August 20, 2010

City of Lakewood responds to LAAG's public records request on city employee salaries

We find it sad and disheartening that Lakewood did not step forward right after the City of Bell scandal broke like so many other cities did and post something about city hall salaries. Not a peep on the Lakewood city website about Bell or the fallout. (typical given Lakewood's usual tendency to "duck and cover") Sadly it was incumbent upon LAAG to make the CPRA (California Public Records Act) request to get something posted for all taxpayers to see. Did the Press Telegram bother? No...Where were these folks before LA Times broke the Bell scandal? Or Attorney General Jerry Brown for that matter? (who is now closing the barn door after the horse got out).... Suffice it to say that we don't trust government officials to be looking into excessive pay of their pals across the hall in government. We were glad to get these Lakewood salaries for our readers but once again a lackadaisical attitude about what city hall is up to and giving Lakewood city leaders a "pass" by letting them continue to keep things "in the dark" forcing residents to do CPRA requests is the type of atmosphere that led to the Bell scandal. Now we see more people starting to "pull their heads out" and look closer at their city halls which quite frankly are run by "rank amateurs" in the best cases and by very suspect people in the worst cases we only now know about. Most are not really "qualified" managers. I guess that is the reason cities pay guys like Rizzo the big bucks...for their excellent management and wisdom.

As for the Lakewood city employee salaries the request once again was here and the response from Lakewood is here (in the original format). Draw your own conclusions.

The problem of taxpayers and whistleblower sites/blogs not watching this topic or their respective cities in general is becoming apparent now that the veneer of "assumed trustworthiness" is being peeled back. The Oxnard story, the Indio story and now Vernon are good examples of more aftershocks (again our hats off to LA Times) 

One of the things that irritates residents and taxpayers in the private sector is that we have born the brunt of the layoffs and unemployment in this recession; not the public sector. We keep asking people to show us one full time government unionized worker that has lost his or her job in the recession permanently. Any takers? We are listening. We'd love to post proof of one real government job loss in the entire state to compare to the hundreds of thousands in the private sector.

Secondly I am tired of the BS excuses that "well we need to pay these salaries as other cities do". Well prior legislation has set limits on city council pay to end that nonsense but not that of city employee pay. I think we need to set limits based on population like the city council. This is out of control. Why should Lakewood's City manager get paid MORE than the Long Beach City manager? Makes no sense. Again folks this is not capitalism. Its tax dollars. The same principles DON'T apply. We need a "race to the bottom" not the "top" when it comes to local government employees making over $100,00 a year. But do we really think Sacramento legislators want to cut their pals pay. Or even publish it like this?

I also get tired of hearing "well people in the private sector make more for the same job". Well first that is bogus. Read this article: Federal workers earning double their private counterparts  Secondly show me a public sector job that's the same as a private sector job. Don't exist. First public sector folks cant be fired and get benefits well beyond what any private sector worker gets. That is now painfully obvious. One retired fireman I know making 140,000 a year at age 50(!) said: Calpers is like "Amway on steroids" indeed.

Another thing to keep in mind about the "low" city council salaries. Some council members already have "day" jobs in the public sector. The city council job is just icing on the cake letting them "spike" their Calpers pension benefits. We already have six (former Lakewood city employees BIEGEL, JOAN $112,153.08 yr; EBNER, CHARLES $129,820.20 yr; GONSALVES, JACK $119,698.44; RODDA, DAVID $139,251.48; SCHROEDER, LAWRENCE $116,251.80; STOVER, MICHAEL $154,147.56) in the Calpers $100,00 club (which they are in for the rest of their lives from age 50 on). (see story below) We don't need any more.  I know people in the private sector already looking at this "spiking" and "piling on" angle. Nice gig. The only people that get "golden parachutes" like this is the private sector are AIG execs and we all know how popular they are. But again if its tax dollars then LAAG really gets mad. We don't care about private money. If a corporation wants to charge high prices and pay its execs a ton of money then they will loose in the "price is all we care about" recession based economy of today.

Folks its time to get real about local government and start paying attention. Stop taking things for granted. You only have yourself to blame for not getting involved and not demanding transparency and accountability from your local elected leaders. We cannot afford to trust them any more. Do we blame the rank and file government employees for accepting a kings ransom for very little work? No we would all like jobs like that. We blame taxpayers for (1) letting local government elected leaders keep things shielded from taxpayers (not timely posted on the web in detail) and (2) taxpayers not calling the city leaders on the salaries pensions and benefits once they know about it and holding them accountable. The city leaders are counting on you to let them get away with murder right in front of you. And if you do they will stick it to you in the end as these salaries will last for LIFE.

Public service pensions over $100,000 per year skyrocket
By Troy Anderson, Staff Writer
Posted: 08/15/2009 04:49:50 PM PDT

At a time when government agencies are cutting back on law enforcement, health care for children and services for the poor, the number of public servants collecting $100,000-plus pensions - including one raking in nearly $500,000 a year - has exploded in recent years, in some cases tripling or even increasing sevenfold.

In Los Angeles County, the number of retired county employees receiving pensions of $100,000 or more has nearly tripled from 1,198 in 2004 to 3,096 today, the Daily News, a sister paper of the Press-Telegram, has learned through a series of Public Records Act requests.

Throughout California, the number of retired state workers collecting $100,000-plus pensions has mushroomed more than sixfold from 816 in 2004 to 5,115 now.

And the number of school administrators and teachers collecting six-figure pensions has rocketed more than sevenfold from 427 in 2004 to 3,088 now.

Los Angeles, excluding the Department of Water and Power, currently has 600 retirees collecting more than $100,000 a year.

"This is just outrageous to me," said Marcia Fritz, vice president of the California Foundation for Fiscal Responsibility, an organization that advocates statewide pension reform. "I would not have expected the number of ($100,000 pension club members) to have increased that much in the last five years."
Nearly $500,000 a year

The dubious honor of collecting the state's highest pension belongs to former Vernon City
Administrator Bruce Malkenhorst, who receives $499,675 per year - even though he is currently facing two counts of misappropriating public funds for allegedly taking $60,000 in city money for personal use.

Malkenhorst's attorney did not return calls for comment.

The second-largest pension goes to an undisclosed Los Angeles County government retiree who is paid $366,384.

As grand juries throughout the state are investigating pension systems, former Assemblyman Keith Richman, president of CFFR, said these huge pensions are the result of a "corrupt pension system."

California, Richman said, is the only state in the nation that allows employees to use their highest year of salary - including unused vacation, vehicle allowances, bonuses and other compensation - in calculating their pensions.

"The bottom line is we have very extravagant pension benefits that taxpayers can't afford," Richman said. "Pension-spiking has played a large role in this. We have public employees throughout the state who are retiring at age 50 and collecting more than 100 percent of their salaries, getting annual cost-of-living raises and lifetime health benefits."

But union leaders bristle at the suggestion that most public workers receive extravagant retirement benefits.

Barbara Maynard, a consultant for the Coalition of LA City Unions and the Coalition of County Unions, said only a small percentage of retired public servants receive "these exorbitant pensions."

"It's really upper management who are receiving these benefits," Maynard said. "The rank-and-file workers are really struggling to get by on very meager pensions averaging $40,000 a year."
Call for rollback

The revelations about the eye-popping pensions - a by-product of what officials describe as a "Cadillac" pension system elected officials have created at the prodding of public employee unions - come as Gov. Arnold Schwarzenegger, Los Angeles City Councilman Bernard Parks and others are calling on elected officials to roll back generous pension and retiree health care plans.

Schwarzenegger has estimated the unfunded retirement promises - the money the state has promised to pay over the lifetime of its employees and retirees without designating where the funds will come from - could be as much as $300 billion if investments don't meet projections.

When the state's first pension fund - the California State Teachers' Retirement System - was created in 1913, teachers who worked 30 years were paid a $500 annual pension, the equivalent of about $10,500 annually now. Over the years, other public pension systems were created and most were designed to pay public servants about half their salary in retirement.

In 1999 - at the height of the economic boom - labor unions aggressively lobbied state lawmakers to pass SB 400 - the "pension-boosting bill" - retroactively boosting pensions for state employees and allowing them to retire at younger ages with higher pensions.

Then in 2003, the California Supreme Court issued a ruling on a 1997 lawsuit allowing public employees to use bonuses, clothing and auto allowances, unused vacation and other income in calculating their pensions.

Since then, government agencies throughout the state have adopted similar plans and public employees - whose pensions are usually based on the highest year's pay - have used a variety of methods to "spike" their pensions shortly before retirement.

Now, even as the number of government workers collecting $100,000-plus pensions has skyrocketed in recent years, the pension systems charged with dispersing their checks have lost tens of billions of dollars in the stock and real estate markets.

As a result, the amount of taxpayer subsidies for these pension plans will have to be increased by billions of dollars in the years ahead, requiring more tax increases and cuts in public services.

The nation's largest public pension fund, the California Public Employees' Retirement System, has recently lost a third of its value, dropping from a high of $253 billion in December 2007 to $181 billion as of June 30.

Even before the historic stock market downturn, the annual taxpayer contribution to the fund jumped from $4.2 billion in 2003-04 to $7.2 billion last fiscal year.

CalPERS spokesman Ed Fong said the system is planning to meet with representatives from public employee unions and its 26,000 member government agencies to discuss ways to reduce costs to ensure retirees are paid the amounts owed them.

Despite failed efforts in recent years to reform the public pension and benefit systems, David Crane, special adviser to the governor for jobs and economic growth, said a growing number of Democrats and Republicans in Sacramento agree steps have to be taken.

While existing pensions can't be renegotiated, Crane said the governor plans this week to propose several reforms, including less generous pension plans for newly hired workers and increased retirement ages.

"I think the Legislature increasingly understands the nature of this problem," Crane said. "They have been issuing general obligation bonds regularly without voter consent to pay these benefits. But now the programs they care very deeply about are being shut down because we have to pay off these past pension promises."

In the same way as CalPERS recently lost a huge portion of its funds, the teachers system, CalSTRS, has dropped by a third from a high of $172 billion in 2007 to $119 billion as of June 30.

Even as taxpayer contributions to the plan have grown from $1.9 billion in 2004 to $2.3 billion in 2008, CalSTRS now says closing the shortfall will require legislative action to further increase contributions made by school districts.

Similarly, the county's taxpayer contribution to the Los Angeles County Employees Retirement Association fund is expected to increase from $805 million this year to $1.1 billion by 2011-12 as the fund has dropped in value since mid-2007.

But while county officials are confident they can afford the increased costs, Parks, the Los Angeles councilman, said the city's pension funds are "seriously in bad shape" and a rapidly growing proportion of the budget is going to pay for pensions and retiree health care costs.

In response, city officials are drafting a change in the city charter that would allow for the creation of a new, less generous pension plan for newly hired city workers.

Assistant City Administrative Officer Tom Coultas said the City Council could approve the new plan for civilian employees, but any changes for police officers and firefighters would require voter approval., 213-974-8985

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