Richmond nears bankruptcy as years of fiscal mismanagement and incompetence by its hyper progressive City Council takes its toll.
In June 2015, we last reported the financial disaster that is the city government of Richmond California after Moody’s downgraded its debt to near junk. Almost six months later, the question is not if the city of Richmond will file for bankruptcy protection, but when. Years of expanding government services, lack of fiscal restraint, poor administration, and just plain incompetence on the part of its City Council has led to this sad state of affairs as Richmond nears bankruptcy.
Other local governments in Contra Costa County since the 2009 recession have had to use the old journalistic “A.I.” approach which means “adjust and improvise,” as they fiddle with budgets and services to maintain essential tasks such as police and fire protection while balancing the budget. Many cities also passed local sales tax increases to make things work and avoid Draconian cuts.
An opposite approach has been taken by the City of Richmond in juggling its financial predicament outlined by Dan Bornstein’s recent column in the Contra Costa Times. A.I. in this case means “arrogance” and “ignorance” as Richmond’s hyper progressive leadership leads its citizenry off the fiscal cliff to certain bankruptcy.
Richmond Mayor Tom Butt and the Progressive Alliance that has controlled the political reins for too many years just don’t get it. They continue to ignore the city’s structural deficit of approximately 19 million dollars a year. The city is also oblivious to its pension and medical benefits deficit for city workers owed CalPERS that is more than 450 million dollars and growing each month.
Earlier articles have shown how abuses in overtime for (mostly) the police and fire departments have lead to ridiculous pay packages for Richmond employees (see table nearby). At the same time this has been going on, these individuals’ pension and medical benefits have gone up exponentially.
As an example in 2014, Richmond’s Fire Chief Michael Banks pulled in a gross income of $561,278, which included $287,034 in overtime and $75,993 in benefits. This package was $52,835 more than the compensation received the previous year by Fire Captain Angel Bubo, who at the time had the highest income of any public employee in Contra Costa County.
It is well documented that if every man, women, child, and decline to state resident of Richmond were to send CalPERS a check for $4,100 they would still be in the red for pensions and medical coverage for retirees.
None of this matters to City Manager Bill Lindsay who acts like the Publisher’s Clearing House is going to bail Richmond out of its current economic mess any month now. Richmond’s criticism of Moody’s Investment Services and Standard & Poor’s downgrade of its bond rating to “junk bond” is tantamount to shooting the messenger.
Mayor Butt’s stated “They want us to cut our budget to the bone, they want us to lay off people, to curtail programs, to spend less money, put more money in reserves, pay off our pension obligations and that sort of thing.” It never occurred to him that the bond rating companies do risk management and have no stake in its findings.
In his campaign for mayor campaign Butt stated, “The City of Richmond is more fiscally sound than it has been in decades” Perhaps this perspective helps explain why he thinks Moody’s and Standard & Poor’s do not know what they are talking about.
In concert with Butt’s questionable sense of reality, City Manager Lindsay held back the release of a report in 2014 that showed the bleak financial outlook the city faces today and in the future. It is likely this oversight helped the city to convince voters to pass a .50 percent sales tax increase that was intended for road repair and infrastructure needs.
As might be expected, the first year’s revenue was used to make debt payments rather than fixing pot holes as promised.
Meanwhile it has been business as usual for local government in Richmond to operate in the red and fall behind each month, as it fails to set aside payments for its retiree benefit obligations.
It is only a matter of time until Richmond joins Vallejo, Stockton, and San Bernardino in having to declare bankruptcy. As Richmond nears bankruptcy, Bill Lindsay will likely not care as he is expected to step down as city manager in early 2016 when his lucrative contract ends that pays him more than any other City Manager in Contra Costa County.
Tom Butt and the self-righteous progressives who rule Richmond will likely blame Chevron, Republicans, Wall Street, landlords, Corporate America, and anyone else standing nearby for causing its financial woes. It is doubtful that a lack of concern for the city’s bottom line could somehow be responsible for the mess Richmond is in.
As Richmond nears bankruptcy and the Chapter 9 flag is run up the flag pole, a judge would supervise the city’s operations. Existing labor contracts, retiree’s medical benefits, and debt obligations will need to be restructured. City contracts with vendors could be changed as well.
Cost cutting will need to occur whether the City Council likes it or not. Even then, bankruptcy is not the cure for everything as existing state law prohibits most pension obligations sacrosanct.
We can see how bankruptcy played out in Vallejo. While that city emerged from bankruptcy four years ago, it is still on shaky ground according Moody’s. Despite prudent cost cutting efforts by City Manager Dan Keen, Vallejo must still keep its budget under control. Even today Vallejo’s police department is understaffed by around 20% because of financial considerations.
Unfortunately, it will likely take years for Richmond to right the ship of government as it carries far more debt per person than most other locales in California that have declared chapter 9. There are no overnight fixes for the years of fiscal mismanagement.
It will be interesting to see what will happen with Richmond’s City Council races in 2016. If Richmond becomes a ward of the state will voters continue to elect the same wild-eyed Progressive activists who have literally destroyed the local government?
How will Chevron, operator of the Richmond Refinery react to Richmond bankruptcy. In the past the large oil company has fought ongoing skirmishes with a local government that hates Big Oil but wants every dollar it can get through guilt trips and litigation.
Instead of opposing Progressives in Richmond, Chevron might consider doing the opposite and not contest the outcome of upcoming City Council elections. Knowing that bankruptcy will limit the power of local government to hassle it, Chevron can sit on the sidelines and let Richmond suffer the results years of its own fiscal mismanagement.
Recent history in Richmond should be a wake-up call for local, state, and federal governments as well. Recklessly spending money and wasting valuable resources eventually lead to disaster. Richmond is certainly begging, even if they do not know it, for an adult to step forward and tell it “no” for a change.
First, Richmond Promise was presented to the public, at least initially, as a community benefit for every child in Richmond who needs financial aid.
This fall I had the honor of serving as co-chair of the Richmond Promise Ad-Hoc Committee. The committee was tasked with making recommendations to the Richmond City Council regarding the Richmond Promise scholarships program.
In my opinion, the million dollar question was which schoolchildren should be eligible to receive Richmond Promise Scholarships. Committee members had very strong opinions about this.
Some committee members believed that only children graduating from West Contra Costa Unified School District (WCCUSD) schools should be eligible. Other committee members believed that only children graduating from WCCUSD schools or charter schools should be eligible.
From the very beginning, I fought for every child in Richmond who needs financial aid to be eligible for a Richmond Promise Scholarships irrespective of their school of record. I did this for the following two reasons:
First, Richmond Promise Scholarships were presented to the public, at least initially, as a community benefit for every child in Richmond who needs financial aid. I thought it would be inappropriate for our committee to recommend something different.
Second, I could not in good conscience penalize children and parents for opting out of some WCCUSD schools. For example, Richmond High School and Kennedy High School are ranked the 40th and 73rd worst public schools in America by NeighborhoodScout.
Although I am a strong supporter of traditional public schools, under the circumstances I voted for every child in Richmond who needs financial aid to be eligible for a Richmond Promise Scholarship irrespective of their school of record. I urge the honorable members of the Richmond City Council to do the same.
~ Mister Phillips is an attorney at law and elected member of the Contra Costa County Democratic Central Committee. He lives in Richmond with his wife and children.
Chevron announced this week it has initiated a root cause analysis to determine what caused the flaring incident at the Richmond Refinery on Dec. 18 that alarmed residents.
Chevron announced this week it has initiated a root cause analysis to determine what caused the flaring incident at the Richmond Refinery on Dec. 18 that alarmed residents.
A team of experts assembled by the company is in the early stages of the investigation, according a letter submitted to the Contra Costa Health Services Department hazardous materials director Randall Sawyer. The investigation team will also include representation from the United Steel Workers, the primary union representing workers at the refinery. The company has also pledged to share the results with local officials including Sawyer’s department, the Bay Air Quality Management District, City of Richmond and the public.
The root cause analysis is an in-depth response to community concerns about the incident and also a follow-up to the 72-hour report that Chevron submitted to the county on Friday (See the full report below).
The community was concerned the incident was a fire, but as the 72-hour report indicates, the unplanned flaring incident occurred as part of the refinery’s safety system that enabled the depressurizing and shutdown of its Solvent De-Asphalting (SDA) Unit. A loss of cooling in the unit initiated the safety flaring.
The root cause analysis will probe what happened in the SDA Unit that required that it be taken offline.
Chevron recently announced internally to its Bay Area employees that it is set to close its Concord facility and relocate employees to the San Ramon in 2016. The particulars of the announcement are bulleted below. According to Chevron sources:
Details for Chevron Concord facility closure
Chevron consistently evaluates and optimizes the company’s office space portfolio to meet business needs where it operate. Chevron’s Concord facility has been underutilized for some time and the company has determined that consolidation efficiencies can be gained from selling the facility and relocating employees from Concord to San Ramon.
Approximately 800 positions will be relocated to Chevron’s San Ramon HQ- These moves are not associated with job reductions. They are simply designed to ensure that employee resources are appropriately positioned to support business needs.
There is no movement from Richmond associated with the relocation of employees from Concord to San Ramon
The functions that currently occupy the Concord facility are: Finance, Information Technology Company (ITC), Downstream IT—functions that are already primarily located in San Ramon.
All relocations are currently expected to occur by March, 2016; Chevron will be looking to sell the facility in 2016.
Chevron built the three buildings one at a time between 1968 and 1982.
There’s a total 576,000 sq. feet of office space spread over three buildings. 132,000, 95,300 and 349,000. Also, the current max employee office occupancy of the buildings is 1475.
Chevron does not currently have a broker.
Chevron has approximately 6,500 employees in the greater Bay Area, with nearly 3,200- not including these moves- currently in San Ramon.
Chevron’s corporate headquarters is and will remain located in San Ramon, California.
Cheap gas has always been a great feature of Concord, California. But where inside Concord is the cheapest gasoline?
It was not too long ago, in October of 2012 to be exact, that gasoline was selling for $5.00 a gallon or more. Now, the cheapest gasoline is hovering around $3.00 a gallon.
A survey of 14 Concord gasoline stations on Saturday, November 15, 2014, reveals where a motorist can obtain the cheapest gasoline in Concord.
See the nearby image to find the cheapest gasoline in Concord.Clcik thru the image to find the cheapest gas throughout the Bay Area.
The prices listed do not include the usual 9/10th of a cent per gallon that makes up the final retail price. Also, note some gasoline stations charge extra for using a credit or debit card. Some require memberships like Costco and Safeway.
According to conventional logic, Democrat Tim Sbranti should easily win his bid to take the open 16th District Assembly seat in Sacramento. The well thought of Mayor of Dublin, who has been involved in a leadership capacity with the powerful California Teachers Association (CTA), possesses impeccable credentials to fill the post.
As a near mirror image to close-by popular elected officials including George Miller, Mark DeSaulnier, Susan Bonilla, and Joan Buchanan, Sbranti’s victory would seem to be a forgone conclusion since no Republican has been elected from the Bay Area to the State Legislature in nearly a decade.
However, in 2014 this is clearly not the case.
Facing Sbranti is relatively unknown moderate Republican small business attorney Catharine Baker. Not taking into account huge contributions from Political Action Committees (PAC) to Sbranti’s campaign (primarily from labor unions), he has thus far raised more than twice as much money as the mother of 11 year old twins from Dublin.
The hierarchy in the Democratic Party sees Baker not only opposing the positions of their handpicked candidate Tim Sbranti, but also challenging the policies advocated by the Party as a whole. This is battle that explains the massive influx of money and boots on the ground from outside the District to fight a soccer mom, community activist who threatens Democrats’ Progressive stranglehold on political power in the region.
Even though the 16th Assembly district is an open seat, by all appearances Sbranti has taken on the role of being an incumbent while Baker seems to be running like a challenger. Sbranti constantly mentions his experience and record as Dublin’s Mayor while his Republican opponent attacks the poor performance of the Legislature.
At the same time Baker has advocated a bi-partisan approach be taken with the State’s budgetary and educational problems rather than following “the party line” that she has depicted Sbranti as representing.
Given these factors, what has provided Catherine Baker with the appeal that has translated to a statistical dead heat in the last couple weeks of the campaign? The answer is simple. The Republican candidate’s ideas resonate with many voters in the 16th district who are unhappy with the status quo in Sacramento.
This disconnect has been very much apparent in the series of joint appearances being held by Sbranti and Baker throughout the district. This local version of the Lincoln-Douglas debates has provided voters a clear choice between two candidates who have both done an excellent job articulating contrasting visions to shaping California’s future.
Based upon these debates, the candidates’ competing stands on issues in the campaign can be broken down as follows:
Clear choices for voters in the 16th Assembly District
Sbranti boasts of having an excellent record in Dublin where he says “the permit process was streamlined to help businesses.” He would like to bring this attitude to Sacramento to help the State do the same thing. Sbranti points out the economy has improved in California as new jobs have increased.
He believes good schools and job training (especially of a vocational nature) will lead to higher employment levels. Sbranti supports increasing the minimum wage in California and feels future prospects for job creation in California are bright. He wants to promote cooperation between government and business entities to enhance economic prosperity.
In contrast, Baker laments the loss of good manufacturing jobs in the Golden State and complains most of new employment opportunities consists of low paying service positions. She is concerned that the recent exodus of large corporations from California including Chevron, Toyota and Tesla because of a hostile business environment in the Golden State.
The small business attorney wants to reduce the gap in employee overhead expense, which she estimates to be 17% more than the rest of the Country. Much of this is Workers’ Compensation costs, government regulations, and higher energy costs which she says impedes economic development.
Baker thinks increasing minimum wages reduces the number of entry level employees from getting into the job market thus hurts those affected in the long run with unintended consequences.
BART and Public Employee Strikes
Sbranti does not think banning strikes from BART and other public employee unions does any good, citing what happened with SF Muni workers who used a sick-out to achieve similar goals. He also pointed out such strikes seldom occur and should not be given so much attention.
“Direct negotiations between labor and management works best,” Sbranti says. The Democratic candidate wants to begin talks at BART much sooner in the future prior to when their labor contracts expire.
Baker has a much different view. She does not think public employees such as BART workers should have the right to strike as such actions are too much of a disruption for public safety and businesses. “The cost for these strikes is too high,” Baker says. She also believes there should be more transparency with labor negotiations as the welfare of the people is more important than the right of essential public employees to strike.
Pension Reform and the State budget
Baker feels the Governor have been kicking the can down the road by not dealing in a meaningful way with pension reform. She is concerned about long term unfunded liabilities that are estimated to be more than 340 billion dollars . Baker wants to take a bi-partisan approach to pension reform modeled after San Jose Mayor Chuck Reed’s policies.
Sbranti opposes the San Jose model as he says it has resulted in the city not being able to attract enough qualified police officers to fill their ranks. He prefers negotiations between the State and labor groups rather than the legislature passing laws on its own.
Sorbent sees the need of public employees paying their full share as what was done in Dublin under his watch. Sbranti praised the actions of Governor Brown and the legislature last year with pension reform and is a firm supporter of Proposition 2 in the November election, which he says is a step in the right direction in dealing with this problem.
In contrast Baker opposes Proposition 2, which she says does not adequately address the need to get the State budget under control. She is especially critical of the provision in this measure that restricts the ability of school districts to have an adequate rainy day fund when less money is allocated during difficult economic times.
Baker says this provision was put in the bill to appease teachers unions who want more funding available for salaries each year. She cites this as an example of special interests getting in the way of progress.
High Speed rail and transportation:
While supporting High Speed rail, Sbranti emphasizes the importance of completing plans of extending BART to Livermore as he feels this takes pressure off freeway traffic. He wants to promote more transportation project delivery on a regional basis. He is concerned about funding for large transportation programs going to metropolitan areas in the Bay Area at the expense of the less populated 16th District
Sbranti is in favor of a transportation tax measure on the ballot in Alameda. Like Baker he is for improvements to be made on freeways whose congestion impedes commerce and has led to gridlock during commute times.
Baker is totally against building the high speed rail right now, and wants to temporarily suspend the program. She wants to put off construction until the State’s finances improve. Instead, she advocates using this funding to take care of higher priority transportation needs.
She says it is important to make road improvements in the district, most notably along the 580 corridor. Baker sees this as being essential to the economic health of the region especially with respect to international shipping going through the Port of Oakland.
Baker is also in favor of the expansion of BART as part of meeting future transportation needs.
In the race for Superintendent of Public Instruction, Sbranti supports CTA endorsed Tom Torlakson, while Baker favors educational reformer Marshall Tuck. This says it all for where the two candidates stand when it comes to improving California’s floundering K1-12 schools system. Their views are much different.
Baker advocates making major changes in education as she is unhappy with “California being 47th out of 50 States in classroom performance.” She thinks throwing more money into this process is not the answer to making necessary upgrades. She is especially critical of the CTA for “opposing changes in dealing with tenure for teachers which is granted after only 18 months on the job.”
The former site committee member of her Children’s grammer school complains top teachers are paid the same as poorer performing ones. Along with this Baker does not like it that when school districts have to make lay-offs, seniority determines who stays and goes.
She also thinks, “The State should not micro-manage individual districts” and wants more local control taken in the education process.” Along with this Baker feels better training for teachers is essential for improving their effectiveness in the classroom.
As a professional educator Sbranti believes the passage of Proposition 30 (which, as a former head of the California Teachers’ Union, he helped pass) has helped a lot to improve California’s public schools. Sbranti challenges Baker’s contention that low teacher performance is a major problem area. By properly funding public education both with staff and up to date facilities, he believes California’s public schools will benefit.
Sbranti proudly states how well the schools have done in the local school district where he has worked. He wants to take his expertise in education to Sacramento in hopes of using it to make the whole system better.
Sbrantiis also a strong supporter of the new “Common Core” educational standards which he believes will improve student achievement over time. He wants to change the focus from concentrating on test scores to better preparing kids to be more successful in life.
AB-1522 (3 days per year family leave to be granted to workers)
This bill, which Sbranti supports and Baker opposes, gives a good indication of where their philosophies differ on the role of government in people’s lives.
Taking the Democratic Party stance Sbranti says in favoring this proposal, “We need to have a work-life balance which this legislation addresses.” If there are abuses by some they can be curbed. He goes on to say, “This new family leave policy will lead to a happier more productive work force.”
The Republican candidate feels much differently about AB1522. Baker says, “This is yet another example of Sacramento trying to micromanage business and adding yet more expense to employers.” Rather than passing legislation such as this she would rather provide more flexibility to improve productivity.
In this vein, Baker cited outmoded rules where overtime pay is required after 8 hours on the job. She says this law goes against the desire for some businesses and workers to put in fewer but longer days that are often better suited to their industries.
Both candidates support Proposition 1 and oppose Governor Brown’s proposal to build tunnels in the Delta to divert water supplies to Southern California. Sbranti advocates use of recycled water in California similar to what he said has been accomplished in Dublin. Baker emphasized building more storage facilities to provide more capacity for California’s future needs.
Independence from the influence of political parties:
In the 16th Assembly District, where many “decline to state” voters reside, there has been less emphasis between the candidates on traditional Democrat vs. Republican arguments that normally dominate Assembly races.
A major part of Baker’s campaign is her call for the need for legislators to make their decisions independently of political parties who presently deside the outcome of the majority of votes that are taken. She has expressed a desire, “to step over the isle in a non-partisan manor and vote my conscience.”
As a self proclaimed moderate Republican, Baker gave an example of being pro-choice and an advocate for Gay Rights as differing from the more conservative GOP. She wants to use this type of independence to help break the gridlock in Sacramento between the two parties.
In contrast Sbranti discussed the compromises he has had to make in City government that indicates his ability to get along with others of different views. He feels this experience will be helpful in being a productive member of the State Assembly.
Asked to give an example of how he defied the wishes of the Democratic Party, Sbranti, cited his support of now Congressman Eric Swalwell when he was running against then powerful incumbent Pete Stark. In doing this Sbranti mentioned Swalwell was once an economics student of his at Dublin High and remains a close friend.
Sbranti touts his leadership in the Dublin City Council and as Mayor promoting renewable energy policies. He also expressed his desire to be dedicated to the stewardship of the environment in taking “this experience and accomplishment to Sacramento.”
At the same time Baker, “wants to reform environmental regulations to cut down on expensive lawsuits” in formulating government policies. Baker cited different governmental agencies duplicating similar tasks which she says complicates matters. She wants to make sure job creation is not impeded by unnecessary environmental regulations that serve no purpose.
Urban Planning (One Bay Area Plan)
Many in the 16th Assembly District question the imposition of “housing element” mandates from the State of California. They claim such “smart growth” policies that include forced subsidized housing elements creates more congestion and impacts the quality of neighborhoods, business districts, and schools, while straining infrastructure. Both candidates were critical of decision making being taken away from local control.
In opposing One Bay Area Plan passed last year by ABAG and the MTC, Sbranti showed concern that local decision making has been impacted and development dollars are being diverted to larger cities where most future growth is planned.
Baker advocates that the Legislature withdraw State mandates so that locally elected officials can determine what is best for their communities. She is upset with unelected agencies (ABAG and the MTC) making such decisions while saying, “We have to do more than writing a letter,” to solve these problems.
In offering final statements during their series of debates both candidates did a good job in summarizing their positions and asking audiences for their vote.
Sbranti harkened back to his being a teacher, community leader, and Mayor of Dublin with a proven record of achievement over the years. He feels, “his experience and ability to work with others,” should give voters good reason to elect him to the State Assembly.
Catharine Baker, relishing the underdog role, speaks of pension reform, improving education, job creation, and curbing the influence of special interests in her closing remarks. She emphasized sending in “reinforcements to the status quo is not a solution to the State’s problems.”
The 16th Assembly District race gives voters a clear choice on November 4th.