Category Archives: Truth vs Lies

Gruendl Whines Again

Former Chico Police Chief Mike Maloney recently posted on his blog an unflattering opinion piece about Mayor Gruendl, who lashed out in the comments like a toddler throwing a tantrum. If it weren’t so pathetic, I would have laughed at him… But he’s the Mayor, for crying out loud! He needs to grow up. There’s no whining in politics.

Here’s a link to the blog post:  Chico: We have a problem….with our Mayor….

We’ve told you before all the reasons why Scott’s got to go. Please send him on his way (and Mark Sorensen, too, while you’re at it) by using the power of the ballot box.

Truth Matters, Chico!



City Attorney Update

Back in October, we wrote a post about City Attorney Lori Barker’s announcement that she would be retiring in April after 24 years of service to the City of Chico. In our original post we speculated, among other things, that she might have been ‘invited’ to retire.

Here’s one of the points we made in the original post:

Ms. Barker is the sole remaining member of the City’s former Budget Reduction Strategy Team. She knows the facts and circumstances surrounding every action the City took to address the impacts of the recession and its accompanying loss of sales tax revenues, the loss of Redevelopment Agency funds and Vehicle License Fees via State takes, and the subsequent defeat of Measure J (the cellphone tax) that resulted in refunds of prior years’ revenues. We suspect that her narrative about what actually happened differs significantly from the Council’s recent public statements, and we wonder whether she was quietly attempting to correct it, to her ultimate peril.

We also expressed concerns about contracting out City Attorney services:

We have had our suspicions all along that the City Attorney function would be contracted out, which should be cause for public concern. A City Attorney who is a public servant has a duty to the citizens. An outside law firm hired by the Council might not operate within the same constraints, and we believe a conflict of interest might exist if there was no duty to faithfully put the community’s best interest above the Council’s direction. We don’t like it and hope it does not happen, although the Mayor mentioned it in the final paragraph of today’s article: “Gruendl said the council could decide to fill the city attorney position or consider options for contracting out.” [Alicia actually called that play in her very first chat with the Council on August 6. She says somebody owes her five bucks!]

At its meeting of December 17, 2013, the City Council considered and approved (4-3-0 with Schwab, Stone, and Gruendl opposed), and the City subsequently issued, a Request for Proposals (RFP) for City Attorney services. The staff report is here: 2013-12-17_Staff Report_Request for City Attorney Proposals, the RFP is here: Request for Proposals City Attorney Services, and the video discussion is here at time signature 03:19:00: Council Discussion of City Attorney RFP.   [As an aside, this video contains one of my favorite Gruendl maneuvers. He actually counted the votes to make sure the motion passed before deciding which way he would vote. He tried to explain it away afterward, but I call BS.] The closing date for receipt of proposals was Friday, January 31.

Here’s where this gets interesting:

Former Councilmember Andy Holcombe, who is currently residing in Australia, got wind of the RFP and wrote a letter to both the Chico News & Review and the Chico Enterprise Record (both published on Thursday, January 23). Here is the text of his letter:

I recently learned that Chico City Attorney Lori Barker is retiring.

I am happy for her but, as a former councilor, worried for the city she served so well.

Lori’s great sense of fairness and what is right will be missed.

The city was her only client. We were better councilors, a better council, and a better city thanks to her professionalism.

What worries me is that the position of an in-house city attorney may be contracted out to a private firm. That would be a costly mistake. The cost of an outside firm providing the same level of service and accessibility to it would be more.

The value of day-to-day legal advice to staff may not be quantifiable, but it is huge. An even greater loss if attorney services are contracted out is the intrinsic value of the city attorney position. The city attorney is one of only two city positions hired by the council. The other is the city manager.

The city attorney reports directly to council as an independent city legal voice responsible to council on behalf of Chico, its client. The position is an important balance and buffer to the city manager. The in-house city attorney position has a significant procedural and substantive role in the running of our city. Whatever budget balancing may be desired, we cannot afford to lose the systematic checks and balances of a city well run.

— Andy Holcombe, Victoria, Australia

Then, on Thursday, January 30, the Chico News & Review published an article, an editorial, and a response to Holcombe’s letter submitted by Councilmember Mark Sorensen.

What’s so interesting about that?

The article states that, “[Ms. Barker] did not want to comment publicly on the matter other than to say her decision to retire was not triggered by any inside pressure to do so, as has been suggested by some city government watchdogs.” This statement is followed immediately by the word “But.”

The article then goes on to give an overview of Mr. Holcombe’s letter, points readers to Mark Sorensen’s response, and then provides the following additional quotes received from Sorensen via email:

He went on to say that Barker “was one of the four primary people in the old ‘Budget Team.’ It seemed that the ‘budget team’ carefully plotted the course, developed the talking points, and decided how information would be provided, when, and carefully filtered and shaped the information that was allowed to come to the public and to council.”

Sorensen said such a setup led to excessive city spending that took the city close to insolvency. “[This] further demonstrates the need for far greater levels of city attorney objectivity and independence from internal management and staff,” he said.

That sure suggests internal pressure to me. And it seems eerily similar to what we speculated about in our original post. [It also appears that Sorensen wasn’t wearing his tin foil hat when he wrote that email. “…carefully filtered and shaped the information that was allowed to come to the public and to council?” Really?] What do you think?

At any rate, kudos once again to the Chico News & Review for reporting rather than repeating. It’s good to know we have one local newspaper that isn’t simply parroting whatever is put forth by Nakamura and his lap-dog Council.

We thank you for your continued readership and welcome your comments and questions. Please continue to share our posts with your fellow Chicoans. Nothing we do makes any difference unless we can get the citizens and taxpayers involved.

Remember: Truth Matters, Chico!

Seen or Unseen: 03/11/2008 Finance Committee Meeting

Next up in our Seen or Unseen series, where you, the reader, get to decide whether your local politicians are dishonest or merely incompetent… The March 11, 2008 Finance Committee meeting!

As before, let’s start with the minutes, so we can establish who the players were: 2008-03-11_Finance Committee_Minutes. Lo and behold, in early 2008, the Finance Committee was still being chaired by Scott Gruendl, with Mary Goloff (aka Flynn) and Larry Wahl rounding out the party.

(As a point of information, note that the Finance Committee minutes are prepared as a memorandum to the full council. This is standard procedure, so whatever information is contained in the minutes gets passed along to each and every council member.)

The first item on the minutes: Consideration of Deficit Reduction Strategy Implementation. According to the minutes, the council adopted a balancing strategy on December 18, 2007. So, why all the hoopla at the December 17, 2013 council meeting about the new-and-improved Executive Team “breaking new ground” by addressing deficits?

Want proof? Here are the minutes from that meeting: 2007-12-18_City Council Minutes_re_Finance Committee

I took the liberty of highlighting some fun details, such as Gruendl specifically calling out that “a significant reduction in costs totaling $912,323 has already been realized,” and seconding a motion that, among other things, reduced the Fleet Replacement Reserve by $300,000 for the next four years and reduced the transfer to the Private Development Fund [oh no he di’int!].

That intentional reduction in the Fleet Replacement Reserve should be kept in mind for a later blog post, which will delve into the Administrative Services Director’s shocking revelation to the 2012-13 Grand Jury about the decline of Fund balances over the last several years. The Private Development Fund deficit, always a council sweetheart, was clearly part of these discussions and the General Fund contribution to it was intentionally reduced. Yet now we’re being asked to believe that this is all news to the current council, including Gruendl and Goloff.

(As an aside, these minutes also demonstrate that Larry Wahl had to disqualify himself from downtown issues, along with Ann Schwab. So why all the recent flap about Schwab’s disqualification from the Sit/Lie Ordinance discussions?)

Now, back to the March 11, 2008 Finance Committee meeting. Next up on the minutes is a Financial Status of All Funds. Of particular interest is the following passage: “…as of 6/30/07 a total of 12 funds were in a deficit position.” [audible gasp] But I heard at a recent meeting that no one ever told them there were negative Fund balances!

While the Mayor has routinely snarked over the last few months that he didn’t like the flashy power point presentations provided by former staff, I’m finding them to be PRICELESS. Here are a few of my favorite slides; Gruendl and Goloff obviously nodded off and missed them.

The 12 funds in a deficit position as of June 30, 2007, and the two types of deficits: 2008-03-11_Finance Committee_Deficit Funds

The Private Development Fund’s existing and structural deficits, explained and with solutions offered. Wow! Does one of those bullet points read, “To resolve existing deficit, the City needs to transfer funds from the General Fund”? I thought no one ever told them the negative Fund balance was a General Fund obligation! 2008-03-11_Finance Committee_F862

The impacts of deficits, including the statement that “large deficits negatively impact the City’s cash flow.” But wait! No one ever warned them of cash flow issues! 2008-03-11_Finance Committee_Deficit Impacts

Want to flip through the entire presentation? Happy to oblige: 2008-03-11_Finance Committee_Status of all Funds

So, do we have convenient memory lapses, or intentional false accusations against prior staff? Ultimately, the council is responsible for all city actions, and plausible deniability doesn’t work when there are public records to dispute that plea.

Hey, Council — Here’s a suggestion: Learn the true history, and start paying attention to the lies you are being fed. Question the sudden need for drama, and what the underlying agenda — that someone else is setting — is really all about.

Hey, Readers — We appreciate each and every one of you. Doubly so when you share our blogs with a friend.

Remember: Truth Matters, Chico!


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Chapman, Mulberry and the LAFCo Stick

As mentioned in our Council Meeting post this morning, one of the items the Council will be addressing this evening relates to the Local Agency Formation Commission attempting to compel the City to annex certain unincorporated islands, including among others the Chapman and Mulberry neighborhoods. Conspicuously absent from the staff report is any mention of the historical context of this issue prior to August 2013. Once again, the ‘rightsizing out’ of institutional knowledge has led to incomplete information for the Council.

Since the history is critical to understanding what is at the core of this disagreement, we at Truth Matters, Chico! compiled some relevant documents (with the help of some ‘friends’) and forwarded them to the Council and staff this afternoon. Depending on the outcome of tonight’s discussion, we may delve more deeply into this issue to further enlighten the new Executive Team.

Following is the text of my email:

Upon reading the Staff Report for tonight’s LAFCo item, containing the most recent letter to the City of Chico, I thought it might be helpful for your discussion if I provided some additional historical information for context. Although some of you may already be aware of this, those of you who are new to the Council may not. Since Mr. Nakamura’s letter contained in the agenda report thanks Mr. Leverenz for the historical timeline, and contains no information prior to August 2013, I can only deduce that there is no one remaining on your staff with the institutional knowledge to provide the City’s perspective.

One important point that should not be ignored is what sparked LAFCo’s interest in this new round of annexations: the Regional Water Quality Control Board’s Nitrate Abatement Order affecting properties currently on individual septic systems. This Order directs each parcel owner, NOT the City of Chico, to connect the property to a sewer service and abandon septic tanks. While the City must provide the infrastructure necessary for the property to be in compliance, the onus for complying with the Order lies with the property owner.

LAFCo has consistently chosen to disregard the health and safety issues surrounding the Nitrate Abatement Order, choosing instead to focus on its goals, and the potential revenues involved in processing the annexations, without regard to financial and other impacts to property owners. LAFCo is using sewer connections as a “stick” to force Butte County residents to annex into the City of Chico.

I am attaching the Nitrate Abatement Order, as well as a few other documents that will provide additional history regarding steps your former staff took to resolve this issue with LAFCo. I hope it will provide additional insight for your discussion tonight.

Best Regards, Quené

Here are the documents that were attached to the email:

Nitrate Abatement Order

LAFCO Hearing summary 01-07-2011

Annexation Plan Council Report 08-03-2012

LAFCo Follow-up Letter 08-06-2012

This is an important subject for anyone living in the unincorporated islands of Chapman, Mulberry, Forest Avenue, East Lassen Avenue, El Monte Avenue, and Chico Canyon Road. While there are many benefits to being annexed to the City, there are also detriments and costs that should be considered. Please share this post with anyone you know who lives in the impacted areas, so they will be aware of what is at stake.

Thank you for your readership. As always, your questions and comments are welcome.

Remember: Truth Matters, Chico!

Leaking the Top Secret Operation

Well, here we go again. At the December 17 meeting, I addressed the Council about its running commentary on the 2nd Floor Staffing/Finance Workout Plan, hoping to put that baby to bed once and for all.

It was going pretty well; in fact, the Mayor was very polite and asked me some clarifying questions — and then allowed me to answer. The Administrative Services Director followed up with positive comments, acknowledging that previous staff had taken action to address the plummeting Fund balances. I was pretty satisfied with that much progress.

But then Mark Sorensen jumped right back into full assault mode — seemingly driven by some sort of clandestine, private-frequency radio transmission (perhaps from a spy drone?) reaffirming his theory that former staff had conspired to harm the Council and destroy the City by secretly driving Fund balances into the red.

You think I’m kidding? I’ll link you to the one-minute video clip so you can see for yourself, but I just want to point out that he actually used the words “top secret operation.” Yes, he really did say those words. Out loud. He did.

Here’s the clip: Sorensen “Top Secret Operation”

After Sorensen made his ill-advised (and ill-informed) remark, I emailed him to let him know he was off base, that it would have been more beneficial if he had simply asked me about it during the discussion, and that I would be happy to speak with him publicly or privately to fill him in on the details of the mini-allocation.

He responded by telling me it was something Quené said during her comments that had triggered the thought, as if that excused it, and so I politely replied and repeated my offer to talk with him openly and honestly about anything he wanted to know.

I received no further response, which has unfortunately earned him a dose of embarrassing public enlightenment in lieu of a pleasant, informative conversation. I swear, I just can’t figure the guy out.

Back in September, we three gals had some pretty lively conversations with the Mayor about believing media reports, after which Alicia finally pinned him down and asked him, if we aren’t to believe the media, can we at least rely on what is said during Council meetings? After a little soft shoe routine and some political double speak, the Mayor finally said, “Everybody holds one another accountable in this chamber.”

Mr. Sorensen, consider yourself on notice that you are going to be held accountable. You don’t get to just say whatever you want from the dais and expect it to be accepted as truth simply because you’re the one who said it. There is a truth to be told, but you have been so preoccupied with your personal mission to ruin the professional reputations of honorable public servants that you refuse to listen and therefore can’t possibly understand it, much less explain it to anyone else. You need to stop. Really.

Now, here is some factual information about the Private Development Allocation (known internally as the “mini-allocation”):

As we explored in a recent post, allocations distribute costs, as opposed to transfers, which distribute dollars. The mini-allocation distributes operating costs from the Private Development Fund (Fund 862) to a handful of other Funds that benefit from work efforts by Planning staff, and to a lesser extent, Building staff. Keep that in mind as you read along.

This particular allocation was first developed in fiscal year 2010-11, as part of the 2nd floor finance plan. It was a tool we used to clean up accounting for the Planning Services Department’s operations, so we could quantify the true cost of processing development applications. For the moment, please just trust me that it resulted in a net reduction in costs to the impacted Funds. There was no additional money being spent.

As you can see in the following document, staff cleverly hid this “top secret operation” from the Council on page 2 of the City Manager’s fiscal year 2010-11 budget message — that would be the second page of the proposed budget — where they would be sure to overlook it.

2010-07-06_Budget Message

Ooooooh, and in the next document you will see that former Finance Director Hennessy went to great lengths to bury the mini-allocation in the budget page dedicated to Fund 862 by assigning it a specific department called Private Development Cost Allocation, so no one would recognize it.

That was such a sneaky move that Administrative Services Director Constantin and his new-and-improved budget team mustn’t have even noticed it when they put it in the current fiscal year’s budget! According to Sorensen, it took the City’s super-duper fraud seeking auditors to finally discover it and bring it to everyone’s attention.

(Also notice how Ms. Hennessy mistakenly revealed the uber-classified negative Fund balance at the bottom of the page… Bad form!)

Fund 862_Mini-Allocation

And the final straw: The next document is an example of how the mini-allocation was hidden in the Funds that received the allocation. I’m using the Sewer Fund (Fund 850) budget page, since Sorensen specifically called that out in his “top secret operation,” but if you go to the City’s published budget, you can find the same line item on every single impacted Fund. This is certainly advanced trickery and foul play!

Fund 850_Mini-Allocation

In the documents above, you can see that the allocation appears in the Operating Expenditures section for both Funds. It is a negative number for Fund 862, since it is technically an offset to expenses, and a positive number for Fund 850, since it is a true expense. The numbers aren’t the same for both Funds, because Fund 862 shows the aggregate allocation, whereas Fund 850 only shows its portion of the allocation.

Now that we’ve established there was absolutely nothing “top secret” about the mini-allocation, let’s look into why we created it.

Since at least as far back as 1991, when the Private Development Fund was created, some Planning salaries were budgeted to other Funds, including the Sewer Fund and the Subdivision Fund. Unfortunately, I no longer have access to my paper files (I had to dig through dusty old budget binders to figure out what had originally happened… ack!), so I don’t have the complete list of funding sources to share with you. Suffice it to say that Fund 862 never fully funded Planning’s operations.

Instead of development staff charging their time to what they were actually doing, they charged time based on where they were funded in the budget. To make the funding ratio work out properly, some staff were charging up to 60% of their time directly to other Funds. (Click here if you’d like to see an example of pre-Private Development Allocation funding for Planning staff.) This was specific direction that came from the City Manager’s office, and it was a source of considerable concern for both Finance and development staff.

Don’t get me wrong, I am not being critical of the funding sources; there is a legitimate nexus between development staff work and benefit to other funds. The problem was a lack of accountability and transparency, which translated into the inability to properly quantify costs and develop appropriate User Fees. How can the cost of processing a Use Permit be accurately tracked when the staff person working on it is charging time to Sewer or Transportation or Redevelopment, just to make the budget numbers work?

There is much more to this, and I promise you I will break it all down when I write the dedicated Private Development Fund post, but for now it is enough to say that we unwound that particular problem by allocating costs, eliminating direct staff charges to the benefiting Funds, and then fully accounting for private development costs in Fund 862.

Here’s an oversimplified explanation of how it worked: We added up all of the private development staff charges to Funds other than Fund 862. We applied a 10% discount factor, since we were attempting to cut budgets in all impacted Funds. Then, via the mini-allocation, the costs were distributed as expenses to the benefiting Funds. Here is the official calculation for the original mini-allocation (which, incidentally, is included in the City’s files for anyone to examine — nothing top secret here):

F862 Mini-Allocation for Final Budget Resolution

Once the allocation was in place, we tied it to a percentage of staff salaries for development work, rather than allowing it to continue as a fixed cost to the benefiting Funds. The effect of this can be seen in the dollar decrease from fiscal year 2010-11 to fiscal year 2011-12. In other words, the more we reduced Fund 862 salaries, the more the allocation was reduced, for a net savings to the benefiting Funds. (There was also a reduction in the allocation due to the loss of RDA funds, but that is immaterial to this discussion.)

The other effect of allocating the costs and direct charging only Fund 862 was the ability to assign cost centers to specific Planning staff work efforts and other operating expenses. This was critical in our effort to establish solid data for a new User Fee Study. Incorrect underlying data will always result in incorrect fees, no matter how skillful the technical analysis and mathematical calculations used in the study might be.

We cleaned up Fund 862 to enable us to use a formula based on actual costs for processing the various types of applications, divided by the actual volume of applications. Unfortunately, however, once ACM Rucker and BDSD McKinley mysteriously vanished, the authority behind the effort vanished with them. But that’s another story in and of itself. What a waste.

And so, the mini-allocation was a good part of the finance plan. I doubt it is still functioning properly at this point, since there is no one left who understands the mechanism of tying it to salaries or the process we put in place for monitoring the Fund balance on a bi-weekly basis. Fund 862 finished fiscal year 2012-13 in the black (annual revenues exceeded annual expenditures); it was the first time that happened since 2001. It will be interesting to see how the Fund finishes for fiscal year 2013-14.

So much for Sorensen’s “top secret operation” conspiracy theory. Hopefully, someone who loves him will splurge on a tin foil hat for him, to keep those wacky cloak-and-dagger ideas in check. Hey, it could help…

We thank you for your readership and ask that you continue to share our posts with your family, friends, and neighbors. As always, your questions and comments are welcome. Consider making a New Year’s resolution to be more involved in what’s happening with your local government; after all, these folks work for you.

Remember: Truth Matters, Chico!


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Seen or Unseen: 10/22/2007 Finance Committee Meeting

Most people have probably heard that quote about the conquerors writing the history books, and I think we have a massive case of that in Chico’s current council and administration.  At every council meeting, I hear another hostile pronouncement about how bad the City’s finances are, and how no one ever told council, or the bad situation was being hidden, or how no information was provided, blah, blah, blah.

That rhetoric is getting a lot of buzz, especially with the help of the Chico Enterprise Record.  But here’s the deal, folks:  My memory is long, and my tolerance for this grandstanding has grown short.  Luckily for me, there’s a solid paper trail to dispute the history that Chico’s conquerors are attempting to write.  Unluckily for some of those council members, public records demonstrate that they are either lying now about not being told, or were too incompetent to be paying attention at the time they were told.  Either way, I hope Chico’s citizens will keep that in mind when election time rolls around later this year.

Let’s start with the October 22, 2007 Finance Committee meeting.  You’ll want to take a peek at the minutes — trust me, this is pure gold in our search for truth about who told the council what and when: Finance Committee Minutes.

Who was on the committee at that time?  Mayor Gruendl was the chair, along with Mary Goloff (then Flynn) and Larry Wahl (now a Butte County Supervisor). The first item in the minutes clearly explains that this was the first of three evening meetings to discuss topics relating to the General and Park Funds’ structural (annual) deficit.

Following are excerpts from the Finance Director’s presentation to these city leaders:

The General Fund has had a structural deficit (annual expenses are greater than revenues) since 2001: Structural Deficit;

Revenues have been inadequate to meet demands for service, with a steep downward trend, since 2001: Revenue Trend; and

Deferred maintenance (specifically on roads) has been an ongoing concern, since the City has been transferring gas tax funds to the General Fund since 1990: Roads.

But no one ever told them, until our hero Nakamura came along! 

Want to see the entire presentation for yourself? Understanding City Finances

Much, much more to come…

Thank you for your continued readership, and please help us spread the truth by sharing this blog with your family, friends, neighbors, and baristas.

Remember: Truth Matters, Chico!



Public Works Director Strikes Out Again

It is unfortunate that we were unable to attend the October 15 City Council meeting, as I would have preferred to address this topic before Council approved the use of sewer funds to repair roadways in one of the local nitrate areas. While recent Council actions lead me to believe nothing I could possibly have said would have changed their minds, it still would have been preferable to publicly remind them of appropriate and inappropriate uses of funding sources, considering how budget-challenged their new Public Works Director, Ruben Martinez, has proven himself to be.

In an earlier post, I discussed how in my opinion, Martinez should not be relied upon for either financial analysis or budget decisions. Now, I have another example of his statements that backs up my opinion of his finance-related skills. (Or lack thereof!)

Martinez’s Agenda Report  for the October 15 Council meeting clearly states that he recommends Council approval of a budgetary supplemental appropriation of $260,000 from the City’s Sewer Fund (Fund 850) to pay for roadway rehabilitation. His assumption appears to be that since the road work is needed in a recently sewered area, he can use leftover project funds for the necessary work.

Now we have mentioned before that Fund 850 is one of the City’s Enterprise Funds. A good way to look at Enterprise Funds is like a utility company; you pay for the service you receive. In the case of Fund 850, you pay to have the City handle your wastewater, rather than maintaining your own septic tank system. The difference between Fund 850 and another utility company is that the City’s Enterprise Fund cannot generate profit. It can only charge its customers the cost of doing business. Fund 850 is a self supporting entity; it provides a service to the public for a fee.

So what expenses should Fund 850 cover? Appropriate expenses can be broken down into three major categories: Operating Expenses such as maintenance, materials and supplies, and staffing; Capital Project Expenses not associated with new development (in which case, the developer covers the cost of building the new sewer system); and a Reserve account, which is created to ensure there will be funding available to replace infrastructure and/or equipment when necessary.

Did I make any mention of roadway rehabilitation above? Nope. Ahhh, but I hear some of you readers asking, “But what about Capital Project Expenses, Quené?” Great question – and very smart of you to catch that! If you will trust me to just make a statement without backup documentation, I would answer by stating that with Capital Projects related to sewer, the contractor is only required to replace the pavement above the sewer trench; not the entire width of the roadway. In the construction world, this is referred to as pavement replacement, and it is clearly a cost of the sewer installation; therefore, it would be an appropriate charge to Fund 850. However, replacing and/or rehabilitating the entire width of the street is not an expense of the sewer portion of a Capital Project and as such should not be paid for by Fund 850.

If you would like to see backup documentation of what pavement replacement looks like and you have an eye for construction plan details, let me refer you to Title 18R of the City of Chico’s Municipal Code. Chapter 18R.12 includes design standards, referred to as Improvement Standards or Standard Plans, and No. S-17 shows the typical details of a pavement replacement project. In comparison, the next page No. S-18A, shows what an entire street width would look like.

The final paragraph of Martinez’s Agenda Report is an outright lie. It states in part “It has been past practice to use sewer funds for roadway repairs related to sewer projects such as current projects like River Road and the West Trunk Line as it has been to previous sewerage projects…” Just when I think he cannot make a more inaccurate statement, he writes something so outrageous that I go slack-jawed.

Neither of his example projects used Fund 850 for roadway rehabilitation. How do I know this to be a fact? Well, it’s very simple, almost too simple… The River Road project is still being designed (you cannot very well spend money on work that has not even gone out to bid), and while the West Trunk Line project is currently being constructed, it was funded with Fund 320 (Development Impact Fee) dollars. This is ridiculous! A Development Impact Fee is significantly different than an Enterprise Fund.

Funding for the West Trunk Line project can be verified from two different sources on the City of Chico website – the Bid Tabulation sheet for the project and the 2013-14 Proposed Budget (not sure why they have not posted a Final Budget yet…it’s only four +/- months late).

Oh, and here is another little tidbit about the River Road project, if and when it should go out for construction. River Road belongs to the County. The City has an easement for work on the sewer trunk lines that exist in the right-of-way, but the road itself? Butte County. Period.

As anyone who lives in the pockets of County that still exist within Chico city limits knows, the City does not pay for fixing the County’s problems. In the case of the River Road project, I am sure some agreement will be made, and the County will likely trade a construction easement for roadway rehabilitation, but should Fund 850 pay for this? Absolutely not.

Just in case I still have not convinced you that Fund 850 should not be paying for roadway rehabilitation, please take a look at the Fund Summary report for the Sewer Fund (Fund 850) which can be found in the City’s Budget and is also most conveniently attached to Martinez’s Agenda Report, Attachment D, linked above. The Fund Summary specifies (on the last page) that the uses of the fund are restricted, and goes on to state that the authorized capital uses are limited to major programs, buildings and facilities, and major equipment, and finally that the only other authorized uses of the fund are for operating and debt service. Conspicuously missing is any reference to paying for roadway rehabilitation.

There is no doubt in my mind that the roadway rehabilitation work is needed in many areas of Chico; however, just because a certain Fund has available dollars does not give the City’s Executive Team the right to use them in whatever manner they desire. This is a clear misuse of Fund 850, and any misuse of funding leads to mistrust in our government officials.

Those of us living in homes on the City’s wastewater system pay our fees for maintaining and operating sewer infrastructure, not for completely unrelated infrastructure that does not benefit wastewater customers.

Martinez has struck out again!

If I have not explained any of these points thoroughly, or if you would like more details about the more technical side of Capital Project budgeting, please feel free to contact me by either commenting below or send us an email at

Thank you for your continued readership!

Conflating: The Big Con

For those of you who have been following City Council meetings and/or reading the media coverage of them, the recent discussions surrounding Fund 400, the Cost Allocation Plan (CAP), and the User Fee Study must leave you terribly confused. We would be surprised if you weren’t.

The City’s Executive Team and the Council are conflating three issues and presenting them as one big slap at prior staff. For instance, in a recent Chico News & Review article that we mentioned in a previous post, Councilmember Sorensen made the following comments:

“Councilman Mark Sorensen noted that the city had paid the consultant some $37,000 for work on the [User Fee Study] report with the goal of better aligning revenues with actual operating expenses. He noted that it came to light only this past February.”

This is false. As I informed the Council during its October 1, 2013 budget discussion, via a reading of the Finance Committee minutes, the User Fee Study was brought forward in February 2012. Since the Mayor and Council waited to respond until after I had left the podium, as usual, I will have to use another 3-minute free speech session to remind them of one tiny little fact they seem to have forgotten:

Once the Study was presented to Finance Committee, the Committee had absolute authority to direct staff’s actions. The Committee could have directed us to use the Study to build a bonfire in the municipal parking lot; or hold the Study for revision once the economy settled and more accurate staffing levels and project volumes could be developed; or take the Study forward to the full Council in its existing (arguably indefensible) condition; and that is what would have happened. Period.

In the nauseating, saccharine tone Councilmember Goloff typically reserves for dealing with us, she asked Nakamura to prepare a timeline of the project. Since there is not a soul left on City staff with first-hand knowledge of what happened, we eagerly look forward to seeing it.

“Sorensen had done some investigation on his own, and explained that he believes the study was deliberately not brought to the council because it indicated that the general fund was going to take a $2.5 million hit…”

The $2.5 million hit to the General Fund was a result of the CAP, not the User Fee Study. The CAP is a completely separate document, prepared for the Finance Department. Its only relationship to the User Fee Study is the dollar amount of citywide overhead costs it identifies as attributable to departments/divisions within the scope of the Study.

“…since the city could not possibly charge enough for the overhead getting dumped on Fund 400, among other funds.”

Fund 400 has absolutely no connection to the User Fee Study. Again, the overhead being ‘dumped’ is related to the results of the CAP.

“It would have severely slowed our accumulation of debt in those funds, and I think that’s why it was withheld—so the city could continue to rack up the debt,” he said. 

The final comment is so absurd as to not even merit a response. Does anyone really believe staff’s agenda was to intentionally run the City into further debt?

As we move forward, we will be writing more detailed posts explaining the three separate but equally important pieces of the City’s financial puzzle, but for now, we simply want to sort them out for you.

Cost Allocation Plan (CAP): This plan looks at citywide costs for indirect administrative support services (overhead) from ‘provider’ departments (City Council, City Manager, City Clerk, City Attorney, Finance, Human Resources & Risk Management), and then distributes those costs, via a very complex matrix with multiple allocation bases, to each ‘recipient’ department. The ‘recipient’ department costs are tallied by fund, and that amount is allocated to the General Fund to pay for each fund’s share of the indirect overhead costs. If the City opts to use a CAP to distribute indirect costs, it must be completed and adopted by Council before the User Fee Study can be updated.

User Fee Study: This study identifies and quantifies the true cost of services provided by the City’s Planning, Building, and Development Engineering divisions, including citywide indirect overhead as determined by the CAP. Some of those costs are recoverable by fees, which are calculated within the Study, while other costs are unrecoverable and must be funded by another source, typically the General Fund.

Fund 400: This fund is used to collect and hold most Capital Projects costs, including direct charges to specific projects, direct administrative support, and citywide indirect overhead (via the CAP). These costs are subsequently allocated out to other City funds, based on each fund’s relative participation in the overall activity in Fund 400.

For everyone’s sake, we hope someone on City staff will be able to separate and provide the Council with a better explanation of these three very different components of municipal finance. We did not set out to embarrass the Council, either collectively or as individuals, but the ongoing stream of misinformation being provided during public meetings and in the media cannot continue to go unanswered.

Remember: Truth Matters, Chico!


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More Monkey Business with Admin Layoffs

Well, we called this move. In our October 1 tag-team presentation to Council during Business from the Floor, Alicia, Quené, and I closed with these words:

While it is clear that none of this will undo the wrongs that have been done, perhaps bringing it into the light will prevent similar bad acts from occurring during the impending layoffs. And we certainly hope we do not see elimination of the additional Admin Assistant positions created to protect the new HR Analyst. That would be the Executive Team’s ultimate backhand to the rules set forth in the Municipal Code. As Councilmember Stone would say, “Disgusting.”

Sure enough, the following day, the new layoff seniority list was published. And what did it include? Elimination of one of the two brand new Admin Assistant positions created in July to protect the least senior member of the citywide admin staff. The net result is that yet another senior admin staff member will take a double hit, from Admin Analyst I to Admin Assistant to Police Records Technician II, complete with a second pay cut. The protected employee is now two full classifications higher than her.

Here is an old chart showing the various positions within the Administrative Career ladder (we do not have the new one, if it even exists) so you can follow along: Admin Career Ladder

We suppose the next logical move will be to reclassify the remaining ‘extra’ Admin Assistant position to Office Assistant, to get back to a zero sum game. But stand by, there’s more…

Also notable among the current admin layoffs is the elimination of the two remaining Office Assistant III positions. The more senior of these two employees will be transferred from Engineering and demoted to an existing .74 FTE Office Assistant II position in Fire; this will reduce both her pay and her hours.

(As an aside, the current occupant of the position in Fire was just bumped in July from Admin Assistant in Planning, down two full classifications to Office Assistant II, with a double pay cut and a bonus 26% reduction in hours. She will be bumped all the way out the door during this round. Nice…)

The less senior Office Assistant III currently serves as receptionist and clerical support for the City Manager and City Clerk. In fact, after the July layoffs, she is the only general clerical employee on the entire 3rd floor. The new layoff seniority list demotes her to Office Assistant II and reduces her from full-time to half-time, resulting in a reduction of both pay and hours, but leaving her in her current job.

Now, we know and like all of these women, so our opinions about the position shifts are not intended to be personal. We are, however, going to go out on a limb and make a call as to what will come next with that 3rd floor position.

This gets a bit convoluted, so please bear with us. If you are trying to wrap your head around the not-really-very-fun games that are being played internally, this is important stuff.

Here’s the first question: Do any of you believe that a single half-time, low-level clerical employee can provide sufficient support for both the City Manager and City Clerk offices? Something is beginning to smell…

Because we are former employees, we know where to look for information that might appear meaningless to anyone on the outside. We requested and received the current year’s Personnel Allocation Worksheets (PAWs), which are documents used to prepare the budget. These documents do not reflect current staffing; rather, they anticipate staffing as it will exist at some point during the fiscal year.

There is no Office Assistant position whatsoever in either the City Manager or City Clerk PAWs. Instead, there is a brand new job classification of “Executive CSA” that we think probably means Customer Service Assistant or something of that nature. The Executive CSA is budgeted 50% each to City Manager/City Clerk, as is the current position; however, the budgeted salary is 5% higher than the top pay for the Office Assistant III classification. The smell is getting worse…

So you might be asking yourself at this point, why demote the only 3rd floor general clerical employee and cut her hours by half? The answer lies in the personnel reduction rules set forth in Chico Municipal Code Section 2R.72.

Had the 3rd floor Office Assistant III position been left intact, the more senior of the two employees would have had bumping rights to it [a position she previously held for many years], and the less senior employee would have been bumped out to Fire. Of course, that would be unacceptable in this new era of personalities before positions, so the 3rd floor position had to be adjusted, at least temporarily, to be less desirable than the position in Fire. That would be the only way to achieve the desired effect of keeping the less senior employee on the 3rd floor. Have you caught a whiff of it yet?

After the July layoffs were completed, we watched in dumbstruck awe as the least senior admin employee in the entire City, who had been protected from layoff by creation of additional Admin Assistant positions, got promoted without notice or an opportunity for others to compete. As we mentioned in our earlier post, this move put her in a higher classification than other qualified employees with far more seniority.

Our guess is we will see that happen again, once this round of layoffs is complete. We bet five bucks the 3rd floor position will be restored to full-time and reclassified to the new “Executive CSA” position, from which the incumbent cannot be bumped. That would really stink.

More of the new efforts at transparency and morale building….


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The Price of Integrity

Today’s Chico Enterprise-Record ran a letter to the editor from Stephanie Taber, in which she attempts to assault our credibility by revealing our salary/benefit packages (public information already provided by the City to the ER annually); pointing to some information about tuition reimbursement (to which she must have been directed by City officials, since Alicia graduated 10 years ago); incorrectly identifying flex schedules as some sort of additional benefit; accusing us of remaining silent while we were “on the gravy train”; and directly attacking our personal integrity.

We generally ignore Ms. Taber, since she has always been highly selective in calling out who was right or wrong, depending on her personal or political agenda. For example, I haven’t read in any of her outbursts that she is currently employed by Butte County Supervisor Larry Wahl, who voted in favor of the now infamous union agreements that linked annual cost of living salary changes to revenue increases but not decreases. An inconvenient truth, perhaps.

Anyway, we thought today’s letter deserved a short and sweet response. Here is what I submitted to the ER editor earlier today:

Former-watchdog-turned-lapdog Stephanie Taber’s recent letter, “Where was this fiscal concern earlier?” contains a number of flawed conclusions drawn from a slanted perspective that my colleagues and I surmise is being fed to her by City officials. We generally avoid responding to her, since in the larger picture her opinions are inconsequential; however, this round of mud-slinging deserves a factual response.

Fact: Tuition reimbursement has been available for at least 15 years [actually, since 1976: AP&P_15-5] to all City employees who choose to further their education in a field of study deemed beneficial to the City. It has never been a benefit available only to a select few.

Fact: Flex schedules require employees either to work a full 40-hour week or use accrued leave time for pursuing their education. Ms. Taber’s assertion that the flex schedule is an additional benefit is absurd.

Fact: Ms. Taber’s conclusion that we three did nothing and said nothing about the City’s fiscal situation is false. In addition to having spoken out to the prior City Manager, we revealed the entire history to Nakamura over the first few months after he was hired. I personally received an email from him in October [2012] thanking me for my full explanation of the issues surrounding the Private Development Fund and agreeing with me that it should be daylighted.

Ms. Taber should examine the price of her own integrity before she questions anyone else’s. Shame on her.

Remember: Truth Matters, Chico!

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