| Those details would include such extras as bonuses and special vacation, insurance and pension benefits.
The measure would also hit cities in their pocketbooks by blocking their ability to borrow money by issuing bonds and to spend money for tax-generating redevelopment projects if the state attorney general determined their council members' salaries to be excessive.
"It's pretty clear in the case of Bell that the City Council put their personal interest ahead of the interests of taxpayers, taking advantage of the ability that they had as a charter city to pay themselves these outrageous $100,000 salaries," said Assemblyman Hector De La Torre (D- South Gate), author of the measure, AB 1955.
State Sen. Louis Correa (D- Santa Ana) said he was planning to introduce a separate bill Thursday to require local administrators and elected officials, including school board members, county supervisors, water district board trustees and city council members, to annually disclose their salaries, benefits, reimbursement payments and other perquisites.
They also would have to disclose income from side appointments to commissions, an issue that arose in the Bell controversy.
Representatives of many of California's 480 cities say they support the intent of the De La Torre bill but believe that attempts by the state to restrict city compensation may be illegal.
The state Constitution reserves for charter cities the power to control their employees' pay, according to Chris McKenzie, executive director of the League of California Cities, whose attorneys are reviewing De La Torre's proposal.
"We want what he is trying to accomplish to be effective and constitutional," McKenzie said. "It's not going to be effective if it's illegal."
The De La Torre measure would not set salaries; it would create financial disincentives for cities to approve excessive pay. It would allow the state attorney general to designate municipalities as "excess compensation cities" subject to sanctions.
The bill would subject the state's 100-plus charter cities, including Bell, to the same standards that apply to general-law cities, where salaries are limited based on the size of the city.
A municipality would be considered an excess compensation city if council members received more than $300 a month in cities with up to 35,000 residents and more than $1,000 a month in those with a population of more than 250,000. Higher salaries would be allowed for full-time councils and pay approved by voters.
If a municipality is determined to be an excess compensation city, it would no longer be allowed to create redevelopment project areas — a key tool used to create tax-generating construction — or borrow or spend money to pursue redevelopment.
In designated cities, the measure also would increase the income tax rate to 50% on the portion of the council members' gross income deemed excessive. That, De La Torre said, would be a "disincentive" for councils to approve excessive salaries for themselves without voter approval.
McKenzie supports the requirements in AB 1955 that compensation packages and contracts with managers who report directly to a city council be ratified by the council in public. At least a week before ratification, the city would have to publicly post the contract information, including the employee's name, position, total salary, benefits "and any other compensation," including contributions to pension funds on behalf of the employee.
The De La Torre proposal, scheduled to be taken up Thursday by the Senate Local Government Committee, was welcomed by Jon Coupal, president of the Howard Jarvis Taxpayers Assn., but he wondered why it took the Bell scandal to get state officials to see that more disclosure was needed.
"We're glad some of our state elected officials are finally getting religion on this issue," said. "But this is a little bit like closing the barn door after the horses have left."
Meanwhile, the state's pension system is under pressure to do more to prevent government pay abuses after The Times reported last week that state officials had become aware of exorbitant salary hikes in Bell four years ago and did nothing about it. State Treasurer Bill Lockyer, who sits on the board of the California Public Employees' Retirement System, on Wednesday unveiled a proposal for the board to produce an annual public report comparing salaries across state and local agencies. The report would list the 100 top-paid public employees. Lockyer's plan also calls for staff at CalPERS to inform the board of any excessive salary increases awarded to public employees and to implement new procedures to ensure that such salary hikes do not clip by the pension fund unnoticed.
The proposal will be considered by the board in the coming weeks.
"The Bell fiasco shows that when a few greedy public officials are allowed to operate outside the public view, they can turn taxpayers into their personal ATMs," Lockyer said. "These recommendations have a simple goal: to help ensure taxpayers know how much they're paying the folks who work for them, and how those payments affect their obligation to fund retirement benefits."
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Here's another related article:
Hefty paychecks for Vernon officials rival those in Bell
The ex-city administrator who now serves as a legal consultant earned seven figures in each of the last four years, records show. Others in Bell's neighboring city got $570,000 to $800,000 last year.
By Kim Christensen and Sam Allen, Los Angeles Times
August 20, 2010
Bell isn't the only city that has paid huge salaries: In neighboring Vernon, a former city administrator who now serves as a legal consultant has topped the $1-million mark for each of the last four years, records show.
Eric T. Fresch was paid nearly $1.65 million in salary and hourly billings in 2008, when he held the dual jobs of city administrator and deputy city attorney, according to documents obtained by The Times through the California Public Records Act.
Described by city officials as an experienced finance attorney, Fresch was paid nearly $1.2 million last year, records show. Through July 31 of this year, he has earned about $643,000 as "outside legal counsel."
Other highly compensated employees include Donal O'Callaghan, who was paid nearly $785,000 last year as city administrator and director of light and power, overseeing Vernon's city-owned utility. He now earns $384,000 a year overseeing capital projects for the utility after stepping down July 20 as city administrator.
Former City Atty. Jeffrey A. Harrison earned $800,000 last year and City Treasurer/Finance Director Roirdan Burnett made $570,000, records show. The year before, Harrison was paid $1.04 million.
Disclosure of Vernon's hefty salaries follows The Times' recent report that Robert Rizzo reaped total annual compensation of more than $1.5 million as city administrator in working-class Bell. That report sparked public outrage among Bell residents and prompted the resignations of Rizzo and two other highly paid managers.
Although Vernon and Bell share a border in Southeast Los Angeles County, they are very different cities. Bell is a working-class, largely immigrant city with 38,000 residents. Vernon has fewer than 100 residents and is largely a business and industrial hub.
But municipal government experts said they were taken aback Thursday by word of Vernon's big paychecks.
"They are beyond anything that I could imagine for a local government manager," Dave Mora, west regional director of the International City-County Management Assn., said of the sums paid to Fresch and O'Callaghan.
Kenneth Pulskamp, president of the City Manager's Department of the League of California Cities, agreed.
"Over 99% of city managers make well below that amount of money," said Pulskamp, who also is city manager of Santa Clarita. " So that seems way out of the ordinary."
Fresch told The Times on Thursday that he has performed complex legal services for Vernon, mostly related to its energy businesses. He said he gradually accepted more and more work from the city since he first started working for it in 1986.
Once he joined the city staff, Fresch said, his services cost Vernon less than what his private-practice "peer group" would have billed for similar work.
He said Vernon saved money through the arrangement. Fresch now serves as "special counsel" to the city, at $525 an hour.
"If people think that I am a city guy making that kind of money, they would have every right to be outraged," he said.
"I'm not trying to say that municipal compensation should be at the level that I'm doing. I'm saying that if you bring a guy like me in, and do transactions for several hundred million dollars, this would not be out-of-line compensation."
Vernon officials defended the salaries Thursday, saying that Fresch, O'Callaghan and others brought a level of expertise the city otherwise would not have had.
They also noted that the City Council has done away with a two-tiered pay system that allowed some officials to bill for hours worked beyond a normal 40-hour work week. The extra pay did not count toward retirement benefits, they said.
New contracts, which have been phased in over the last year, call for straight salaries for employees.
"Vernon's goal continues to be to bring to the city the most highly trained experts in the field with the best, most creative thinking to solve its challenges," interim City Administrator Mark Whitworth said in a letter with the city's response to The Times' records request.
Whitworth said "the benefits of this high-quality team are evident," noting that "Vernon businesses bring hundreds of millions of dollars in revenue to the region, and support 50,000 jobs."
Vernon City Council members are paid $68,052 each year, far greater than in most cities in Los Angeles County, according to a Times survey.
Founded as an industrial city, Vernon has built its economic well-being on a base of about 1,800 businesses.
Its municipally owned power plant provides electricity at rates consistently lower than those elsewhere, Whitworth said, and the city provides top-tier services, including a fire department that is one of only 60 Class 1 departments nationwide.
Vernon has long been dogged by accusations that it is a fiefdom run by a family that has held sway over the town for generations.
In January, former Mayor Leonis Malburg was ordered to pay more than $500,000 in fines and reimbursements to the city after his conviction for voter fraud and conspiracy charges, bringing an ignoble end to his lengthy reign as Vernon's patriarch.
Malburg, the grandson of Vernon's founder, served on the council for five decades.
Although prosecutors had asked for jail time, Superior Court Judge Michael Johnson cited Malburg's age — 80 — and his medical history in deciding against incarceration.
Malburg's wife, Dominica, 83, was ordered to pay more than $40,000 in fines and fees.
In December, the judge found the couple guilty of engaging in an elaborate scheme in which they pretended to live in Vernon while actually living in a Hancock Park mansion.
Former City Administrator Bruce Malkenhorst Sr., who according to the records obtained by The Times made $911,563 in 2005, was later indicted on public corruption charges.
Still, Malkenhorst retired with a then record state pension of $500,000. Malkenhorst, who rode to work in limousines, is accused of taking $60,000 of city money for personal use. He is awaiting trial.
On Thursday, Whitworth, who also is Vernon's fire chief, singled out Fresch and O'Callaghan for praise for their work on behalf of the city.
Both had been brought in initially as consultants, he said, but so impressed council members at the time that they were asked to join the payroll.
But the League of California Cities' Pulskamp said that, no matter how many hats the two wore, their salaries were "many times the norm" for city managers — probably five times the going rate for a city of Vernon's size, he said.
"Typically, city managers have some expertise in some area whether that be finance or personnel or one of the other departments," he said. "Typically that is just part of being a city manager — you don't get paid extra for that type of expertise."
State Assemblyman Hector De La Torre (D-South Gate), who has proposed legislation that would penalize cities with "excessive compensation," said Vernon's business base does not justify such high pay for its officials.
"You cannot defend these kinds of numbers," he said. "A city government is not a private business. Period. This is not a private company."
http://www.latimes.com/news/local/la-me-vernon-20100820,0,6472015,print.story |
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