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California’s city officials scramble to limit damage from Bell scandal

The scandal over high salaries paid to Bell officials has city leaders throughout the state scrambling to limit the political damage.

City halls have seen an uptick in residents calling to find out what their local officials make ever since the story broke two weeks ago and prompted widespread public outrage.

On Thursday, city managers from across the state will gather in Sacramento to discuss damage control. Among the ideas on the table: launching an independent examination of city officials’ salaries and compiling a database of salaries for municipal executives.

The Legislature also is mulling several Bell-inspired proposals, including a requirement that cities make salaries easily accessible on websites. Another suggestion would cap pensions of highly paid city officials, an issue that arose after The Times reported that former Bell City Manager Robert Rizzo, who earned nearly $800,000 a year, would receive roughly $600,000 a year in pension benefits once he retired.

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Many of the ideas are designed to put political distance between Bell and the rest of California’s 480 cities and towns. “It would be really unfortunate if anyone took the outrageous action of one city and generalized it to all cities,” said Chris McKenzie, executive director of the League of California Cities, which is hosting the meeting.

The stories of soaring salaries come at a difficult time for cities, which are making cutbacks amid a recession that has made many taxpayers ever more interested in what services they get for their tax dollars.

In Sacramento, the Bell salary controversy threatens to undermine the arguments made by city managers against state budget proposals that would take money away from municipalities. For months, city officials have lobbied the Legislature, arguing that they are suffering financially because of the economic slump and cannot afford deeper cuts.

“However, the Times story suggests this duress may not apply to all our cities, or that some cities are not allowing their economic plight to curtail Fortune 500-level salaries for their senior executives,” State Senate President Darrell Steinberg (D-Sacramento) wrote in a pointed letter to the League of Cities last week.

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At a time of low public confidence in government, the Bell revelations pose another threat to the credibility of local officials.

“It just makes for a toxic environment,” said Max Neiman, senior resident scholar at the Institute of Governmental Studies at UC Berkeley.

City clerks, human resource directors and finance officers said they have been processing an influx of public records requests for public officials’ salary figures since the revelations of the salary paid to Rizzo as well as Bell’s police chief, who made $457,000, and the assistant city manager, who made $376,000.

Officials have found themselves repeating the mantra, “We’re not Bell,” to concerned residents.

Figuring out exactly how much top city leaders make can be difficult, however. The base salary of city officials is usually the most easily accessible number, but it rarely captures the total compensation. City leaders also can be paid through car and phone allowances, housing agreements or deferred compensation plans. In some cases, city managers can receive a separate salary by holding a different position or serving on a board or commission.

Those extras can significantly boost total compensation, but they are difficult to sort out.

Take the case of Laguna Hills. Barbara Kogerman, who ran for City Council in the Orange County suburb, sought the assistance of three local graduate students to figure out how much City Manager Bruce Channing earned and how his pay compared to that of other Orange County city managers.

Collecting the information was difficult, in part because each city offered data in a unique format, the students said.

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In the case of Laguna Hills, the students said Channing received a base salary of $233,430 but calculated his total earnings at $460,809 after including $227,379 in additional payments.

Channing strongly disputed the report, calling it “factually inaccurate and misleading” because it included what he said were reimbursements for phone bills, travel costs and other expenses.

“What it costs an organization to equip an individual to perform their duties is not the same as the salary that the individual is paid,” Channing said.

The Internal Revenue Service has rules designed to distinguish between legitimate reimbursements for business expenses and disguised forms of compensation, but applying those rules to individual cases can be tricky.

Channing, the vice president of the League of California Cities’ City Managers Department, plans to attend the meetings today in Sacramento and said action is needed in the wake of the Bell revelations.

Making total compensation figures easier to look up is one of several items on the agenda in Sacramento.

Assemblyman Hector De La Torre (D- South Gate) said legislation he is working on may go beyond requiring public disclosure to also restrict how compensation and pensions are provided.

“We’re looking at how you can limit aspects of contracts that are completely out of whack with prevailing practices, including salaries,” De La Torre said, calling Bell’s compensation “ridiculous.”

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He also has consulted with the California Public Employees Retirement System on possible legislation to limit cities’ ability to award excessive pensions, the cost of which must be borne by all government agencies paying into the system.

As The Times has reviewed city manager salaries, it has found a few officials who have actually taken pay cuts during the tough financial times.

For instance, the city managers of Signal Hill, Santa Fe Springs and Redondo Beach reduced their pay or declined merit bonuses, as did the entire city staff of Bellflower

“To see people doing what they’ve apparently done in Bell offends me on a personal level,” said Bellflower Assistant City Manager Leo Mingle. “It’s obscene.”

sam.allen@latimes.com

abby.sewell@latimes.com

patrick.mcgreevy@latimes.com

Allen and Sewell reported from Los Angeles. McGreevy reported from Sacramento.


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