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health care for city councils

COSTA MESA, California, July 4 -- In the midst of growing controversy over full time health benefits for part time city council members, the city of Costa Mesa released current figures on city council compensation last week, showing the city council members received more than triple the national average and more than double the state average for city council members.

    Each Costa Mesa city council member, other than Mayor Pro Tem Jim Righeimer, received $1,595 per month in “health benefits”, including life insurance, according to information released by the city Director of Communication William Lobdell.

    By comparison, Newport Beach council members receive an average of about $1,167 according to the city Public Information Manager Tara Finnigan. She was unable to provide amounts by council person “because our Finance staff is very busy due to this being the fiscal year end.”

    According to Finnigan, four of seven members of the Newport Beach city council receive the health benefits, with Mayor Pro Tem Nancy Gardner, Council Member Rush Hill, and Council Member Steven Rosanksy opting out. She added, “Council Member Rosansky does not accept the cafeteria allowance, but we do contribute $215/year for him to Medicare.”

    Jennifer Muir, spokeswoman for the Costa Mesa Employees Association, said, “The City Council keeps saying they’re in the middle of a budget crisis, but they won’t give up their personal perks. Before cutting services to the public, they should look at reducing the perks they get for their part-time job.”

    “City council members who work a few hours a month should not receive these benefits unless they are willing to pay for them,” asserted Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association. “The positions are service, not jobs.”

    Colin McCarthy, president of the Costa Mesa Taxpayer Association, stated, “The $1,595 represents the total of medical, dental, life and long-term disability benefits. In that sense, Costa Mesa’s health benefits for its Council members are in-line with the averages for these categories.”

    The national average in 2009 for health benefits in private business was $402 per month for just the employee and about $1,114 per month for the employee and two family members, according to the Kaiser Family Foundation.

    The California average for all state workers combined is $502.43 per month for just one employee’s health coverage, with the state paying an average of $447.79 per month (or 89 percent), according to National Conference of State Legislatures. The California Public Employees’ Retirement System (CalPERS) does not provide an average figure, but in March the Bay Area News Group estimated a state worker average of $709 per month.

    In response to the Bell scandal, California State Controller John Chiang placed city council and mayor compensation figures on the world wide web for public examination. Unfortunately, the data is from 2009, missing several cities, subject to variations in methods that city report data, and uses two different methods for presenting information (either by individual city council members or as a combined figure for the entire council).

    According to the state data, the local cities of Tustin and Laguna Hills were in the top five for the entire state, at $20,373 to $26,433 per year for Tustin and $24,656 to $30,519 per year for Laguna Hills.

    Responding to criticism when the state data was released in December 2010, Tustin dramatically cut their city council health benefits. According to the Los Angeles Times in a Monday article, Laguna Hills now averages $24,300 per year.

    The annual amounts for Costa Mesa are $19, 140 per council member.

    Irvine provides its city council members with between $8,354 and $13,330 per year. Huntington Beach provides its city council members with between $3,785 and $11,238 per year for health along with an additional $540 to $1,466 a year for dental and $222 a year for vision.

    According to the Kaiser Family Foundation the national average in 2009 for health plans in private business that cover two family members was $13,375 per year.

    Although exact numbers are difficult to compute, Costa Mesa is well within the top 10 percent of health compensation for city councils in California and possibly in the top four percent. Newport Beach appears to be in the middle of state health benefits for city councils.

    Righeimer explained his refusal to accept the city health benefits and life insurance, “A major part of our campaign for council was getting control of the cost of city employee benefit programs which include pension and health benefits. I felt that at this time it would be difficult for me to ask our city employees to cut back on these unsustainable programs and accept them myself, therefore I declined the healthcare benefit and the CalPers Pension plan. I did accept a tax deferred savings plan were the city matches my 3.75% contribution similar to a 401K styled plan.”

    Both cities use a “Cafeteria style plan”, in which both employees and city council members select from CalPERS options. According to Finnigan, Newport Beach council members can only select from medical plans, excluding both vision and dental plans. According to a Costa Mesa city official who requested anonymity, council members and city employees may chose from health care, dental, vision, life insurance, disability insurance, and other options. The city official also claimed that any amount not used for health benefits would be paid the employee or council member as taxable income. No Costa Mesa city official has verified the city’s methods for the record.

    “The City Council gets the $1,595 amount for a cafeteria health plan,” explained Muir. “But if they do not use the full amount, they can receive the difference in cash.”

    “In contrast,” Muir continued, “the city pays $799/month for a general employee cafeteria health plan. If that amount is not enough to cover their health care needs, the employee pays the difference for coverage for themselves and their families. That varies based on individual need, but we know that many of our employees have significant out of pocket health care expenses.”

    In Newport Beach, local citizen Jim Mosher criticized the city budget at the June 28th city council meeting, claiming that the City Charter prohibited city council members from receiving health benefits.

    David Hunt, Newport Beach City Attorney, responded, “The benefits are authorized under the Charter and under state law.”

    Mosher cites Newport Beach City Charter Section 402, “(A) The members fo the City Council shall receive no compensation for their services as such. (B) The members of the City Council shall receive reimbursement on order of the City Council for Council authorized traveling expense when on official duty. In addition, each member shall receive the sum of four hundred forty-one dollars and Fifteen Cents ($441.15) per month, adjusted annually,” continuing with an explanation of how to compute cost of living increases.

    Hunt stated, “The health benefits the Council is receiving are under to the Public Employees Retirement System (“PERS”). Section 900 of the City’s Charter authorizes and directs the City “to do and perform any act, and to exercise any authority granted, permitted, or required under the provisions of the Public Employees Retirement Act.” The Public Employee Retirement Act then specifies that “payment by a contracting agency of employer contributions and any other amounts for employer paid benefits under this system shall not be construed as receipt of salary or compensation by the elective officer for purposes of any statutory salary or compensation limitation.” (Government Code section 20322(f).) Thus, both under the Charter and state law, the PERS benefits are fully authorized.”

    “In the budget that was just adopted,” Mosher complained, “taxpayers will be paying the Council members an average of $94,248/7 = $13,464 each towards their medical/dental/vision plans during fiscal year 2011-12, even though the Charter would seem to allow nothing beyond their basic expense stipend.”

    The Newport Beach city council proudly announced last month that it was cutting city council pay and benefits by $45,000 a year. When the city was passed at the June 28 city council meeting, Mosher asked why the amount budgeted had increased slightly over the previous year.

    Newport Beach city manager Dave Kiff explained that because of increases in retirement plan costs the $45,000 in savings was from the total that it would have cost had the city council not voted to cut their pay and benefits.

    Mosher also pointed out, “Earlier this year, Councilman Hill mentioned what he felt was the exorbitantly high cost of mounting a campaign for a contested seat - about $100,000 in his case.”

    Mosher estimates total compensation to each council member at #130,665.72 over their four year term and added, “In other words, a successful candidate can currently expect to make a ‘profit’ even when they completely fund a $100,000 campaign out of their own pocket.“

    In a March interview with the San Jose Mercury News, Vosburgh said of health benefits for city councils, “The only reason there isn’t more outrage is that most people aren’t aware of this. It amounts to a gift of public funds, a theft from taxpayers. That’s what it comes down to.”

    Muir said of the Costa Mesa, “The City Council’s health insurance benefit is high when compared to general employees and even to the supervisors and managers. My understanding is that of all the employee groups within the City, the City Council is the only one that hasn’t taken a cut to their benefit packages. As you know, general employees are paying more toward their pensions, did layoffs and furloughs, etc.”

    Muir continued, “My understanding is that even department heads and supervisors last year decided not to take an increase to their health benefits last year, as the City Council did.”

    According to the city, Costa Mesa department heads get $1,467 per month in health benefits. Division managers get $1,458 per month. Police captains get $1,000 per month. General employees get $799 per month. Sworn police officers get $631 per month. Sworn fire fighters get $566 per month. Police lieutenants get $526 per month. These numbers contrast with the $1,595 per month for part time city council members.

    Lobdell explained the release of the information, “In an effort for further transparency, we’re highlighting the total compensation for Costa Mesa City Council members and posting it on our website” (previously, council compensation was included in the list of all City employee compensation).


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