California Cities Confront Managers' Extravagant Pay and Perks
City of Vernon has only 90 residents, but managers earned $1.6 million a year.
LOS ANGELES, Sept. 9, 2010— -- Top managers for the city of Vernon, Calif., enjoyed pay and perks that outpaced some of the nation's top leaders.
It is one of a growing number of California municipalities confronting questionable practices by municipal employees.
Vernon has only 90 residents, but top city managers were earning an astounding $1.6 million per year with some fancy perks, including first-class air travel around the world and $800-a-night hotel rooms.
"For these city officials to be receiving salaries larger than the governor, larger than the president of the United States is absolutely unjustifiable," said Bob Stern of the Center for Governmental Studies.
The city's small homeowners association is outraged that their city leaders were living the high life, particularly in a town that recently laid off workers and cut health insurance because of budget problems.
At one angry council meeting, residents shouted, "Shame on you!"
More Cities See Exorbitant Pay by Managers
Vernon joins a growing list of California locales facing a payroll problem.
In neighboring Maywood and Bell, the Los Angeles Times uncovered shocking salaries.
In Bell, while 17 percent of the suburb's 40,000 residents were living under the poverty line, former City Manager Robert Rizzo was making nearly $800,000 a year while on the city payroll.
As if years of living well off Bell's taxpayers wasn't enough, Rizzo stands to earn $600,000 a year in retirement -- the highest pension for a public employee in the state of California.
Public outcry has led California Attorney General Jerry Brown to take action.
"We have a case where hundreds of thousands of dollars of public money has been paid out under completely suspicious circumstance," Brown said.
California Attorney General Launches Investigation in City Payrolls
Brown is heading an investigation not only into Rizzo's big payout, but also the salaries of two other city officials.
Former Police Chief Randy Adams and former Assistant City Manager Angela Spaccia were forced to resign along with Rizzo after the Los Angeles Times reported that their annual salaries were $457,000 and $376,288 respectively.
Residents have rallied city council members to take legal action against their high-rolling managers to get back millions of dollars.
The City Council itself was not exempt from high salaries, with some of its part-time workers receiving almost $100,000 a year.
Residents Pay for Payroll Expense
The Los Angeles Times also uncovered that Bell had the second-highest property taxes in Los Angeles County and overcharged by hundreds of thousands of dollars for sewage service.
The spending of taxpayer dollars drew from the residents of Bell, a blue-collar city whose median household income is $40,556 a year.
"They were bankrupting the residents," said Christina Garcia, a community activist. "People were unable to pay their taxes. We pay double what the city of Beverly Hills is paying."
"This is what has ravaged the city, because this city is poor and they don't know how to defend themselves," added Bell resident Steven Brown.
But the city is trying to fight back. In addition to the City Council announcing Friday its plans to subpoena the records of all highly paid managers, the California Public Employees' Retirement Fund confirmed its own investigation into former city officials' pension claims.
Four officials already have been forced out of office. In each community, activists said the reason officials were able to get away with this for so long was because no one was paying attention.