Little more than a year after Nevada City hired a new part-time police chief, the state’s employee pension agency is forcing the town to initiate a process to seek a more “permanent” police chief — a move that could see Chief Jim Wickham replaced a lot sooner than originally expected.
“(CalPERS) is absolutely the problem,” said City Manager David Brennan.
“PERS does not care about a local governments’ financial situations. They are only concerned with getting as many people paying into the system as possible.”
The matter comes on the heels of the city’s previously fledgling budget being propped up by a 3/8-cent sales tax increase approved in 2012 that put its overall sales tax at 8.50 percent.
The increase was approved by more than three-fourths of voters in November and took effect at the beginning of April with first revenues expected at the end of July.
Part of the city’s justification for needing close to $400,000 extra in the first year alone was that the city had lost $487,000 in tax revenue from 2008-09 levels — forcing the city to staff some of its most prominent positions with part-timers, including the city manager, city attorney, city engineer and the police chief.
These positions were staffed with retirees, able to subsist on their part-time incomes thanks, in part, to their pensions. As long as they didn’t work more than part-time hours, the city saved the cost of funding those positions’ pensions, which also kept those employees from so-called “double dipping” into the pension program.
“As annuitants, we have saved the city hundreds of thousands of dollars,” Brennan said.
But the cost-saving tactic of part-time retirees has been challenged by CalPERS, California Public Employees’ Retirement System.
In response, Brennan, City Engineer Bill Falconi and City Attorney Hal DeGraw altered their employments with the city. None technically work for the city anymore, Brennan said.
Instead, all three of their positions became contracted, as listed on the city’s website. Today, those positions are essentially outsourced to third-party entities for whom Brennan, DeGraw and Falconi work.
While CalPERS’ regulations don’t address the employment of those three positions, the police chief must be a city employee or outsourced to the sheriff’s department, Brennan said.
And CalPERS requires that if a council-appointed position is held by an annuitant, the city must hold an active recruitment for a regular employee concurrently, Brennan said.
“The current PERS regulations, they are really strict on their restrictions on when you can use an annuitant,” Brennan said.
Nevada City had already anticipated an eventual Wickham departure.
“I told them when I came on board that I would act as an interim chief and help them through their financial program,” Wickham said.
But Nevada City didn’t expect his departure to occur for another year and a half, Brennan said. In fact, Brennan said the city was beginning to initiate a new, 18-month contract with Wickham that would have included specific objectives and his initiation of finding his own replacement.
“There are some things Jim is working on that we would like to see completed before we bring someone else on board,” Brennan said.
However, when the city ran the contract past CalPERS, they objected, citing the ongoing recruitment stipulation.
“We don’t believe we are there yet to hire a full-time chief,” Brennan said.
There is also a disagreement as to who appoints the police chief.
Nevada City relegates that administrative function to the office of city manager, but CalPERS dictates that a city council holds that authority, Brennan said, and Nevada City does not have resources to battle CalPERS on the distinction.
Brennan compared such a showdown as David versus Goliath.
Instead, the Nevada City Council has scheduled a “discussion and authorization for initiating recruitment for police chief,” according to the agenda for its April 24 meeting.
That item proposes a more-than part time, but less-than full-time police chief, Brennan said.
The city staff report indicates such an increase would be associated with an additional $3,000 impact on the police department budget. The city’s website lists notes that its interim police chief collects a $48,000 annual salary.
Wickham is not interested in applying for a more than part-time position that could jeopardize his Mill Valley Police Department pension, he said.
Should council initiate the recruitment process to fall in line with CalPERS’ restrictions, the city would begin a process to publicize the job.
In that time frame, the city would likely interview candidates in September, the staff report notes.
“We’ll see how it plays out,” Wickham said.
To contact Staff Writer Christopher Rosacker, email email@example.com or call 530-477-4236.