[bearishgurl]

What many people may not be aware of is that CA public retirement systems do not actually fully fund the retiree’s monthly healthcare premium. They pay a monthly healthcare allowance to retirees of approx $200 – $350, depending on the retiree’s highest year’s gross pay and years of service. The actual cost of the premiums is much higher as they are priced at COBRA rates. For instance, SDCERA charges $619.11 to $975.01 mo for an HMO for the member only. A PPO costs $2,080.08 mo for the member only.

See: http://www.sdcera.org/retired_health_insurance_plans.htm

(load third link)

The member is free to take their monthly healthcare allowance into the open market and purchase healthcare coverage with it. Those that can qualify to be underwritten as a reasonable rate most certainly do this.

Obviously, if the separating employee under the age of 65 has pre-existing conditions or cannot otherwise qualify for a plan on the open market at a reasonable price, they take one of the plans offered by the assn and pay the difference in premium with their mo pension (IF their monthly pension is high enough to do this). The assns plans must accept all eligible retirees and their spouses/domestic partners, regardless of health.

Medicare supplements offered by the assn are only $213.99 to $365.16 per mo for the member only.

Thus, LA could likely put $200 – $350 mo for each existing retiree back into their general fund (IF it is they who are actually funding their retiree’s healthcare allowances) if they are able to legally remove the benefit.

[bearishgurl]

[quote=The-Shoveler]… Same kind of Idea in the 30’s, this was what the grapes of wrath was about.[/quote]

I saw a kid reading the cliff’s notes of it on a stationary bike at the gym yesterday. I’ll have to check it out!

I like Dust Bowl stories. I have these two on CD!

[bearishgurl]

[quote=The-Shoveler]Funny how history repeats
“grapes of wrath”

Go back to the dust bowl hell or Detroit or where ever you came from.[/quote]

You talkin’ to me, shoveler?

You mean … Cali … near Oakland? They’ve got the same “urban sprawl” problem within 15 miles of the city center, LOL. And nearby Vallejo got into fiscal hot water by pandering to developers in its infamously expensive “Mare-Island conversion project.”

It’s over 500 miles away but same story all ‘round. All was made possible by your (incompetent?) former Legislature:

http://en.wikipedia.org/wiki/Mello-Roos

Never read the book, shoveler, but it’s on my kid’s reading list this year. Why don’t you ‘splain to the Piggs why you mentioned it?

[bearishgurl]

[quote=briansd1][quote=bearishgurl]

One is not eligible for Medicare until they are 65 years old. If the worker was “put out to pasture” at 55 with a gold watch and a party (in favor of a 23 yo), what do you expect them to do for healthcare in the intervening ten years, brian?[/quote]

Get another job, like everyone else? Or pay premiums out of pocket? Or don’t get sick. Or get medical in Mexico. Like everyone else.[/quote]

Lots of retirees are currently doing one or more of those things, brian. The point I was trying to make is that MANY CA gov’t workers were “retired” involuntarily. Their positions were actually riffed in budget cuts or a new appointing authority came in with their own people surrounding them and thus the old mgrs and administrators of the former regime were replaced. This did NOT happen with line workers such as myself who were protected by civil service rules. But this happened to MANY at-will public workers who are undoubtedly now receiving the highest pensions.

[bearishgurl]

[quote=briansd1][quote=bearishgurl]
Question to ponder: If Dr. Husing’s info on pgs 10, 23, 24, 25 and 48 was accurate or near-accurate in 2000, why did the IE’s leaders vote to approve all the subdivisions they did??
[/quote]

Too late now. The houses have been built. The people are there. You can’t undo the past…[/quote]

I’m sure everyone (now but not then) is beginning to understand this, brian. Hindsight is 20/20.

I was simply showing here how the blame lies with the pols (and their lackey appointees) who carried out the votes and implementation for all the (unneeded) CFD’s and subdivision permits in the last decade-plus.

Urban sprawl was indeed the straw that broke the camels back (in the cities/counties which still had land left to build in 2000-ish). CA jurisdictions really didn’t have to go thru this at all as we didn’t need the addt’l housing and still don’t need it.

[bearishgurl]

[quote=briansd1][quote=bearishgurl]

Time for LA to rein in those retiree health benefits (which are NOT “guaranteed”). THAT is the the low-hanging fruit which would yield immediate results. [/quote]

One very good suggestion. End their health benefits and for force them into Medicare.[/quote]

One is not eligible for Medicare until they are 65 years old. If the worker was “put out to pasture” at 55 with a gold watch and a party (in favor of a 23 yo), what do you expect them to do for healthcare in the intervening ten years, brian?

[bearishgurl]

10. Before you sign that mortgage (trust deed and note in CA), wear your thinking cap and have a large magnifying glass at the ready. Scour the terms of the trust deed and note and ask as many questions as possible. Do not worry about the time. It is also prudent to have a very knowledgeable friend or relative (CPA?) or attorney chained to your ankle or even take your docs in advance of closing to one for your unanswered questions. If you do this, bring these same docs to closing and compare them word-for-word to the docs you are asked to sign.

Don’t expect your escrow officer or anyone else present at closing who stands to make a commission from your sale to give you straight answers to your questions.

Do not pass go or collect $200 (or the keys) until you understand EVERYTHING that you are signing!

Note: A move is underway in the CA DRE to reinstate its Code of Ethics (under the CA Business and Professions Code), repealed in 1996.

http://firsttuesdayjournal.com/reality-check-resurrect-the-dre-code-of-ethics/?utm_source=first+tuesday+Students&utm_campaign=ecb5a0fdc7-July_23_2012_Weekly_Email7_20_2012&utm_medium=email

This would go a long way towards hammering it into licensees that they could be in violation of the law for failure to disclose to client-buyers all pertinent facts known about a property or mortgage. But there were so many bad apples and/or ignoramuses licensed after the law’s repeal that it could be awhile before they let their licenses expire because they feel its too hard for them to conduct biz in such a “transparent” environment.

[bearishgurl]

[quote=The-Shoveler] . . . Los Angeles teeters on the brink of bankruptcy

Los Angeles teeters on the brink of bankruptcy

The tsunami of unfunded pension liabilities and health benefits is about to hit the shoreline for Los Angeles. And if Stanford University’s estimates are correct, Los Angeles is facing roughly $27 billion in unfunded pension liabilities. For a city whose annual budget is in the $7 billion range this year, that figure is daunting.

L.A.’s chief administrative officer, Miguel Santana, noted that the budget shortfall is likely to be much greater by 2014-15. “Every year it gets worse,” he said.[/quote]

Time for LA to rein in those retiree health benefits (which are NOT “guaranteed”). THAT is the the low-hanging fruit which would yield immediate results. A big part of this problem is that in recent years they likely coerced (thru “dangling carrots” and/or making their work lives miserable) their older workers to retire early, like so many other CA jurisdictions did … in order to replace them with young (cheaper) know-nothings. A huge retiree health-benefit liability is a direct function of having too many retirees ineligible for Medicare at one time. That’s p!ss-poor planning, IMO. Not only does LA no longer have the daily benefit of these retirees’ intellectual property, they (short-sightedly) “put out to pasture” hundreds, if not thousands of still-able-bodied workers in favor of 20-somethings.

Stupid is as stupid does. Now they are likely paying hundreds of 75-100% retirements whilst paying salaries to the same amount of replacements … this time with l-o-o-ong learning curves ahead of them and virtually no one with any institutional knowledge to speak of to train the new hires and “mind the store.”

Could LA have possibly done this to themselves??

[bearishgurl]

#1 My Dad (toured Italy WW2 ) “Rome was built on a hill” obviously my brother-in-law did not get this tip, he bought at the bottom of a hill, had a high water table, flooded and sump ran continuous, also found plumbing customer in “hole” i.e. lakefront, near lake, ect (hole where water drains to) mad I couldn’t get his sump to stop pumping.I have 2 walkout basements , both high,dry and no sump pumps.

LOL, birmingplumb. . . You had a very smart dad! Unfortunately, in SD County, we have areas even on higher ground where a sump pump (used after big rains) is often needed. The don’t call it “Spring St” for nothin’ :=0

sd_matt, are you listening?

#2 Never buy next to undeveloped vacant land unless you want to fight city hall when a sewage disposal plant gets put in next door or a prison.

OR if the 2-3 AC vacant lot across the st has a ditch running thru it, it might be a path for illegals to take at night or an “adopted” law-enforcement helopad. But more often than not, if one buys on the edge of town in CA, they can likely expect to see dozens or even hundreds of new roofs on adjacent vacant land during the period of their ownership.

#3. “Honey stop the car, this might be the place” seen in many ads. Plumber finishes this with-“now turn off the motor, roll down the windows and listen for road noise that stops my quiet Sunday afternoon naps in hammock between those 2 pines.”
The 5, the 15 & 805 considered, good luck with this one, but noise carries double to a hilltop as opposed valley elevation-try a hill for noise.

Absolutely, unequivocally agree. Buyers need to visit these properties during the height of rush hr (am AND pm) and stand in the FY, middle of house, next to fwy-facing windows and BY to get the full effect of what it would be like to live there (or keep a tenant in there).

#4. Visit property during thunderstorm. (Laguna Beach). Look at “lakes” created due to no perk.

The most desirable part of this area is at or close to sea level. Many 1930’s-era developed lots there have shored-up land with a set of stairs leading to the beach but there is really nothing anyone can do about this (correct me if I’m wrong here, birmingplumb). This anomaly will not affect property values there because there is no other place in the US to compare to this “exclusive” enclave.

#5. In city, look at storm sewer covers in street. If there a only a few holes, sewer undersized and can’t take full opening of rainwater, so city slowed intake. You will get water over curb.

Yes, you do. I note this happens regularly on some of the sunken sidewalks in dtn SD in spite of originally having a deep curb there with wide access to the storm drain.

#6. Check basement steel poles for rust along bottom, shows flooding basement.

Interesting and will save for future reference. SD County residences do not have basements.

#7. Got this from truck driver when concerned about too much shade and roof not drying out and rotting. “It ain’t the roof, its the bottom of the floor in the crawl space. Take a drill and drill the wood floor from the crawl, that,s the path the water vapor takes-ground up-it shows there first, then roof.

Great idea! Thanks for the tip!

#8. The inside can be redone for 30k so why look.(How they buy with no inspection)
Trust me I have redone the whole 1200 sf “wife’s old house” and turned it into a rental and have not had a issue in 12 years. New roof,windows,kit,floors,copper,electrical,inside doors.

Good for YOU, birmingplumb! I agree that a “professional inspection” in escrow is not always needed and likely a waste of money if the buyer knows exactly what they are looking at. If waiving an inspection contingency will put a buyer’s offer into the realm of consideration (in a multiple-offer situation) then I believe it is prudent to waive it, ESP if the new buyer will replace nearly everything as you did.

9.# Ask the postman who live across the street.(Thanks Dad)

Of course. Or the local resident-cop. Or little old lady daily walker who has lived there for 40+ yrs!

[bearishgurl]

[quote=no_such_reality]BG, that’s nice data however, it really highlights why you don’t want to live in the IE, not why they went broke.

Again, peak actual revenues, $133M, 2011-2012 revenues, $118m.

You are all missing the forest for the trees

(the forest)
A 10-15% revenue drop and the government is unable to adjust over a four year period.
(/the forest)

The rest is noise.[/quote]

When did SB go on a hiring spree? Was it before FY 2007/08 or after?

The answer to this question will shed some light on the way thru the forest.

[bearishgurl]

[quote=The-Shoveler]Very Good BG,

Now explain Compton, LA will soon follow.[/quote]

If Compton does file for BK protection, it will be on account of sheninigans on the order of the City of Bell and Cudahy.

I don’t see the City of LA filing for BK. It has a VERY diverse population with a HUGE base of high-earning taxpayers owning multiple RE assets.

[bearishgurl]

As to CAR’s earlier links today, a few things really stood out to me in Dr. Husing’s prophetic Power-Point presentation (2010) on the City of San Bernardino:

http://www.ci.san-bernardino.ca.us/civic…

Pg 3: Inland Empire (IE) was down 93,327 jobs between 2008 and 2009

Pg 4: By 12/09, the IE had a 15% unemployment rate

Pg 6: By 2009, the IE had 3x the unemployment rate of 2000 to 2008

Pg 8: By 2009, building permits in the IE had declined 82.4% since 2005

Pg 10: The economic base of the IE has always been largely blue-collar

Pg 15: Question: Would three million people have actually relocated to CA between 1997 and 2007 if there was was no new construction there available to purchase with easy qualifying terms?

Pg 18-19: Out of 1,080,328 existing homes in the IE, 628,327 were “underwater” in 2010. Out of those “underwater,” 250,831 (40%) were in default in 2010, 183,447 (29%) had a Notice of Sale file on them and 119,066 (19%) were REO’s. This leaves 12% of these underwater homedebtors in the “Squat-SS” group, the “Squat-Mod” group or the group still paying their mortgages in a timely manner.

Pg 23: 51.5% of the SB’s households are tenants

Pg 24: 25% of the IE’s SFRs are tenant-occupied or vacant

Pg 25: 38.3% of SB’s households receive some form of public assistance

Pg 44: The RE crash in the IE affected those who worked in FIRE and related industries the most

Pg 48: 48.5% of adult SB Co residents possessed a HS Diploma or less; 47.8% of adult RIV Co residents possessed a HS Diploma or less

Pg 53: In 2004, 93 ships in the Port of Los Angeles could not be unloaded due to not enough available labor (this was NOT due to a lockout or strike)

Pg 57: The IE lost 34,900 manufacturing jobs since 2007

Question to ponder: If Dr. Husing’s info on pgs 10, 23, 24, 25 and 48 was accurate or near-accurate in 2000, why did the IE’s leaders vote to approve all the subdivisions they did??

…What sets Stockton and San Bernardino apart is a far narrower set of circumstances: They were at the epicenters of the American housing bubble and the American housing bust.

How bad was the bust? Of the 372 federally designated metropolitan areas in the United States, Stockton ranks first in foreclosures, while Riverside-San Bernardino-Ontario ranks third. Among the thousands of U.S. cities, San Bernardino proper ranks third in foreclosures, while Stockton ranks fifth. Ranking the May unemployment rates in those same 372 metropolitan areas, with the area with the lowest unemployment listed as No. 1, Stockton ranked 364th and San Bernardino 354th. Unemployment in the city of Stockton in May stood at 17.5%. In San Bernardino, it stood at 15.9%.”

. . . It’s these numbers, not political chicanery or wage-and-pension rigidity, real though [sic] they may have been, that set Stockton and San Bernardino apart and that best explain what happened to them. That means any assessment of blame for their predicaments has to expand from such usual suspects as greedy public employees to include banks that flooded these cities with subprime mortgages that were resold into the high-flying securities market. It should include the huge retail corporations that have devised supply chains that employ area residents at barely livable wages.

Conventional wisdom may blame the unions and the pols. The facts tell a different story.

http://www.latimes.com/news/opinion/commentary/la-oe-meyerson-city-bankruptcies-foreclosure-20120725,0,6443912.story

As to this piece, I agree that Stockton and SB both have many factors in common which contributed to their bankruptcies. Both overbuilt with *new* residential construction (which was primarily sold to underqualified buyers). This comedy of errors led to a complete crash of their residential RE values leading to a precipitous drop in property tax revenues and jobs in the local RE/construction industry.

However, unlike the author, I believe the pols ARE to blame. It was actually THEY and/or their appointed officials (their direct reports) who issued or caused to be issued voluminous subdivision permits, primarily during the millennium boom, which, along with readily available NINA purchase money 1st and 2nd TDs and refinance 1sts, 2nds and HELOCs, was the direct cause of the boom and bust cycle which followed. The boom cycle caused the cities of SB and Stockton to be flooded with new residents who would not have otherwise have flocked there but for all the *new* construction available for no money down in CA with easy qualifying which was priced at far less than the coastal cities.

See my comments where I already discussed this phenomenon:

http://piggington.com/stockton_bk_here_we_come
re: the Stockton BK filing

http://piggington.com/otcontest_to_guess_the_occupant_of_beautiful_new_building_in_rsf
re: the Vallejo BK filing

See also: http://piggington.com/ot_san_bernardino_votes_to_file_for_bankruptcy_protection

[quote=bearishgurl on July 14, 2012 – 3:00pm.][quote=no_such_reality]. . . Tax proceeds may have fallen, but they haven’t fallen that much. It’s a sign of the massive over building, over staffing cities have done. . . [/quote] Actually, NSR, tax proceeds to CA cities and counties HAVE fallen a great deal, due to downward adjustments made by many CA county assessors in accordance with Proposition 8 . . . [/quote]

[bearishgurl]

[quote=no_such_reality]Total budget peak $133M, total budget today $118.
http://www.ci.san-bernardino.ca.us/civica/filebank/blobdload.asp?BlobID=13895

Yes, they would BK, they’ve been overspending for years BEFORE the drops…[/quote]

nsr, I’ve downloaded the current budget and will print it. But I just have one question for you.

WHY do you think SB felt they needed to hire as many people as they did (and “overspend” on these additional salaries) during the “boom” years??

[bearishgurl]

[quote=Allan from Fallbrook][quote=CDMA ENG]Oh Boy… Here we go again…

Piggs… Clear to arm… Clear to fire.

CE[/quote]

CE: Fire in the hole! Grab a beer and some chips and enjoy the (impending) fireworks.[/quote]

I began my 2-cent response this morning but had to take a rain check on it until later this eve. Stay tuned …

Thank you for posting those awesomely informative links, CAR!

;=D

[bearishgurl]

Congrats sd_matt!

The LM village is a very charming and walkable area to live in or around!

IIRC, the vast majority of the “granny flats” in that area are considered “grandfathered-in” by the city council and are legal rentals. Some even have separate addresses than the main house and some have a “Certificate of Non-Conforming Use” filed on the property.

Congratulations also on “inheriting” a good (longtime?) tenant!

[Author]

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