Mailbag

We received this note in response to our post from a couple days ago regarding the Claremont Police Officers Association and their preparations for contract negotiations with the City (to be filed under "Prepping the Battlefield"):

DATE: Wed, February 16, 2011 1:26:41 PM
SUBJECT: "crime scenes"
TO: Claremont Buzz

Really smart post -- nice work connecting the dots, and a pleasure to see. I like Dieter Dammeier, and think highly of Claremont cops, and still thought you righteously nailed them to the wall on this one.

Yes, it's unfortunate that the CPD officers give residents the false choice of having to either support their contract demands or else fear for their collective safety. We don't doubt that our police work hard for their money, but let's face it, a Claremont officer doesn't face nearly the same daily challenges as, say, an officer working the LAPD's South Bureau. The CPOA needs to set aside its own selfish interests and start thinking about what sacrifices they can make rather than insisting that everyone else - their fellow non-safety employees, people who count on services provided by the City, and cash-strapped taxpayers - pay for the CPOA's every demand.

Driven by an Inland Empire unemployment rate of 13.9%, public sentiment is lurching away from support for the CPD officers refusal to pay their share of their CalPERS pension plans. Witness the Daily Bulletin's editorial on just this subject. The Bulletin noted that Claremont's Ad Hoc Committee on Economic Sustainability came to the conclusion that the status quo for the City's budget is no longer viable.

That committee report, which was released last week, recommended a 1.5% hike in the City's Utility Users Tax, from the present 5.5% to 7%. The report also called for all city employees, including police officers, to start picking up their share of the costs of their pensions. The Bulletin agreed that the employees need to pay their fair pension shares, but they disagreed with the committee's proposal to increase the utility tax:

We admire the committee's thoroughness, looking at all sorts of possible tax and fee hikes before settling on the utility users tax as the most feasible and effective. But we do not favor raising the tax in this economic climate, nor did the three council candidates we have endorsed - Sam Pedroza, Opanyi Nasiali and Jay Pocock. We doubt that voters would approve the hike.

Nasiali, one of nine members of the economic sustainability committee, was the only one to oppose any utility tax hike. He was one of two who wanted employees to pay their own share of pension costs as quickly as possible, rather than phasing the change in over four years as the majority favored. (The employee share for public safety employees is 9percent of salary, for other employees 8percent.)

Requiring employees to pay their share ASAP - or perhaps, to reduce the discomfort somewhat by requiring them to pay 4percent in 2012-13 and the full amount from the next year on - is a reasonable course of action. (Glendora has imposed such a change on its employees; Claremont sanitation workers have already agreed to pay their own full amount.)

Government agencies started picking up employees' share of pension obligations as well as paying their own employer share when times were good - but times are no longer good and, besides, such largesse never was sustainable in the long term. Better for employees to pay that share than for mounting pension costs to require more and more layoffs and reductions in service over the years.

There are two items worth noting here. First, according to the Bulletin, incumbent Sam Pedroza is opposed to a utility tax hike. So it seems unfair and hypocritical to us that Pedroza supporters, some of whom are working behind the scenes to elect a slate consisting of Pedroza, Robin Haulman, and Joseph Lyons, are lambasting Nasiali and Pocock for being similarly opposed to raising the utility tax. Second, the same Pedroza-Haulman-Lyons supporters are spreading false rumors that Nasiali wants take away employee pensions. As the Bulletin piece stated, Nasiali is simply advocating that employees pick up the eight- or nine-percent that they are supposed to be paying in the first place. And, by the way, the city would continue to pick up its share of the employee pension payments.

So any talk of a wholesale elimination of the pensions is a lie, and we urge readers to get the name of any campaign volunteer who makes such statements, along with the name of the candidate they're working for. Better yet, ask for them to commit such statements to paper or to a recording, and forward those to us for a future post.

With election day only a few weeks away, the gloves are coming off those Claremont 400 fists, and it's up to the rest of us to hold them accountable for their silly games.

Where Are They Now?

We were wondering what became of Oliver Chi, Claremont's former Assistant to the City Manager (photo, left). You may recall that when last we heard, Chi had just resigned as City Manager of Rosemead. That was back in April, 2009.

Well, Chi was back in the news last week. The story, as told by Rebecca Kimitch in Pasadena Star-News, is a little convoluted. It begins with a former Rosemead councilmember, John Nunez, who lost his re-election campaign in March, 2009. Soon after that election, Nunez filed for unemployment benefits for losing his City Council seat.

After Rosemead officials learned that Nunez was claiming the benefits, they filed an appeal with the state's Employment Development Department (EDD). The EDD, however, sided with Nunez, and he has collected a total of $11,000 so far. All that money came from the Rosemead coffers because the EDD bills Rosemead directly for its workers' unemployment claims. This all prompted several outraged state officials to threaten to change the state's laws governing such claims. The Star-News article explained:

Since Nunez's claim became public, two state lawmakers have challenged its validity and threatened to change state law. State Sen. Gloria Romero, D-Los Angeles, and Assemblyman Curt Hagman, R-Chino Hills, are helping the city appeal Nunez's claim for a third time.

This time, they are citing a section of state code that seems to explicitly prohibit elected officials from receiving unemployment.

"We have written a very clear letter to the EDD, indicating how they have misapplied the law. But we have yet to hear a response," [current Rosemead City Manager Jeffrey] Allred said.

The Nunez matter caused someone to take a closer look at what Rosemead was paying out and to whom. Turns out that, after he resigned last year, Oliver Chi also filed for and was granted unemployment benefits. According to the Star-News piece, Chi collected around $10,000, which was apparently a surprise to the city of Rosemead. City officials there seem to have thought they were done with Chi when they paid him $350,000 under the settlement agreement he and the Rosemead council reached prior to Chi's resignation.

Chi, unlike Nunez, had the good graces to return the $10,000 he received for his unemployment claim. In the article, Chi defended himself:

Chi said he had every right to collect unemployment after he left his post in April 2009 since he resigned "under the threat of termination." He agreed to return the payments in order to maintain a good relationship with city staff and officials.

What's $10,000 between friends?

This really ought to show folks who think that every high level managers in the public sector can be every bit as greedy as the people who brought you the tech stock and real estate bubbles and the Wall Street investment banking firms that were responsible for the financial meltdown of 2008. The scale may be smaller, but a fellow can dream.

If the rank-and-file public employees who do the actual work and the voters who foot the bills paid any attention to the money lavished on some of these guys and gals in salaries, benefits, and severance packages, the outrage would be every bit as great as what you're seeing right now with with bank bonuses.

In fact, it may already be reaching that point. In our next "Where Are They Now?" installment, we'll look back to Claremont and points south.

A Not-So-Golden Dream

Click to Enlarge

It's beginning to look a lot like 1994, at least in terms of the economy, housing, and unemployment in the Southern California exurbs....


FDIC CLOSES PFF BANK

PFF Bank & Trust and Downey Savings yesterday became the 21st and 22nd banks to be taken over by the Federal Deposit Insurance Corporation this year, the LA Times reported.

The FDIC, as is their usual practice, moved in late Friday afternoon and took over both banks. PFF's proposed merger with FBOP Corp. appeared to be falling apart, so the FDIC brokered another buyout by Minneapolis-based U.S. Bank.

U.S. Bank will take over both PFF and Downey Savings. The Times article gave the specifics:

PFF, short for Pomona First Federal, specialized in loans to Inland Empire developers and home builders, running up $289.5 million in losses in the January-September period.

"The closing of these two thrifts once again demonstrates the tremendous impact of the housing market distress on the state of California," John Reich, director of the Office of Thrift Supervision, said in a statement announcing the seizure of the institutions.

Downey Financial Corp., parent of Downey Savings, was founded in 1957 by developer Maurice McAlister, a bass fisherman and nickelodeon collector who built shopping centers that included Downey branches. Co-founder Gerald McQuarrie died 15 years ago. McAlister remained chairman until July, when Downey's problems were already apparent.

PFF was the oldest banking outfit in Southern California, founded in Pomona in 1892 to serve towns in what was then the citrus belt. Parent PFF Bancorp Inc., based in Rancho Cucamonga, had hoped to sell itself to Oak Park, Ill.-based FBOP Corp., which owns California National Bank and other community banks.

The Times had a separate blurb that reported the takeover should be seamless, and customers should see no disruption in service:

The Federal Deposit Insurance Corp. said the 213 branches of the two organizations would reopen as branches of Minneapolis-based U.S. Bank under their normal business hours, including those with Saturday hours. Depositors automatically will become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain insurance coverage.

Customers of both banks should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the organizations, regulators said. Over the weekend, depositors can access their money by writing checks or using ATM or debit cards.

One reason for the Friday takeovers is to allow a weekend transition period, which also gives bank customers time to let the news sink in. The Times listed the FDIC's call center phone numbers for information about the two banks:

PFF Bank - (800) 930-6827
Downey Savings - (800) 930-5169

The hours for the phone lines this weekend are today from 8am to 6pm PST, Sunday from noon to 6pm, and daily from 8am to 8pm after that.

The Times also noted that the FDIC's website also has separate pages with information for PFF and Downey Savings.


INLAND EMPIRE UNEMPLOYMENT RATE HIGHEST IN US

The LA Times also carried a front page article today on the rising unemployment rates in the Inland Empire. The Times reported that unemployment in the region that includes San Bernardino, Riverside, and Ontario reached 9.5% in October, the highest level here in 13 years and the highest current unemployment rate of any U.S. metropolitan area.

Like the PFF troubles, the local unemployment problem is linked to the housing market crash, as the Times noted:

Ignited by the collapse of the local housing market, which decimated the construction and lending industries, the wave of unemployment has trickled into almost every area, including retail, manufacturing and local government.

The region's troubles are set against a backdrop of growing unemployment throughout the nation. The U.S. Department of Labor reported last week that a growing number of jobless Americans are turning to government assistance. The number of workers collecting unemployment insurance payments has now reached a 25-year high at 3.95 million.

Meanwhile, the percentage of people unemployed in the Inland Empire has more than doubled from a year ago, and some experts predict the situation will worsen before it improves.

"It's a perfect storm," said Brad Kemp, director of regional research for Beacon Economics, which recently conducted the second annual Inland Empire Economic Forecast Conference.

"It was one of the fastest-growing places in America," he said. "And when you have that kind of growth, you have the potential for loss."

The downturn has all but erased the glow of optimism the Inland Empire enjoyed only two years ago, when newly minted mansions and an array of upscale retailers fashioned parts of the region into a more affordable Orange County in the making.

In many cases, those developments are now symbols of the decline, from the sparsely populated outdoor malls to the rows of repossessed homes -- victims of housing price plunges of 35% in Riverside and 37% in San Bernardino in the last year.

All over, there are signs of reversed prosperity.

Ontario International Airport went from setting growth records to losing about a third of its airline traffic in the last year. To curtail costs, buildings and a parking lot were closed. And at night, one of its unused runways shuts off its lights.

So, we're back to 1994 or back to 1982. Or 1932. The more things change, they say. Boom gives way to bust, with each successive era erasing the preceding one from the collective memory.

One begins to wonder if Joan Didion's essay "Some Dreamers of the Golden Dream," about a 1965 murder in the San Bernardino Valley, was written in the mid-1960's or yesterday:

This is the country in which a belief in the literal interpretation of Genesis has slipped imperceptibly into a belief in the literal interpretation of Double Indemnity, the country of teased hair and the Capris and the girls for whom all life's promise comes down to a waltz-length white wedding dress and the birth of a Kimberly or a Sherry or a Debbi and a Tijuana divorce and a return to hairdresser's school. "We were just crazy kids," they say without regret and look to the future. The future always looks good in the golden land, because no one remembers the past. Here is where the hot wind blows and the old ways do not seem relevant, where the divorce rate is double the national average and where one person in every thirty-eight lives in a trailer. Here is the last stop for all those who come from somewhere else, for all those who drifted away from the cold and the past and the old ways.