STOCKTON (CBS13) – There are more problems for the city of Stockton after it appears the city has been unlawfully paying council members cash benefits – for at least 20 years.

The local newspaper alerted the city after it appears no one at City Hall knew they were breaking the rules.

“I’m mad, I’m angry,” Mayor Ann Johnston told CBS13 on Wednesday. “Stockton doesn’t need another scandal like this at a time when we are dealing with so many other huge financial issues.”

The city has illegally paid more than $45,000 into Johnston’s retirement fund alone over 17 years.

“You come in and get a packet. You talk to HR, they say ‘you have this choice, this choice, or this choice.’ You don’t question an attorney ‘Is this right or wrong?’ You take the word of the personnel that this is appropriate.”

The city says a total of 14 council members and mayors, including Johnston and two current council members, are enrolled in CalPERS retirement benefits.

Councilman Dale Fritchen says he had no idea enrolling in the city’s CalPERS retirement program was against the city charter.

“I’m going to have to give it back,” he said of the money. “I’m not entitled to it. I’m very embarrassed that the city has had all these problems that they’ve been involved in over the last few years.”

But according to the plain language in the city charter, elected officials are not entitled to any retirement benefits.

“We depend upon our attorneys, our HR directors, our mangers, to have all the knowledge about all the rules and regulations,” Johnston said. “That’s what they are paid big bucks to do.”

Instead, it’s taxpayers spending big bucks to bankroll the banned benefits.

The illegal perk is now more expensive than ever, costing taxpayers $30,000 a year.

“The total impact was about $277,000,” said Connie Cochran, the city’s public information officer.

“It was a decision made in HR that has significant consequences for all of us and for the city itself,” Johnston said.

The cash-strapped city is trying to avoid bankruptcy, with leaders busy cleaning up years of financial problems. Now, city staff is forced to sort out yet another mess.

“It’s embarrassing,” Cochran said, “and we certainly don’t want it to continue. It’s been brought to our attention. It is a problem. It’s been done incorrectly.”

Mayor Johnston vows to fix the problem.

“Everything that’s revealed, we have address, and we’re doing that,” she said. “We don’t just shove it under the rug. We fix it, and so that’s what we’re doing.”

They’re not doing it alone. The state controller is conducting an independent audit of the city, which is expected to start next month.

“Every time we turn over a rock there’s another problem. I’m very thankful that the controller is coming to audit the city,” Fritchen said. “I want to find out exactly where we are as a city. We cannot fix ourselves and go on until we find out where we are.”


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