When I heard Mark Sorensen is going to retire as of June, I realized that the dipshits on city council will be hiring a new city manager over the next four or five months. These people don’t have bargaining skills, they are too quick to give away the store. Historically, the city of Chico has always paid new hires more than the departing manager, for some dumb reason. Which, of course, raises the rest of the department head salaries all the way around, and hey, look out for that pension deficit increase.
I would think, the smarter thing to do would be to hire at a lower salary, with a reasonable promise of raises to come for a job well done. But it’s a common argument in the public sector – albeit tired and untrue – that “we” have to keep salaries competitive to attract better people. I always have to ask – and just how has that worked out for you? It sure hasn’t worked regarding Chico PD, horny bastards.
Meanwhile, Redding has hired a new city manager at less salary than their departing manager, with a significantly smaller benefits package (see letter below for the figures). Dave, check my math – I think they’re saving at least 10%, just in salary. I don’t know how this guy will work out, but I think it was smart of them to rein in their salaries, starting at the top. We’ll have to watch that.
Wow, that Tippin guy must have been roofie-ing the council coffee pot – a $589,000 total benefits package?
We’ll have to watch the upcoming conversation about our new city manager. My district reprobate, Mayor Kasey Reynolds, has told me she believes the salaries she and council have offered are reasonable and necessary to attract “good people” – and then she went and hired those pervert cops! And signed their contracts!
With the current political atmosphere, it’s hard to get people to pay attention to the nuts and bolts. So I wrote a letter about it!
In June 2024, Chico City Council granted two automatic pay raises to manager Mark Sorensen and clerk Debbie Presson. Sorensen was making $212,307.28, Presson close on his heels at $190,271.02. Each has received a 5% and a 7% raise over the last year and a half, setting them up for an extravagant retirement paid for by the taxpayers. Sorensen has announced his retirement as of June, and I expect Presson to make the same announcement shortly.
At last October’s Finance Committee meeting, Councilmember Tom van Overbeek commented he was concerned with the recent increase in Chico’s unfunded pension liability – from $117 million to $180 million over a short period – calling it “startling”. Where was his curiosity when he approved those automatic pay increases? The time is now to discuss the effect these outrageous salaries have on our pension liability. City employees pay less than 20% of their own pension cost, with management paying less than 10%. Now the same council that has approved these salary increases will hire a new manager.
Redding recently hired a new manager, with a new salary of $295,000 – a decrease from the former manager salary of $329,979. Will Chico follow Redding’s example, taking this opportunity to reel in the outrageous and ever-increasing pension deficit?
Ask Van Overbeek, Winslow, and Reynolds – they’re all up for re-election, which is when these people are usually most willing to talk.
Chico Taxpayers Association 
The City of Chico is going to get a new city manager. This should be, and can be, a very meaningful and important decision. This is not an easy job. In fact, it’s extremely difficult to do it well.
The annual budget for the city of Chico is $100 million. There are over 500 employees. A city manager must be an expert in each of the following areas: Human resources, Budgeting, Prioritizing expenditures, Overseeing business plans from multiple departments ranging from engineering to wastewater to recycling. In short this is a big time, very difficult, executive level job. Let’s treat it like that.
Compensation changes behavior. I’ll repeat that because after four decades in the private sector if there’s one thing I’ve learned it’s this: compensation changes behavior. Unfortunately the design of the comp plan for the city manager is a fixed salary with annual increases and a pension. The lack of accountability and the lack of responsibility in jobs where a fixed salary is present generates a much different work ethic than incentive based compensation plans in the private sector . Where is the bonus for a good job? Where is incentive compensation for hitting certain metrics? What are those metrics? What happens if they’re not met? I’ve got no problem with the city manager making $500,000 if he or she gets the job done. But paying $200,000 plus expenses and a pension for somebody who hangs out for a few years, pushes the problems down the road and doesn’t meaningfully move the dial is just a waste of money.
How about tying some portion of the compensation to the level of the unfunded liability? About tying some of the compensation to a reduction in the homeless population? Or reducing the cost of city services to the average taxpayer . How about tying some of the compensation to the success of downtown Chico as measured by tax revenue produced by local merchants? How about the city manager being an advocate for the citizens of Chico by reducing employee costs? One way to reduce employee costs would be to have the employees pay a higher percentage of their pension and benefits. Again in the private sector, one of the main jobs of the CEO is keeping the cost of Labor down. Labor is typically the biggest input/cost of any company
Of course Chico needs a good city manager, But where does it say that the person has to be a public employee before coming to Chico? The incentives for public employees are generally all wrong when it comes to producing meaningful results for citizens. One of the main considerations of potential new city manager recruits is probably the ongoing expansion and maximization of their own current pension. (One of the calculations that goes on in the mind of a potential candidate for city manager is simply how many years they can add to their current years of public service, plus the increases, so that they can maximize their pension. If I was a candidate I’d certainly be thinking that way.) That would be a major consideration in the employment process. The problem for the citizens of Chico is that maximizing the value of the city manager’s pension is not in the best interest a the citizens of Chico. In fact its quite the opposite.
How about recruiting candidates from the private sector. And why is a pension automatically included?
I can virtually guarantee you that if the city manager did not have a pension, he or she she would see the folly in spending millions of dollars to keep a pension funded for other employees, or at least see the value in starting a conversation about increasing pension sharing costs.
Why is it only the taxpayers that are on the hook for the unfunded liability? Shouldn’t current city employees be responsible for their portion of the unfunded liability? Or at least pay the same percentage of it that they pay on their current salary?
How about a contract with a low base salary and really large incentive payments for accomplishing certain metrics?
This is a high level executive position. Let’s have the compensation the recruiting and the candidates be equal to that description.
Wow, thanks BC, this is a good discussion.
“...after four decades in the private sector if there’s one thing I’ve learned it’s this: compensation changes behavior.” I hear that! “The lack of accountability and the lack of responsibility in jobs where a fixed salary is present generates a much different work ethic than incentive based compensation plans in the private sector.” Can you believe you have to say that? It seems like common sense, and of course we’ve seen it here in Chico and also on the county and state level.
“Where is the bonus for a good job? Where is incentive compensation for hitting certain metrics? What are those metrics? What happens if they’re not met?” Gee, good questions – people get fired in the private sector – even in pro sports, even really nice people with good intentions. Like Mike Tomlin. But in the public sector we allow them to resign in good graces with another notch on their pension register, going on to a higher salary in another town as if butter didn’t melt in their mouths. That’s not the way to build character in the ranks.
” paying $200,000 plus expenses and a pension for somebody who hangs out for a few years, pushes the problems down the road and doesn’t meaningfully move the dial is just a waste of money.” Here we’ve had city managers one after another who have admitted out loud that they are “kicking the can down the road“, in exactly those words, in reference to the pension deficit. Council members have declared that CalPERS is bad, but done nothing to get out.
“How about tying some portion of the compensation to the level of the unfunded liability? About tying some of the compensation to a reduction in the homeless population?… ” All great ideas, things that are done constantly in the private sector. Remember when Governor Schwarzenegger ordered CalTRANS to offer contractors a bonus to finish repairs in a certain time frame after a tanker truck fire in the MacArthur Maze? That wasn’t business as usual, you know CalTRANS, but they got a contractor who was able to complete the job in a crazy amount of time.
I would say we should recruit from the private sector, but they should have job experience comparable to all the stuff you mentioned in the first two paragraphs. Two we’ve had, right off the top of my head – Dave Burkland and Sorensen, and they both sucked. I don’t remember a good manager we’ve had, they’ve worked steadily to raise their own salary, starting with Lando and his “tie city salaries to revenue increases but not revenue decreases...” MOU.
So you see, that’s their “metric” – they base salaries on how much money is in the city treasury.
Here’s the most important question for me – “Why is it only the taxpayers that are on the hook for the unfunded liability?”
Thank you, and we’ll pick that up next time, on This Old Lady Got a Pot on the Stove. Stay tuned!