Ventura Council Explores Large Unfunded Pension Liabilities; Shopping for Contractors to Improve Five Points Intersection — Again

Ventura City Council Meeting

Monday, May 8, 2017

By Kevin Harris

After weeks of staff presentations and Council debate, the Ventura City Council unanimously approved of a new Water Services Agreement that will have San Buenaventura purchasing Casitas water through 2047, during Monday’s busy Council meeting. The lawmakers also rejected recent bids to improve the Five Points Intersection, but agreed to re-advertise for contractors again at a later date, before agreeing to begin paying down the city’s large unfunded pension liabilities for 2017-18.

 

Item 10– Water Services Agreement with the Casitas Municipal Water District

During a previous City Council meeting, on April 10, 2017, city staff attempted to present, and get approval for, the Water Services Agreement with the Casitas Municipal Water District. Some of the details were briefly discussed, but the Council decided, with some input during public comments, that the public was not given enough information or enough time to review the agreement, so the topic was pushed back until this Monday’s meeting.

Joe McDermott briefly reviewed the agreement’s highlights, including a reminder that the new contract includes wiping away a previous balance owed to Casitas for “rental water,” a high balance built up by a bad provision. Shortly thereafter, McDermott recommended, once again, that the Council approve of the agreement.

The “Public Comments” period followed, where one speaker suggested, “Whisky’s for drinking, and water’s for fighting over. So when we come to these meetings, we have to be prepared to address some very serious consequences.” He followed that dramatic opening with three main concerns: That the Ventura Water Commission will not get to review the agreement; the water mark limits are subjective in the contact (as opposed to being a real number of gallons); and that unlike the previous contract, this one does not allow for “blending.” The speaker then ran out of time and could not elaborate further.

Another public speaker, Keiran Moss, agreed that there is no valid reason for not having the contract reviewed by the Water Council, and also said that the agreement does not have to be accepted “as is,” and can still be negotiated.

Keiran Moss

City attorneys then tried to ease the pubic’s concern by explaining some of the reasons for the policy oddities. For example, regarding the subjective, or open ended number related to water use cutoff… Apparently, in the 1995 agreement, the city had to pay for a minimum amount of water each month, whether they used it or not, to give Casitas a consistent cash flow that would help them secure investment bonds. This is why the attorneys often referred to the previous agreement as a “financial agreement,” and not in a complimentary way.

The City Council unanimously approved of the new agreement (minus Council Member James Monohan, who was absent for the night).

 

Item 3– Five Points Intersection Improvement Project

Earlier in the meeting, the Council heard from members of the public – who showed up in number to unanimously support the Five Points Intersection Improvement Project. Local cyclists, business owners, and residents spoke about the dangers and difficulties they’ve been experiencing due to the troubled crossway.

Sherry Eggbert told the Council of her depression during a previous hospital stay for an ill family member, and how being able to use that intersection would have helped considerably. She also suggested that fixing Five Points (at Telegraph Road, Main Street and Thompson Boulevard), will help connect the hospital to the residents and businesses around it.

Sherry Eggbert

Council Member Mike Tracy sees things differently, however. “I don’t think we should over emphasize the danger of that intersection,” he said, after explaining that statistically, it’s not a particularly dangerous crossway. He said that with all of the road and pavement repair projects currently scheduled, and the fact that pavement repairs are seasonal (due to weather), he does not believe fixing Five Points should be a priority.

A grant being used to help pay for the proposed repairs gives the Council up to one-year to decide whether they will go ahead with the project. The Council then voted to reject all current bids for the repairs, and to reconvene at a later date to advertise again to retain bids for the repairs. Most public members left at that point… nearly all who remained departed after the Water Agreement vote.

 

Item 11– Unfunded Pension Liabilities- Budget Workshop

Among the last orders of business during the meeting was a “Budget Workshop,” which consisted of a report on the status of San Buenaventura’s Public Retirement System, and an analysis of the city’s unfunded accrued liabilities. The workshop was presented by Gabel Garcia, Ventura’s Finance and Technology Director.

Though this lengthy exchange was best suited for accountants, progress was ultimately made during the session. Council Member Mike Tracy made a motion to “begin paying the unfunded accrued liability portion of the CPERS (California Public Employees Retirement System) in advance, in fiscal year 2017-18, and continue the start of each year after.”

Tracy continued, “And then also direct staff beginning with our budget workshops for 2018-19, to include a review of the unfunded liability account, and recommendations on ad-hoc payments toward that liability,” he said.

Unfunded liabilities are shortfalls of pension funds compared to what is owed employees for future pension liabilities. However, it is not feasible to have it at 0% unfunded. Note that Ventura’s calculated unfunded pension liabilities are up to $169 million. Labor agreements of the past have greatly increased pension costs, although steps have been taken to contain them for newer employees. Not everyone agreed with the funding plan, which may not be aggressive enough to pay liabilities down anytime in the foreseeable future. David Grau of  the Ventura County Taxpayers Association has been a leading critic. Some prior estimates were too rosy due to overoptimistic assumptions made about investment rates of return and actuarial estimates.

Report DETAILS

The Council voted, and passed unanimously, Tracy’s motion to begin paying down the unfunded accrued liabilities.

Council Member Mike Tracy

Finally, Mayor Erik Nasarenko expressed his gratitude to the city staff for their diligent work on the Budget Report. “This is a real issue that every city has to content with, and now you have given us a recommendation, you’ve given us numbers, to digest and consider, and I want to say thanks.”

 

Meeting AGENDA with REPORTS

The next City Council Meeting will be Monday, May 22, 2017, at 6:00 PM. To watch the City Council meetings online, go to: http://www.cityofventura.net/video. Then scroll down to “Public Meetings” where you can find the videos well as the downloadable meeting agenda.


Kevin Harris

Kevin Harris is a reporter, editor and journalist, previous President of Cal State Northridge’s Society of Professional Journalists having worked for the LA Times and Newhall Signal. He is now also a Realtor and videographer, and lives with his two children in Thousand Oaks. 

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