WATER RATE INCREASE - Just say NO!

This week I received a notice from the City of Fullerton that they would like to raise water rates...AGAIN!  

The proposed rates are specifically for pass-through costs from Metropolitan Water District, Orange County Water District, Southern California Edison, and the City of Anaheim (we purchase electricity from Anaheim for Fullerton's wells in Anaheim).  

We know MWD (the agency that gave each employee a $6,000 bonus) recently raised rates to help cover salaries and pensions as well as some infrastructure needs.  We are required to purchase about 30% of all water from MWD.  The OCWD charges us a pumping tax that is significantly less than MWD but those rates keep creeping up. 

And those pesky electric bills keep going up as well.  

Let's recap a few important changes to your rates:

In 2012, a post-recall Council directed staff to refund about $7.4 million: http://www.ocregister.com/articles/city-374846-water-bills.html 

In 2013, a new council majority (Chaffee, Flory, & Fitgerald) voted to redirect staff to only refund about $3.3 million and concocted a new scheme to keep the rest and continue their slightly smaller skimming operation: http://www.ocregister.com/articles/customers-522970-water-city.html  & http://www.orangejuiceblog.com/2013/03/fullerton-water-heist/

Now, the City will charge you more and as a direct result skim more, and claim it in the name of pass-through costs.

Fill out your protest form that was attached on your bill.  If you didn't get the notice for any reason, fill out this form and send it in immediately.  Share with all of your neighbors, employers, friends, and family in Fullerton!

(Click image to view/print)

CalSTRS Fails

Press Release from State Controller John Chiang

SACRAMENTO – State Controller John Chiang today released his review of the California State Teachers' Retirement System's (CalSTRS) ability to detect and prevent pension spiking. The review found CalSTRS does not adequately audit more than 1,900 reporting entities (including school districts), has missed opportunities to reduce instances of suspicious or unjustified salary increases and also failed to adequately use existing electronic systems designed to identify cases of pension spiking. It also includes recommendations to address each of those shortcomings.

"Starting with more rigorous auditing and better use of existing technology, CalSTRS must fortify its ability and resolve to crack down on those seeking unjust enrichment at the expense of their fellow educators and taxpayers," said Chiang. "These recommendations aimed at strengthening CalSTRS' anti-spiking efforts will complement the recently-enacted pension reform package and shut down this form of public theft." 

The review specifically examined the electronic methods that CalSTRS uses to detect and prevent pension payments based on unusually large or excessive final compensation amounts, the auditing processes the system uses to oversee the state's school districts, and the efforts conducted by its newly-formed Comprehensive Review Unit during the review period of July 1, 2009, through June 30, 2011. The scope of the review was expanded to include records from three school districts, one community college district and one county office of education.

The review found that the CalSTRS audit program did not adequately detect or deter pension spiking. Although more than 1,900 agencies are a part of CalSTRS, the pension plan averages only 40 audits a year. During the review, CalSTRS was implementing a new stand-alone Compensation Review Unit charged with specifically detecting pension-spiking activity, which should result in more audits. However, the Controller said more auditors are needed to provide adequate oversight of the reporting by districts to CalSTRS.

The review evaluated pay increases granted prior to retirement to determine whether they were adequately approved, justified and documented. A geographically diverse sample of five local education reporting agencies was chosen: Pajaro Valley Unified School District in Santa Cruz County, the San Francisco and San Diego unified school districts, Foothill-De Anza Community College District in Santa Clara County, and the Los Angeles County Office of Education. Two of the five, or 40 percent, lacked documentation to justify pay increases granted to their employees immediately prior to retirement, such as board or executive approval or written performance evaluations. 

For example, at the San Francisco Unified School District, one executive received a 26% pay increase six months prior to retirement, and another executive received a 20% increase one year prior to retirement. The district was unable to provide any documentation supporting those raises.

After similar and repeated requests were made to the San Diego Unified School District, officials ultimately responded that documentation supporting raises was missing from their files.

CalSTRS uses a system that electronically identifies instances in which an employee's monthly pay increase exceeds a certain percentage, or in which an employee's "special compensation" exceeds a specific dollar amount in one year. However, the review found that during the period evaluated, CalSTRS did not review, verify or follow up on pay increases that were flagged by the system. The Controller urges CalSTRS to review all of the cases that were flagged by the system, require the agencies to provide adequate documentation supporting those increases and better determine if the pay increase thresholds are appropriate to detect pension spiking. 

The findings and recommendations from this review will be presented at the September meeting of the CalSTRS Audit and Risk Management Committee. The Controller also plans to perform a similar review of pension-spiking prevention measures at the state's largest pension system, the California Public Employees' Retirement System (CalPERS).

Water Rate Study Ad Hoc Meeting - Be Heard!

PUBLIC MEETING AGENDA

 

Main Library Conference Center

353 W. Commonwealth Avenue

June 11, 2012

6:00 P.M.

                                                                                                                                               

1.  CALL TO ORDER

2.  ROLL CALL

3.  CONSENT

     Approval of the Minutes of April 9, 2012 Ad Hoc Committee meeting

4.  ACTION ITEMS

Consideration and final recommendation.

·         Utility Impacts of Street Maintenance

·         Lease of Office Space

·         Public Safety

·         Lease of City Property

·         Payback Options

5.  PUBLIC COMMENTS  

Public comments will only be heard on items appearing on the agenda.  Persons addressing the Ad Hoc Committee will be limited to three minutes.  

6.  CONSIDERATION OF MOTIONS OR RECOMMENDATIONS:

7.  ADJOURNMENT

OC Register Columnist Avoids the Obvious

OC Register columnist David Whiting shows the same trait as the Fullerton City Council members being recalled- denial.

Whiting gives his impression of the Fullerton recall election and the reaction of the public since the video was released.

While Whiting is entitled to express his opinion, he chose to use his creative writing skills over his journalist skills to express his support of the three doomed council members Jones, Bankhead, and McKinley.

I suppose when the facts are present, one need only close their eyes and the facts go away.  I'm sure my toddler would agree.

Unfortunately, sticking one's head in the sand doesn't resolve anything.  It only drags out the inevitable demise that is certain to follow.

Whiting gives the before and after impressions of the soon-to-be ex-councilmen and uses some mild quotes. He ignores, as city council candidate Matt Rowe pointed out, numerous tasteless, insensitive, and demeaning comments made by McKinley.  Bankhead and Jones also made plenty of similar remarks that have reflected poorly on our city.

From Matt's Facebook post at the OC Register on-line:

Here's some better quotes for Councilman McKinley.
---
Theme: Compassion
On sexual assault and the FPD (Rincon).
"Those ladies weren't people like this." 
This is not compassion. This is judgement. Does Pat McKinley side with the victims here or with the officer? You decide, then read the next one.
"It was just inappropriate touching. Not a good thing, but it ain't a dangerous thing."
This is not compassion. Pat McKinley actively dismissed what it feels like to be sexually assaulted and defended the officer's actions. Need more, read below. 

On Kelly Thomas.
"You can't get six people around one guy."
This is not compassion. This is attacking witnesses to the crime. As the video demonstrates, you can certainly get six officers on one guy. They piled on and crushed Kelly to death. Again, this is not compassion, this is Pat McKinley defending the FPD on national television. Need more?
"I've had my eyes bloused a few times myself... facial injuries are not life threatening."
This is not compassion. This is Pat McKinley minimizing the injuries that Kelly Thomas received. He's making a foray into medicine and is not acting appropriately for a councilman. No eye blousing every received by Pat McKinley should EVER be compared to Kelly Thomas's injuries. Need more?
"I can guarantee neither of these officers intended for Kelly Thomas to die. They had no intention of murdering him."
THIS IS NOT COMPASSION. This is Pat McKinley, again, sticking his nose where it doesn't belong. He has no idea what the officers' intent was. Here he is AGAIN advocating for the FPD and not advocating for a citizen of Fullerton, a victim of the FPD. Still need more?
"This should be an interesting trial and Mr Barnett is an extremely competent lawyer, and he has said that he has other information."
This is not compassion. This is Pat McKinley alluding to evidence held by the defense that may exonerate the officers. He has no business stating this, true or untrue. He's supposed to be advocating for citizens, for Fullerton, and for victims of crime inside the city limits. Making a statement about how good the defense attorney is and how interesting he's going to make the trial is not compassion. If it is, it's only for the FPD.
---
Theme: Police Discipline:
"I probably hired them all."
Yup. You probably trained them, too. Not exactly who I want ensuring my rights aren't violated.
"We changed the entire culture of the department."
I have no doubt you did.
"We put Rincon on administrative leave, immediately."
Really? This is a lie. Pat McKinley left Rincon on the job after receiving multiple complaints. He assaulted many many women. What did Pat McKinley do about it? He left him on the street, retired, then blamed the incoming police chief. View it yourself.
http://www.youtube.com/watch?v=Mg3uCUnivlU&feature=youtu.be
---
I have no idea why the person writing this article wrote what they did. What I can tell you is that we're not all on the same page. The quotes presented by the author, at best, occurred weeks and months after Kelly was killed. What the author should be presenting is what the council members said before the press got a hold of the case. That's the justification for the recall.
I guess this really sums up the reporter's journalistic ability: "As one speaker in council chambers put it, 'The world is watching this meeting.' I'm not so sure about the world."
The speaker was Ron Thomas. The world is most definitely watching. 10 million views and counting.
YES ON RECALL.

Well said Matt!  

Sticking our head in the sands of Fullerton have left us with over $1-BILLION of debt, no less than a dozen law suits, several former police employees incarcerated or on trial, accounting gimmicks and misappropriation of public funds, illegal taxes, and a blood on our streets.  \

The only cure for Fullerton's failed leadership is to replace the council with competent and caring leaders who will not look the other way while Rome is burning.

CAUSE: head in sand, EFFECT: (see images below)

A DUI crash mock-up. Unlike many

other Fullerton images, no one died

or was injured in this picture.

Water Rate Study Ad Hoc Committee Meeting Canceled

The Water Rate Study Ad Hoc Committee meeting has been canceled with no reason given.

The meeting was scheduled for this Wednesday but City manager Joe Felz canceled the meeting.  No reason was given.

The meeting would have been held to review the City Manager's list of "costs" associated with operating the City's Water Department and determine how much should be billed to the Water Fund.

Meanwhile, Fullerton Water Department customers are still being overcharged 10% on their water bills.  

Redevelopment Debt $642 Million

I was reminded by an automated email from the City that the Redevelopment Agency's Oversight Board has a meeting coming up on Tuesday May 22 at 3PM in the City Council Chambers.  

I was also reminded just how much debt our City Council (acting as the Redevelopment Agency) has incurred on our behalf over the past couple of decades.

According to the report from the City to the State we taxpayers are on the hook for $641,969,234!

And what did you get for your money?  High-density apartments, parking garages, and a number of employees to figure out how to give us more debt.  I know that sounds harsh but that is what we are left with.  There were very few projects that made improvements to the infrastructure and even those were relatively minor.

Its sad that we have squandered so much and received, as a community, so little in return.

Reducing the debt will take hard work, dedication, and vision.

Preview of Tonight's City Council Meeting - What's in it, what's not

Tonight's City Council Agenda is spectacularly huge.  There are 23 items on is and that doesn't include the study session for the Task Force On Homelessness and Mental Health Services or the Closed Session conferences with legal counsel.  One of the countless law suits alone could cost Fullerton taxpayers more than $10-million and no one was killed.  Indeed, it is a strange world we live in.

I'm not sure what to expect for the Task Force's study session and the agenda is void of information.

The Consent Calendar is where we often see expensive plans put quietly in motion and tonight is no different.  The 15 items consist of General Plan update, legal contracts, labor contracts, insurance report with recommendations from staff, November's general election, Successor Agency debt update (more on this in a moment), Measure M funding, custodial services contract, agreement with Brea for sewer replacement, rezoning, property acquisition, sewer lining, Chapman Ave (at Fox Fullerton) right-turn lane, and the Walnut/Lincoln sewer replacement.

All told, these represent $647,106,698 in spending.  Of that, $641,969,234 is from the Redevelopment Agency's debt courtesy of the City Council.  That leaves $5,137,464 in new expenditures/allocations.  And where is this buried?  The Consent Calendar.

There are Public Hearings on four items.  
Agenda item 16 is the OCTA Bike Share Pilot Project.  This is a 66-month trial run to see if people will use bikes dispensed from an automated bike rack like a vending machine.  The staff report claims huge success in major metropolitan cities like Boston, Chicago, and Mexico City.

Item 17 proposes the use of tax dollars to subsidize a low-income apartment building proposed for 345 East Commonwealth, dubbed the Alexander Senior Housing Project.  Besides the issue of using public funds for private housing, there remain discrepancies in the City's numbers.  The Joint Powers Authority that the City wants to partner with has approved $14,000,000 while the City seems to think they will get $14,500,000.  I have repeatedly brought this up and City staff just shrug.  I oppose the project for several reasons including substandard parking, zoning, and open space, as well as the use of public funds for private development.  Deals like this are bad for taxpayers and ultimately bad for the real estate market.  It gives one developer, The Richman Group or TRG, an unfair advantage by giving them $14,000,000 and numerous development concessions as noted above. And TRG has little to no risk.

Item 18 is the tow franchise and repeal of a chapter from the municipal code.  This is the by-product of the Fullerton Police Department's failed attempt last year to ramrod a contract through to Anaheim/Fullerton Towing and To' and Mo' Towing.  Last year you may recall that the FPD compiled and reported to the Council the nitty-gritty details of employees who worked for the other responding tow companies.  Most saw the report for what it was, cheap shots to justify keeping a 40-year contract in place.  The FPD then pushed through a commercial truck route law that punished tow operators on City streets.  Everything the FPD has had to do with towing seems to be under a dark cloud of cronyism and special favors.

Item 19 is the proposed revised budget that was continued from the last meeting.  City Staff were ordered to return with a balanced budget.  Although the balance sheet works, the premise behind the more than rosy numbers is questionable.  For example, the budget assumes the City will receive $20,000 in outdoor dining fees for restaurants with patios in the public right of way, like Florentine's bar on the northeast corner of Commonwealth and Harbor except Florentine's won't be paying a dime for their use of the sidewalk.  Ask the council members being recalled why.  The budget also shows a "potential revenue from citywide fee study" with $50,000 generated.  Since when does a study in and of itself generate tax revenue?  Then there are the so-called cuts or savings.  Staff assume that there will be a $260,000 reduction in contract costs for legal services, graffiti, animal control, and custodial service.  The proposed custodial contract is $16,430 less than the current contract which allocated $425,801 to cleaning City Hall.  Strange how we can get the contract workers to take a 4% cut but not our own employees.  There are several other glaring issues that should have been addressed but weren't.

And finally, Regular Business...
Item 20 is All the Arts for All the Kids Heart Project.  This allows those big decorated hearts to be placed all around town without going through the permit process.

Item 21 tackles the skate park and its operations.  It asks that the Skate Park Ad Hoc Committee pick up the slack and help with cleaning and maintaining the park.  That's a first and not a bad suggestion if their are community members interested in taking on that role.  I'm glad to see it opening up again (pending approval by the Council).  there is an estimated $50,000 cost to make some much needed upgrades and maintenance.

Item 22 is the Boys & Girls Club lease agreement.  The deal looks a little shady.  The City asked the Club to lease the facility in exchange for a $1,000,000 contribution.  The Club will purchase their own furniture and computers ($300,000) and will pay the remaining $700,000 in monthly payments of $3,333.33.  At that rate, it will take the Club 17.5 years to make their "contribution" to the City.  In the mean time, Park Dwelling Funds will be used to backfill the shortfall.  I like the Boys & Girls Club but this creative financing is not good.

Outdoor dining is last on the list as item 23.  Aside from playing with the numbers, one of the proposed price lists uses type of beverage served.  No alcohol means you will pay $0.30/SQFT, beer and wine will cost you $0.60SQFT, and full liquor means you get saddled with a $0.90SQFT cost to use the public's right-of-way.  As noted above, Florentine's seems to be immune to these taxes despite his outrageous encroachment onto public property for the consumption of alcohol.

So what's missing?  WATER RATES!!!  Why aren't they being adjusted?  

There is a lot to cover tonight and I hope you come out and speak.  Speak from your heart and be heard.

Fullerton and Hercules, More Reasons to Vote YES On Recall

Here is a press release from State Controller John Chiang.  His office audited the City of Hercules and found poor record keeping and accounting practices that called into question how the City spent State and Federal grant funds.  

After learning that Fullerton has similar issues, I cant help but wonder how long it will take for State and Federal officials to take notice and followup with action.

Here are two quotes from Chiang that can be as easily applied to Fullerton as they were to Hercules:

"During my time in office, this could be the worst set of city accounting records I have seen," said Controller Chiang. "The City’s books were so poorly managed, that I must question their use of every single federal and state dollar granted to the City."

"The manner in which city officials approached their fiduciary responsibilities falls below every reasonable standard of care and begins to explain why Hercules is under water," said Chiang. "The longer the City goes without accounting for its taxpayer dollars, the greater the risk that federal and state authorities will withhold money from the City, further increasing Hercules' difficulties." 

More reasons to recall Don Bankhead, Dick Jones, and Pat McKinley!  

City Council Meeting Tonight - Tuesday May 1

Please come to tonight's City Council meeting and be heard!  

DEBT

Tonight's agenda includes a revised debt obligation report (Item 3) showing the City's Redevelopment debt at $625,165,719.  MORE THAN HALF A BILLION OF DEBT!  This gem is in the Consent Calendar which means the report can be approved with other actions in one motion.  Ask for Item 3 to be pulled from the consent calendar so that we can tell the City Council that $625,165,719 is too much debt.

BUDGET

Also on the agenda is the Revised Budget for Fiscal Year 2012-13.  The revised budget relies on using City reserves to close the structural deficit of at least $1.5-million and make the broad assumption that your water bill will remain the same or go up.  It addresses the 10% cut by the City Council when they halted the illegal water tax however it assumes that there will be two new "fees" in the tax's place to "recover costs" that do not exist.  You and I will continue to pay more and as soon-to-be-Recalled Councilman Dick Jones suggested, the illegal water tax has two new names: Right of Way Impact Fee and Property Lease Fee.

You would think after the backlash over these artificially created "costs" that they would have forgone the fees and dealt with reality.  No.  Business as usual.

SOCIAL ENGINEERING

The General Plan Update or Fullerton Plan is also on the agenda (Item 7).  Depending on your view of social engineering, the General Plan Update may be great or terrible.

I don't like social engineering and therefore am inclined to disagree with the update.  The update incorporates many of the far left's goals to get people walking and cycling by penalizing those who operate gasoline powered  vehicles.  The word "sustainable" is used about as often as "green".  And we know how well these "green" initiatives have worked for the City with the installation of the Library's solar array.

As the name implies, it's all about "cap & trade".  CAP or Climate Action Plan makes the broad assumption that man has changed the Earth's climate and laws like this will change it back.  For that matter, there are several issues with the CAP but I'll focus on just one today.  The software used to dream up the plan's data for cap and trade, greenhouse gas emissions, and other statistical data was developed and disseminated by the very organization that lobbied for AB32 (the Global Warming Solutions Act- as if we can solve the world's problems with one law in CA).  That sounds like a conflict of interest but I'll let you do your own homework and figure out the particulars.

Tow Trucks and Commercial Routes

After a barrage of complaints of selective enforcement that favored one tow company over another, we have  the issue of "Truck Routes" back on the agenda (Item 8).  According to the staff report, some revisions to the municipal code should resolve the problem.  However, the revisions are minor and do not address the larger problem: are tow trucks "commercial vehicles" and therefor required to adhere to the truck routes?

The revised code references the California Vehicle Code's definition of "commercial vehicle".  Here is the actual language:

260.  (a) A "commercial vehicle" is a motor vehicle of a type required to be registered under this code used or maintained for the transportation of persons for hire, compensation, or profit or designed, used, or maintained primarily for the transportation of property. 

(b) Passenger vehicles and house cars that are not used for the transportation of persons for hire, compensation, or profit are not commercial vehicles. This subdivision shall not apply to Chapter 4 (commencing with Section 6700) of Division 3. 

(c) Any vanpool vehicle is not a commercial vehicle. 

(d) The definition of a commercial vehicle in this section does not apply to Chapter 7 (commencing with Section 15200) of Division 6.

This means that all tow trucks, delivery vans, maid service cars, ice cream trucks, plumbers, general contractors, electricians, or any vehicles that advertise a company or service and weigh 10,000 pounds or more are not permitted to travel in the City except along designated truck routes.

Of course there is a nice exemption for any vehicles being operated by city contractors, such as their contract tow company.  I see no changes that will resolve the issue of selective enforcement.  The municipal code gives tacit approval for Fullerton Police Officers to chase tow truck competition out of Fullerton and disenfranchising private business.  Only the City's contractor has free reign over Fullerton.

Conclusion

Clearly we are faced yet again with an agenda that supports a select few and contains little connection with the reality facing Fullerton's residents and business owners.  

Voters will have an opportunity to make a difference on June 5th by RECALLING Jones, Bankhead, and McKinley.  

Water Tax Repealed, Rate Decrease Anticipated

The City Council voted 5-0 to do the right thing: Rescind the 1970 City Council Resolution that granted an automatic transfer of 10% of gross water sales to the General Fund.  The money was then used to cover General Fund obligations, 80% of which is for salaries, benefits, and pensions.

The end of the water tax does not mean the automatic reduction of 10% of ratepayers water bills.

That will be explored by the Water Rate Ad Hoc Committee in the coming weeks.

For now, though, let's savor the moment.

One year ago I said that ending the water tax would allow for ratepayers' money to go where they had intended it to be spent, the water system.  "Oh no.  That would mean a $2.5 million cut to the General Fund" said the tax's supporters.  "We can't have that!"

The fact is, that money was not supposed to be going into the General Fund and reliance on those funds demonstrates a clear disregard of fiduciary responsibilities by our city officials.

The money was earmarked for water purposes and any other use is a clear misappropriation of public funds.  Suddenly with the water tax gone, the Water Fund has all the money necessary to begin replacing 4 to 6 miles of pipe per year instead of 1 mile per year.  This is a leap in the right direction.  However, there is much more work ahead.

You can expect another tax and spend plan to come forward to try to make up the $2.5 million annual cut in illegal funding.

Keep a wary eye out for gimmicks, games, and gambling with your money by city officials and vote June 5 to recall Bankhead, Jones, and McKinley.

Illegal Water Tax Not Quite Dead

Ending the illegal 10% water tax is only part of the solution

It shouldn't come as a surprise to anyone that the end of Fullerton's decades-old water tax will not mean the end of Fullerton's financial woes.

As far as anyone can remember only a handful of Fullerton employees fill out time sheets and account for their time spent on specific tasks or projects.

This was the case in 1970 when the City Council voted to tax the Water Fund 10% of the gross water sales.  The blanket application of a percentage-based tax instead of the actual specific costs for service is indicative of poor management from people who had no idea just how much time and effort their employees spent working on water projects and tasks.

The City Manager has placed the elimination of the water tax on Tuesday's City Council agenda citing legal reasons, not economic reasons.  He has very few economic reasons to support any tax because he has no proof of the time and effort spent by employees working on the system except for certain water system employees and engineering employees.

That being the case, how did the City and their consultant, Municipal & Financial Services Group, produce this chart?

Somehow city staff and the consultant concluded these figures and presented them to the Water Rate Study Ad Hoc Committee as facts for consideration when determining just how much water rates should be increased.

If we take a leap of faith that these numbers are remotely accurate, then there are no other costs.  Therefor, any newly discovered "costs" are truly fabricated from thin air.

And then there is yet another problem.

Tuesday's City Council agenda contains a resolution which will, in essence, stop the water tax for May and June of 2012 and from then on.  However, the 1970 resolution states that the 10% tax will be applied at the conclusion of the fiscal year.  In other words, NO MONEY SHALL BE TRANSFERRED until June 30.  Somehow, the City Manager has taken it upon himself to transfer funds BEFORE June 30.  That's illegal.

Read the resolution for yourself, in particular the last paragraph:

Also, the agenda includes a rate hike to cover the "pass-through" increases from Metropolitan Water District and the Orange County Water District.  The problem I have is that MWD will not be raising rates on Fullerton until January while the rate hike to you and I goes into affect on July 1.  

The bottom line is that you, the ratepayer, must attend the City Council meeting on April 17, 2012 at 6:30PM (303 W. Commonwealth Ave.) and speak out on the continued gross financial mismanagement.

Why can't the City of Fullerton track labor for the Water Fund (or anything else)?

After listening to the City Manager and various department managers discussing their budget woes at the City's Budget Workshop on Tuesday night it occurred to me to ask a basic question.

Having worked for a few different employers over the years one learns that employee time sheets are an important tool for allocating labor costs and client billing.  "If you cannot measure it," says professor Barry McCarthy "you cannot manage it."

Something I heard, I can't recall just what specifically, caused me to rise out of my seat and approach the dead microphone.  The question was so simple I thought I might be asking a "stupid" question.

My question: "Do employees bill their time to specific projects or funds?"


The answer: "No."

A short time later, Director of Engineering Don Hoppe told me his Engineering Department does track time based on the engineering project.  So, while nearly all of City Hall fails to track employee time, a fundamental principle of management, Don Hoppe's engineering team gets an "A".

If the City were anything like a business, it would have failed decades ago.  But they can simply raise taxes (fees) and continue their charade until someone notices.  Like when water rates skyrocket.

Several managers that I spoke with after the Budget Workshop said they wanted to know how much time their employees are spending on specific projects and tasks but that the current (and new) accounting system just isn't set up for that type of data input.

Of all of the jobs I have ever had, in the public sector and private sector, only two employers did not have employees fill out time sheets and list what work they did.  Both companies went out of business years ago.

The City's inability to account for labor and, therefor actual costs, is at the heart of the issue.  It also blows a titanic hole in labor  arguments about efficiency and effectiveness of employees.

And so City Hall, when faced with running out of money, looks to the taxpayers for the bailout.  Its time to end taxpayer funded bailouts and require employees to track their time based on project funding - just like that which the City requires of their own consultants and contractors.

How much overhead gets billed to the Water Fund?

Looking further into "costs" of service for our water, how many different ways is administrative overhead charged to the Water Fund?  This pie chart shows several.

1. "Administrative Services" (8% direct allocation from water bill)
2. "Other Expenses" (2% direct allocation from water bill to pay Community Development Department, Human Resources Department, Parks & Rec Department, the City Council, and the City Manager)
3. "Franchise Fee" (11% direct allocation from water bill to pay for the Finance department, City Administrator, City Attorney, and the City Clerk for their respective DIRECT SERVICES to the Municipal Utilities Department- see Resolution 5184 below) 

Resolution 5184, 1970

Good grief!  That's 21% of the Water Fund or $4,746,000.  If that number sounds familiar, it should.  That's the same amount being allocated to the Maintenance Services Department which are probably direct costs and not bloated overhead.

No wonder City Hall doesn't want the Water Fund audited!

The bottom line here is that everyone it seems has their hand in the Water Fund.  Adding additional taxes to current or future water rates is unacceptable and will not solve City Hall's spending problem.  

The Trench Tax

One of the attempted, and thus far rejected, justifications for a percentage-based franchise fee that was concocted by City staff was the Trench Tax.

The Trench Tax was created as a means to pay for the damage created by having wet utilities (water lines, sewers, etc.) buried in the street.

Keep in mind that the Trench Tax is part of the New & Improved Franchise Fee and does not include the cost of the Maintenance Services Department repairing the street each time their is a water leak or water line repair.

According to three licensed civil engineers that I have shown the transfer study to, trench settling occurs when the soil is not compacted appropriately.  Using the correct backfill material and compaction standards will create a base capable of supporting the road.  In lay terms, when done correctly, trench work does NOT accelerate deterioration of the street.  Also, when contractors want to dig in the street, a city inspector comes out to make sure that the street is constructed and restored correctly.  This is a double standard with no inspector verifying the City work.

Aside from the Trench Tax, Maintenance Services Department bills their time spent working on broken water lines to the City's General Fund, at least that is what Dave Schickling reported at the April 9, 2012 meeting.  I have found no evidence to support this claim but since there is no audit of the Water Fund, we cannot possibly know if money was paid to the General Fund to reimburse for the Maintenance Services Department's water-related work.  More importantly, this cannot be part of the Franchise Fee because that is suppose to cover certain administrative costs (which we were taxed twice for as well and is indicated in the pie chart - Franchise Fee vs. Other Expenses vs. Administrative Services).

And then there is this pesky but colorful pie chart which shows that the Maintenance Services Department accounted for 21% of the budgeted cost to maintain the Water System, or $4,746,000 in 2011.  

We are left contemplating just how many ways City staff will attempt to tax our water to fix the same piece of asphalt.  Here are at least two:

1. Trench Tax (a.k.a New & Improved Franchise Fee, less rent-back)
2. Allocation of Water Fund from water bill for Maintenance Services

But it gets worse.  How much bureaucratic overhead is paid for through your water bill and what does it actually cover?  Find out tomorrow.

Water Rate Study Ad Hoc Committee Calls On Council to Rescind Water Tax

Last night the Water Rate Study Ad Hoc Committee voted unanimously to recommend to the Fullerton city Council that the "in-lieu" franchise fee, or "water tax" as it has become known as, should be suspended indefinitely.

Another motion was made to recommend an audit of the Water Fund.  The motion failed 5-5.

Some members stated they had enough reports and felt spending more money would not provide any answers.  One member even said that no matter what is discovered in the audit, it would not be enough for some.

Others, like myself, feel it is a disservice to the public to not account for the misappropriated funds.  As we look to answer the question of how much was overcharged to ratepayers, we realize we cannot arrive at a fact-based answer.  Instead, the city's staff will have the Ad Hoc Committee look at what could or perhaps should be charged to the Water Fund.  That may be an appropriate step going forward but without an audit we will never know where our money went.

Water System Manager Dave Schickling offered up the City's Comprehensive Annual Financial Report as an audit that covered the Water Fund.  Unfortunately, the CAFR does not look at the Water Fund in any detail.  Instead, the accounting consultant was provided total dollars into and out of the Water Fund.  This may show that the Fund is operating in the black but does nothing to ensure that the transfers were legal or that the funds were used in support of water projects and system management.

I asked the Director of Engineering, Don Hoppe, and the Water System Manager, Dave Schickling, about how Maintenance Services bills their time to repair water leaks and the street that they dig up.  They said the time is all billed to the General Fund.  At the May 23, 2011 meeting the Water Rate Study showed that Maintenance Service accounted for 21% of the operations and maintenance of the water system.  This created some confusion, at least for me, because the Rate Study showed these maintenance costs as being part of the allocation from the Water Fund and not part of the franchise fee.  In the end, I am left to guess where at least $22.5-million was spent.

The chart below shows that Maintenance Services expenses accounted for 21% of the O&M expenses, "Other Expenses" as 2% (read the footnote on the chart to see what "other" refers to), and then the Franchise Charge at 11%.  According to the City, this chart represents all of the costs and expenses necessary to operate the Water System and consequently the Water Fund.

City Manager Joe Felz will be compiling what he believes to be a list a various "costs" to bring back before the Ad Hoc Committee.  The purpose would be for the Ad Hoc Committee to determine what "costs" are appropriately associated with and billed back to the Water Fund.

The Ad Hoc committee seemed somewhat unified in a desire to have only the actual costs billed to the Water Fund, but as we have seen, those "costs" are subject to staff interpretation.

Since last night's meeting, many members have expressed their concern over the way the entire Water Rate Study has been handled.

I think a large part of the problem has been the business-as-usual approach by staff to have a committee rubber stamp studies, reports, and recommendations all at the behest of city staff.

That's not to say the process yielded no results.  In fact, early in 2011 I made it my goal to end the water tax.  Last night, the first milestone was reached with the Ad Hoc Committee's recommendation.

As a final thought on water rates and the City's handling of this issue, I want to draw your attention to the City's Budget Study Session tomorrow.  The purpose of the meeting is for the City Manager and department managers to present their respective budgets.  This is where we find out how much of our money the City would like to spend and where they will spend it.  Even though the Ad Hoc Committee recommended that the City Council end the water tax completely, the City Manager, Joe Felz, intends to move the budget forward on the assumption that the General Fund will continue to receive a percentage of the Water Funds revenue.  So you see it is business as usual at the Fullerton City Hall.

Business as usual left us with an $8-million budget gap in the two-year budget for 2011/2012 and 2012/2013.    The proposed budget for 2012/2013 & 2013/2014 will have a $5-million deficit with the ending of the water tax and the official plan is to ignore it.

MARK YOUR CALENDAR - More meetings...

The Citizens Infrastructure Review Committee (CIRC) is scheduled to meet on Wednesday, April 4, at 6pm in the City Council Conference Room.  This is a PUBLIC meeting and PUBLIC COMMENTS are encouraged.

What does the CIRC do?  As the name implies, the committee reviews the City's infrastructure program also known as the Capital Improvement Program.  We look at prioritizing projects, funding sources, and act as the ears for the City Council.  The committee serves as an advisory body and has no authority to do anything accept approve previous meeting minutes and make recommendations to the City Council.

The Water Rate Study Ad Hoc Committee is scheduled to meet on Monday, April 9, at 6pm in the Main Branch Library.   This is a PUBLIC meeting and PUBLIC COMMENTS are encouraged.  

The Ad Hoc was formed to vet the initial water rate study which was conducted in 2010 and reviewed by the committee in 2011.  As part of the study, the committee asked questions about the in-lieu franchise fee ($2.7-million water tax).

The Ad Hoc is made up of two committees, CIRC and the Energy and Resource Management Committee (E&RC), as well as 5 community members.  Many of the CIRC and E&RC members have chosen not to participate for personal reasons such as scheduling and the depth of commitment necessary.

MARK YOUR CALENDAR - Water Rate Ad Hoc Meeting April 9th at 6PM, City Yard

Where is your money going?

The next Water Rate Study Ad Hoc Committee meeting is scheduled for Monday, April 9th at 6PM at the City Yard (Basque & Commonwealth).

Please attend this important meeting and speak up.  If you have ever wondered why Fullerton was in this mess it is because too often we all sit back and expect someone else to do all of the work.  Please do your part and engage in the discussion.

Do you think using your water rates to pay for "rent" of city-owned property is a bad idea?  Do you want a refund of the money you were over charged?  Do you want the City to actually use ALL of the money they collect from water sales do be spent on the Water System?  Are you upset that the Water System has been neglected?  Are you fearful the City will try other tricks and accounting gimmicks to take more of your money and provide fewer services?

Please mark your calendar and bring your neighbors.  Fullerton is YOUR city.  

Water Main Breaks In Front of Water Reformer's House

The irony, astonishing.  The coincidence, unnerving.  The big picture, never clearer.

If you could choose a place to break a water line, would this be at the top or bottom of the list?  It's in front of my house...again!

This is just around the corner from the house that exploded yesterday and has many questioning the water systems integrity and capability when taxed with fire services.  Did the sudden demand on the system place too much stress on the water lines?  One would think so but I have not been able to speak with the Water System Manager, Dave Schickling, or the City Engineer, Don Hoppe, to ask.

After you and I have contributed $27-million through the water tax since 1996 to the City's General Fund, you would think the City would have this under control.

A City of Fullerton representative contacted my wife to tell her that, because the leak is slow, they'll be out TOMORROW, on a Saturday, to fix the line.  Can you say OVERTIME?  Seriously.

If the City was ever going to try to demonstrate water efficiency and commonsense responsible water management, you would think they might want to expedite a water main break.  I wonder how many other breaks occurred since yesterday...

Neighbor's driveway is barricaded 

MARK YOUR CALENDAR - Water Rate Ad Hoc Meeting March 19 at 6PM

Fullerton's Water Rate Study Ad Hoc Committee will be receiving the Water Fund to General Fund Transfer Study prepared by the same consultant that prepared the initial water rate study in 2011, Municipal & Financial Services Group, Inc.  

The public meeting will be held at Fullerton's Main Branch Library and will begin at 6PM.  Anyone wishing to speak on water related issues, will be given an opportunity to do so.  

This is the same group that reported the "Franchise Charge" as being 11%, or $2.49-million, of the total water sales on their May 23, 2011 presentation.  

Contact the City Clerk's Office if you need any special accommodations. 

(714) 738-6350 or CityClerk'sOffice@ci.fullerton.ca.us  

$62.1 BILLION - CalPERS Unfunded Liability

SACRAMENTO – State Controller John Chiang today released a new actuarial report showing the 30-year cost of providing health and dental benefits for state retirees is $62.1 billion.

"Even as California continues its struggle to get back on firm fiscal footing, we must begin to address our obligation to pay health and dental benefits for current and retired state employees," Chiang said.  "Even slight amounts set aside will help lessen the impact on future generations, and ensure that we fulfill our responsibilities to the state workforce and our taxpayers."

The unfunded obligation as of June 30, 2011, grew $2.2 billion from the $59.9 billion obligation identified as of June 30 2010.  The accrued liability grew less than expected due to favorable healthcare claim experiences linked to a combination of fewer claims, less expensive claims, less utilization of services, and the implementation of new California Public Employees' Retirement System’s (CalPERS) health programs designed to reduce costs.  

While state pensions are pre-funded, allowing investment returns to reduce liabilities, California pays for retiree health benefits on a "pay-as-you-go" basis, or the minimum amount needed to fund the costs as they are due.  The latest actuarial report estimates California’s obligation for retiree health and dental benefits, also referred to as Other Postemployment Benefits (OPEB), based on two different funding scenarios:

• The current pay-as-you-go policy results in an actuarial unfunded obligation of $62.1 billion, which represents the total the State would need to pay for future retiree health benefits earned as of June 30, 2011, by current and future state retirees.  Based on this unfunded obligation, California should pay $4.7 billion in 2011-12 to pay for present and future retiree health benefits. In the 2011-12 Budget Act, the State provided $1.71 billion to only cover current retirees' health and dental benefits.

• If the State shifted to fully pre-funding the costs of future benefits, the actuarial unfunded obligation would be cut by more than $21 billion to $40.7 billion.  Under a full pre-funding approach, the State would set aside money in a separate trust solely for future retirement health care benefits.  The investment income generated by the trust would be used to reduce the costs to the State and its employees of paying for future benefits. To take advantage of the tremendous cost savings resulting from fully-prefunding, the State would need to contribute $3.3 billion in 2011-12, or $1.6 billion more than the State currently pays.

Recognizing that fully funding the health and dental benefits obligation is unlikely given the State's tight budget, Controller Chiang noted that even incremental steps toward pre-funding the obligation would significantly reduce the State’s liability (see chart ).  For example, if the State pre-funded just 10 percent of its obligation, it would only need to pay $160 million more than its current pay-as-you-go contribution.  However, that additional payment would shave $2.7 billion off of the State's unfunded liability.

Pre-funding 25% of its obligations would cost the State $400 million more than the pay-as-you-go contribution, but would reduce the total unfunded liability by $6.54 billion.

In 2004, the Governmental Accounting Standards Board Statement 45 (GASB 45) required states and local governments to publicly disclose the future costs of paying for post-employment benefits other than pensions for current state retirees and employees.  Chiang commissioned California’s first report shortly after taking office in 2007.  This report is the fifth to be issued under his administration.

While GASB 45 does not require states to fully fund its obligations, all three credit rating agencies have urged states to at least have a funding plan in place to avoid any future downgrades.

The actuarial report  and a chart  showing how much pre-funding would cut future costs can be found on the Controller's website at www.sco.ca.gov.