CalPERS may come clean, devastate cities

Pensions & Investments:

The stakes are high as the CalPERS board debates whether to significantly decrease the nation's largest public pension fund's assumed rate of return, a move that could hamstring the budgets of contributing municipalities as well as prompt other public funds across the country to follow suit.

But if the retirement system doesn't act, pushing to achieve an unrealistically high return could threaten the viability of the $299.5 billion fund itself, its top investment officer and consultants say.

[...]

Two years of subpar results — a 0.6% return for the fiscal year ended June 30 and a 2.4% return in fiscal 2015 — reduced views of what CalPERS can earn over the next decade. Mr. Junkin said at the November meeting that Wilshire was predicting an annual return of 6.21% for the next decade, down from its estimates of 7.1% a year earlier.

Indeed, Mr. Junkin and Mr. Eliopoulos said the system's very survival could be at stake if board members don't lower the rate of return. “Being conservative leads to higher contributions, but you still have a sustainable benefit to CalPERS members,” Mr. Junkin said. The opinions were seconded by the system's other major consultant, Pension Consulting Alliance, which also lowered its return forecast.

But a CalPERS return reduction would just move the burden to other government units. Groups representing municipal governments in California warn that some cities could be forced to make layoffs and major cuts in city services as well as face the risk of bankruptcy if they have to absorb the decline through higher contributions to CalPERS.

“This is big for us,” Dane Hutchings, a lobbyist with the League of California Cities, said in an interview. “We've got cities out there with half their general fund obligated to pension liabilities. How do you run a city with half a budget?”

CalPERS documents show that some governmental units could see their contributions more than double if the rate of return was lowered to 6%. Mr. Hutchings said bankruptcies might occur if cities had a major hike without it being phased in over a period of years. CalPERS' annual report in September on funding levels and risks also warned of potential bankruptcies by governmental units if the rate of return was decreased.

CalPERS has now missed its investment return targets -- badly -- for the past 1, 3, 5, 10, 15, and 20 years. Cities and state agencies are legally 100% liable for the difference.

Methane found on EUSD Farm Lab site

From the Inbox:

On Nov. 14 the Encinitas City Planning Department approved an Encinitas Union School District development for a Farm Lab on Quail Gardens Drive. (PBD number 2016-52 in the notice of decision city archives) There is methane on this property. The Planning Department, the School District, the Director of the farm lab seem oblivious to the fact that elementary schoolchildren will be in the same area as the methane. Anna Yentile, the City’s planner for this project, wrote:



The planner also wrote as part of the approval:

“No potentially significant adverse impacts to the environment will result from the project and the project is exempt from environmental review pursuant to Section 15304(b) and 15311 of the California Environmental Quality Act (CEQA) Guidelines.”

City Senior Planner Kerry Kusiak approved the project.

Developer attorney Marco Gonzalez publicly calls Measure T opponents liars

(We suppose that's an improvement -- two years ago he was calling them racists!)

On NBC 7:

"Really the disappointment came from the campaign against it.  The folks who were behind it were found to be using some misleading factual information.  And, you know it's not terribly hard to get people to vote against growth in a city like Encinitas, but I felt like they took the rhetoric to a new level.  They used a lot of just misinformation and lies and half-truths to scare people into believing that the plan was something that it really wasn't."

Gonzalez gave no specifics about what the alleged "misinformation and lies and half-truths" were, or who "found" opponents "to be using some misleading factual information."

NBC 7 interviewed Gonzalez and Measure T supporter Catherine Blakespear at length, apparently making no effort to get the No on T side of the story. Measure T opponents have offered to work with the city to come up with a plan that complies with state law and, unlike Measure T, actually contains affordable housing.

Popout neighbor from hell

In early 2015, the City Council majority voted to approve some extraordinary setback exemptions for what appeared to be a ridiculously narrow, unbuildable sliver of a lot.

An EU commenter wrote:

These are encroachments into side yard setbacks. The municipal code has restrictions on encroachments. Using the words "pop outs" suggest a legal use which it isn't.  Kranz, Blakespear, and Shaffer legalized an open season of illegal encroachments for every property owner in Encinitas. The builder wanted to live with his family and attorney wife on this nonconforming lot with illegal encroachments. The builder threatened a lawsuit and had contacted the attorneys that represented the BIA against the city if he didn't get his building permit. The builder also wanted the council to give him special treatment. Read his letter. This isn't a case of decks encroaching into side yard setbacks. The developer pushed out the house sidewalls to put in kitchen cabinets, a wet bar, 12 feet long "window seating" extending out from the house and other encroachments.

And here it is under construction:



The neighbors aren't pleased.

Building to the max

From the Inbox:

Who at City Hall decided this fits our community character? And don't we know this is going to be used as an excuse for more to come?

Gaspar surges in absentee vote for Supervisor

Tuesday night's absentee ballot count brought Kristin Gaspar's campaign back from the brink of extinction.

Last night's vote count makes her the favorite to win. With just 82,000 of 396,000 remaining votes counted since Tuesday, Gaspar has cut Roberts' lead from 1735 votes to just 560 votes.

If the remaining absentee and provisional ballots are anything like those counted so far, Gaspar wins. Roberts' only hope is if the remaining ballots to be counted are markedly different somehow. This could happen if the registrar is counting some geographies ahead of others, or counted absentees ahead of provisionals.

Developer attorney Marco Gonzalez REALLY wants 48-foot-high mixed-use buildings in Encinitas

... rather than the city working with residents to develop an affordable housing plan that fits Encinitas' community character.

From Lisa Shaffer's newsletter:

Attorney Marco Gonzales [sic] proposed an alternative path, which is for the City to adopt Measure T despite the public vote, and offered to work pro bono to defend the City against an anticipated lawsuit from the opponents of Measure T.