Charter committee re-examines council pay

In a reversal, the committee tasked with drafting a charter for Costa Mesa on Wednesday decided to re-examine the compensation of City Council members and edged toward giving them a to-be-determined fixed stipend.

The Costa Mesa Charter Committee had indicated during its Oct. 23 meeting that the council's compensation for the part-time job was adequate and could stay as is in the proposed document.

Most committee members were swayed during the committee's meeting Wednesday as they debated whether the elected officials should continue to receive pensions and medical insurance. After learning of a city policy that allows the council members to reallocate their benefits money, a majority of the committee leaned toward the fixed stipend.

The details of that policy were unavailable at the meeting, however, and some on the committee said they believed that the council members could essentially "cash out" any unused benefit money, thus sending it to their paychecks.

The city pays up to $1,476 a month for each council member's healthcare, life insurance and long-term disability insurance.

On Thursday, city officials clarified to the Daily Pilot that unused portions of the council's benefit money go into a deferred-compensation plan, not paychecks. They referred to the plan by its federal tax code number, 457, which has some similarities to a 401(k).

All the council members receive the $1,476, but exactly how they use it is not public because it pertains to confidential healthcare information, city officials said in response to a Pilot inquiry.

Aside from the benefits, all five council members receive a flat monthly salary of $904.40, or $10,853 a year. They also can receive a pension or, if they opt out of that — as Mayor Jim Righeimer and Mayor Pro Tem Steve Mensinger have done — they must enroll in the Public Agency Retirement Services program.

Committee member Gene Hutchins called the current setup too complicated, preventing the general public from tracing how much council members truly receive.

"The more complex we make it, that doesn't look good," he said.

Member Andrew Smith said he didn't like the idea of a part-time council member earning such money.

"I think it blurs the line between public service and public employment," he said, later calling the situation a "mini-Bell" — a reference to the Los Angeles County city that in 2011 became a nationwide symbol of employee and council member compensation corruption.

"They're servants" to the public, Smith added. "They're not employees."

When asked by the committee about the cost-saving potential for discontinuing council pensions, the group's counsel, Yolanda Summerhill, said such a move could be prohibitive because doing so would be considered a breach of contract with the California Public Employees' Retirement System (CalPERS).

The San Jose City Council had sought to terminate its CalPERS program, only to find out that doing so would cost the city $5 million to $5.7 million, according to the committee's report.

In the end, the committee opted for language that says only future council members aren't eligible to receive a CalPERS pension payable by the city.

By comparison, as of 2012, the elected board members for the Mesa Water District receive $207 per day of service, for a maximum 10 days per month. They do not receive pensions, and they may use up to $1,300 a month toward participation in the district's health insurance plans.

They cannot receive cash payments in lieu of forgoing the health coverage, according to the district's website.

All five directors participate in the health plan, according to a Mesa Water spokeswoman.

Costa Mesa Sanitary District's elected directors receive $221 per day of service, for a maximum of six days a month. They also don't receive pensions and, as of 2011, have been eligible for the district's medical plan.

The district pays a small portion of that plan, leaving the directors — none of whom are currently enrolled in it — to pay the premiums, said Anna Sanchez, the district's human resources director.

Charter Committee members Mary Ann O'Connell and Bill Fancher were absent Wednesday.

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