Napa Valley Taxpayers Alliance

NVTA Board Letter to Planning Commission/Supervisors on Angwin

To: Napa County Supervisors and Planning Commission

Re: Angwin Bubble

From: The Napa Valley Taxpayers Alliance

The Napa Valley Taxpayers Alliance Board supports retention of the Angwin bubble.

The bubble issue should be separated from the decision of whether to allow PUC permits for their eco-village project. Unfortunately, SRA (Save Rural Angwin) has attempted to use the General Plan process to do an end-run around normal permitting and environmental review processes. We view this as an abuse of the General Plan process as it has gone beyond the general issue of whether removing the bubble has merit, turning it into a referendum on the very specific PUC eco-village project. It is patently unfair to PUC, (and ultimately, all landholders in the county) to change zoning designations in the middle of the game, and a misuse of the General Plan process to attempt to do so.

Because of that, and the attendant overwrought emotions which has limited meaningful dialogue to date, we believe that the bubble should remain in place. Any decision should, at a minimum, be postponed until after PUC project environmental reviews and other permitting processes take place. In no instance should PUC's zoning be changed without their express permission. The bubble issue should not be allowed to be leveraged against what should be a regular planning process. And as there is likely insufficient time left in the General Plan process, the bubble should remain so as not to interfere with PUC's lawful right to apply for project permits.

We cannot subvert a process hammered out over a long period of time because a vocal minority decides they merely don't like it. What message does this send to the rest of the county - to other property owners?

If we allow SRA to subvert PUC's right to develop their property, without even a hearing before the planning commission, then we are sending a message to all our neighbors that if and when the time comes for them to legally do work on their land, vocal neighbors can shut them down. That undermines all the agreements made to set up the ag preserve, it is unfair and uneven in its application, and finally, it is an abuse of both due process and rights of private property ownership afforded to all by our system of law. It would be an ill-advised decision likely exposing the county to unnecessary legal complications.

The whole purpose of having the bubble was to provide for some limited development in the Ag Preserve. This was not an accident, and it has been reaffirmed since then. The county should resist any urge for expediency or to broker an "agreement", and abide by its laws and regulations reached over time through debate and compromise.

Do not "pop" the bubble.

Michael Haley

President, Napa Valley Taxpayers Alliance

Board of Supervisors Meeting Tommorrow

The following was sent to our membership tonight, and states our position on the current contract negotiations with the County miscellaneous employees. Links are provided for sources of some of the information included therein.

I received information on the salary increases for County employees over the last five years, for both miscellaneous employees and the Sheriff’s dept. The employees are divided up into these two main categories, so that any non safety employees are called miscellaneous. This includes the Probation department which is pushing for the enhanced pension and retiree health benefits.

In short, in the five year period from 2002 to 2006 miscellaneous employees received a 17.5% increase in COLA, or cost of living adjustments, ie pay increases.Law Enforcement received 25.2%. Now they also received what they call step increases each year, and equity adjustments. All receive the equity adjustments, not all receive step increases if they are at the top of their scale already or if they receive a bad performance review. It is my belief that most of the employees get both those every year, although I do not yet have the exact numbers.

Even if you just look at the COLA increases, and compare them to the CPI, according to ABAG the CPI has increased 10.9% in the last five years through 2006, so their COLA raises are higher than that. COLA raises are supposed to reflect the cost of living only, yet they have been consistently higher than the cost of living.

In the meantime, in the private workforce, raises have actually been below the CPI, about 1.3% currently in Napa. Private industry workers typically get only merit increases, a "raise" that is based mostly on performance, and to some extent on longevity.

Because we can’t be certain exactly what the negotiations specifically are about, I plan to raise the following points tomorrow.

1. The Napa Valley Taxpayers Alliance is here today because we are concerned that unless employee costs are reigned in, the County is going to head down the same path of structural deficits and technical bankruptcy that the City of Napa is now in, that the State of California is now in, and that local governments across the state are now in.

2. The Budget document itself says that a relatively small increase in County costs could push us into a structural imbalance. What that means in plain english is that you already know before the year begins that you don’t have enough money to pay for what you are already obligated to pay for. It means you’re broke.

3. One good example of where those costs could come that would push the County into deficits with no revenue to cover it would be if the Probation Dept pensions were to be increased to the enhanced safety level. We feel that the safety pensions for Sheriff’s are already too rich and to continue to push other groups of employees into that high level of pension is fiscal insanity.

Only three short years ago the Probation employees along with the other miscellaneous employees were given a 25% increase in their pensions, going from 2% at 55 to 2.5% at 55. This resulted in the unfunded liability increasing in those three short years from $26.9 million to $48.7 million. Now they want another large increase, which is going to further increase the unfunded liability dramatically, and therefore create large increases in annual payments to Cal Pers.

Most people in this room know that just to cover an unfunded liability for retiree health and other benefits, the Supervisors recently voted to pay $4.1 million per year for 14 years to cover it. That is about the total amount we are currently able to spend on roads in the County, and that amount is woefully inadequate.

We cannot afford another multi- million dollar annual liability which enhancing probation pensions represents without serious further cut backs in service as well as leading toward a City of Napa perpetual budget crisis situation.

4. Long term we cannot afford to give public employees in Napa County or anywhere else higher raises and benefit increases than the taxpayers are earning themselves, for they are the ones who have to make the money to have to pay for it. It is an unsustainable system economically and it doesn’t really matter whether or not certain employees deserve certain benefits, it is bankrupting the system.

Ok, that is probably way more than I will have time to say. I am hoping that some other members will bring up a few more points like:

1. Wages for private employees have been below the rate of inflation, the CPI, for almost a decade now. This however is not true for government employees, whose wages have grown much faster than inflation.

2. Miscellaneous County employees have enjoyed a 17.5% increase in wages just on COLA’s alone over the last five years, law enforcement 25.2%, while the Bay Area CPI has been 10.9%. County employees have also received step increases and often large equity increases in that time as well.

3. The fact that 911 operators or Probation officers both of whose jobs consist mainly of office work can be included in safety pensions undermines the whole rationale of a safety pension.

Safety pensions were originally conceived for those risking their lives in the line of duty. I suppose anyone who drives to work could be portrayed as risking their life for their job, but it is clear that both 911 operators and Probation Dept work are not nearly on the same level of risk as fire and police work, and just asking for these level of pensions betrays the fact that this is just about seeing how much money they can get, and is not justified.

Napa County Has Responded to NVTA Questions

I have received four PDF files of information that we have requested from the County. I am not going to post them here, but I have forwarded them to our email list via email. If you would like to see them and you are not on our email list, you can join the list and I will send them to you. Write me at michael@napablogger.com

I will be posting information and analysis of the information soon.

Parks and Open Space Budget Issue

There was a meeting last Friday of a subcommittee of the Supervisors, Mark Luce and Bill Dodd, to take testimony about a pot of money garnered from TOT taxes and how they were going to spend it.

There is a little pot of money with the county that is 1.5% of the 12% of the TOT tax that is collected from tourists at hotels that is in the process of being divvied up. Right now it is about a million dollars and they expect it will generate around $750,000 or more each year.

There is a write up by the Napa County Convention and Visitors Bureau which details their position as well as provides background information. I have copied some of that information below, click on the "continue reading" link. Thanks to Julie Nord of the Grape Growers for passing it on to me.

What is happening is that the CVB is being drastically cut by the City and the County is only going to give them $99,000 for this year of the TOT money. In the meantime they are going to give the Parks and Open Space District the biggest chunk of that money, around $550,000. I think this is short sighted in that investment in the Visitors Bureau will generate more tax dollars by increasing tourism, and everyone will benefit from the further taxes generated by that.

You may feel that there are a lot of tourists coming through here, which there are, but there is no guarantee that will continue and any business has to devote some substantial part of its revenues to marketing or it will be in trouble. We cannot be so arrogant as to assume that visitors will automatically come here without doing anything to attract them when Sonoma and other wine country locations are literally spending millions attracting them right next door.

Also, many lodging places in Napa are not doing well, and even the top ones have a lot of vacancies during off peak times. The Sales and Marketing manager from Marriott Hotels spoke at a meeting Friday afternoon and stated that they are collecting about $1 million a year in TOT taxes in Napa, and that if the CVB plan works they could fill their off peak dates it would result in about another $400,000 in TOT taxes. That is just from one vendor, so we are talking some significant amount of money here.

It's a case of being penny wise and pound foolish, but I am afraid that the Parks and Open Space District has three votes sown up, Diane Dillon, Brad Wagenknecht, and Mark Luce, and that they will be getting the bulk of this money.

And by the way, that is more money right away than the voters were promised during the campaign, where they stated there would be a $350,000 budget.

Napa Employee Health Costs High

The Sacramento Bee has an editorial about rural health care costs for government employees under CALPERS being  higher than state averages. One of the counties that is mentioned is Napa as being one of the higher ones, and the fact that Blue Sheild wants to shut down its HMO here due to the unusually high costs. The Bee suggests that the counties should instead look into why their costs are so high. From the article:

"In El Dorado County, the average cost of a hospital stay for a public employee is $7,373 a day. Statewide, the average cost is $4,825 a day for the health plan covering the California Public Employees Retirement System, or CalPERS.

A key health plan for CalPERS, Blue Shield, is proposing to abandon its HMO in four of the most expensive counties -- El Dorado, Napa, Lake and Plumas. Understandably, the counties want CalPERS to delay, defer or abandon the idea. In essence, however, they are asking public employees who live in urban areas to subsidize the costs in monopolistic rural areas.

News and Action Alert

Please see the action alert at the end of this post.

Our meeting with the County on April 4 went well. We had good attendance and we put them on notice that we are watching and concerned about budget issues. I understand an article about the meeting will be appearing in the Register soon.

There was some frustration in that most of the information was general, and also lacked context. The context that we needed was historical and statistical. We found out many facts about this years budget, but it was not given in relation to anything from which to draw relevant conclusions.

Therefore, we are going to continue to meet with the county, and I am asking everyone who attended and also those who did not to identify important questions for follow up. The main need is for historical information, like what the per capita growth in government expenditures has been, and what is responsible for the increase. We also have yet to get detailed salary information but I am working on that soon.

Please email me the issues you would like clarified, as I am continuing to meet with the county and city. Today, Leon Brauning, Don Clark and myself are meeting with Mike Parness and Carol Wilson from the City of Napa.

Some gems of information have emerged, and I have followed up by attending the County budget workshop put on by staff today for the Supervisors and have continued to gain understanding of the budget. Some of the facts gathered from both events include:

* Over 50% of the state budget and 65% of county taxes are devoted to schools, the overwhelmingly largest item in tax expenditures.

* The unfunded liability for the County for just non safety employee pensions is about $48 million. The unfunded liability for health and other benefits for non safety employees who are retired is about $34 million, for a total of about $81 million–far more than I previously was told.

A pension expert was at the meeting today who evaluated the health portion and said that the county would need to pay $5.9 million a year into the pension fund for 14 years just to cover the health part. That is big bucks for the county, as another budget expert today gave $2 million annually as an example of an amount that would seriously impact the budget. They haven’t even started to look at the bigger pension liability yet.

* Safety employee pensions have been switched to a CalPers pool by State law, and the county does not know the dollar amount that is unfunded, but the percent funded is 87%. For comparison, the percent funded above that is leading to the $4.7 million annual payment is 85%, about the same. Safety employee benefits are much better than regular employees, but there are fewer of them. In any case it is going to be a sizeable annual sum to straighten this out.

* The county is $220 million short in funds in needed road maintenance according to the roads department. That is over a period of 30 years, which works out to about $7.3 million per year. For purposes of comparison, the current annual budget for the whole department is around $4 million from the county, with varying additional funds from the state. $1.2 million was given from the State last year, but next year we are expected to get nothing from the state which means nearly a million dollar deficit.

Due to the risk of putting everyone to sleep (if you have gotten this far), I will stop with the numbers.. Also, in fairness I have to say that I am tending to list the worst problems, but there is no doubt that we have some formidable issues here.

On the bright side the County has some large reserves, but if they were to pay off all these expenses it would take more than we have by a large margin. They are being paid off slowly while the county maintains reserves, a prudent policy.

The main problem as I see it now is that the unfunded liabilities and the problems that are creating the unfunded liabilities are not going to go away. Those problems are too generous salaries and benefits, and continued increases that are ongoing. The County is in negotiations with their two unions now for new contracts and there is no doubt that they are going to be pushing for further increases, while the current rates are leading to the above problems as it is. I note that there is an assumed 6% salary increase for the 08-09 year in road department projections.

Whatever pressures may be on the County to increase salaries and benefits, we are past the point of being able to afford it. Nothing will happen except increased debt unless citizens in Napa wake up and take action to demand that this train slow down.

One possibility that was mentioned at the Supervisors meeting by their long term budget consultant was to form a citizens advisory committee to consult on budget priorities. The Supervisors appeared cool to that idea, so I stood up and said that I thought it was a good idea, which I do. A group similar to the General Plan Steering Committee to go over all this and make recommendations to the County would be the best way to do it, in my view.

It is quite possible that this is eventually going to turn into a heated political issue, and the only way to generate more light than heat and not get bogged down into partisan warfare is to have citizens from all sides of the political spectrum informed and active in making long term budget decisions.

ACTION ALERT! Please email or call your supervisors and tell them that the citizens committee to set long term budget priorities is a good idea. Better yet, volunteer to be on it. You can get their contact information by clicking on their names at this address .

For Those Getting Too Much Sleep

And now to those of you sleeping too well, here are some facts that may help keep you awake a little better. The current Federal unfunded pension liability for Federal Government employees only---not taxpayers in general---is bigger than the social security deficit. It is 4.7 trillion dollars. The current social security unfunded liability is a mere 4.6 trillion dollars. There are no current plans to address it, in fact me, you now, and those who subscribe to some obscure government newsletter are the only ones who even seem to know about it.

I had to laugh when I saw the answer Dan Walters of the Sacramento Bee sent to me when I asked about our persistent State budget deficits, see if you can tell what I am talking about, Here is the question and answer which appeared in yesterdays Bee.

"March 26, 2007

Question: Dan, my impression is that there is a $6 billion budget "gap" which is really a deficit that has not been closed. I believe we have deficits from previous years that have not really been dealt with either. Is this true and do you know the total amount? Michael Haley, Napa

Answer: There is a persistent operating deficit roughly of the size you mention and both the administration and the Legislature's budget analyst say that it will continue at least for the remainder of this decade. Past deficits have been covered by borrowing either from private lenders or internally from restricted funds."

http://www.sacbee.com/static/weblogs/capitol/

I laughed at the phrase "restricted funds". They are stealing from accounts that are restricted for certain purposes. In Napa that happened with the farm worker housing fund, and some one or two got fired for it. In the State they call it "good government" or "balancing the books".

There is a huge unfunded liability for state pension and health plans, and according to the State Legislative Analyst it requires at least $6 billion a year that they are not paying in just to go into the investment fund, on top of each years bail out of current employees.

They have already borrowed $17.75 billion to shore it up, before 2003. I doubt the state budget analyst's prediction is going to come true, as we have borrowed more money to the point that we have tripled our debt in the last three years alone. We are not paying in, no way we are going to catch up by the end of this decade.

In the City of Napa, the portion of the budget that has gone to employee compensation has gone from 77% to 88% in three short years. Are we going to be at 99% in three more years? Will we have scores of well paid employees sitting in empty offices with no computers because there will be no money for anything but compensation?

Sounds absurd, and hopefully it is but the way that pension costs have been skyrocketing one wonders. We don't yet know the exact numbers for Napa County, other than two years ago it was 80% of costs, but we do know that even though pension consultants predicted bankruptcy for the State in 1999 when Grey Davis had CalPers give up to 90% of salary for safety employee pensions, in Napa some are not only getting 109% of their highest salary but are also coming back to work in other government jobs and collecting both retirement and another salary, usually as "consultants".

And here is the kicker. Our Assembly person, Noreen Evans, introduced a bill to raise the pensions for safety employees all the way up to 100% of their highest salary. What was even worse is that she also included changing the definition of what salary was to whatever the local government (read unions) wanted. This most certainly would have included anything remotely considered salary, overtime, uniform allowances, travel reimbursements, per diems, the baby, the bathwater, etc.

This was done in New York City, right before 9/11. The Firefighters there got the government to change the definition of what constituted salary to include overtime. Then 9/11 happened, and in one year 3200 Fireman retired at once, realizing that due to the overtime incurred, their retirements would never be bigger.

That is the big version of what happened in Napa in January of 2005 when due to increased retirement benefits, nine police officers retired at once. Right now Contra Costa County is five years from insolvency due to over generous pensions and health care. Right now they have about 8500 active employees, and over 5000 retired and on benefits. In four years they will have about 9000 on retirement. Think they can make it?

How many employees is Napa supporting on retirement now compared to how many are working? We need to find out.

Evans bill would have been a financial disaster, but it shows you who is running the state government, the public employee unions. Evans received a number of "what are you nuts?" letters and her bill did not reach a vote. She was, however, reportedly surprised by all the negative reaction. Scary, huh?

This situation is not going to change unless voters start to demand from the government that it change. Right now the public employee unions are running the government at all levels in California. So far the public has supported that, but I do not think the general public realizes how much tax money is going into these pensions and benefits, how really generous they are, and how out of balance it is with the compensation that private sector employees receive. In other words, they are napping, and they need to read articles like this to jolt them awake a bit.

Please help me start to push back against this so that in Napa we can start to have some money for something else, like parks, road improvements, flood control, more police, and other things that we cannot afford right now.

One last thought, Keith Caldwell, American Canyon Fire Chief who just retired, announced his intention to run for Supervisor today. Gary Simpson, former Sheriff has also announced. Both will not only receive full pension benefits, which will amount to 90% or more of a salary north of 150K, but also receive 70K a year as a supervisor. I intend to publicly ask them to forego one of those, because after all they won't really be retired if they continue to work for the county as a Supervisor. It will be double dipping.