D.A. Inquiry Begun Into Allegedly Improper Pensions Paid to Three : Benefits: San Juan Capistrano officials are being questioned by investigators about payments made to the former city employees over the last five years.

District attorney investigators have begun questioning San Juan Capistrano officials about three former administrators who obtained tens of thousands of dollars in allegedly improper retirement benefits over the last five years.

Capistrano Valley Water District General Manager Ray Auerbach said last week that investigators asked him about the salary and benefits paid to former General Manager James S. Mocalis, former Assistant Manager E. Phillip Hale and former water board attorney James S. Okazaki. All three men held posts in the city administration before joining the water district, which is overseen by the San Juan Capistrano City Council.

Auerbach, who took over as general manager of the district when Mocalis retired in 1987, declined to elaborate about his contact with investigators when contacted by The Times.

Charging that the pensions were calculated contrary to county policy, Board of Retirement members voted Monday to cut in half the $30,000 annual benefit Mocalis receives and the $23,000 paid to Hale. At Okazaki’s request, they postponed action to revoke all of the $20,000 he annually receives.

District attorney officials declined to comment about the inquiry. But Mocalis and Okazaki were recently notified that they are suspects in an unrelated criminal investigation involving a controversial 1988 land transfer in Laguna Niguel. When they joined the Laguna Niguel Community Services District upon retiring from San Juan Capistrano, Mocalis signed and Okazaki notarized a deed that gave up public control over 96 acres of open space. A developer subsequently built houses on the property. On Wednesday, both men voluntarily testified about that matter before the Orange County Grand Jury.

In the case of Mocalis and Hale, retirement officials say they improperly inflated their salaries with accumulated sick leave and vacation time during their last year of employment, thus doubling their monthly retirement checks.

Retirement benefits for public employees are based on years of service, age and the highest annual income, which usually occurs in the last year of the worker’s employment.

Hale retired from the water district in 1985 and Okazaki left in early 1988.

Water district figures show that in Mocalis’ last year as a regular employee, $73,271 in accumulated sick leave and unused vacation time was added to his base pay of $63,797--giving him a total annual salary of $137,069. Using that increased figure, Mocalis’ annual retirement went from about $15,000 to $30,000. He has been collecting the pension since 1987.

In Hale’s last year before retiring in 1985, $42,000 in sick leave, vacation time and management bonuses were used to increase his yearly salary to $96,720, also nearly doubling his retirement benefits.

Meanwhile, Okazaki, who retired in early 1988, was paid $9,601 a year and classified as a full-time attorney for the water district. Okazaki conceded in a recent interview that he should have not accrued retirement benefits as a full-time employee after 1984, when he quit working for the city and began working part time for the water district. But he defended his right to receive benefits as a full-time employee during his previous years of service as San Juan Capistrano city attorney.

Mocalis also defends his arrangement, saying city officials offered him a better retirement package because he had told them he planned to move on and they did not want to lose his service.

When he moved to the water district he was given a four-year contract, signed by the San Juan Capistrano Mayor Gary L. Hausdorfer, that outlined the enhanced retirement benefits.

The contract also provided him with a car, overtime at $60 an hour paid as deferred compensation and the same annual increases as the general managers in South County Water Districts. He was also credited with any unused sick leave or vacation time that he had accumulated while working for the city.