SES Foundation

Tech Note: TN1010-1: Proposition 23, the Impact on Nevada County

Russ Steele

Abstract - The total cost of implementing Assembly Bill 32, the California Global
Warming Solutions Act of 2006, has been the subject of controversy since the California
Air Resources Board (ARB) released its first economic analysis in September 2008. Each
subsequent economic analysis, including those commissioned by CARB indicated AB32
implementation would be a net cost to consumers. Thus, industry groups, legislators,
business owners, independent consultants, and the Legislative Analyst’s Office (LAO)
have all been critical of ARB’s cost estimates. With the current state of the economy, the
public is becoming increasingly concerned about the negative impact of AB32‘s
implementation on California’s economic future. After examining the economic issues
SESF concludes that passing Proposition 23 will have a positive economic impact on
Nevada County.

You can download here: Download Prop-23 Tech Note_10-04a

TechTest2010 Scholarship Program Update

The SESF TechTest2010 "Survivor Breakfast" is scheduled for Friday May 28th at Tofanellis in Grass Valley. The breakfast will begin at 8:30 a.m. All TechTest2010 test takers, donors, and volunteers are invited (each student is encouraged to bring their parents as well). The top 3 placers will be announced at this breakfast while the checks will be presented at each school's Scholarship event or like event. Each "survivor" will be given a "TechTest2010 Survivor T-shirt". Special thank you to our donors and newest corporate sponsor Telestream.

Prizes:
1st place $6,500
2nd place $4,400
3rd place $2,100

A copy of TechTest2010 with the solutions can be found here.

TechTest2010 Update

24 Nevada County high school Seniors sat for TechTest2010 on March 27th.  SESF will again host a "Survivors Breakfast" this coming May.  Per usual,  TechTest2010 Survivors and TechTest2010 donors are invited to attend. Please check back for details.

TechTest2010 results will be posted after the "Survivors Breakfast." The scholarship checks will be presented to the students during the annual NUJHS scholarship awards night (for NU students) or Truckee High Schools graduation ceremony.

Thank you to the teachers, donors/sponsors, students for making TechTest2010 a success.  A special thank you goes out to our newest sponsor TELESTREAM.  

Misc Facts about SESF/TechTest

SESF is a 501c3 non profit organization. TechTest is supported by SESF Board members, community members at large (including donors from out of state), and for profit businesses.  Every penny contributed by donors goes toward the scholarships.  SESF is an all volunteer organization with no paid staff.  SESF is not connected to CABPRO.  Background on the exam: while members of the SESF board sat at NUHS's scholarship night several years ago to present a $500 scholarship to a student for designing the SESF logo it was noticed that not one scholarship was focused on Technology/math/science. It appeared that the vast majority of scholarships were earned in the areas of athletics and the arts.  Shortly after, SESF decided to hold a merit based math/science exam to help promote technical careers and technical education. In the interest of promoting math/science education previous TechTests have been available on the SESF website. A couple months following the exam SESF hosts a "Survivor Breakfast" to congratulate each student who attempted the grueling exam. At this breakfast the donors are also encouraged to attend and mingle with the "survivors." In addition to breakfast each "surviving test taker" receives a "TechTest Survivor" t-shirt.   Historically, the winners names are not made public until the Nevada Joint Union High School District's scholarship night.  In 2009 SESF was contacted by Congressman McClintock's office because the Congressman wished to express his appreciation for the students taking the exam.  In 2009, the winner was presented with a signed certificate of appreciation by the Congressman. The students accomplishments are the focus of the "TechTest Survivor Breakfast" and as such there is not keynote speaker or "entertainment."  Regarding the exam: It was decided early on by the SESF board, Donors and education committee that the test needed to be "university level" to weed out the best from the existing great minds and to give students from different school districts an "even playing field."

Michael McDaniel

KVMR is offering talks on conservative topics

Russ Steele

George Rebane, SESF's Director of Research, will be giving short talks (4min) on conservative topics on KVMR, every other Friday at about 6:15, starting this Friday the 19th of February 2010 according Paul Emory, KVMR's News Director.  Mark your calendar, or put an alert in your iPhone or Blackberry.

George's thoughts can also be found at Rebane's Ruminations, including the text from his talks. Here is a link to his first talk on KVMR.

TechTest2010 Scholarship Program

Russ Steele

The SES Foundation is again sponsoring a merit scholarship program for Nevada County's high school seniors who are bound for careers in science and technology. TechTest2009 merit scholarships totaled $15,000, with thirteen merit winners.  

SESF is now seeking donations for TechTest 2010. SESF is a 501(c) (3) foundation and all donations to the merit scholarship fund are eligible non-profit tax deductions.  Please send your donation to the following address:

SESF
PO Box 1895
Grass Valley, CA 95945

All checks should be made out to the "SES Foundation" with a note in the memo box "TechTest"

Thank you for supporting the success of Nevada County's future engineers and scientists. 

Additional information on the SESF TechTest program can be found at the SESF Website.

How would muni's attack a problem that moves from a quiet footnote to a screaming line item?

The Orange County Register is reporting that "Staff for the Governmental Accounting Standards Board is eyeing a plan to make municipalities report their pensions’ unfunded liabilities on their balance sheets — which are used by lenders to determine an agency’s financial health. Currently, the unfunded liabilities are listed as footnotes." Download GASB standards Pension 11-09

It is argued that such an accounting change would more accurately reflect a municipalities financial strength or weakness. For Nevada County this accounting change would force over $50,000,000 in debt to be moved from a footnoted item to a line item on County financial statements.  The $50,094,441 debt associated with the Nevada County Misc Employee pension plan equates to over 25% of our County's current year total budget.

Would entities/banks/investors loan (and at what rates?) money to a muni which openly and transparently listed their unfunded pension and health care benefit debt?  Would taxpayers and municipal leaders be as quick to start new programs knowing what impact such growth in service would cost long term?  How would muni's attack a problem that has moved from a quiet footnote to a screaming line item?

Note: listed debt to pension plans are 2006 pre-"market crash" figures for MISC employees only (does not include Public Safety) Download NOV_08_NEV_CO_PERS_UL-using 2006 market values

Michael McDaniel December 10, 2009

Another point of view - Pensions Unsustainable

Russ Steele

CalPERS pushed hikes now called ‘unsustainable’

Steep Losses Pose Crisis for Pensions

Russ Steele

Our local government agencies have some tough decisions to make.

The financial crisis has blown a hole in the rosy forecasts of pension funds that cover teachers, police officers and other government employees, casting into doubt as never before whether these public systems will be able to keep their promises to future generations of retirees.

The upheaval on Wall Street has deluged public pension systems with losses that government officials and consultants increasingly say are insurmountable unless pension managers fundamentally rethink how they pay out benefits or make money or both.

Details in the Washington Post

How We Estimated Nevada County's Expected Unfunded Liability

Note: This math was reviewed in September 2009 with Joe Christoffel from Nevada County and it only includes the MISC Employee Pension plan (it does not include the Public Safety Employee Pension plan).

Go to page 5 of the Actuarial Valuation (as of June 30, 2007) for the Miscellaneous Plan of the County of Nevada (employer #505)Download NOV_08_NEV_CO_PERS_UL.

Find the Entry Age Normal Accrued Liability figure on page 5- $248,063,046.
Next find the June 30 2007 Market Value of Assets as of $228,852,611 on page 5. 
Now adjust the Market Value of Assets DOWN by the amount of reported losses to the CalPERS investment portfolio from June 2007 through June 2009 (HERE-page 3).  In 2008 the losses were 4.9% and in 2009 (through June 30) the losses were an additional 23.4%. Total losses from 2007 through 2009 were 28.3%.  Adjust the 2007 MVA down by 28.3% to get a current estimated MVA of $164,137,323.

The amount of promised benefits are $248,063,046 minus the amount available to fulfill the promises of $164,137,323 creates an unfunded liability of $83,925,723.

We use the MVA in the calculation because CalPERS states,"..the funded ratio based on the Market Value of Assets is a better indicator of the solvency of the plan."


Math:
Entry Age Normal Accrued Liability of $248,063,046
minus Market Value of Assets (estimated June 20 2009) $164,137,323
equals the unfunded amount of $83,925,723.

The goal of the exercise was to estimate how badly the recent stock, bond, real estate crash hurt the County's pension plan.  It should be noted that the $83,925,723 does NOT include CalPERS' admin fee.  Net of the CalPERS 1% annual admin fee the UL jumps to $88,552,776.