Sunday, August 8, 2010

The Bell Maelstrom Just Gets Deeper and Deeper

First the good news:

The Los Angeles Times continues to be a newspaper that engages in traditional investigative reporting.

Second, transparency is coming to public salaries in California. John Chiang, the state Controller, has ordered the posting of all salary information for elected officials and employees. Many communities are already doing it as a result of the Bell disclosures.

One problem though is trying to ascertain the total value of compensation packages. The base salary is easy, but other expenditures may come into play. For example, a few of the Bell employees subsequently received over $100,000 for additional purposes.

Other communities might provide housing allowances, car, gas, and repair benefits, cell phones, and the list goes on.

Third, as public salary figures emerge, Bell stands out in the avarice of its public officials. Many city managers and other public officials took pay cuts during this economic downturn. They are to be commended.

And now the bad news:

The Bell scandal gets more sordid daily, as details continue to emerge.

The poor citizens of Bell were paying the second highest property tax rates in Los Angeles County. The countywide tax rate averages $11.60 per $1,000 of assessed value. The rate in Bell is $15.50, which is about 50% higher than those of Beverly Hills, Palos Verdes Estates, and Manhattan Beach, and even higher than Malibu’s. Only a few residential parcels in the City of Industry pay a higher rate than the homeowners of Bell.

The Bell rate was rising while the property values were dropping, spending was cut on community services and police, and the salaries of the Magnificent 7 soaring.

City Manager Robert Rizzo’s reported salary was $787,387. The Los Angeles Times now reports that his total compensation package was $1.540.299.96, which included 107 days of vacation time annually, 36 sick days, and pension and social security benefits. Bell would pay $48,996 into Rizzo’s deferred compensation plan and $20,496 into his 457 plan, the equivalent of a 401K for government employees – all of this in addition to his CalPers pension. Bell also covered his health insurance premiums and any medical bills not covered by health insurance.

The total compensation for vacation and sick days was $386,736, which exceeds the posted salary figures of any Los Angeles city official. For example, L.A. Mayor Villaraigosa’s salary is $232,425 annually.

Angela Spaccia's stated pay was $376,640, but the total package came to $845,960 including $188,640 in vacation and sick leave. Police Chief Randy Adams' package rose to $770,046 including $76,046 in vacation and sick leave.

In short, these three public officials were earning more in vacation and sick leave alone than almost all Bell residents were earning period.

Aside from the personal venality of the 4 Bell Council members paying themselves almost $100,000 annually, any Council member who signed off on Rizzo’s package should be recalled for gross incompetence.

If this package was not properly approved by the Bell City Council, then someone is going to jail. In any event, a grand jury investigation is probably in the works for Bell.

We now know that the Magnificent Seven were not the only bell officials receiving high salaries. Two other officials were each earning over $400,000. Lourdes Garcia, the Director of Administrative Services, earns $422,207 and Eric Ergana, the Director of General Services, earns $421,402. Annette Peretz, the Director of Community Services, grosses $273,542. Other high salaries include $247,573 for a deputy city engineer, $295,627 for the Business Development Coordinator, $238,705 to a police captain,, and $229,992 to a police lieutenant.

On the other hand, many underpaid, low scale employees were laid off in recent years.

Angela Spaccia, the $376,288 Assistant Manager of Bell, was loaned out to the neighboring Maywood when it contracted with Bell for services. Bell billed Maywood $10,000 monthly for Angela’s services as Interim Administrator. Bell is receiving 50,833 monthly to run Maywood’s operations. She may or may not have resigned from Maywood last Friday, but her contract with Maywood is up next week.

The CapPers pension debacle deepens. CalPers is the primary pension fund for California public employees. It is temporarily delaying the payment of pensions to the three retiring Bell officials, pending investigations of their validity. The problem for Calpers is that 4 years ago it flagged the 47% salary increase for Robert Rizzo and notified Bell that it would have to apply to CalPers for an exemption. Bell applied for the exemption, which CalPers granted. Thus, CalPers was aware of the excessive salaries and pensions from an early date, and in essence ratified them.

141 other municipalities have been told they will have to cover some of the Bell pension costs because of the way CaLPers operates.

Allegations of voter fraud have emerged in Bell elections, especially with absentee ballots. Just as significant, instances of self-dealing and conflicts of interest have arisen between Bell and Council members, including Mayor Hernandez.

Municipal and county employees throughout the state are especially outraged because they fear a voter backlash with already unpopular tax increases, and government employee compensation packages.

The Bell Council members justified the compensation package for Rizzo and the other Bell employees because of how fiscally sound the city was managed.

We now know the city issued $35 million in lease revenue bonds to acquire some federal land near the 710 freeway and adjoining a tract it already leases to the Burlington Northern Santa Fe Railway. Lease revenue bonds do not require voter approval because they do not obligate the general funds of a community. The intent was to also lease this land to the railroad, but the lease was never consummated.

Bell is in default on the bonds.

The Bell maelstrom deepens every day.

No comments: