Severance Pay Deals Problematic
During their last months in office, political leaders in South Gate approved $2.8 million in severance packages for more than a dozen administrators, promising them 18 months’ salary if they were fired and one year’s pay if they quit.
The unusually generous contracts have seriously hampered the new City Council’s efforts to restore fiscal order in the troubled city that was left nearly bankrupt by former Treasurer Albert Robles and his council allies, who were ousted in a January recall election.
The former leaders had hired or promoted 17 officials during their two-year reign that the new council cannot fire without risking more financial harm to the working-class city. The new leaders say some of the leftover officials are unqualified, including a $102,000-per-year department director whose experience consisted of a stint as an advisor to a Burger King franchise.
Five other officials -- including City Manager Jesus Marez and Robles, who was deputy manager as well as the elected treasurer -- have been placed on administrative leave while investigations into alleged wrongdoing are underway.
Marez and Robles, who undertook an eleventh-hour spending spree that all but depleted the city’s emergency reserves of $2.1 million, haven’t worked in two months but still receive their regular salaries as required by their contracts.
Robles receives $10,800 per month. Marez gets $11,400 monthly. They also have cellular phones and city vehicles. Robles drives a 2003 Buick Le Sabre; Marez, a 2001 Ford Taurus. If fired, they could receive $194,000 and $205,000, respectively.
Undoing such employment contracts is tricky and not always possible, say legal experts. While the new council awaits the conclusions of a legal review, it has started laying off more than 200 city employees to keep the city financially afloat. Vice Mayor Henry Gonzalez questions the legality of the severance deals but says for now the city is stuck with most of the officials.
“It’s blood money ... just a way to take care of cronies and buddies,” said Gonzalez, who with Councilman Hector De La Torre opposed the contracts.
The leaders at the time justified the generous employment packages as necessary incentives by saying that job candidates were reluctant to work in the politically volatile city southeast of downtown Los Angeles.
But experts in municipal affairs said such agreements are unique in size and scope. The severance clauses kick in even if tenures lasted only a few months. Former Public Works Director Ricardo Pacheco, for instance, resigned in January after working eight months and will collect about $95,000.
“It’s totally inappropriate,” said Claremont City Manager Glenn Southard, past president of the California Management Foundation. “If I gave all my employees 12 months severance if they quit, they’d probably quit.”
Pacheco, who is a councilman in Baldwin Park, said in a January letter to the council that he quit to focus on his reelection campaign. He did not return calls seeing comment.
Many of the officials given the lucrative contracts were hired in the past 12 months, after the former council majority stripped away qualifications -- including college degrees and municipal experience -- required for administrative posts.
Rick Lopez, who has attended junior college, became the new police chief after the council repealed a requirement that the top cop have a bachelor’s degree.
Marez, an electrical engineer, had three months of municipal management experience. Robles, who was treasurer at the time, was given the managerial post after being arrested on threat and illegal weapons charges.
Some of those employees brought in were politicians from other cities, including Pacheco and Raul Pardo, a South El Monte councilman who was once found guilty of punching out a newspaper photographer. The new hires took over several major departments, including public works and community services.
Their contracts ranged from $80,000 to $138,000. They were given city-owned cars, or $375-a-month car allowances. And they were issued cellular phones, with $100 monthly limits.
The generous perks and severance agreements were unavoidable, according to the employment contract amendments passed last December by Mayor Xochilt Ruvalcaba, Vice Mayor Raul Moriel and Councilwoman Maria Benavides, who were ousted from office in the January recall along with Robles.
“The city recognizes and acknowledges that the volatile political condition of the city ... makes it necessary for the city to make certain considerations ... in order to attract and retain such employees,” reads the standard clause in the contracts.
Experts in municipal affairs say such separation agreements are almost unheard of. City managers can be given severance packages, but such agreements are rarely given to department heads or managers. Giving checks to people who quit is also extremely rare.
“The South Gate provisions are very unique and used more extensively than I’ve heard of before,” said Huntington Beach City Administrator Ray Silver, president of the city managers’ department for the League of California Cities.
After receiving the packages, many of the officials openly campaigned for the recall targets. Victor Bracamontes, the $112,000-a-year director of community services, was cited by police after he was allegedly seen at 1 a.m. posting anti-recall signs on city property.
Salvador Alva, the city attorney, sent a mailer to every resident asking them to fill out a “police abuse report card.” The city’s two police unions said it was a blatant attempt to smear police officers who spearheaded the recall campaign.
At a news conference, Lopez said he feared a Rampart-like police scandal, even though no civil rights group has ever made such accusations. Lopez also appeared in full uniform on campaign mailers against the recall. Campaigning in uniform is against the law. (Lopez said his picture was used without his permission.)
Lopez and several other officials disappeared from public view after their political bosses were ousted in the election. Lopez went out on stress leave. Marez called in sick. Bracamontes and two other managers took medical leave.
Of the remaining department heads and managers, not all are considered by the new leaders to be incompetent or tied to the former council. Some, said Gonzalez, are willing to modify their contracts.
For those unwilling to negotiate, legal experts say, city officials have few options. One is for the council to terminate the officials and force their hand, making them test the enforceability of the contracts in court.
The one official who has been fired, Director of Parks and Recreation Christy Jakl, threatens to file a wrongful termination lawsuit unless she receives $1 million. A paralegal, Jakl was given the $101,500-per-year post by Marez just hours before the new council was sworn in.
She was fired days later by the new manager amid questions by the new council members about the city’s hiring practices and applicants’ qualifi- cations. Jakl was brought on without council approval. According to her resume, she has no municipal experience. She listed her stint as a senior advisor to a Burger King franchise as one of her main qualifications.
Her attorney, David Dicker, said the city owes her $750,000 in salary and benefits for the five-year contract, and $250,000 for her wrongful termination.
Mayor Hector De La Torre called Jakl’s demands “absolutely ridiculous.”
“It was just another situation where [the former leaders] were using the city as a friendly employer, an employer willing to take anybody,” he said.