Ann Schwab’s mismanagement – 21 top-paid retired employees get over $2 million a year in pension payments, plus benefits and COLA

2 Oct

 

Sometimes a bad thing is so bald-faced, so blatant, so obvious that you can’t believe it’s true. This is what I have found as I’ve dug and delved at the pension mess. It’s so simple it took me forever to figure it out.

In Sacramento there is a tug-o-war playing out between Governor Jerry Brown,  the California Public Employees Retirement System (CalPERS), and the Service Employees International Union (SEIU).  The subject of this wrestling match is the billions – yes that’s BILLIONS –  promised to former and current public employees, and whether they should be paid now by the public entities (like the City of Chico) who signed their contracts, or whether the state should borrow money to pay them and hope that the stock market will recover enough to pay the money back.

State Controller John Chiang says we have a projected deficit of over $38 BILLION over the next 30 years. The interest to borrow the money to pay this is projected at $149 million.

“Thirty-eight BILLION?” you say. Well, let me explain how we got there.  In Chico, we have 21 retirees who make more than $100,000 a year,  in pension, including a former fire chief who makes more than $200,000 a year! 

Name Employer Warrant Amount Annual
ALEXANDER, THOMAS E CHICO $8,947.23 $107,366.76
BAPTISTE, ANTOINE G CHICO $10,409.65 $124,915.80
BEARDSLEY, DENNIS D CHICO $8,510.23 $102,122.76
BROWN, JOHN S CHICO $17,210.38 $206,524.56
CARRILLO, JOHN A CHICO $10,398.98 $124,787.76
DAVIS, FRED CHICO $12,467.78 $149,613.36
DUNLAP, PATRICIA CHICO $10,632.10 $127,585.20
FELL, JOHN G CHICO $9,209.35 $110,512.20
FRANK, DAVID R CHICO $14,830.05 $177,960.60
GARRISON, FRANK W CHICO $8,933.56 $107,202.72
JACK, JAMES F CHICO $9,095.09 $109,141.08
KOCH, ROBERT E CHICO $9,983.23 $119,798.76
LANDO, THOMAS J CHICO $11,236.48 $134,837.76
MCENESPY, BARBARA CHICO $12,573.40 $150,880.80
PIERCE, CYNTHIA CHICO $9,390.30 $112,683.60
ROSS, EARNEST C CHICO $9,496.60 $113,959.20
SCHOLAR, GARY P CHICO $8,755.69 $105,068.28
SELLERS, CLIFFORD R CHICO $9,511.11 $114,133.32
VONDERHAAR, JOHN F CHICO $8,488.07 $101,856.84
VORIS, TIMOTHY M CHICO $8,433.90 $101,206.80
WEBER, MICHAEL C CHICO $11,321.93 $135,863.16

That’s 20 pensions over $100,000 and one over $200,000 – over $2 million dollars a year, just those 21 pensions. These pensions were based on 70 – 90 percent of the employee’s highest year’s salary. We have over 100 city employees who make over $100,000 a year, meaning, they will retire at over $70,000/year-plus, many of them over $90,000, even over $100,000/year.

What pack of absolute ninnies would sign contracts with employees that guaranteed these pensions while requiring not one penny in premium payment on the part of the employee? Our city council, that’s who. They just signed another police contract – the city even pays the “employee share” of the pension premiums. Ann Schwab, your mayor, signed that contract.

So, am I the only non-public employee who thinks this is crazy?  Public employees get pensions based on their salaries. These pensions are  administered by CalPERS. But instead of requiring realistic pension premiums for these superCalifragilistic pensions, CalPERS and the SEIU hatched a plan to gamble on the stock market. CalPERS will tell you, without any shame, that they expect to fund our pension machine almost completely through gambling earnings, without any input from the recipients.  According to an article on their website,  Calpensions.com, “Most pension funds expect to get about two-thirds of their revenue from investment earnings, not annual employer or employee contributions,’ but they admit, “critics say the earnings forecasts are too optimistic.”

Yeah, way too optimistic – they’ve gotten dunked time and time again since 2003, including just this past couple of months. They’ve already lost over half their fund, a couple of times.  A July CalPERS press release reported a 1 percent annual gain – they need to make around 7.5 annually to stay on top of their, our, obligations.

So Governor Brown wants a premium rate increase, now!, meaning cities like Chico would be hit hard. Look at that list again.  But the SEIU says NO! Here’s the thing, again according to CalPERS, “Unions asked the [CalPERS] board to spread out higher pension costs mainly caused by a lower investment earnings forecast. Paying part of the new rate over two decades, instead of the full amount now, makes an extra $149 million available for worker pay and other programs next fiscal year.”  But it will cost at least that much to borrow the money to pay pensions we are already paying right now. See what a mess this is? 

The SEIU knows that if cities and counties had to pay more toward their pension obligations, things would change remarkably. First of all, Chico – along with towns all over the state – would have to lay off current employees in order to make those payments  – and those people would of course be union members. The union would lose those dues, and the union would start to shrink, and it’s power would start to diminish.  If you think our salaries are wild, you can just imagine what they get paid at CalPERS. Those people have not even begun to be laid off yet. 

Second, cities would be less eager to write the contracts that got us in to this mess in the first place – contracts that guaranteed overtime by which people could spike the salaries on which the pensions were based, and then allowed the employee to get out of paying for any of it.

Look at that list again – the red names are people I’m certain were either with the police or fire department. There are a couple of others I suspect to be retired “public safety” workers. The pensions they are receiving are more than the salaries they agreed to – they got them by spiking their regular salaries with overtime.  You’ll note, the biggest pension goes to former Fire Chief John Brown. I sat in at least three meetings listening to Brown declare that paying overtime was cheaper than hiring more firefighters, but he never had any proof, no figures, nothing. He just declared it as the truth and the idiots on council ate it up and rubber stamped contracts with structured-in overtime. Same with the cops – right now Chico Police Officers Association President Will Clark is hammering council for more structural overtime written into the city budget – he wants overtime budgeted for every three day weekend. Publicly Chico PD makes big talk about wanting more officers, for “public safety” –  but behind closed doors they’re howling for more overtime for themselves and their pensions.

The “public safety” contracts are the biggest problem. We need to get structural overtime out of the budget, completely. We also need to make employees pay their own benefits premiums. Look, if you paid all your adult children’s expenses, you’d look like an ASS, wouldn’t you? Why do we pay the “employee’s share” of benefits for people who make as much as four times the median income?

Ask Ann Schwab – that’s aschwab@ci.chico.ca.us.

One Response to “Ann Schwab’s mismanagement – 21 top-paid retired employees get over $2 million a year in pension payments, plus benefits and COLA”

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