20170712-bc-citystate-3 (copy)

In this file photo, Bakersfield City Manager Alan Tandy speaks about the city's sales tax at the 2017 State of the City Forum.

The city of Bakersfield plans to use $12 million in revenue from its recent sales tax increase to help pay for its ailing pension system, a move long expected but objected to by some local residents.

The city will use the cash influx to change the way it pays for its pension system, CalPERS. It claims the money will only be used for cash-flow purposes, and still be in the bank at the end of each year through its new system.

Instead of making the CalPERS payments on a monthly basis, the city will instead pay for the entire system once a year.

The move is expected to save $8.7 million over the next seven years. CalPERS charges a 7.5 percent interest rate over the 12-month time period to cities who pay on a monthly basis.

Because expenditures exceed revenues for the first five to six months of the year, the city historically has not had enough cash in its general fund reserves to make the annual payment.

By paying annually, the city expects to ultimately save money, and potentially help the city’s bond rating.

“In addition to making it possible to save on CalPERS cost by making an annual up-front payment, increasing our cash reserves would also strengthen the City’s fiscal stability and firm up our standing with the rating agency and to least protect, if not improve our current credit rating,” City Manager Alan Tandy said in a memo released Friday.

The current balance in the general fund is $13.1 million, according to the memo.

The CalPERS payment due this July is estimated to be $20.8 million, the memo said, and will increase to $36.1 million by 2024.

The city plans to use a portion of the savings to add $1 million to the general fund reserve each year, to increase the reserve to $18 million by 2024.

You can reach Sam Morgen at 661-395-7415 or smorgen@bakersfield.com. You may also follow him on Twitter @smorgenTBC.

(30) comments

Venger45

What, a joke from day one this trash on N was a mess..then tandys lies about were the money is going to... like i said all this is tax payers paying for the citys problems. Also paying for cal pers.. You know the thing is no money no hire no money no fire no money police.you live in your means.. The next time i have no money i will ask the city to help me.. Also for me in April. all of my purchases will be in the county and i will buy cars out of town.There is no way i will help pay for this mess...

Sickofit

Just like people.....always something to complain about.

clsoca

So we should remain silent about city government corruption. Hummmm, do we live in China?

Fram Smith

A friendly reminder- some people participating in this discussion are not from this area and are payed to comment. REMUDA is one such individual- be advised. But for us folks who live here, let's be honest. I voted for Measure N ,
( please note, by ignoring post by those people who don't live, vote, and pay taxes here, we can in fact advance the dialogue..), knowing that the bulk of the new money would go to cover the underfunded pension liability for city employees. My thinking was that we will cover our pension liability because the alternative is to declare bankruptcy as a municipality. This poor fiducial planning by the city is the result of the fact that we have a part- time city council that we pay $100 a month. We waste millions of dollars as a city because the people in charge of these millions are working full- time jobs, when they should be looking after their constituents money. We are unwise to be " penny wise and pound foolish" to not have our city coucil become payed full- time employees working for us, so they do not simply rubber stamp and wobble their heads in the affirmative, to what the city manager and city attorney, bring forth. If Measure N would not of passed, we would have cuts across all city services. That would mean less cops, slower response times, etc. Remember, the alternative to not living up to our pension obligations as a city, is bankruptcy- there is no third way . If we can figure out how to add an additional fee(s) to some of the larger estates, as well as target dealing with that segment of the population that " over- uses" city services, ( i.e. homeless, metally ill, addition issues, chronic poverty), we could get handle on the financial issues. However, until we decide that we want a full- time professional city council who get up every morning dealing with these issues that could help make this place called Bakersfield a better place to live. I will be attacked for such thoughts- but mainly by payed trolls like REMUDA who don't live, work, or pay taxes here.

clsoca

Respectfully, I do not agree with your perspective and I have lived in Bakersfield since 1961. What is needed is our city leaders must return to the collective bargaining tables and renegotiate sensible pensions. Some will say the pensions have been altered for new hires, but not enough whatsoever has been done, thus the tax increase. By 2024 Bakersfield's annual pensions cost will have spiraled to 36 million a year and they will continue to go up from their. To make matters worse, with the city flushed with fresh cash from the tax increase, the public sector unions are legally in a good position to force the city to hand out big pay raises in accordance with "Good Faith Bargaining" requirements under collective bargaining law. These pay raises will also increase pension payouts liabilities for life. The pension problem is not getting better its getting substantially worse. What Tandy has done is put a band-aid on this problem and Its not going away!!!!! Additional tax increases will be required in the future to pay the enormous pension shortfall the city faces with current employees and future employees.

RaulMartinez

Pensions were not mentioned as the reason for the tax increase because doing so would have cause the measure to fail. City management did not want citizens on the oversight committee that understand pensions. Tax payer Association and the chamber used their recommendation to reward those that fund them. Follow the money and you will the truth. Time to change my Amazon deliveries to an unincorporated area.

Veritas

The ballot clearly stated to improve public safety related services and mentions other vital city services (?). What it also contained is wording that said they could basically spend on other things as well. I just looked at the actual ballot language and it does not state whether it is a “general” tax or a “special” tax. By the language contained within it is clearly “general”, but i would think that it should be clearly started which one it is. Judicial review anyone?

bakodon

Call Kern County Taxpayers TODAY or leave an email:

http://www.kerntaxpayers.org/contact-us/

bakodon

CALL City Council today or send email:
https://bakersfieldcity.us/gov/elected_officials/city_council.htm

bakodon

What do you expect from a brain dead City Manager and the bobble head council and a Mayor who is only out for a photo op! Please somebody start and recall of measure N TODAY. We cannot wait for these impotent faceless bureaucrats spend all the money we voted for......OR I got an idea....lets hold them accountable and tell them spend only for law enforcement! Please write or call you bobble head councilperson TODAY

Quick

Three things, first, the language of the measure never specifically stated that all, or any, of the revenue generated had to go towards public safety.

Secondly, a quick math lesson..the estimated revenue generated will be approximately $50 million. Of that, $12 million is going towards making a CalPERS annual payment that will save the city around 8.5 million in interest, meaning that $12 million investment will actually "cost" the city only about ~$3.5 million when you factor in interest costs (nearly 1 million a year, as the article states).

Third (and it's related to two) the city will not only save ~8.5 million (which is money that can be spent on other city services) but there is still ~$38 million left from the projected $50 million in revenue. So, it's not as if the city is taking the entire fund and putting it towards pensions. The majority if the money (more than 3x the amount being spent on pensions) is available for public safety.

clsoca

If the 12 million $ going toward pensions is no big deal, how come its not mentioned in the ballot measure language. I know why, its because our city leaders "suckered" the citizens who voted for this.

REMUDA

" . . . until ended by voters,"
-------------
" . . . until ended by voters,"
--------------
" . . . until ended by voters,"
---------------------
" . . . UNTIL ENDED BY VOTERS." (with the support of all surrounding 'OCCASIONAL' non-Bako voters, consumers, citizens and non-citizens who pay the 'Penny Tax" and 'OCCASIONALLY' benefit from those; OCCASIONAL' "City Services" . . . !)

REMUDA

The ABSOLUTE PRIORTIES were clearly stated (timely and as advertised) . . . and are not to be usurped:
------------
“ To prevent cuts/improve 911 emergency response, police/fire protection . . . "
-----
ballotpedia.org/Bakersfield,_California,_Measure_N,_Sales_Tax_(November_2018)
---------
The ballot question was as follows:[1]
------------
“ To prevent cuts/improve 911 emergency response, police/fire protection, anti-gang/drug units, neighborhood police patrols; rapid response to assaults, robberies, gang violence, home burglaries; crime prevention; address homelessness; retain, attract jobs/businesses; unrestricted general revenue purposes; shall the measure be adopted approving an ordinance establishing a one-cent sales tax providing $50,000,000 annually until ended by voters, requiring independent audits, citizens oversight, all funds for Bakersfield?[2] "
-----------------
Time for legal action?

byebyeCA

Time to get signatures on a ballot to repel this sales tax. Time for public workers to pay for their own retirement and quit taking a free ride on the taxpayers. Why should workers in private industry pay for a Cadillac retirement for public workers. Pay your own way and quit being moochers!

bakodon

WE NEED TO START REFERENDUM PROCESS TODAY! WHO KNOWS THE RULES?

Veritas

This measure was put on the ballot as a “general” tax, which means the city politico can use these monies for “unrestricted general revenue purposes”. That is the key wording that allows them to do whatever they want with these tax dollars and the exact reason why I voted No. If it would have been put on as a “special” tax then they would have been restricted on what they could spend this money on. Time for Tandy to go and the top wage earners to get a pay cut. Hit ‘em where they hurt us taxpayers, in the pocket book.

clsoca

Nearly 1/3 of the measure N dollars are now being diverted to pensions. Don't you think it's highly unethical for our city leaders to omit this important factor in the ballot language. They took the citizens and all the support groups like Kern Tax and The Chamber of Commence as suckers.

clsoca

Below is the text of measure N, the suckers of Bakersfield voted for. Nothing is mentioned nor implied about pensions.

BAKERSFIELD PUBLIC SAFETY/VITAL CITY
SERVICES MEASURE

To prevent cuts/improve 911
emergency response, police/fire protection,
anti-gang/drug units; neighborhood police patrols; rapid
response to assaults, robberies, gang violence, home
burglaries; crime prevention; address homelessness, retain, attract
job/businesses; unrestricted general revenue purposes;
shall the measure be adopted approving an ordnance establishing
a one-cent sales tax providing $50,000,000 annually until ended by
voters, requiring independent audits, citizens oversight,
all funds for Bakersfield?

mrdwm1

The new taxes should be used first to buy one-way bus tickets for Mayor Airhead, Manager Blimpy, and the entire City Council, to send them to San Fran Freako or some other leftist utopia, where their talents might be more appropriate.Does anyone really believe that Measure N would ever have passed if the current shenanigans were envisioned?

clsoca

Appears a bit deliberate to announce a change in how Measure N $ will be spent on the eve of a three day weekend

Miket93312

Repeal Measure N, show the city that the citizens care!!

Veritas

So what happened to the “Oversite” committee? I knew the city politico would misuse this money, that is why I voted No on this measure. I just thought they would take a little longer to violate the content and spirit of said measure. Sounds like it is time to start a petition to have Mr. Tandy removed from his position. Our tax dollars pay for his salary and benefits and he is defrauding us yet again. Or, let’s make all city employees who earn $100,000 a year or more(Isn’t Tandy in the $200,000 range?) take an immediate 5% cut. Let’s put that on the next ballot! Then maybe we will get their attention.

irish523

These funds were to recruit and place more law enforcement officers on our streets and in our community to provide a safer environment. It wasn't intended to pay for 6-figure pensions of retiring captains, sheriffs, and other management personnel who worked for maybe 20-years. This is outrageous such lying to the tax-payers is criminal. You should have approved the medical marijuana dispensaries which generate millions of dollars in tax revenue. I find it interesting that these same law enforcement personnel who voted down the dispensaries were pushing for the sales tax increase to pay for their retirement. This is criminal!!

clsoca

Pensions were not on the ballot whatsoever. City leaders deliberately mislead the public insofar how the 1% sales tax will be spent. "REPEAL MEASURE N 2020"

JSmith

This is how politics work nowadays. Lie about tax increases then use it to "grease" the faithful unions. The citizens of Bakersfield deserve this. You voted a tax increase on yourselves and this is what you get, suckers. Even supposed conservatives in this town supported this tax increase, including the kern taxpayer association. It is a dark time in this city, county and state. This whole thing ends badly I can assure you. All of us in the private sector have risk with our retirements. Why doesn't the public retirees have no risk? Because we sucker taxpayers will bail them out every time. I hope you suckers who voted this in have learned a lesson.

clsoca

Well Said!!!!!!!
Suckers!!!!!!!!!!!!!

RaulMartinez

What about public safety? It sounds like a management problem. How do we put the 1% sales tax on the next ballot?

alexkelley

WTF did I say back in August 2018?!! This tax increase WILL NOT be used for city service emergencies or “critically in need” infrastructure improvements long neglected by budget shortfalls. HECK NO! Alan “the Hut” Tandy has dictated & decreed these ill-gotten monies (by means of voter fraud & manipulation, still in need of serious investigation) will be used to pay for foolishly negotiated & carelessly managed PENSION PROGRAMS to fatten up old city workers who have bowed at the trough of Tandy’s gluttony. Where are our GOP City Council members to stop the misappropriations?! Where is Zack Scrivner’s condemnation; this is SUPPOSED to be his “red line” issue! AGAIN, the hard working taxpayer takes it up the tailpipe while all our its leaders comply & submit to the Tandy machine just waiting to get THEIR “thirty pieces of silver” from him. Shame on our leaders!! Shame!

Paintguy

Why should the general public have to pay for there retirement shortage. How about just adjusting the payout for the shortage !!!

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