Facing lawsuit, Chico cancels public workshops on pension obligations – Chico enterprise-record

CHICO – The series of meetings scheduled by the City of Chico to discuss pension obligations with the public starting Tuesday are called off, pending further litigation.

The city received a notice on June 1 from the Sacramento political and lobbying nonprofit, Howard Jarvis Taxpayers Association, ordering the city not to take legal action seeking validation of the show. future pension obligations.

Chico’s administrative services manager Scott Dowell recently explained why pension bond bonds may be a last resort to manage the $ 146 million debt of unfunded accumulated debt owed to the public employee pension system. from California. A series of public workshops was planned to help citizens understand the strategy of these bonds.

The organization’s lead lawyer, Laura E. Dougherty, wrote in a letter to the city recommending that the proposed bond issue be submitted to local voters, “or abandoned.”

Calling the resolution to validate obligations for accumulated unfunded debts to CalPERS “constitutionally flawed,” the organization said in the letter: “Other cities such as West Covina and Simi Valley have recently rejected identical validation actions. and abandoned such resolutions ”.

“Chico should save taxpayer money and avoid filing this action,” the letter added.

Dougherty said Monday that because pension bonds create new debt, the organization believes voter approval is required under the United States Constitution.

“We are saying that the resolution of the obligations should not be validated because there was not the approval of the voters,” said Dougherty. She added that if the city can put the question on a ballot and get a 2/3 approval vote, it will work. However, if they don’t, she said, “It’s a very legitimate legal concern where there should be voter approval.”

She cited the opinion of the Governance Finance Officers’ Association – an official finance organization – against pension obligations.

“Failure to meet the target rate of return places both the debt service requirements of the taxable bonds and the unfunded pension obligations on the issuer,” the association states on its website. “Local jurisdictions across the country have faced increased financial stress due to their dependence on pension obligations. “

That means the city is now in litigation over it, and Dougherty said his office received notice of the city’s pension bond option validation request on Monday. Dougherty said anyone interested in or who would be affected by the obligations can respond to the lawsuit filed against the city in Butte County Superior Court until June 28.

If no one files in court, Chico can go ahead and ask for a default judgment, and automatically the bond is posted and they can go ahead, she said. But the organization expects at least one party to file in court, triggering a hearing.

For now, the first public workshop meeting scheduled to discuss bonds, which was scheduled to take place on Tuesday, has been officially canceled on June 4 by Technical Clerk Stina Cooley.

Asked for comment, City Attorney Vince Ewing said the case is pending, so city counsel has no comment.

Chico resident Greg Steele said he was frustrated that citizens opposed to the city’s proposal have to go to court to fight it, and with what he believes is a lack of transparency from the city on pension obligations and future stocks.

“What really concerns me is the lack of information,” said Steele, a retired public sector employee. “We have to be ready to defend against the city of Chico. And that is really not fair. And we have to be ready to go to court by June 28? “

“Have at least one meeting and let the public know what’s going on, before you go to court,” Steele added.

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