Managers, Supervisors to Begin Contributing to Retirement Plans as Redding Confronts its Massive Unfunded Pension Problem

Redding’s new city manager, his assistant and 50 other department heads, managers and supervisors will begin contributing to their retirement costs in a move the City Council hopes will be followed by other employee groups.

The council voted 5-0 to require the non-represented management team to begin making a 2 percent contribution to the Public Agency Retirement Services (PARS) plan. The action will save the city an estimated $134,500 a year, with $38,000 of that returning to the general fund, Personnel Director Sheri DeMaagd said.

A drop in the bucket, considering Redding has $207 million (and growing) in unfunded pension liabilities, but a step in the right direction. “This is the beginning of a great effort,” Mayor Brent Weaver said while promising that work in the months and years ahead to reduce the city’s liabilities will be ongoing. “Tonight is the first of many actions going forward.”

Councilwoman Francie Sullivan lauded the unrepresented management workers for being “the first to step up” and help the city confront its mounting pension obligations. “They’re giving up take-home pay, which is always difficult.”

“If this is handled correctly, we can emerge from this activity and be functional,” Weaver said, adding that one of the reasons new City Manager Barry Tippin outshone the other applicants for the position was the opinion that Tippin “had the best ideas for balancing the budget without going nuclear and tearing this community apart.”

Tackling the unfunded pension problem will require “hard work from all our city employees. We’re going to have to pull together,” Vice Mayor Kristen Schreder said. “Pension obligations are heavily on our minds,” Councilwoman Julie Winter agreed.

In a related move, the council voted 5-0 to approve Weaver’s response to the Shasta County Grand Jury report on the unfunded pension liabilities. The response, in essence, says the mayor agrees that the pension issue is a growing problem and that Tippin is hard at work on performance goals and agreements with the unions that are intended to result in a “balanced and stable 10-year General Fund financial plan.”

The city’s response goes on to state “By working with our labor partner groups, developing opportunities to increase revenues by finding new revenue sources and creating stimulus for economic development, the City of Redding should be able to mitigate the anticipated increases in CalPERS contributions and not impact services.”

In other action Wednesday, the council:

Picking up the trash

–Voted 5-0 to approve, in concept, a proposal by Tippin to shift responsibility for trash removal and shopping cart collection to the Solid Waste Division of the Public Works Department. Currently, the Police Department does the bulk of the cleanup and cart collection work with help from Development Services (code enforcement), Community Services (parks) and Public Works (solid waste utility).

“With the increase in the number of encampments and the proliferation of shopping cart theft, it is appropriate to better define the responsibilities more clearly from both a fiscal perspective as well as the administrative and functional roles,” Tippin said in his staff report.

Funding is already in place for the Solid Waste Division and the proposed changes will help streamline cleanup efforts on public property, Tippin said. Additionally, Solid Waste already has taken on state-mandated responsibilities for trash-related water quality and environmental stewardship of the Sacramento River and other waterways.

Dale Ball, one of the leaders of Shasta Support Service, a volunteer group that organizes community cleanups, voiced his support for the proposed change. “This is a great job of thinking outside the box” and a way to keep momentum going “when the money is not quite there.”

The formal shift in responsibilities will be considered by the council in September, Tippin said.

Cloud Column

–Heard a presentation from Jim Phillips, a sculptor, whose “cloud column” was recently installed in the middle of the roundabout at Shasta View Drive and Old Alturas Road as part of Redding’s Art in Public Places Program.

Jim Phillips gave a brief presentation on his donated "Cloud Column" sculpture. Photo by Jon Lewis.

Jim Phillips gave a brief presentation on his donated “Cloud Column” sculpture. Photo by Jon Lewis.

Thanks to a grant from the Shasta Regional Community Foundation and donated services, no public funds were spent on the sculpture. Phillips thanked John Corless with Nichols Melburg & Rosetto for the installation design work; Azeddine Bahloul with CGI Technical Services for soil inspection services; Aaron Rader of Rader Excavating; Redding Electric Utility; and Public Works.

The cloud column is the third project donated by Phillips, a former high school art teacher. His other sculptures are at the Redding Library and Shasta College campuses in Redding and Red Bluff.

Jon Lewis
Jon Lewis is a freelance writer living in Redding. He has more than 30 years experience writing for newspapers and magazines. Contact him at jonpaullewis@gmail.com.
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17 Responses

  1. conservative says:

    Retail is an important part of Redding’s economy.  Local media covered the closing of Sears in Chico, but did not cover the closing of Kmart in Eureka.

  2. name says:

    Did they mention anything about the empty business park?

  3. Educated says:

    Let’s see: 2% of a $240,oo salary (and that does not include the massive(retirement with big compensation at 55!!)  benefits City employees receive …is $4,080. That is truly risky-dink compared with their over-the top benefits, including survivor health care after the death of the city worker. These benefits are non-sustainable in an era in which most of us will live well into our 80’s and even 90’s. That means many will have spent more years retired on the public dime than working!!

    • cheyenne says:

      Thank you.  Now I know, at 74, I have at least 20 more years to collect my $12,000 a year pension, no benefits, from CALPERS.  By the way I retired at 64, not 55.

    • S&KH says:

      Please take the time to become Educated on the subject before you spout off.  No one at the City makes a $240,000 salary.  The problem is due to a convergence of several issues such as the city underfunding the retirement program for years when times were good; general fund revenues dropping because of Redding’s poor business climate; those that oversee the retirement program over-stating projected returns and the city employees for buying the BS the city was feeding them when negotiating.

      It really has come down to the City having to pay the bill they have ignored for so long and now not having the means to pay for it.  We’re already are feeling the effects with reduced services and protection.  It’s only going to get worse as time goes on.

      It’s also interesting that the City has chosen to socialize the pain to all employees even though it is a cash flow problem only with the general fund. (The 2% cut will only benefit the general fund by ~$38,000.)   The enterprise funds are healthy and strong and the cut is not necessary.  The City Council has chosen to undercut the productivity and strength of the other departments not in the general fund.  We should expect to see problems and reduced services in the water and electric services if this continues.  If the City Council wants to mistreat their employee, you can expect the best and brightest to move-on to greener pastures.  This will leave the city to be run by the less qualified and unable to hire those needed to right the ship.

      • Educated says:

        In anyone’s book, compensation includes benefits. When the last city manager retired at age 52!!!!!!!!, his stated “salary” was $236,000, his “other pay” was $19, 759. Other pay being? a “on the city” car? I don’t know. That comes to $255,738.

        His “Benefits package came to an additional $112,000.

        I do not blame him for taking the pay that the City offered him. Nor do I blame him for retiring at age 52. He is a good man. BUT I do hold responsible the completely PIE IN THE SKY retirement system that the city offers. NO PRIVATE COMPANY CAN OFFER SIMILAR RETIREMENT BENEFITS AND SURVIVE. What nearly destroyed Ford/GM  was their retirement/pension packages. These are no longer sustainable in a world economy. I haven’t researched Apple or Amazon’s retirement, but I doubt that their employees can retire at age 50 with full benefits. Simply moving the age of retirement to a more realistic age (65 ) would HUGELY impact the problem.

        Does Barry Tippin, the current City Manager, also receive a huge salary and benefits package? Of course.

        The simple answer is the same one that private businesses have found: a generous 401k plan or stock options (not available to government, obviously).

        If city workers find “regular” compensation beneath them let them go try their skills in the private economy.

      • trek says:

        Then why is COR still handing out raises to the already bloated salaries of the top management figure heads? If the city is losing money and business’ are moving away then the city management is behind the eight ball. You can’t keep compensating employee’s with money that’s not there can you? Greener pastures? I say let them leave the cash cow and go try and graze amongst the sheep and star thistle.

  4. conservative says:

    Many cities are reinventing.  There is a rebirth in manufacturing in places with a better business climate.  Additive manufacturing is sometimes called 3 d printing.  Complex parts are less expensive.  A software change is easier than re-tooling.  Oregon is a leader, with companies like Precision Castparts.  Precision Castparts and competitors are part of the rebirth of Reno Sparks Carson.  Over 100 companies have invested in the Tahoe Reno Industrial Center.  And that is just one industrial park in the region.  Next time you are in Carson City, take a drive around the  Carson City Airport industrial park.  It shows what Stillwater could have been.

    If you get a chance, visit Food Truck Friday in Reno.  My daughter and I had  pad Thai.  Over 35 food trucks.  500-1000 people.  We didn’t see a single cop.  In  Redding’s Market Fest, both times I visited, I saw cops in twos and threes and cops giving out jaywalking tickets.  If you can’t make it to Reno, look at the Food Truck Friday Facebook page.

    • common sense says:

      There is a rebirth in areas that are “Open” to thinking out side the box and allowing in Businesses that bring jobs,regardless of personal/Religious beliefs.

      And sometimes….cities are left with No alternatives and are Forced to change…..let us hope we don’t have to get to that point here locally….I know….Change is Hard!….It can be very difficult on the Ego….

  5. Justin says:

    I want to know if they had the proper permits and paid the applicable fees for the “art” installation?

  6. Joanne Lobeski Snyder says:

    Thank you Jon.   Superb journalism is not dead!

     

  7. Gary Ault says:

    2% is a slap in the face of the taxpayers, when our top management makes more than cities like Bakersfield, which is 3-4 times the size of Redding…….a measly 2% is chump change!   Come on City Council, kick that up to 8-11% like the rank and file have to pay……until then….this is just insulting!

    • S&KH says:

      Why would we aspire to be as bad as Bakersfield?  Besides, having just looked it up, Redding’s top management makes on average 16% less and as much as 25% less than Bakersfield top management.  With the additional 2% the total is now 9% which is in the range of the rank and file sited…

      Unfortunately, Jon Lewis got it wrong when he identified it as only managers/leaders/supervisors getting the additional 2% cut.  It cut across both managers and non-managers alike right down to the rank and file.   …and this will more than likely not be the last cut as this does not fundamentally solve the problem.

      • Gary Ault says:

        The 2% is not a cut, it is an investment in their own retirement.  A previous article in the R S stated that the unrepresented managers pensions were being paid by the city at 100%.  Now they may have been wrong or you could be wrong.  What I am hearing is you are a city employee who is unhappy with having to pay for your benefits.  My whole career with the state I paid, I also paid into a private retirement fund because I realized retirement can be expensive!  As for Bakersfield, a city with way more tax revenue than Redding could ever hope to have, and our city leaders are only 16% behind on salary? I will recheck your numbers, because the last time I did check our city manager made more!

         

         

         

  8. T.i.m says:

    The City of Chico recently looked at leaving CalPers, but it would cost $175 million after covering the termination fee and unfunded liabilities.  To put that $175 million in perspective, Chico’s entire budget for 2015-2016 was $109 million.

     

  9. Sally says:

    Jon – Thank you again for letting us know what actually transpires at these types of meetings.  We are fortunate to have someone contribute so richly to our community!

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