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Chico council narrowly directs staff to study outsourcing as a way to address $181 million CalPERS liability
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Summary
By a 4–3 vote, the Chico City Council asked staff to identify and rank outsourcing opportunities in non‑public‑safety departments to help address a stated $181 million CalPERS unfunded liability, with proponents citing fiscal risk and opponents warning of impacts to public‑service quality and unionized jobs.
The Chico City Council voted 4–3 to ask city staff to study opportunities to outsource certain non‑public‑safety functions as a way to help manage a growing unfunded actuarial liability in the CalPERS pension system.
Councilmember Tom Van Overbeck opened the discussion, saying the city faces approximately $181 million in unfunded pension liability, up from about $117 million in 2021, and that the city's share of pension contributions totals about $14 million annually. "We've got a $181,000,000 unfunded pension liability," he said, and suggested staff identify and rank functions that might be outsourced without compromising service quality.
Opponents urged caution. Councilmember Hawley said the analysis must consider the quality of public services and the role of unionized, benefited jobs: "Our city employees are also people who are moms and dads in our community." Councilmember Winslow also voted no, arguing staff already examines cost‑benefit tradeoffs during regular budgeting.
Proponents asked that recommendations be delivered early enough to inform the budget process (targeted for March–April). The motion — limited to non‑public‑safety departments — passed on roll call 4–3 (Yes: O'Brien, Van Overbeck, Vice Mayor Bennett, Mayor Reynolds; No: Goldstein, Hawley, Winslow).
Council and staff discussed examples and limitations (seasonal work, contractor oversight, and the need to avoid outsourcing sworn positions such as police and fire). Staff indicated routine budget processes already review costs but agreed to a focused evaluation to rank opportunities for savings and assess local vendor capacity.
The directive does not itself change staffing; it asks departments to return a prioritized report and recommendations.
