Million-Dollar Munchikins

How a councilwomans taxpayer-funded multiple childbirth complicated HBs budget crisis

Photo by Jack GouldHuntington Beach City Council members aren't in the job for the money: as part-time Surf City employees, their salaries are set at only $175 per month each. But they may be attracted to the handsome medical benefits that come with their elected posts: council members are the only part-time municipal employees who receive full medical benefits under Huntington Beach's generous health plan.

Exhibit A: Councilwoman Pam Julien Houchen, who was first elected to the council in 1996 and served as mayor in 2001. Last year, Houchen took a two-month break from council meetings to give birth to triplets—a procedure that may have cost as much as $2 million. Fortunately for Houchen, the tab was entirely covered by the city employees' health package, which is paid for by city taxpayers.

Houchen didn't respond to telephone calls seeking her comment for this story. Of course, there's nothing illegal or necessarily unethical about a middle-aged woman who holds public office deciding she wants kids—even three kids.

But Houchen's expensive childbirth took place even as Huntington Beach began eliminating social services and laying off employees to save money. Late last year, the council voted to stop funding the only community center in Oakview, Surf City's impoverished and long-neglected Latino neighborhood. And on July 7, the council voted to eliminate 70 positions at City Hall. Twelve employees were laid off, nine retired early, 19 were switched to other departments and another 12 were demoted to lesser-paying jobs.

And more layoffs are on the horizon. According to Clay Martin, director of the city's administrative-services department, part-time council members are also negotiating to have full-time city employees increase their monthly contributions to the city's health plan. Council members would also have to pay more, but not the rest of the city's part-timers, who don't receive any medical benefits at all.

"I think the state budget crisis as well as the other economic crises swirling around have had an impact on the negotiations," Martin said. "I can't really get into the specifics, but the city has had a number of budgetary challenges before it, and the state is just one of them."

Houchen's triplets appear to have caused a major increase in the cost of the city's employee health plan. The year before she gave birth (fiscal year 2000-2001), the city's health plan—which covers 985 employees—cost taxpayers $8,516,092, not including Medicare payments, unemployment insurance or worker's-compensation costs. The year she became a happy mother of three, those costs increased more than 40 percent to a whopping $12,027,917.

Meanwhile, budget figures from other cities show that Huntington Beach had the highest per-employee health-care costs that year: $12,211. Santa Ana was a distant second with an average per-employee cost of $6,181, while Anaheim, Costa Mesa and Irvine's costs were anywhere from one-third to one-half of Surf City's—$5,301, $3,943 and $6,022, respectively.

Although Huntington Beach's Finance Department claimed to have no precise figures on health-care expenses for council members, sources close to City Hall say they were told Houchen's triplets cost Huntington Beach taxpayers between $1 million and $2 million. A recently retired city employee who spoke on the condition of anonymity claimed many city workers are angry about that expense—and upset that council members such as Houchen have full medical coverage in the first place—but fear retribution if they talk on the record with the media.

Illustration by Bob Aul

"There could be repercussions," the source said. "They are fearful somebody will find out that they talked to you, especially with all the layoffs going on. I was told yesterday that they anticipate taking another [budget] hit next year, and that means eliminating more services, more layoffs and golden handshakes—whatever they can do to eliminate costs."

Houchen's medical benefits will disappear as soon as a she leaves office. Since Huntington Beach has a two-term limit for council members, Houchen would have to step down in 2004 and sit out a term before running again.

But that obstacle to uninterrupted medical coverage would itself disappear if voters pass an initiative scheduled to go to city voters in March 2004 that proposes to break the city into five separate council districts—reducing the size of the City Council from seven members to five. The initiative would also impose a lifetime limit of two terms per each council member.

City staff is still researching the wording of the proposal. But Councilman Dave Sullivan said the way it is currently written would allow council members to start from scratch.

"The situation Houchen is in now is that she is in her second term, and that will end in November 2004," Sullivan said. "Under the old system, she would have to step down and run again in 2006. Under the new system, if it passes and if she's re-elected, she could immediately serve two more four-year terms, for a total of 16 consecutive years."

The initiative was written by Scott Baugh, a former Republican state assemblyman who now works as a lobbyist for hire. When Baugh first proposed the initiative last year, Houchen was the only person on the council to support it. She could be simply returning a favor to her ally Baugh, who hosted a $150-per-person fund-raising reception for Houchen during her November 2002 council race. (Another major supporter of the initiative is the Huntington Beach Police Officer's Association, which also spent money for billboards supporting Houchen's latest council bid.)

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