The state pension system, known as CalPERS, has told the Rancho Santiago Community College District to reverse changes to Chancellor Raul Rodriguez’s salary because the contract approved by the district’s board is “prohibited under retirement law.”
In August 2017, the board approved a new contract for Rodriguez which incorporated a $30,000 relocation allowance into his salary. Members of the district’s faculty union, which has been heavily critical of the chancellor, accused Rodriguez of trying to spike his state pension.
But the district’s attorney, Ruben Smith, argues CalPERS has not completed an official review of Rodriguez’s account, and “for you to come out and say they’ve declared it’s not legal is premature.”
“Trust me, no one is trying to pull a fast one here,” said Smith. “His salary is not being spiked.”
Smith said the agency is “misinterpreting” the contract’s language.
“They’re thinking that we’re taking that relocation pay and adding it to his salary for retirement purposes,” said Smith. “We’re taking his relocation pay and doing away with it and we’re increasing his salary so it’s more competitive.”
The $30,000 relocation allowance was part of Rodriguez’s original contract when he was hired in 2010 and is intended to reimburse him for the cost of his move from Stockton to Santa Ana. He’s continued to receive the allowance for the past seven years.
The district said the new contract amounts to a $30,000 salary increase for Rodriguez with no new costs to taxpayers, since he was already receiving the money in the form of a benefit. Rodriguez said he needs the relocation pay to keep up with the higher cost of living in Orange County, and the change to his contract was not an attempt to boost his pension, saying “it’s not [pension] spiking if I don’t retire.”
But union members cried foul, arguing that regardless of whether Rodriguez’s overall compensation is the same, by increasing his salary, the new contract would also increase his final pension payout.
State pension law does not allow housing or travel pay to count toward one’s pension.
Smith also pointed to language in Rodriguez’s contract that the relocation allowance will expire 30 days before the termination of the contract, claiming that the $30,000 will not get factored into his pension because of that.
“That compensation gets taken out before his contract terminates. So it doesn’t even get calculated in, because it gets deleted,” Smith said.
CalPERS, however, does not calculate pensions based on a person’s last pay period, but rather a one- or three-year average of their highest annual compensation, according to the agency’s spokeswoman, Amy Morgan.
Initially CalPERS reviewed Rodriguez’s salary in late August and said there was nothing wrong with the arrangement.
But after a board member for the faculty union, Santiago Canyon College counselor Barry Resnick, questioned CalPERS’ determination and sent them updated documents approved by the school board in September, the agency came to a different conclusion.
“CalPERS reviewed the additional documents that Mr. Resnick forwarded to us…and determined that…Rodriguez’s new salary was not in compliance with the retirement law,” said Morgan in an email. “CalPERS does not tolerate pension spiking and invites the public to assist us in identifying any and all instances.”
According to Morgan, the district’s board will need to amend Rodriguez’s contract to comply with retirement laws. His account also has been flagged by CalPERS, and will be reviewed again when he retires. The $30,000 salary increase under his latest contract will not count toward his pension.
"If the compensation remains out of compliance at the time of Rodriguez’s retirement, CalPERS will deny it,” Morgan said in an email.
When CalPERS conducted its review in late Aug. 2017, the agency relied on two salary schedules sent by the district which were approved by the board in April, before the chancellor’s contract was changed.
Resnick, a board member for the Faculty Association of Rancho Santiago Community College District, or FARSCCD, contacted CalPERS multiple times alerting them to an updated salary schedule approved by the board in September, which shows an additional $30,000 in Rodriguez’s salary.
Resnick, a former president of FARSCCD, questioned why the district did not provide the updated salary schedule to CalPERS, although he would not go as far to say the district lied.
“That’s hard to answer [until] I know what CALPERS asked them [the district] for,” Resnick said. “Deception has been the hallmark of Rodriguez’s tenure in the district. Based on what I’ve seen in the past, it wouldn’t surprise me.”
Smith said he is not familiar with how the district communicated with CalPERS but the district has not withheld any information.
He and other district officials have suggested the controversy over Rodriguez’s salary is politically motivated.
“Other people want to interpret it differently to play games – but I think you’ll find that there’s nothing going on here,” Smith said.
As of Monday evening, Smith did not respond to questions about whether the district would amend Rodriguez’s contract to comply with retirement law.
Resnick and the faculty union have butted heads with Rodriguez over a number of issues, most recently a proposal increasing the number of units faculty are required to teach, without a proposed pay increase, and a controversial partnership between the district and the government of Saudi Arabia.
“I’m not just a faculty member, I live in this district and pay taxes,” said Resnick, who lives in Orange. “And I don’t tolerate taxpayer abuses either.”
Contact Thy Vo at firstname.lastname@example.org or follow her on Twitter @thyanhvo.