ANAHEIM : Budget Panel Chief Quits Over Pay Issue

The chairman of the city’s recently formed Budget Commission has resigned because the board has repeatedly been “duped,” he said Thursday, by city management and by the City Council.

Rick Vaughn, owner of an insurance agency, said the council’s passage this week of a 4.5% salary scale increase for managers convinced him that neither the council nor management is serious about fixing the city’s looming budget deficit. That deficit may be $4 million this year and $9 million in subsequent years due to declining sales tax revenue.

Vaughn resigned at Wednesday night’s commission meeting.

“All along the commission has said that the only way the city will be able to balance its budget is to freeze wages, and maybe even impose a cut in some cases, and not just on the lower-level employees but management too,” he said.

“Just last week, we had the leaders of the city’s labor unions in and told them a freeze will be necessary,” he said. “How are they going to feel now that the City Council has promised a 4.5% raise to the managers? The unions are going to say that’s not fair.

“Don’t get me wrong. I’m not a lover of the unions, but I’m no lover of management either.”

Management’s new pay scale does not automatically mean more money in city executives’ paychecks. David M. Morgan, human resources director, told the council that passing the pay scale increase merely kept the management scale in line with the unions’ scales and that the council would have to allocate money for the raises if they were ever to be given.

“But,” Vaughn said, “if you think the government is not going to do something that it has authorization to do, well, I just don’t have that much faith in government.”

Vaughn was elected chairman by the other nine commissioners when the panel was organized in October. Such a commission was demanded by several citizen groups outraged by the 2% utility tax the council passed last fall to help balance the budget. At the same time, the city cut $8 million from its $544-million budget and eliminated more than 100 jobs through freezes, layoffs and early retirements.

The commission has no legislative power but is supposed to review the budget and make suggestions to the council on balancing it.

Vaughn said the panel was never told about the pay scale increase, which the council passed Tuesday, 3 to 2.

City Manager James Ruth said the commission’s job is not to oversee day-to-day budget issues such as the pay scale but to suggest broader budget policy.

“I don’t believe (the scale) is the kind of thing that should be reviewed by the budget committee,” he said. “I think what (Vaughn) did was wrong, but he did what he had to do.”

Sharon Ericson, the president of the Anaheim Municipal Employees Assn., the city’s largest union, said the scale increase will undercut any call for a wage freeze.

Dr. L. Kenneth Heuler, a retired physician who is a member of the panel, said the other commissioners also have problems with the scale increase because of how the unions will view it, but he does not think resigning will solve the problem.

“I think Rick made a mistake,” he said. “He’s a talented guy, and he could have done a lot more for the city by staying on the commission.”