California Money

By Joanna Lin / December 4, 2014

California taxpayers spend about $40 billion a year to pay their fire chiefs, mayors, tree trimmers and thousands of other city and county employees. Some – including harbor pilots in Los Angeles – make more than $300,000 a year. Others receive as little as $190, the payout for one planning commissioner in tiny Alpine County.

Although the salaries of government employees are public, most taxpayers know little about whether these paychecks, which typically represent more than a third of communities’ spending, are fair.

No statewide standards govern how local pay is set, leaving the public in the dark about whether their city managers, for example, are paid appropriately for the job and the community.

With that in mind, The Center for Investigative Reporting analyzed four years of data – from California’s 482 incorporated cities and 58 counties – to see what factors correlated with top officials’ compensation. Most of the time, the larger a community and the higher its median rent, the more money its leaders tended to make.

But CIR’s analysis, based on data that cities and counties report to the state controller, also found that top officials in a few communities bucked the trend, earning significantly more than their counterparts in similar places.

Butte and Yolo counties are about 90 miles apart in the Sacramento Valley and similar in size and living costs. In 2012, then-Butte Sheriff-Coroner Jerry Smith earned about $183,000 – about the same as his counterparts in similar counties. But Yolo Sheriff-Coroner Ed Prieto made almost 40 percent more ­– about $256,000.

The difference is largely explained by money Prieto received in lieu of retirement pay. Prieto, a retired California Highway Patrol captain, chose not to participate in Yolo’s retirement system, so he receives extra pay equivalent to what the county would otherwise contribute to his pension, said Assistant County Administrator Mindi Nunes.

The analysis also showed that pay can spike significantly when officials leave office.

After Greg Johnson was forced to resign as city manager of Indian Wells, he became California’s highest-paid municipal employee for 2011. His severance package included a year’s salary and benefits and about $65,000 in unused vacation, administrative and sick leave. Johnson, whose desert resort town had about 5,000 residents and 39 people on its payroll, took in more than $677,000 that year, compared with his regular annual salary of nearly $255,000.

“I have to say, in hindsight, it’s a very bad contract. Something none of us will let happen again,” City Councilwoman Mary Roche said of the City Council’s approval of the severance package, according to a news report at the time.

Wade McKinney, the current city manager, can bank far fewer leave hours under his contract than his predecessor could. If he were fired, his severance package would include nine months’ salary and benefits instead of a year’s.

Cities use severance packages as a powerful enticement when recruiting new leaders. State law limits a public employee’s severance to 18 months’ salary.

It’s like an insurance policy for what can be a vulnerable position, said R. Craig Scott, an Orange County attorney who negotiates contracts for executives in the public and private sectors.

“They can, on any night the city council meets, find themselves unemployed,” he said. “By a 3-to-2 vote – they’re gone.”

In addition to promising severance pay, city manager contracts historically have not capped how much vacation time can be accrued, Scott said. That’s led to hefty payouts for some outgoing city managers.

When Buena Park City Manager Rick Warsinski retired in 2012, after working 33 years for the city, he cashed out $293,050 in unused vacation and sick time. With a salary of more than $239,000 and about $13,000 in other pay, including a cellphone allowance, he earned more than $545,000.

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