City Officials Resign After Salary Scandal
Breaks, Investigation Launched by Law Enforcement Officers. News of exorbitant pay for several elected
officials in the tiny Southern California city of Bell has rocked the country,
and led to the resignation of several council members, large pay cuts, and a
handful of investigations.
It all started July
15 when the Los Angeles Times wrote
an article titled: "Is a City Manager Worth $800,000?" The article
noted that officials in Bell, a city described as "one of the poorest
cities in Los Angeles County," were receiving six-figure salaries. Chief
Administrative Officer Robert Rizzo was receiving an annual salary of $787,637,
with a contract that stipulated he must receive a 12 percent raise each July.
In response to the
article, Mr. Rizzo told the Times: "If
that's a number people choke on, maybe I'm in the wrong business. I could go
into private business and make that money. This council has compensated me for
the job I've done."
A week later, he
resigned, along with Police Chief Randy Adams, who was paid $457,000 per year,
and Assistant City Manager Angela Spaccia, who was
paid $376,288 per year. The three also are prohibited from receiving any
pension payments until they are cleared from any legal misconduct. If Mr. Rizzo
is cleared, he will receive more than $600,000 annually for the rest of his
life.
According to
documents obtained by the newspaper through a California Open Records Act
request, Bell's part-time mayor and four of the five part-time City Council
members earn more than $100,000 per year.
Bell's city
officials were able to increase their pay by persuading voters in a special
election to adopt Measure A, a 2005 ballot measure that was said to give the
city more local control by making Bell a "charter city." That same
year, a state law took effect that limited the pay of city council members in
"general law" cities – but by then, Bell was exempt because of the
recently approved ballot measure. No
opposing ballot argument was submitted to voters, and only 336 voters approved Measure A – less than 1 percent of the city's
population of about 40,000.
On July 26, Attorney
General Jerry Brown launched an investigation into Bell officials' activities
by subpoenaing employment, salary and contract records. The attorney general
and candidate for governor said: "These outrageous pay practices are an
insult to the hard-working people of Bell and have provoked righteous indignation in California and even across
the country. I'm determined to get to the bottom of these exorbitant payouts
and protect the state's pension system against such abuses, and today's
subpoenas are an important step in that process." Mr. Brown's probe will
examine the legality of the officials' salaries and other activities in Bell.
The Los Angeles County District Attorney launched a similar investigation
several weeks earlier.
While under
investigation from the county district attorney and the state attorney general,
Bell Mayor Oscar Hernandez apologized to the public for his excessive salary.
He said he will finish his term without pay and will not seek re-election when
his term expires in March. Vice Mayor Teresa Jacobo
also will finish her term without pay and plans to step down.
Bell's City Council
voted July 26 to reduce the council members' salaries to $673 a month – a 90 percent
pay cut.
Concerned about the
potential fallout from Bell's situation, the League of California Cities hosted
a gathering in Sacramento on July 29 with city managers from across the state.
Many city halls have been inundated with calls and public record requests
regarding city officials' salaries.
Chris McKenzie,
director of the league, said: "It would be really unfortunate if anyone
took the outrageous action of one city and generalized it to all cities."
While figuring out a
public official's base salary can be easy, understanding the total compensation
package can be more difficult. Some officials receive additional funds for car
and phone allowances, housing agreements, deferred compensation plans, gym
memberships, bonuses for speaking a foreign language, or additional salaries
from holding various board or commission positions, the Los Angeles Times reported.
The Times noted that several residents in
the City of Orange tried to calculate City Manager Bruce Channing's
compensation package. They found that Mr. Channing was paid $460,809 when
including the base salary with other payments.
While the League of
Cities claims that excessive salaries are not the norm, taxpayers may have
reason to dig deeper to determine if their public servants are being fairly
compensated. A June 30 report by the Placer County Grand Jury found that many
small cities, including Auburn, Colfax, Lincoln, Rocklin, Roseville and Loomis
are paying their city managers excessive amounts compared to the region's cost
of living and what other managers in larger cities earn.
For example, the
grand jury report found that Roseville's city manager is paid $393,675,
Rocklin's manager receives $300,398, and Lincoln's manager takes home $279,781.
In an address to the
business community in San Diego, Governor Schwarzenegger said July 29 that he
would support legislation requiring local governments to post salaries online.
He said: "Cities should put all public salaries on their website – like
the state does. They have pulled the wool over the people's eyes for
years."
Cal-Tax recommendation: The people of California deserve
honest, hardworking officials to serve and manage the day-to-day task of
government – and these public servants should be fairly compensated for their
service. However, over time, in an effort to develop competitive salaries and
benefits for public-sector employees, government has become bloated.
"Public servants" do not serve the interests of the people when they
eat up tax dollars that otherwise could be used to fund government services or
reduce state and local deficits. Officials in Bell are not the only egregious
examples of excessive pay, as indicated by the Placer County report. Also, each
week, Capitol Weekly newspaper
publishes a list of promotions for state government employees, and the list
indicates that many top administrators are receiving very lucrative salaries.
It's high time that the attorney general investigate excessive salaries of
public officials. Many local district attorneys also should launch investigations
to determine if public salaries are excessive and if their local officials are
serving the public, or their own narrow interests.
Cal-TaxReports, August 2, 2010
© 2010 California Taxpayers'
Association.
All Rights Reserved.