Contra Costa Taxpayers Association

Recently, voters in the 9 Bay Area counties approved Measure AA, a regional parcel tax intended to restore Bay Area wetlands and other worthy-sounding goals.  (5 counties approved the measure; 4 did not. The parcel tax applies to properties in all 9 by virtue of the 69% approval rate of votes tallied). 

Measure AA is just the most recent example of a regional effort with the stated interest of achieving broad-based improvements across many of government’s jurisdictional lines.  The concept of joint powers between jurisdictions has existed since the 1920’s, and has produced beneficial results such as fire management, water management, and bridge construction. However, the vast expansion of these powers, especially in California, has produced downsides that should be of concern to all of us.

The downsides are of concern to taxpayers, and these concerns are increasing as the number of regional organizations increases.  You have no doubt heard the outcry over the Metropolitan Transportation Commission’s (MTC) use of transportation tax monies to build a headquarters building in San Francisco.  What you may not have heard was that also housed in that facility are Association of Bay Area Governments (ABAG), San Francisco Bay Conservation and Development Commission (BCDC), Bay Area Air Quality Management District committees (BAAQMD), Joint Policy Committee (part of ABAG), and the new San Francisco Bay Restoration Authority (SFBRA) to implement Measure AA.  ABAG pursues the initiatives of Plan Bay Area and One Bay Area Government, as well.

All regional organizations and initiatives tend to have attractive mission statements and reasonable-sounding goals, but they share a common set of downsides that can be problematic. 

• The thrust of many regional organizations and initiatives is to significantly reduce local land use decisions and alter public expenditure priorities without the involvement of established governmental authorities – cities, counties, and the State.
• The governing bodies of the organizations are not elected by the public, but are rather appointed by other, sometimes un-elected, bodies. Once created, regional governance is on its own, operating without little or no influence from voters or elected officials.
• Regional governance has the authority to tax without any input from voters or any say at the ballot box. Regional governance can sell bonds at will, without voter approval.

CoCoTax met with representatives from the 9 counties in the Greater Bay Area before the June primary election in an effort to coordinate opposition to Measure AA.  Many of the individuals in the room have met regularly for the last 4 years as part of a loose-knit group called simply, The Nine-County Coalition (http://nine-county-coalition.squarespace.com/).  They have asked whether CoCoTax would like to attend their quarterly meetings with an intent to share information, provide and receive alerts regarding upcoming regional measures, and, in general, exchange suggestions and strategies. The overall goal is to assist all attendees advocate on behalf of taxpayers and property owners to retain local decision-making by our elected representatives whom we can hold accountable through our electoral process.

Tell us what you think.  CoCoTax will plan to attend the Coalition meetings and report what we learn.  We encourage your input on issues and articles shared.

Fire-EMS 2nd Round MSR Information.pdf

http://antiochherald.com/2016/06/p21789/

Richmond is required to pass a balanced budget by June 30, but the city suffers from a persistent budget deficit. Recently, the projected deficit amounted to $10.2 million.

To close the gap, city officials propose to cut vital services to residents while largely ignoring that compensation for municipal employees is really driving the deficit.

Even across the board cuts and the elimination of many city programs cannot achieve a balanced budget without fundamental reforms to salary structure and the overall size of the city workforce.

Why? In recent years the city has shifted resources away from providing municipal services to residents while increasing funding for employee compensation.

The city is forcing financially distressed residents in Richmond to swallow these steep costs. According to Transparent California, a nonpartisan think tank that gathers public employee compensation through public record requests, Richmond's fire chief in 2014 earned more than $560,000 in salary and benefits. In fact, more than 20 Richmond employees earned more than $300,000 in salary and benefits while more than 200 Richmond employees received more than $200,000 in salary and benefits.

The average Richmond full-time employee earns $130,000 in total compensation.

When considering that the average Richmond resident earns less than $40,000 full-time in the private sector, these figures become even more shocking.

With just more than 106,000 residents, the average resident pays slightly more than $1,000 in annual compensation to Richmond city workers.

The city is asking its distressed, low-income population to foot an ever-growing bill while reducing services like street paving and library hours. While people want first responders to be fairly compensated, at what point does "fair" become "extravagant"?

In contrast, the city of Albany's police chief, the city's highest paid employee, earned $255,000 in salary and benefits in 2014. While the median resident earned more than $80,000 annually, the average Albany resident pays approximately $700 annually toward public employee compensation, $300 less than neighboring Richmond.

Additionally, Richmond's workforce appears to be bloated. With a population of 106,000, Richmond has 735 year-round, full-time employees.

Although nearby Concord has a larger population of 125,000, it only has 319 year-round, full-time employees. While Richmond has one city employee for every 144 residents, Concord only has one city employee for every 390 residents.

When including part-time employees, Richmond pays total compensation of $116 million total for all city employees. Concord, on the other hand, only pays about $54 million.

In 2014, Richmond urged voters to pass Measure U, a half-cent sales tax deemed necessary to fund essential city services, like the pavings of roads. After Richmond voters dutifully passed Measure U, the city manager and City Council within weeks redirected Measure U proceeds to plug its budget deficit at that time.

Rather than reform an unsustainable salary structure at that time, Richmond just kicked the can down the road. Unfortunately, as compensation rises, long-term pension benefits costs continue to increase.

If the city manager and City Council cannot rein in these excessive costs, Richmond residents should demand an independent review of Richmond's salary structure and the makeup of its workforce.

This review should indicate market rates in compensation and benefits for city employees, particularly for senior managers and department heads, as well as the typical staffing levels.

Richmond residents must then ensure that the city manager and City Council implement the recommendations fairly. This is the only way to stop the perennial budget deficits and to balance services for residents with affordable compensation for its employees.

Ben Steinberg is a Richmond resident and Jack Weir is president of the Contra Costa Taxpayers Association.

Suggesting that the West Contra Costa Unified School District has “outstanding financial management” is akin to suggesting that the 7-9 Oakland Raiders had an outstanding season last year. Yet this is exactly what outgoing Superintendent Bruce Harter wrote in his recent April “Superintendent Message” that went out to all staff and was posted publicly on the District’s homepage.

As citizen advocates for taxpayers whose money the District is managing, we are compelled to point out the myriad ways in which Superintendent Harter’s spin does not hold up to scrutiny. Here are the sobering facts:

Harter suggests that complaints about the WCCUSD Bond Program being plagued by cost overruns are a myth because “During the formative years of the bond[s], our Board implemented a system of checks and balances to ensure that the schools were built as envisioned and that the bond dollars were spent as intended” and that “Annual external audits review the entirety of the program.”

The fact is that until recently, school construction projects were not managed on the basis of carefully planned budgets! Instead, they were designed and managed “on scope,” a fanciful term meaning that cost was no object in pursuit of buildings with whatever features anyone wanted to include. The system of checks and balances that Harter cites was so weak that it took a whistleblower coming forward and alleging tens of millions of dollars of wasteful mismanagement (which Harter himself is asserted by the whistleblower to have “facilitated”) to get the board and the public to pay attention. The annual audits have been so flimsy that the school board was recently compelled to authorize nearly $1 million to conduct a full, independent forensic audit to uncover what’s been happening behind closed doors.

What is most disturbing about Harter’s suggestion that costs have been kept in check is the stark reality that a huge $1.6 billion bond program is essentially out of money while thousands of WCCUSD students are still stuck in portables or buildings with worrisome seismic conditions, with few new facilities in operation. How could a well-run facilities program possibly produce that result?  It is like saying that your personal budget worked perfectly when you run out of money halfway through the month and still need groceries.

Harter then goes on to state that “our construction costs are lower than the averages in the Bay Area or Los Angeles,” citing costs per-square-foot. This is simply incorrect. The costs per-square-foot measure does not take into account either the bloated building sizes (at 150-225% of State averages) or the other “soft” costs (no-bid contracts to favored campaign contributors) where ballooning always happens — it’s like figuring only the cost of a steak without considering the hundred-dollar bottle of wine you’ve also decided to order. One might expect Bay Area costs to be somewhat higher, but WCCUSD’s new facilities are enormously more costly than the state average, when measured on a cost per student basis.  For instance, the new Pinole Valley High School will be 268,000 square feet, 161% of the California average for high schools - if it had the 1,600 students for which it is designed.  In truth, there are currently only 1,200 students, which means 223% of the benchmark, and by the time it is complete the District projects only 1,000 students, driving the ratio to 268%.  On the soft cost side, the architect’s fee for this Taj Mahal is a whopping $14.8 million, or $12,300 per current student. For comparison, a full service charter high school campus at Hilltop was built recently by an outside foundation for a total construction cost, including land acquisition, of $30 million, or only about twice that of the Pinole project’s architect’s fees alone…stunning!

 A new Pinole Valley High School, with a $231 million budget, will cost nearly $200,000 per student! Let that sink in. Two hundred thousand dollars per student, half of the cost of the median home in Pinole. The average cost-per-student for California high schools is $61,000.

From the experience of CoCoTax members serving for years on citizens school bond oversight committees in the county, we know that managing a facilities bond program is a complicated, complex and daunting task, one fraught with political challenges. However, we cannot mislead our way to an acceptable outcome. If we are going to move forward and provide the schools all of our students deserve, we must manage from a place of truth, transparency and reality. If voters and taxpayers are ever going to trust the District enough to support revenue measures in the future, district leaders must be open and truthful, and the board must hold accountable those who do not meet those requirements.

The painful truth is that WCCUSD has not exhibited “outstanding financial management.” The plain truth is that district taxpayers have much higher tax bills, with less new schools to show for them, than do the taxpayers in other communities. However, it is also true that we now have an opportunity for a better future, since many of the actors involved in the mismanagement have left or are leaving the district.

Sunlight, as it is often said, is the best disinfectant. We believe by shining some light on the reality of WCCUSD’s financial management, we are taking a necessary step towards a future where it can be said with a straight face that such management is more like the Warriors than the Raiders – truly outstanding.

Jack Weir, President

            The Times editorial supporting the San Francisco Bay Restoration Measure AA misses the mark.  This seemingly minor tax increase to finance shoreline projects is actually the proverbial camel’s nose under the tent.

            The proposed $12 annual parcel tax is grossly unfair and inequitable.  Even though it amounts to what one might spend for lunch for two at McDonalds, it is a serious incremental burden for those seniors and others who are already strapped to meet the dramatically growing cost of living in this region - the highest in the nation.  The owners of multi-million dollar commercial properties along the shoreline will pay exactly the same as the elderly widow struggling to stay in her small inland cottage, but they will reap huge hikes in property value.

            Under the “environmental” banner, there is a politically correct implication that the proposal must be worthwhile.  Everyone is for a clean environment, but will this scheme really accomplish what it claims?  Or, is it more likely that once launched, we will be asked for additional taxes down the road?   As new regional agencies have evolved, local taxpayers have been asked repeatedly to pay new taxes for worthy infrastructure purposes.  Yet, we have witnessed the state correspondingly decrease its traditional funding for those functions, instead diverting funds to pay for ballooning pension costs and social programs. 

            In terms of jurisdiction, if the Bay is threatened by rising sea levels, why isn’t the US Army Corps of Engineers leading the way?  It is chartered by Congress and funded by our federal taxes to manage all navigable waterways in the nation, and spends mega-billions annually in regions other than California.  Why should the Bay Area pay higher taxes in order to lure back some of the money we send to Washington in the first place?  It is well known that California is viewed in Washington as a reliable cash cow “exporter” of tax revenues to subsidize other states’ needs.

            So, what is the SF Bay Restoration Authority agency?  Few knew of its existence before this tax proposal was announced, other than the various environmental groups and construction unions that stand to benefit financially from its activities.  The board is considering a Project Labor Agreement, which will raise costs by 15-20%, and lock non-union contractors out of bidding.  All publicly-funded projects should go to the lowest qualified bidder; PLA’s are bad public policy.

            The really scary thing is that this is the first “regional” government body empowered to levy taxes, and its governing board consists of officials NOT directly elected to the position; where is public accountability?

            If this measure passes, the camel will be back, again and again, sticking its nose deeper and deeper into our wallets.  Proponents proclaim there is no opposition to this proposal, of which the public only recently learned.  For over 75 years the Contra Costa Taxpayers Association has promoted “Good government at affordable cost.”  We vigorously oppose this scheme, because it is neither.

No good deed goes unpunished in the world of public union politics. The firefighters’ union and its cronies have attacked the efforts of two east county citizens to correct the local fire district’s underlying fiscal problem.  Hal Bray and Bryan Scott formed the East County Voters for Equal Protection (ECV) to develop a relatively painless tax reallocation solution that will allow the district to reopen several shuttered fire stations, significantly improving emergency response in the area.  They have the full support of the Contra Costa Taxpayers Association.

A cabal of union-influenced proponents are pushing for an increase in local property taxes, an idea that surfaced in the past.  It was opposed by CoCoTax, and was soundly rejected by voters for good reasons:

• The district has done little to correct its crippling unfunded pension obligation, a problem that can only be addressed if the board opens its eyes. It must reject the assumption that taxpayers will somehow foot the bill; municipal bankruptcies in Vallejo, Stockton and San Bernadino have shattered that myth.
• The unwillingness of the fire district board to even seriously acknowledge the problem is evidenced by the fact that they recently granted a 5% across-the-board wage increase, thereby exacerbating the pension shortfall.
• Area taxpayers are already struggling to make ends meet with recent tax increases at every level of government, and face a flood of new tax hikes on the June and November ballots. Most of these proposals are generated by the reality that unfunded public employee post-retirement obligations - whose disclosure is now required by new national accounting rules - represent hundreds of billions of debt statewide, and are clearly unsustainable.

Mary Piepho and other officials who have attacked the ECV effort should be ashamed of themselves for encouraging such bald falsehoods:

• The tax reallocation proposal does NOT force any participating agency to cut its current spending. It does ask them to forgo a very small portion of their projected future tax revenue increases in order for the fire district to receive funding at the average of all the county’s fire agencies. Any of the government bodies involved should easily manage this shift, given the importance of effective emergency response.
• Bray and Scott do NOT oppose a parcel tax increase. They have made clear that if area voters wish to impose such a tax on themselves, so be it. They are focused solely on correcting a structural tax imbalance that has persisted for decades.
• “Sacred cow” school districts should NOT be exempt from contributing. These agencies receive by far the largest share of county property tax revenues. Any incident involving large groups of school children to which the fire department cannot promptly respond is potentially devastating.

CoCoTax has met with various parties in east county and stands ready to work with anyone who is truly dedicated to finding sound long-term solutions to the dire need for better emergency response, but only at a cost taxpayers can afford.  We do not wish to demonize firefighters, whose emergency response efforts we fully appreciate, but we vigorously oppose this campaign of lies and slander for the ultimate purpose of kicking the public pension can down the road.

Jack Weir

President, Contra Costa Taxpayers Association

jweir39@aol.com

            

Fire District Funding Committee Reviews Progress, Goals February 19, 2016, Brentwood, CA --   About a dozen members of the East County Voters for Equal Protection (ECV) met in the Brentwood Raley’s Event Center on Wednesday, February 17th, and reviewed the citizens action committee’s progress as well as short-term plans. The ECV committee has developed a program that would shift $7.8 million of the current $154 million in property tax funds collected within the fire district boundaries to the East Contra Costa Fire Protection District (ECCFPD), following procedures outlined in the California Revenue and Taxation Code and elsewhere.   These funds would allow the district to permanently open and staff three additional fire stations with no additional taxes imposed on residents.  The special assessments appearing on tax bills would not be effected.  The ECV program calls for government entities, recipients of the 1% ad valorem property tax, to voluntarily shift a small portion of their property tax allocations to the fire district.  District tax payers would not be asked to pay any additional taxes.  Phasing in the program over three or four years would mean that no current budgets would be cut, and the reallocated amount would bring the ECCFPD allocation percentage level to approximately average for all fire districts within the county.  Hal Bray and Bryan Scott, Co-Chairs of the committee, reviewed recent informal meetings with elected members of the Contra Costa Board of Supervisors, the City Councils of Brentwood and Oakley, and civic administrators.  Meetings with candidates for the District 3 Board of Supervisor position, to be open in November of this year, were also discussed, as well as past and planned presentations to civic and service groups.  The ECV is continuing to make progress in researching the leadership of the many Special Districts that receive property tax funds within the ECCFPD, in anticipation of garnering their participation.  Members of the ECV reviewed their progress in setting up presentations to civic and service groups as well as progress in researching the leadership of the many Special Districts that receive property tax funds within the ECCFPD.   Changes to the organization’s Facebook page were discussed, as were plans for a printed brochure.  Members contributed $150 to defray printing expenses.  The next ECV meeting will be held on Thursday, March 3rd at the same location, the Raley's Event Center, 2400 Sand Creek Road, in Brentwood.  The Event Center is located within the grocery store, next to the Pharmacy.  The public and all interested parties are invited to attend. #   #   #   “East County Voters for Equal Protection” is a non-partisan grass roots citizens action committee formed to address the unequal funding of fire and emergency medical services existing in 249 square miles of Eastern Contra Costa County.  About 110,000 residents, as well as those who work and play in Eastern Contra Costa, have services funded at a level one-fourth to one-third of those levels in other parts of Contra Costa County.  For more information contact committee Co-Chairs Hal Bray at hal.bray@pacbell.net or Bryan Scott scott.bryan@comcast.net.   The group’s Facebook page is located at https://www.facebook.com/EastCountyVoters/ on the Internet.

From the Contra Costa Times:  

Tax propositions might rain down on Bay Area residents like an El Niño downpour this year as cities, counties, school districts and agencies try to persuade voters to pay for improved transit, smoother roads, school repairs, city building rehab, and bay water and wildlife conservation.

Transportation authorities in Contra Costa, Solano, Santa Clara and Santa Cruz counties are planning sales tax elections. Santa Clara County is also talking about a sales tax to help the homeless. BART directors plan a $3 billion bond measure in Contra Costa, Alameda and San Francisco counties. AC Transit directors are talking about a bond measure for the bus system's Oakland to Richmond area. An obscure SF Bay Restoration Authority led the rush to the ballot box with a nine-county parcel-tax measure for the June election. The Walnut Creek City Council and the Walnut Creek School District are discussing measures; so are Orinda, Lafayette and its school district. Not to be left out: the city of Hayward and the Hayward Area Recreation and Park District. On top of that not necessarily complete list, Gov. Jerry Brown has said that the state needs new taxes and fees to maintain its transportation systems. The legislative fist fight between Democrats and Republicans over taxes vs. reallocating existing money has led to months of inaction. An initiative petition campaign has qualified for the November ballot a $9 billion statewide Public Education Facilities Bond Initiative for new and modernized school and community college facilities.

"It does seem somewhat unusual," said Mark Baldassare, president of the Public Policy Institute of California. "Anyone thinking about asking voters to raise taxes or fees is aiming for the November 2016 ballot" that will draw more voters, he said.

Low voter turnout has plagued California elections in recent years, he said. Los Angeles city elections in March drew just 10 percent of eligible voters.

Historically low bond rates might also be driving governments to the ballot box, he said, before the Federal Reserve starts ramping up interest rates.

The rush to get a hand into residents' wallets unnerves taxpayer advocates.

"Why didn't anyone tell me it was open season on taxpayers?" asked Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association.

He challenged the bay conservation measure as one that many would pay for but that would most benefit the corporations ringing the bay shoreline, not the people in the outer reaches of the bay.

The "Clean and Healthy Bay Ballot Measure" on the June ballot would charge residents $12 a year, raising $25 million a year for 20 years to reduce trash and pollution, improve water quality, restore habitat, improve shore access and protect against floods.

Another taxpayer advocate cast a gimlet eye over the ballot prospects and said he was appalled. "We're certainly challenged just to keep track of them," said Jack Weir, president of the Contra Costa Taxpayers Association.

The problem he and others see is the growing burden of paying for underfunded public employee retirement benefits.

Under new rules that require public agencies to account for their unfunded pension liabilities, the state pension deficit could reach $250 billion, state Sen. John Moorlach, R-Costa Mesa, said in a Jan. 24 Orange County Register column.

That figure does not include the hundreds of cities, school districts, community college districts and utility districts, each with pension obligations, he said.

As the public agencies try to meet new requirements to fund that debt, they have less available for the services they are meant to provide, Weir said. That sends them to voters pleading for more money.

"We have to solve the problem," he said. "We can't continue to spiral into fiscal insolvency."

Pension woes driving down the cities? Maybe, maybe not, said a state expert.

"We have 482 cities, and it is hard to make a general statement," said Mike Coleman, a fiscal adviser for the League of California Cities and the California Society of Municipal Finance Officers.

"Each community is in a different place on pension and health benefits," he said.

And, until the final decisions come down, it won't be possible to say whether it will be an unusual election year.

Whatever happens, Weir said putting such a number of tax measures before voters would lead many to say, "Hell, I can't afford this," and vote no on all of them.

Community Choice Power:

Government at its worst

Community Choice Aggregation, also known as Community Choice Power, has landed in San Francisco, Sonoma and Marin counties and crept into Contra Costa via Marin Clean Power in Richmond.  Contra Costa County is now considering going “full steam ahead”, if you pardon the pun, as a Community Choice provider via a government JPA (Joint Powers Agreement) with local city governments.

Let’s hope not.  Community Choice Aggregation is government at its worst.  Government has proven incompetent at regulating PG&E so now it wants to ratchet up its efforts by giving local governments the power to make PG&E their indenture servant and us its ultimate victims.

Community Choice Aggregation:

- Wrongly expands the coercive powers of local government;

- Has several negative tax impacts;

- Allows the JPA to legally misrepresent the quality of the electricity it sells;

- Gives the JPA the abusive roles of partner, competitor, regulator and taxing authority over PG&E and their joint customers - us.

Community Choice Aggregation is coercive in several ways.  The 2002 legislation that created Community Choice Aggregation allows for a sophisticated, uncompensated “taking” by local government without payment by forcing PG&E into a “master/slave” relationship with government agencies.  PG&E must do ALL the work: build and maintain the distribution system, the billing system, the customer relationship system, and the support systems needed to run a utility.  PG&E must hire, train, and manage the employees that perform all the work and  handle all interaction with customers.

Government just takes the profits.

CCA is also coercive in its implementation.  The legislation creating this monster mandates that all residents in the geographical area of the JPA are automatically switched to the JPA as customers.  To not be switched, a customer must beg (“opt out” in government terminology) to stay with PG&E.  It is government force substituting for a marketing and sales capability.  Why be good when you can be government?

Next, a government  JPA pays no taxes.  PG&E does.  Who is going to make up for the loss of tax revenue?  There is a reason there is no mention of taxes on the Marin or Sonoma clean energy websites. 

Community Choice aggregators frequently brag about being less expensive; when they actually are in it primarily because they pay no taxes (and can tax PG&E their “competitor”).

Their tax advantage also allows them to use tax free bonds to purchase or build power generation facilities, again giving them a competitive advantage in the market and reducing tax income for government.  Who do you think will be forced into making up for the lost tax revenue?

A Community Choice aggregator can also legally misrepresent the quality of their service by delivering coal or natural gas powered electricity without telling their customers.  How?  By purchasing “unbundled” (not attached to any specific project) Renewable Energy Certificates.  RECs are certificates sold in the open market that allows the buyer to claim legal ownership of 1 megawatt of renewable energy anywhere in the world.  Originally accepted in the financial marketplace these certificates have been found to be deceptive and have lost favor with investors.

And I’m sorry, but there is not enough “green power” to meet the claims of Community Choice Aggregators and I find this deception reprehensible.

Finally, there is something inherently wrong with a program that allows government to be the partner, competitor, regulator and taxing authority over a company and an entire industry.  Or as the old saying goes, “power corrupts, absolute power corrupts absolutely”.

We, as citizens, rightly give some coercive powers to our government.  Policing, taxing, and regulating are powers needed to be a government.  Giving Community Choice Aggregators the powers detailed above is wrong and needs to stop here.  

Hal Bray

473 Coronation Dr.

Brentwood, Ca 94513

925.240.7018

Mr. Bray, a resident of Brentwood is Vice Chairman Emeritas, Contra Costa Republican Party