Joe Nation Report To Mesa Water Monday

 JOE NATION'S NUMBERS FOR MESA WATER
At the meeting at the Mesa Water District Tuesday afternoon, consultant Joe Nation was supposed to present some pension numbers to the Mesa Board that look very favorable.  You can find the graphics from his presentation HERE.  I did not attend the meeting, nor have I had any first person reports from the site, but I can share with you my observations of the information Nation was going to use.

APPLES AND ORANGES

 (click to enlarge)

The chart shown here is only one of several used to present his material.  As you can see, this study really doesn't compare apples and apples... it compares Mesa Water District - a small, special district - to several local municipalities, including Costa Mesa.  While these numbers are interesting, a more representative presentation would compare Mesa to other special districts in Orange County - like the Costa Mesa Sanitary District, for example.  To make this presentation all Nation had to do was plug the Mesa Water numbers into his spreadsheet used for his presentation to Costa Mesa.

GOOD NUMBERS - NOT A GOOD COMPARISON
Don't interpret my comments as a denigration of the position Mesa Water finds itself in.. the numbers are good, especially when compared to municipalities that can't simply vote to raise rates to cover budget shortfalls, including pension payments.

Don Quixote and Sancho Panza Team Up

TEAMED UP AGAIN
In the past I've referred to Mayor Pro Tem Steve Mensinger and Planning Commission Chairman Jim Fitzpatrick as Don Quixote and Sancho Panza, respectively because Fitzy always seemed to be glued to Mensinger's hip, providing a supportive echo to almost every utterance he made.

PONTIFICATING THE PARTY LINE
Today retired Costa Mesa resident Jeff Arthur, who has become a fairly regular fixture at recent City Council meetings, published a commentary in the Daily Pilot, HERE, in which he spouted the party line - that the sky is falling in the form of unfunded pension liabilities - and quoted Stanford professor Joe Nation extensively.  Nation recently held forth at a Study Session during which he painted a picture of gloom and defined some draconian measures to solve "the problem" - creative stuff, like raising taxes - just the things you'd anticipate from a self-avowed "progressive".


MIXING IT UP WITH THE GREAT UNWASHED
All of a sudden the comment thread on this commentary exploded, first with a comment by Mensinger lauding Arthur for his views.  Further down Fitzpatrick, who is apparently on the road to recovery from his post-Costa Mesa Sanitary District Board ouster funk, opined that the problem must be serious "when a Pension beneficiary like Jeff Arthur starts sounding the bell.."  What does that mean, exactly, Fitzy?  Do you mean pensioners have a better perspective than those of us who actually pay for the pensions?

SAY, WHAT?
Later Mensinger made an almost incomprehensible comment - he does that - that added nothing at all to the discussion.

EVER THE BULLY
In my opinion, it is unseemly for an elected official to mix it up on comment threads in the public press.  It has more than the slightest whiff of bullying, but it's his right to do so.  And, as several of his friends have told us from time to time when he did something stupid, "Well, that's just Steve".  So, he gets a pass because he always has...  Very sad for us all.

Joe Nation Is The Bearer Of Bad News

DAPPER AND DEPRESSING

The Grim Reaper showed up at the Costa Mesa City Council Special Study Session Tuesday night, but he was disguised as former Democratic politician now Stanford University professor Joe Nation.


LONG PRESENTATION
In what turned out to be a more than two-hour long presentation to the council on the current state of Costa Mesa's pension obligation situation, he painted a bleak picture.  His slick, informative slide show can be viewed HERE.  When the whole presentation is available on the city web site I'll return and post that link here, too. (As promised, you can view the streaming video of the study session HERE.)  You can read Bradley Zint's take on the presentation in the Daily Pilot HERE, and Mike Reicher's coverage in the Orange County Register, HERE.

DOOMED WITHOUT CHANGES
According to Nation, who has become the go-to guy on the pension crisis since he was drafted by his Stanford department chairman to fully-immerse himself in this issue, Costa Mesa's relationship with the CalPERS pension system is unsustainable and, unless dramatic, drastic steps are taken, it will saddle the current taxpayer's children with the debt.

NEGOTIATION AND MORE TAX REVENUE
He tells us that for our city, and most others around California, to dig themselves out of their pension difficulties it will require pension reform - changes in the pension formulas and two tiers with lower benefits for newer employees - and increase in revenues.  In the latter case, he suggested that a one-quarter cent sales tax increase would raise $5.5 million annually, which would close the gap less than one-third of the way.  He also suggested a parcel tax of $370 per household for every household in the city for the next twenty years.  He said that would resolve the shortfall.  He described that kind of approach as "uncommon, but not unheard of".  He told us that Oakland assesses such a fee - $1,200 - and "they are a lot worse off than you are!", which didn't give me any comfort at all.

PROPHET OF DOOM
Among the many interesting comments Nation made during his presentation went like this:
"A lot of people consider me a progressive or liberal.  I think that this is a progressive or liberal issue.  And I think it's a progressive or liberal issue because, if you don't deal with this, you as a city, not only will you not have police officers and fire at the levels that you need, you won't have a library, you won't have potholes filled, you won't have parks, you won't have anything you care about."

BENEFIT ENHANCEMENT REPORT
I left the meeting before Bobby Young presented his discussion of the "Fiscal Impacts of the 2.5%@55 Enhancement for Miscellaneous Group. I'm going to review his presentation on tape, but you can see his slide show HERE.

RIGHEIMER WRAPS IT UP
I did fast forward to the end of the meeting and watched Mayor Jim Righeimer's summation.  It didn't leave me feeling particularly good about the future.  He called for collaboration between the City and Employees to try to resolve the problem.  He said in no uncertain terms that this state-wide problem will not be fixed until it crashes, blaming it primarily on the unwillingness of the legislature and the CalPERS Board to come to grips with the true financial reality of the situation.  He did state unequivocally, "There's no way this is going to get paid off. It can't be paid off. That's another 15-18 million dollars a year.  There's going to have to be some movement from the state legislature and PERS to go ahead and change benefits going forward for existing employees.  That will not happen in the State of California until it crashes." He went on to say, "The situation is 'Where is Costa Mesa going to be when that happens?' and I, for one, am not interested in giving additional payments to PERS.  I don't mind putting it aside somewhere else, but I can't imagine sending them an additional 10-15 million dollars a year when it can just disappear tomorrow and we'll be tossed into the same category with everyone else."

I'M BUMMED OUT, TOO
So, are you feeling good about this now?  I'm not.  I encourage each of you to try to carve out the time to watch Nation's presentation, Young's presentation and, especially, Righeimer's summation.  The play schedule for this event on Costa Mesa Television - Channel 24 on Time Warner Cable and Channel 99 on ATT U-Verse is below. Click on image to enlarge.