Vallejo’s unfunded pension liability is approaching 3/4 of a BILLION DOLLARS


By JD Miller, CPA

 

A Council candidate asked me for my endorsement recently. While I really appreciated that I was asked, I may be sitting this election out …

Unless I find a candidate who’s platform is almost exclusively focused on fixing the fiscal problems of Vallejo.

According to the Stanford Institute for Economic Policy Research, had every man, woman and child living in Vallejo written a check to CalPERS for $5,511 in 2013, a total of $648,461,958. That’s almost three quarters of a BILLION DOLLARS. We could have wiped out our unfunded pension liabilities at that moment in time in 2013, guaranteeing every currently retired City employee retirement for life. But we didn’t.

Every year, this problem gets worse. Salaries go up. Benefit costs go up. We hire additional police officers and fire fighters that the City cannot afford to pay for.

The solution is for all parties to sit down, to agree to stop this runaway train, to agree to fix the problem, and FIX THE PROBLEM.

Even if the citizens were to renew Measure B, they would have to be willing to double the 1% sales tax on average at least every 12 years just to stay where we are today with the same number of police and fire employees and with more potholes in our street every year that don’t get fixed. This means that fewer than 20 years from today, the 1% Measure B tax could grow to 4 to 5%. Just to stay where we are today. And we want more today, so staying where we are isn’t good enough.

Everyone your age that I talk to worries that their kids or grandkids won’t be as well off as you and I are today. Yet what do we do about this? Nothing.

Every day we do nothing, we continue to mortgage their future. We do nothing to slow down or stop the runaway train that is the unfunded pension debt that we have created over the last 20 years. Every day, this runaway train picks up speed. The longer we choose not to act, the more tragic will be the train wreck.

Our doing nothing only serves to destroy the better life that we all want our kids and grandkids to enjoy.

It will cost everyone a significant amount …citizens, City employees both working and retired, businesses …whether we choose to do something now or just wait for the consequences later. And those later consequences will be an order of magnitude larger.

Citizens will have to pay far more and get far less in return because ever more of their tax money will have to be paid to CalPERS to pay the retired employees.

Many City employees will no longer have their jobs and the benefits they enjoy with those jobs because that money will have to be paid to CalPERS to pay the retired employees.

Retired employees will worry about whether the retirement check they just got will be their last because CalPERS is running out of money.

Larger businesses and owners of smaller, local businesses will have to find new ways to stay in business without raising their prices to a level that forces the out of business.

And employees of these businesses, employees who aren’t a public employee, who don’t work for a city, county or for the State, will have to worry about whether they can keep their jobs, about whether what they earn will allow them to live as well as we do today.

The solution is for all parties to sit down, to agree to stop this runaway train, to agree to fix the problem, and FIX THE PROBLEM.

Here are five significant advantages to sitting down and fixing this problem today:

1. The problem is much smaller and easier to manage today than it will be in that future date when we no longer have a choice, when we are forced to fix it.

2. It will cost each one of us far less to fix the problem today than it will at that future date when we no longer have a choice, when we are forced to fix it.

3. We can enjoy the services that we are paying for now but not getting.

4. We can eliminate the worries that will grow as we move toward that future date when we no longer have a choice, when we are forced to fix it.

5. Our kids and our grandkids will have the opportunity to live a life better than the ones their parents and their grandparents lived.

If you want to make it possible for our kids and grandkids to live a life that is as good as or better than the life you enjoy today;
If citizens want to pay far less and get far more in return for their tax money;
If City employees want more job security and the opportunity to continue to enjoy benefits like they do today;
If retired City employees want a retirement free from the worry that CalPERS will ever run out of money, that they may not receive another retirement check;
If businesses and business owners and their employees want to stop worrying about their future as we move toward that future date when we no longer have a choice;
all parties must sit down, to agree to stop this runaway train, to agree to fix the problem, and FIX THE PROBLEM.
Any candidate for Mayor, any candidate for Council, candidate for County Supervisor, any candidate for Assembly or State Senate, must be willing to commit to getting all parties to sit down, to agree to stop this runaway train, to agree to fix the problem, and FIX THE PROBLEM.


'Vallejo’s unfunded pension liability is approaching 3/4 of a BILLION DOLLARS' have 35 comments

  1. November 11, 2015 @ 9:37 pm Ravi C Shankar

    Thank you so much, JD.

    This is extremely helpful to everyone, even the accounting/finance folks.

    Let this awareness spread so that people can ask smart, accountability questions next year from everyone.

    What is the current council doing about this as they review the budget in early January (mid-point) and for the 2016-17 budget ?

    Reply

    • December 19, 2015 @ 9:57 am AHQZB4

      This might be just the thing to help us solve this Big Problem!

      California pension overhaul advocates move forward after Kamala Harris issues analyses

      California moved one step closer to a public retirement fight after the state issued official summaries for two pension-change ballot proposals on Thursday – and for the first time neither labor unions nor the measures’ proponents griped that the language was politically slanted or inaccurate.
      “It’s not the most positive way to describe the initiative,” said Chuck Reed, the former San Jose mayor who is backing the proposal, “but a least it meets the legal requirement to be accurate.”

      ….

      Read more here: http://www.sacbee.com/news/politics-government/the-state-worker/article49033965.html#storylink=cpy

      Reply

  2. November 12, 2015 @ 9:54 am John_K

    Well said, JD. It is time to put this liability issue on the front burner. We should insist that every candidate take a stand on it. It needs to become a hot campaign issue with questions asked at every candidates forum next year. It needs to go into the next “goal setting” session held by Council Members. I think they have lost sight of this and need to be reminded until they talk about it at every meeting.

    And it seems that Measure B money is being used as if it was a permanent tax… are employment promises being made that may prove to be unaffordable without further tax increases? Are we spending windfall money on permanent employment and benefit promises again? Last time we did that, the whole City went over the cliff.

    Reply

  3. November 12, 2015 @ 3:18 pm Coleen Cole Morrison

    JD, Glad to have you back! If you have any idea on how we actually get this dialogue started, please share.
    From the gist of what you’ve said, the union and city would need to work together on a solution, but the last time I looked, the VPOA was suing the city because of a financial decision the city made to address retiree expenses. Based on their actions, unions demand golden eggs but act like they have zero responsibility for contributing to a healthy golden goose. Union political theorists don’t care if a city can’t pay what they demand – thank God we voted for Measure A, otherwise we’d be in worse shape. I agree we need to do something, but unfortunately JD, the “we” taxpayers are not invited to the table to help craft a real solution, we just get to pay the impossible bill.

    Reply

    • November 13, 2015 @ 8:53 am Ravi C Shankar

      Coleen,

      agree and disagree with your GREAT observations and questions to JD.

      …..”I agree we need to do something, but unfortunately JD, the “we” taxpayers are not invited to the table to help craft a real solution, we just get to pay the impossible bill……”

      We all know which council members supported and who opposed the effort in 2014-15. We all can simply vote new council members and a mayor who WILL work for us — and keep this as a #1 campaign goal. We have a lot of power in 2016 to discard council members who did not truly work for the people and choose from truly greatly promising candidates !!

      How about COLEEN for council ? or JD for council/mayor ?? HE WOULD BE INCREDIBLE.

      Let’s host a series of town hall meetings from April to October 2016 with JD answering questions and spelling specifics of what we can all do ! Let us persuade JD to go to each candidate’s forum in 2016 and ask them this big question each time. Let us get JD on OZCAT and VCAF-TV from March to October 2016 …. to talk about Budget and what each of the candidates and the citizens can do to make it work.

      Reply

      • November 13, 2015 @ 2:58 pm Publicus

        The Jumpers were smart. They developed a political bloc that included 1. Union folks, 2. The white chamber of commerce (mostly real estate folks that profit from the “farm the poor” industry) 3. the black fundamentalist churches that hate gay people (and women) and 4. conservative Filipinos. But that is the old demographic. Between the 2000 and the 2010 census, the population of both blacks and whites dropped substantially. That drop was made up by Latino folks. That is a really good thing. Vallejo is named for a Mexican General who founded this City as a place where ordinary people dispossessed from other countries could own a little plot of land for a home. General Vallejo served as a delegate to the first California Constitutional Convention and lobbied hard against California being a slave state and fought for the rights of women and Native Americans to own property. That is a proud heritage of liberal values. This City should welcome the Latinos shoved out of Napa County. That demographic was never a part of the Jumpers bloc. If you look around, you can see their entrepreneurial spirit everywhere. If Latinos ran for City Council and we could engage that voter bloc, it would be over for the Jumpers.

        Reply

        • November 13, 2015 @ 9:39 pm Laurel

          Publicus, the Latinos may be closing in on being a majority in the COV, but unless they vote their power is lost. I would be willing to bet the majority of Latino households in Vallejo are comprised of undocumented people who can neither vote nor run for office, so while hard working and entrepreneurial they remain powerless and therefore contribute nothing to our solving our current political/ societal problems.

          Reply

          • November 14, 2015 @ 10:36 am Publicus

            Don’t underestimate the potential power of the Latino community. You may be partially right. But wait for the children born in the US (the so-called anchor babies) to come of age. They, like General Vallejo, will embrace American democracy. They will vote and ultimately dominate politics. They care about education, family values and fairness. The new Latino majority will vote in the interests of community. They are not going to be swayed by PSU spin of jobs, job, jobs. They want to buy their own homes and do not expect free HUD subsidized housing. I can’t wait.

  4. November 13, 2015 @ 4:05 pm anon

    In the “big” picture, according to pension tracker.org, the total market base (?(as opposed to an Actuarial Basis of $281 billion)) unfunded liability for CA is $946.4 billion. That makes Vallejos’ portion of the problem .0008 or 8/10,000 of the total amount. The solution is bigger than a Vallejo policy set by Vallejo council members. To help put things into perspective Vallejo’s unfunded liability per household is about 11% less/lower than Healdsburg and about 2% more/higher than Benicia.

    Curiously JD suggests 5 “advantages” to fixing the problem but does not offer a single solution? The Stanford Institute for Economic Policy Research that JD references does make recommendations. The SIEPR suggests future shortfalls can be avoided by “1) prudent contribution policies”, 2) managing assets in a way that limits volatility, and 3) setting sustainable benefit levels”.

    1) is addressed by using “Normal Costs” contributions. That would be contributions made consistently regardless of the health of the PERS portfolio. Employees were required to make contributions every pay day for the entire length of their employment. Cities were not required to contribute when the pension was healthy. 2) Is really out of the hands of the agencies (cities, counties, ect…) or employees hoping to receive benefits. 3) The example that SIEPR used was “By way of example, first ­time public employees hired on or after August 29, 2003 in Oregon became part of the Oregon Public Service Retirement System (OPSRP). OPSRP is a hybrid plan with two components: the Pension Program (defined benefits) and the Individual Account Program (401(k)­style).

    Will JD support a Key policy recommendation by SIEPR that suggests: “Offer employees a hybrid sys­tem of both defined benefits and a 401(k)­style system.”?

    Reply

    • November 14, 2015 @ 5:33 pm JD Miller

      I don’t know who ANON is. Does that mean that ANON doesn’t want you to know who he/she is?

      The policy that the ANON suggests … “Offer employees a hybrid sys­tem of both defined benefits and a 401(k)­style system” won’t even stop the hemorrhaging, let alone be a positive step in the direction that must be taken immediately.

      The Stanford Institute for Economic Policy Research (SIEPR) recommendations, “1) prudent contribution policies”, 2) managing assets in a way that limits volatility, and 3) setting sustainable benefit levels”, provide an outline for discussions among the interested parties …the taxpayers, the City Management, the City Council, and all City employees. Notice that did not include the Unions.

      The Unions can only be a part of this conversation when they start acting like they care for their members’ jobs and their members futures, and the jobs and the futures of the taxpayers who are paying for everything the Unions demand. The Unions can no longer expect that whatever they ask for will be paid for by the taxpayers. The taxpayers want to pay a fair share and then keep a fair share for their own futures.

      1)The “Normal Contribution” suggested by CalPERS isn’t large enough to cover the increase in future retirement benefits for current City employees, let alone the unfunded portion for current retirees.

      The value of the contributions to CalPERS by employees, citizens, and investment returns, less the retirement benefits paid out was $407,716,497 in 2013 according to SIEPR.

      The unfunded portion, the amount that the citizens must still pay, that must be there as of 2013 was $648,461,958, or 159.21% of the $407,716,497 that is with CalPERS.

      And the amount of the unfunded portion isn’t going down. Back in 2000, when the then sitting Council agreed to increase the retirement benefits for City employees by 50%, the unfunded liability created by this decision was about $80 million.

      Vallejo has paid into CalPERS the amounts that CalPERS advised was the “Normal Contribution” for 12 more years through 2013. If the “Normal Contribution” amount had been the right amount to pay down the unfunded liability, the unfunded liability would not have increased by more than 810% to $648,46,1958. If the “Normal Contribution” amount had been the right amount, our unfunded liability would be something less than $80 million.

      The “Normal Contribution” recommended by CalPERS isn’t large enough to reduce the unfunded portion. it isn’t large enough to fix the problem.

      2)managing assets in a way that limits volatility is out of our hands right now, but isn’t out of our reach. However, this issue is not an easy one to deal with and it won’t be one that can be handled unless everyone comes together on the other two SIEPR recommendations.

      3)That leads to SIEPR’s third recommendation, “setting sustainable benefit levels”. Without sustainable benefit levels, nothing matters. The amount of the unfunded liability will continue to escalate. This is like a runaway train. Everyone must come together to stop this runaway train. And a hybrid plan won’t do it. It won’t even slow it down.

      Every City employee should be concerned because many of them won’t have a job, let alone the retirement benefits they hope for. That’s because an ever increasing portion of the taxes that the citizens pay must go to pay for retirement payments for current and future retirees …those lucky enough to qualify for those retirement benefits.

      The General Fund has a limit. That limit is the amount of taxes that the citizens are willing to pay to get the services they are getting. It should not take a rocket scientist to figure that the less the citizens get, the less willing they are going to be to continue to pay.

      To give you some perspective. To pay off the $648,461.958 in 20 years, the City would have to pay CalPERS $44,881,051 every year IN ADDITION TO the approximately $9 million the City currently pays to CalPERS. That’s a total of about $54 million every year just to honor the promises that past City Councils made and that the Unions hold to be promises that will be met because someone will find a way to pay them.

      The General Fund revenue is about $73 million. That $73 million pays CalPERS the $9 million and salaries and benefits for City employees and other costs for the services City employees provide to the taxpaying citizens. If the City has to pay an CalPERS an additional $44,881,051 to honor retirement benefit promises, where is the money to pay the salaries and benefits for current employees?

      The next time you see your Union rep, ask him or her how he/she sees the City paying an additional $44,881,051 every year while continuing to pay the salaries and the benefits every City employee wants to keep.

      The only fix for this conundrum is for all parties to come together …the taxpayers, City Management, City Council and every City employee to decide on how the City will provide the services that the taxpayers want while protecting the salaries and benefits that the City employees agree to. Everyone will be hurting when making this agreement. But waiting until later only makes the hurt worse.

      The citizens don’t want their City destroyed. The City employees want to know that can sleep easily because what they do for their City is appreciated but the citizens and that they can depend that they will be able to enjoy the security they want in their continued employment and in their years after they retire.

      it’s in everyone’s best interest to stop this runaway train right now. Waiting only makes the tragedy more devastating.

      Reply

  5. November 13, 2015 @ 7:41 pm anon

    An interesting table provided by SIEPR and pension tracker.org is the ratio of :
    Employer Total Pension Contribution ($) / Total Expenditures.

    Vallejo is 122 on the list at 5.7%. Is 5.7% of total expenditures endangering our grandchildren?

    Reply

  6. November 14, 2015 @ 5:40 am tramky

    There is another view of the unfunded liabilities: it will NEVER be payable or paid, and the issue should simply be bypassed, ignored. The City of Vallejo filed for bankruptcy over $12 million. The Federal bankruptcy process did NOT even touch this enormous unfunded liability; it could not be solved and no one, including a Federal bankruptcy court judge, was NOT going to void that liability. It would mean taking on ALL the public employee unions, and that ain’t happenin’ in Sacramento. So it remains on the books and theoretically payable.

    But of course it can not and will not be paid.

    Reply

    • Vallejo Voter

      November 24, 2015 @ 3:22 pm Vallejo Voter

      The Bankruptcy judge did not “touch” the Vallejo unfunded pension liability or any issue related to retirement BECAUSE the City did not raise the issue in its Bankruptcy Petition in part because Vallejo believed that if the retirement fund was a part of the BK, the retirees and unions would appeal any decision adverse to them by the BK judge which would prolong the BK period. The length of the Vallejo BK was lengthened by the Unions claims that Vallejo was not insolvent and when faced with an unfavorable decision, appealed. The Unions added about $6million to the legal bills and over a year in BK. BUT, the Bankruptcy judge handling the Detroit Bankruptcy ruled that the retirement funds could be “touched” and retirees were just unsecured creditors. Many cities face the unfunded liability issue and many opine that more California cities will file BK because of that problems in the near future.

      The City can’t fix the problem completely. The State legislature and Governor have to address CalPERS.

      Reply

  7. November 14, 2015 @ 2:20 pm anon

    JD states: “Every year, this problem gets worse. Salaries go up.”

    I don’t have much historical data for that topic, however, the current Vallejo HR posted salary schedule for the VPD has printed, in red across the top, 5% DECREASE. The VFD has posted on their salary schedule “0 INCREASE” and a note that states the employee contribution to PERS is 13.4% That is an increase employee contribution of 4.4%. Up from a 9% contribution the employees paid prior to bk.

    What is JD talking about? Maybe the problem does get worse but JD should be more accurate when assigning blame.

    Reply

    • silasbarnabe

      November 14, 2015 @ 5:21 pm silasbarnabe

      What JD is talking about is the CALPERS mandatory contribution rates. Pre BK Vallejo was around 28 percent of salary now Vallejo is about 52 percent of salary. For those too dim to understand that means for every dollar Vallejo pays their employees, 52 cents of every dollar must be paid to Calpers minus the employee contribution which in Vallejo is 9 percent which leaves the taxpayers on the hook for 41 percent for every dollar.

      Reply

  8. November 14, 2015 @ 2:22 pm anon

    It is good for JD to have a flock that follows him around Ravi, John, Colleen

    Reply

  9. November 15, 2015 @ 8:45 am John_K

    ANON, I don’t think it does much good to deny the unfunded liability. Rather than snivel about JD and his fan club, why not give us the historical compensation data you mentioned? As well as the CalPERS promises made with SB 400 back in 1999?

    Reply

    • November 15, 2015 @ 10:12 am anon

      John, Where did you get the idea that I “deny” there is an unfunded liability? On Nov. 13 (above post) I said: “To help put things into perspective Vallejo’s unfunded liability per household is about 11% less/lower than Healdsburg and about 2% more/higher than Benicia.” Is that not admitting an unfunded liability?

      I admitted that: “I don’t have much historical data for that topic, however, the current Vallejo HR posted salary schedule for the VPD has printed, in red across the top, 5% DECREASE. The VFD has posted on their salary schedule “0 INCREASE””. If you go to the COV HR and look at salary schedule you will see there were no raises as opposed to JD statement “Every year, this problem gets worse. Salaries go up. Benefit costs go up.” Does a 5% salary decrease sound like “Salaries go up”?

      ” and a note that states the employee contribution to PERS is 13.4% That is an increase employee contribution of 4.4%. Up from a 9% contribution the employees paid prior to bk.” Does the FD employee pension contribution increase of 4.4% sound like “Benefit costs go up”?

      Rather than snivel about these facts that counter JD’s statement why not give us the historical CalPERS “promises” made with SB 400 back in 1999?

      Promises? In the law of contract, an exchange of promises is usually held to be legally enforceable.

      Fan Club is right No fact checking necessary. A nicely worded article without a single solution. Will JD support a candidate that supports the SEIPR recomendation: “Offer employees a hybrid sys­tem of both defined benefits and a 401(k)­style system.”?

      Reply

    • November 15, 2015 @ 11:26 am Publicus

      You folks arguing here are aware that real estate values in Vallejo are less than half that of all of our San Francisco Bay Area neighbors aren’t you? The reason is that Vallejo real estate values are based on the Return on Investment for HUD section 8 properties since Vallejo has so much of it. If Vallejo was not controlled by the Vallejo Housing Authority and HUD, our distorted real estate values would adjust to the regional norm. Then Vallejo would receive more than twice the real estate taxes it has now. While Jumpers are dreaming about bringing dirty industry back to Vallejo because they think it means progress, they ignore the obvious. America is no longer an industrial power. That went to Asia. Even the big refineries are not long for this world as renewable energy supplants fossil fuels. Walnut Creek, Orinda, San Raphael, Napa don’t chase dirty industry because they have pots of money since their housing values are so much greater. With high housing values comes folks with disposable income to patronize nice restaurants, shop at stores and hire craftsmen to fix up their kitchens. To take advantage of all that money floating around, restaurateurs and fancy stores follow. Regional shopping hubs like Walnut Creek Broadway Center draw regional shoppers to drop their money. After that, businesses move in to hire the folks with good educations (because that is why they make all that money). Economic theory is not rocket science. The City of Vallejo’s strategy of chasing dirty industry and farming the poor with HUD subsidized housing might benefit some scuzzy investors, some Union guys living out of town and the bureaucrats sitting on their hands in City Hall but not the whole community. it is a vestige of the past. And it is a losing proposition because as people with disposable income give up and move away, there goes all the potential commercial activity along with the good jobs. City Hall will get more and more desperate to find the money to pay staff. More fees, more fines, more permit costs, more taxes. When it would be so very easy to just take advantage of our location in the heart of the most dynamic economic region in the world. Looking in the rear view mirror does not move you forward safely. Jumpers have no vision…..

      Reply

      • November 15, 2015 @ 7:20 pm anon

        [ When it would be so very easy to just take advantage of our location in the heart of the most dynamic economic region in the world. Looking in the rear view mirror does not move you forward safely. Jumpers have no vision…..]

        Next thing you know the “Jumpers” will doing everything in their power to make this a ‘refuge city for the homeless’ …..oh wait…somebody already tried that? Well, if at first you don’t succeed………yada yada yada.

        Reply

    • November 19, 2015 @ 4:02 pm John_K

      Anon, you presented some interesting historical data, i.e. the employee contribution to PERS is 13.4% — which is an increase in employee contribution of 4.4%. Up from a 9% contribution the employees paid prior to BK. And you asked the question,

      “Does the FD employee pension contribution increase of 4.4% sound like ‘Benefit costs go up’?” If you supply a little more historical data, you can answer that question.

      Prior to BK, taxpayers contributed 28% to CalPERS, but that has increased to a taxpayer contribution of 50.8% — which is an increase of 22.8% Yup, benefit costs go up. Gone up 4.4% for employees, but leaped up 22.8% for taxpayers.

      Getting back to your suggested “solution” of a hybrid system­ of both defined benefits and a 401(k)­style system – it is 15 years too late for that to make a dent in Vallejo’s huge unfunded liability, but it could make for a better deal in the years to come. For the future, I would think a fair deal would be 50-50. Employees and Employer both pay half of the retirement contribution, regardless the type of system.

      Considering the value of the benefit when it comes time to cash in and retire, I think the current Vallejo retirement benefit is an exceptional value at 13.4%. Don’t you?

      Reply

      • November 19, 2015 @ 6:19 pm Anon

        It is not my “suggested solution”. It is the Stanford Institute for Economic Research Policy suggested solution. CM Keen told JD the COV is closing the gap. So, I would shelve your “fair deal” in order to examine the SIERP solution. I know, silly to think someone would prefer a solution from Stanford over your well thought out idea.

        Reply

        • November 20, 2015 @ 8:03 am John_K

          Stanford offered it as a suggestion for new hires, but you have been incorrectly associating it with a solution to the unfunded liability problem. Looks like you picked a single cherry picked from an orchard.

          Reply

      • November 19, 2015 @ 8:33 pm Anon

        If I got the math right (?), the taxpayer increase was 55% (28 : 50.8) while the employee increase was 65% (9 : 13.4).

        Reply

        • November 20, 2015 @ 8:05 am John_K

          Your “math” is not precise.

          13.4% of $100K
          22.8% of $100K

          Which number is larger?

          Employee Contribution: 13.4% (a one-time increase from 9%)
          Employer Contribution: 50.8%

          Which number keeps going up EVERY year?

          Reply

  10. November 15, 2015 @ 1:20 pm Publicus

    Another tiny economic factoid. Our next door neighbor to the north requires an army of minimum wage workers to work in the wineries, tend the vineyards, clean the hotels, wait tables and cook. Many of those in that army of workers drive to work from Vallejo on Highway 29 each day while a large group of folks in Vallejo sits around waiting for someone to hand them an easy job. Napa College has training programs for all those jobs and a regional bus will take folks there. Jobs like this cement plant may provide a few jobs and cases of respiratory disease later. Again, the solution is easy. If you want a job, got to school and train for it. Learn to be on time, have a good attitude and work hard. The constant whine that there are no jobs here is bogus too.

    Reply

  11. November 15, 2015 @ 7:08 pm anon

    [You folks arguing here are aware that real estate values in Vallejo are less than half that of all of our San Francisco Bay Area neighbors aren’t you?…. When it would be so very easy to just take advantage of our location in the heart of the most dynamic economic region in the world. Looking in the rear view mirror does not move you forward safely.]

    So your solution is to increase individual property taxes on those living here and not create new tax revenues from commercial development? Is that what is best for the citizens of Vallejo?

    Reply

    • November 16, 2015 @ 11:45 am Publicus

      Again, you show your ignorance of real estate principles. Property taxes are only adjusted when a property changes hands. If property values were a bit higher, then absentee investors looking for cheap rental properties would not be able to dominate the market keeping home owners out. Right now, investors with all cash buy up blocks of foreclosed homes cheap sight unseen. Realtors love those buyers. They are so easy plus there are probably some management fees. An individual home buyer that actually wants to live in Vallejo might take their time with inspections. Time is money. An absentee investor really does not care about the condition of the property, just getting it onto the market to anyone. After the investors have sucked the life out of neighborhoods, they move on to other, newer neighborhoods to suck the life out of those neighborhoods. When they are done and the properties have no economic life left, the investors walk off and leave the banks holding onto vacant, substandard and deteriorating homes. Any homeowner that currently lives here will not be affected by rising property values. It will only affect investors and that is a very good thing. If more homes were sold to people who actually plan to live in them and property values rise, then Vallejo would have more middle class people with disposable income to spend, Their education levels would be higher so businesses needing skilled workers would move too. The Jumper strategy of pursuing dirty industry and a real estate market oriented toward absentee investors is backwards.

      Reply

      • November 16, 2015 @ 6:59 pm Anon

        [After the investors have sucked the life out of neighborhoods, they move on to other, newer neighborhoods to suck the life out of those neighborhoods. When they are done and the properties have no economic life left, the investors walk off and leave the banks holding onto vacant, substandard and deteriorating homes.]

        I think you are wrong. across the street from me was the tenant from hell. The landlord was the tenants parents. Drugs, gang members, subletting illegally (15-20 people living there), noise, foul language, ect… Thankfully, foreclosure. Absentee investor buys it (for a song) and puts about $100,000 into renovation. Young couple with a 3 yr old, a dog and mother-in- law move in. Waaaaay better than the last tenant and landlord (land lord lives in Vallejo).

        I think you are full of yourself as well as smoke when it comes to ‘what is’.

        Reply

  12. November 16, 2015 @ 7:36 pm anon

    But we are off topic. Let us get back to why JD thinks the unfunded liability is going up, due to rising salary and benefit costs when the Vallejo HR website states a 5% salary decrease and a also shows a 4.4% employee contribution increase towards their pensions?

    Reply

    • silasbarnabe

      November 17, 2015 @ 12:05 am silasbarnabe

      So Marc, Since you are not posting my comment ts are you and sam kurshan buddies again?

      Reply

  13. November 23, 2015 @ 10:15 am tomdavis@gmail.com

    Sadly,NO government agency across this once great country is solvent. Dems And Repubs alike have bankrupted this country. I think our dependency on credit cards and prescription drugs mirrors our decline into a second world country.People refuse to take responsibility.

    Reply

  14. Vallejo Voter

    November 24, 2015 @ 3:30 pm Vallejo Voter

    Deja vu. Different numbers, but same argument from 2006, 2007 and 2008 leading up to BK.

    Read:
    California Dreaming
    Lessons on How to Resolve America’s Public Pension Crisis
    By Lawrence J. McQuillan
    From Independent Institute July 2015

    Reply

  15. November 30, 2015 @ 12:10 am tramky

    The crux of the problem is quite clear and well known. The public service unions want to foist the majority of pension costs onto taxpayers, and they demand that the pension benefits increase across the board, including medical care, usually to levels unheard of in the private sector. Since taxpayers have no one representing their interests behind the closed doors of collective bargaining, it remains just shooting fish in a barrel.

    Reply


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