A reader sent me information that has had me doing a lot of research the past week. For years I’ve known that city council members receive salaries and benefits, but according to Transparent California, several members have somehow racked up pension deficits.
A pension deficit is created when an agency promises pensions but only makes partial payments toward the premiums. City of Chico has paid less than 50% of cost, with most employees contributing less than 15%. CalPERS claimed they could cover those deficits with stock market investments, but their investments have paid poorly, partly due to corruption such as taking bribes to buy bad stocks. One investments director, a Chinese national, was found to be making investments in his own holdings in China.
Staff’s strategy to bang down (or at least look like they are banging down) the deficit has been to siphon money from every city fund to make their “side fund” or “extra” payments. While employees pay a 9 – 15% share of the “regular” payments, they pay nothing toward the “extra” payments. So at present, CalPERS is demanding over $140 million in “deficit”, and our lovely council and Staff expect us to pony up.
Are council benefits part of that deficit? According to Transparent California, as of 2019, Council member and former mayor Sean R. Morgan, who receives about $20,000 in benefits, had about a $22,000 deficit. Wow, Ann Schwab is reported at about $43,000! Coolidge and Reynolds also have deficits listed. How could this happen?
Transparent California, run by Nevada Policy Research Institute, gets its figures from the public agencies on which it reports. So I contacted city of Chico Human Resources Department.
The staffer I contacted was pleasant and seemed helpful, but when I confronted her with the links, she told me she believed, ” the data on the website (that the City of Chico does not maintain or control) is not fully accurate.“
She also offered, “ some Councilmembers may have public-sector jobs which may be covered by CalPERS…and thus possibly some overlap of data? “
Obviously she didn’t look at the site – as you can see at the above link, Morgan’s salary and benefits as an employee of CSU Chico are listed separately. So are Schwab’s.
So I went to the Secretary of State’s website, publicpay.gov
I like Transparent California better because they list names, which is less confusing. As you see, publicpay.com just lists positions. And, publicpay.com has a notice – “This city [CHICO] does not include payments toward the unfunded liability of the employer sponsored retirement plan.”
As I dug deeper into information about TC, I found out they “prorate cost of pension debt payments made by the agency“, because the agencies won’t give that information. So what does that mean?
The HR Staffer told me the city pays the mayor a flat salary of $720/month and council members get $600. They are allowed to choose their benefits package. They are offered a range of plans.
She highlights the cheapest plan, just for example – see the city’s contribution for an EPO for an employee + spouse (and several of these people have children so it’s more) is over $1200/month. The employee, for a plan that covers their spouse, pays only $188 a month.
Judging from the figures we see on publicpay.gov, these people are being pretty generous with themselves. The 2020 benefits figure for Coolidge as Mayor is over $17,000.
According to city charter, if the employee has another job at which they have a better plan, they can choose to opt out of the city’s plan and take cash instead!
According to state law, if city council members are offered benefits packages, whatever the pay split, the entire cost must be paid. I’m not sure how that works, and I’m wondering – is the city paying the entire premiums? Or letting them ride with CalPERS investments? Why else would there be deficits for sitting council members?
I cc’d my representative Kasey Reynolds in the conversation because she’s listed as having a debt:
Of course Reynolds didn’t respond. But here’s what I think. I think the city is letting the benefits ride on the stock market just like the pensions. Otherwise, why would they have a separate deficit, “Other Post Employment Benefits,” or OPEB?
I’ll have to get back to you with that, next time, on This Old Lady Goes to Town.
Chico Taxpayers Association 
That’s all very interesting. I see that in some comparable positions/salaries, there are varying amounts for pensions. If not accurate, those must be on a unique type of (fake) distribution schedule. Seems like a lot of extra work and isn’t making sense so far. Strange. I might try to find out if such pension costs are public information. Seems like those should be.
It’s all public information, but agencies like city of Chico fight to keep from giving it out. Agencies like Transparent California and newspapers like the Enterprise Record have sued for this information. Then the agencies tell us the figures aren’t accurate.
But I think the bigger problem is people aren’t paying attention, or don’t understand, or don’t care because they don’t get it. The school system isn’t exactly knocking itself out to help the public understand. In fact, Chico Unified has been sued a number of times for non-compliance.