want 100% plus salary at retirement. In fact some of these fire, police and city employees a few years back were getting 110% of their salary at retirement. In fact the running joke was, "I can't afford to work any longer, because I make less than now than if I were to retire". Talk about a golden handshake.
The more government workers there are, the more votes they can make for higher salaries and benefits. Kinda like letting illegals in to vote. Never ending spiral in to destruction.
I should know, I have first hand knowledge as my parents were teachers, (they hated the Ca. Teachers Union)
I also worked over 40 years with Fed Gov and saw so much waste. Anytime I tried to make things more efficient, I was ostracized and removed from positions of authority.
Exactly. Give them an inch, and they will take a mile. This isn't about helping children. It's about lining the pockets of school administrators with gold. Way too much BS overhead adm in schools from Sac, to local school districts.
This won't stop till they steal all our property (Homes). Property tax, is the last real money value in the state and they have what it takes to get it. TAXES
Regarding State Stree 300 to 1300. Thank you, City Council, for creating Funk Zone 2, with slightly better parking. What else can you junk up? Pearl Chase's SB has bit the dust.
The city offers a "two-for" type of employment for many employees. For example, work 30 years and get paid for 60. Consider working from age 21 to 51, then retire and receive another 30 years at, or close to, the highest income. Indeed, including Cost of Living Adjustments (COLA) takes the retirement income above the highest employed one, plus medical benefits, until 81, which is a year less than estimated 82 life expectantly. Private companies cannot, and do not, offer anything close to those numbers.
It's amazing the information you can dig up through PRAR (Public Records Act Requests). In my experience, it can take half a year to have these requests fulfilled, where 10 days is the limit.
I'm thoroughly disgusted with their scheme to close State Street (I remember that council meeting - and Murillo's intentions were so transparent) and then to keep it closed, long after the covid pandemic necessitated it. What a debacle.
Isn't it scary when the city government pension dollars annually one day will be costing the taxpayers more money than it costs to actually run the city government annually? Good subject, Bonnie
What I should have said is to vote against what they are proposing. The wording of it we have to research. Prop 13 is two things. 1) that the government must take it to the ballot to raise any tax and 2) Property tax... They will find a way to mislead the voters.... I'll find the wording....
We should not agree to giving these “ public servants” another dime. The public pays government employees inflated salaries for jobs from which they cannot be fired, and gives them retirement plans that bankrupt the cities that had employed them. Einstein’s definition of insanity.
Sorry doc - “The definition of insanity is doing the same thing over and over again and expecting different results.” is not attributable to Einstein. Sometimes that quote has been pinned on Ben Franklin too - but he didn't say it either.
Great research Bonnie, thanks for keeping our residents informed. We must take action and let the city council know this deficit spending nonsense must stop.
A simple email can do that. The Bike group has emailed all their members to write or show up to CC in support of Staff Recommendations regarding State Street. :(
Excellent and well sourced article by Ms. Donovan. This problem has existed for some time. I raised the issue when I ran as the sole Republican candidate in the Santa Barbara County 3rd District Supervisor contest in 2020. I was running against two government employees; a Democrat who was a Santa Barbara County employee prior to be elected as SB County Supervisor and a former Democrat, retired from the federal government, who had switched his party affiliation to ‘Independent’ in order not to embarrass the Santa Barbara GOP who were fully and financially supporting him.
Public Employee unions create more than just financial problems. The private sector winds up with no representation because candidates know they need to support of public employee unions to win elections. Politician are completely beholden to these public employee unions on every vote. Democrats typically get the SEIU and Teamsters support while the GOP frequently gets support from the public safety unions. I applaud Ms. Donovan for bringing attention this current redistribution of wealth from the private sector to public employee retirees. Just know that this is merely the tip of the Marxist iceberg.
The City was warned years ago that they would be in debt and they did nothing.
The real debt is over $10,000,000.
But when was the last time government was honest.
The City & County are in financial trouble through irresponsible actions. Why should we pay to bail them out? Raising taxes will not fix their stupidity. It only prolongs the inevitable.
Pensions are the biggest expense, but look at irresponsible spending like the state street underpass, frivolous lawsuits ivy the government, misspending on homeless.
The government, our ejected officials don’t care and/or are incompetent to manage money much less run a business/government.
They are like children with no regard, no education, self entitled twits who think money grows on trees.
I'm glad that the City of SB prepays the entire Annual Payment and does not accrue additional financing costs. We are blessed to have prudent and highly skilled folks running our city. Please don't assume anything else as stated in your article:
"The difference between the total outstanding amount and the monthly payment due adds an additional financing cost of $639,388 per year. This is like paying for our city’s pensions on a high-balance credit card. Deeper and deeper the massive unfunded pension hole grows."
Your words lead readers to believe that the City of SB is paying the monthly amount. Next time, just call the City's Finance Director to get your facts straight before you go to print. FYI, I personally processed the invoices shown in your article and the City did not incur any additional financing charges.
Again, Bonnie, you have outdone yourself with the information you have obtained and passed on to us. I have just sent off an email to the City Council as suggested by you. Let's hope that if there is enough community input they will vote no on Agenda Item 9. Thanks again for all you are doing.
Great work as usual Bonnie, very informative. Sounds like the city is drowning in red ink. The city deficit is one thing, but when you add unfunded pension liabilities of the County of $1 Billion and the State $1 Trillion it adds an extra sense of urgency. Also, adding sales tax is again one thing, but the issue of repealing Prop 13 is of even more concern and if some activists have their way, will become reality. If Prop 13 is ever repealed, it’s game over for California and will be the final nail in the coffin.
I fear the pension doomsday scenario is just beginning and is a ticking time bomb waiting to go off on the taxpayers.
The root cause? I think we all know, it’s been from years of mismanagement by the one party state at managing costs, and colluding with the public sector unions. Both resulting in unrealistic city wages and pensions. When a city pension is more than what the employee would normally make, or in excess of $200-$300k annually, you know you’re in trouble. Further, when negotiations happen between the unions and city government, both parties are seemingly to be on the same side of the bargaining table…surprise!
As pension cost rises as does servicing the debt, levels of service (LOS) decreases. There is a tipping point when the cost of pensions are the single highest line item in the budget. How close are we?
I think a change to a defined contribution plan from a defined benefit plan would help resolve some of the under funded issues.
Very informative response JL. Sadly, everything you pointed out is true. In my view, going over a financial cliff is now eminent. CA Bond rating will tank. It’s like pigs eating from a trough, impossible to pull them off.
Many other companies that had defined Benefit for decades made the change to defined Contrubtuon - for new hires. So it has been done. Perhaps offering buy outs for early retirement pencils out, or what about managing ee to get dead beaks off payroll , or even privatize whole departments It is unsustainable and irresponsible to all citizens , especially lower income
I hope you noticed that the finance department only looked for ways to increase revenue!! They weren’t looking for any way to decrease spending.
The responsible thing is to limit unnecessary expenses instead of exacting money money from citizens who are already experiencing record high prices due to the Federal Government’s reckless policies
Thank you Bonnnie for the nuts and bolts description of the problem.
Thank you, Bonnie. Would you consider writing a book about this? There must be countless cities across the country that are going through this. You are so smart, so honest and so clear.
Great article Bonnie. I'm tired of ALL levels of government. They ALL are a bunch of crooks stealing our tax money to buy votes or pay off cronies. If we were to look into these elected criminals, we would find that most of them have debt up to their own ears and owe back taxes or other money owed to loan sharks. It is a way of life for these people.
Government workers I am very sad to say, that most (not all) think they are underpaid, under benefited, and want 100% plus salary at retirement. In fact some of these fire, police and city employees a few years back were getting 110% of their salary at retirement. In fact the running joke was, "I can't afford to work any longer, because I make less than now than if I were to retire". Talk about a golden handshake.
The more government workers there are, the more votes they can make for higher salaries and benefits. Kinda like letting illegals in to vote. Never ending spiral in to destruction.
Not sure if it isn't too late to stop it??????
I agree. And don't forget the Calif Teachers Union!!! The biggest crime syndicate.
I should know, I have first hand knowledge as my parents were teachers, (they hated the Ca. Teachers Union)
I also worked over 40 years with Fed Gov and saw so much waste. Anytime I tried to make things more efficient, I was ostracized and removed from positions of authority.
Exactly. Give them an inch, and they will take a mile. This isn't about helping children. It's about lining the pockets of school administrators with gold. Way too much BS overhead adm in schools from Sac, to local school districts.
This won't stop till they steal all our property (Homes). Property tax, is the last real money value in the state and they have what it takes to get it. TAXES
Regarding State Stree 300 to 1300. Thank you, City Council, for creating Funk Zone 2, with slightly better parking. What else can you junk up? Pearl Chase's SB has bit the dust.
The city offers a "two-for" type of employment for many employees. For example, work 30 years and get paid for 60. Consider working from age 21 to 51, then retire and receive another 30 years at, or close to, the highest income. Indeed, including Cost of Living Adjustments (COLA) takes the retirement income above the highest employed one, plus medical benefits, until 81, which is a year less than estimated 82 life expectantly. Private companies cannot, and do not, offer anything close to those numbers.
It's amazing the information you can dig up through PRAR (Public Records Act Requests). In my experience, it can take half a year to have these requests fulfilled, where 10 days is the limit.
I'm thoroughly disgusted with their scheme to close State Street (I remember that council meeting - and Murillo's intentions were so transparent) and then to keep it closed, long after the covid pandemic necessitated it. What a debacle.
Isn't it scary when the city government pension dollars annually one day will be costing the taxpayers more money than it costs to actually run the city government annually? Good subject, Bonnie
I predict a repeal of Prop 13.
Vote No on it!
I truly pray that that doesn't happen. It would absolutely ruin a huge amount of people.
What I should have said is to vote against what they are proposing. The wording of it we have to research. Prop 13 is two things. 1) that the government must take it to the ballot to raise any tax and 2) Property tax... They will find a way to mislead the voters.... I'll find the wording....
We should not agree to giving these “ public servants” another dime. The public pays government employees inflated salaries for jobs from which they cannot be fired, and gives them retirement plans that bankrupt the cities that had employed them. Einstein’s definition of insanity.
Amen to that!
Sorry doc - “The definition of insanity is doing the same thing over and over again and expecting different results.” is not attributable to Einstein. Sometimes that quote has been pinned on Ben Franklin too - but he didn't say it either.
Great research Bonnie, thanks for keeping our residents informed. We must take action and let the city council know this deficit spending nonsense must stop.
Thank You, John!
A simple email can do that. The Bike group has emailed all their members to write or show up to CC in support of Staff Recommendations regarding State Street. :(
Agreed, aside for the sales tax on bikes which can easily cost over $10k, what other user fees to they pay?…zero!
Excellent and well sourced article by Ms. Donovan. This problem has existed for some time. I raised the issue when I ran as the sole Republican candidate in the Santa Barbara County 3rd District Supervisor contest in 2020. I was running against two government employees; a Democrat who was a Santa Barbara County employee prior to be elected as SB County Supervisor and a former Democrat, retired from the federal government, who had switched his party affiliation to ‘Independent’ in order not to embarrass the Santa Barbara GOP who were fully and financially supporting him.
Public Employee unions create more than just financial problems. The private sector winds up with no representation because candidates know they need to support of public employee unions to win elections. Politician are completely beholden to these public employee unions on every vote. Democrats typically get the SEIU and Teamsters support while the GOP frequently gets support from the public safety unions. I applaud Ms. Donovan for bringing attention this current redistribution of wealth from the private sector to public employee retirees. Just know that this is merely the tip of the Marxist iceberg.
The City was warned years ago that they would be in debt and they did nothing.
The real debt is over $10,000,000.
But when was the last time government was honest.
The City & County are in financial trouble through irresponsible actions. Why should we pay to bail them out? Raising taxes will not fix their stupidity. It only prolongs the inevitable.
Pensions are the biggest expense, but look at irresponsible spending like the state street underpass, frivolous lawsuits ivy the government, misspending on homeless.
The government, our ejected officials don’t care and/or are incompetent to manage money much less run a business/government.
They are like children with no regard, no education, self entitled twits who think money grows on trees.
NO ON NEW TAXES.
Hold them accountable.
I'm glad that the City of SB prepays the entire Annual Payment and does not accrue additional financing costs. We are blessed to have prudent and highly skilled folks running our city. Please don't assume anything else as stated in your article:
"The difference between the total outstanding amount and the monthly payment due adds an additional financing cost of $639,388 per year. This is like paying for our city’s pensions on a high-balance credit card. Deeper and deeper the massive unfunded pension hole grows."
Your words lead readers to believe that the City of SB is paying the monthly amount. Next time, just call the City's Finance Director to get your facts straight before you go to print. FYI, I personally processed the invoices shown in your article and the City did not incur any additional financing charges.
Good to know Doug!
Again, Bonnie, you have outdone yourself with the information you have obtained and passed on to us. I have just sent off an email to the City Council as suggested by you. Let's hope that if there is enough community input they will vote no on Agenda Item 9. Thanks again for all you are doing.
Thank You!
The ballot measure reads "...and for general use...." Which means it can all be spent how they see fit. I vote No.
John Richards