The Cuesta College Board of Trustees has agreed to award outgoing president Gil Stork a $51,000 stipend to help pay for medical benefits after he retires June 30, a decision that baffled faculty members given a projected budget deficit of more than half a million dollars in the school's general fund.
Additionally, the board agreed to convert Stork's $10,359.24 mileage allowance into his annual salary, increasing it to $217,545.12 for the 2017-18 school year, which increases his pension based on his peak salary year.
Cuesta College Board of Trustees President Barbara George said in a written statement to The Tribune that the amendments to Stork's contract are "to create consistency with past practice for superintendent/president retiree benefits." George said the one-time stipend was proposed to honor the employee contract that Stork and the board agreed to in 2010.
However, Debra Stakes, an earth sciences professor who serves as president of the Cuesta College Federation of Teachers, said the union considers the $51,000 stipend "an unconstitutional gifting of public money."
She also said converting the travel allowance into annual salary so Stork can receive a more lucrative pension is "not very genuine."
According to the agreement, the $51,000 stipend is to be used to purchase an annuity in lieu of providing ongoing benefits. Before the Public Employee Pension Reform Act (PEPRA) was put into law in January 2013, community colleges were able to grant lifetime medical benefits to retiring superintendent/presidents.
That's no longer the case.
And though Stork is eligible to receive Medicare, George said the stipend "met the original intent of the contract."
"This was vetted with the district's legal representation, who advised the district that, in fact, other community colleges have purchased annuities for retiring superintendent/presidents," George said.
Stork, a San Luis Obispo native and graduate of SLO High School and Cal Poly, has been credited with guiding Cuesta College through a turbulent period after its accreditation was threatened. He's worked in education for more than 54 years.
"This took faculty by surprise, because it is really inconsistent with the way that any other employee is treated," Stakes said. "I think we want to make a note that no employees at this college get retirement medical benefits. … The majority of community colleges provide some sort of medical benefits for their faculty when they retire, at least until they reach 65.”
In January, Cuesta predicted a shortage of $551,000 in its ongoing unrestricted general fund resources, citing a drop in enrollment and increases in mandatory spending as the two main factors. At the time, Stork said this year's budget deficit would be covered by district reserves, but that would not be a sustainable practice moving forward.
Stakes said the projected deficit is "phony" — having reviewed Cuesta's budgets from the past decade — and the school does not balance budget estimates, inflates expenses and under-reports income. She said the school consistently plans to have money left over.
"I can't believe Dr. Stork would proclaim a deficit, which, to most people, would make it sound like we're on the brink of financial ruin — but that’s not true," Stakes said. "Most of that residual goes into this huge, inflating contingency account. It can't have been much of a deficit if they can give such a generous retirement benefit to one person."
George said the Board "recognizes that Dr. Stork has medical costs not fully covered by the retirement plan."
Shifting general funds into this one-time stipend prevents the district from paying ongoing costs, school officials said.
George noted that Stork's current salary is "well below the median of superintendent/presidents' salaries in comparable college districts" and that he did not experience a salary increase between 2010 and 2015.
George also highlighted the board's approval of an ongoing salary increase of 4 percent for faculty in March.
Even with the raise — which came after faculty picketed on the first day of spring semester to protest unfair compensation and later threatened to strike — Stakes said faculty members "are just shaking their heads in bewilderment" over Stork's contract amendments.
"Four percent over two years is not great, and we're still not at the average," Stakes said. "That's what makes us bitter. The fact that we've had to work so hard, and they give us as little as possible, and then they shower this munificence on Dr. Stork."
College officials said faculty were present at the board meeting when the agreement was approved, and no public comment was made during the item's discussion and vote.
"The board takes its fiduciary responsibility seriously when taking any and all actions," officials said, "including those regarding executive compensation and employee contracts."