The Bell Tolls
You may have heard about Bell, the town in Southern California with the generous pay packages for its officials. The city manager, Robert Rizzo, made more than $700,000 last year. The chief of police took home $457,000. The assistant city manager collected about $375,000. All in, the salaries of those three city employees represented about 10% of the city's entire operating budget.
Tough luck for Bell's taxpayers, right? Well, tough luck, apparently, for a lot of taxpayers, all over the state. As always, it's about the pensions. Thanks to the complicated system of pension liabilities in California, supervised by CalPERS, the California state pension authority, a lot of other cities are going to be on the hook for Bell's extravagance. Randy Adams, Bell's Chief of Police, is eligible for a state pension of about $411,000 per year. But Bell doesn't have to pay it:
Under CalPERS rules, the city is responsible for just 3% of that because he only worked there for one year. Taxpayers in Glendale, Simi Valley and Ventura would have to pick up the rest...
Other cities will be on the hook for much of Rizzo's and Adams' pensions costs even though their salaries were relatively modest until they landed in Bell. When they resigned last week, Rizzo was making nearly $800,000 a year and Adams was making $457,000.
Bell hired Adams at more than double the salary he was making in Glendale. That salary spike also doubled his eligible pension amount under CalPERS, the state's public employee retirement plan.
Glendale would probably have to pay around 16% of Adams' pension. Simi Valley, where he served as police chief for seven years, would absorb 18%, and Ventura, where he worked for 23 years, would pick up the lion's share, around 63%.
City managers in Glendale and Simi Valley estimate they'll have to come up with an extra $40,000 in taxpayer dollars each year to cover Adams' pension costs. Ventura's tab could go much higher.
"We had no control over his final year's salary," said Glendale City Manager Jim Starbird. "Yet the rest of us will be bearing the brunt of Bell's decision."
Nice, right? Though it's tempting to think this is all just a local, one-off issue -- crazy towns in California doing crazy things -- I'd bet that you can find a Bell in every state. Probably more than one.
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Comments :
Jun '10
Re: The Bell Tolls
Is there a Ricochet, California? We need to start a town. I had no idea there was so much money in it.
Jun '10
Re: The Bell Tolls
Generational wealth transfer from the young to the old is immoral. Might as well call it by its proper name: theft.
May '10
Re: The Bell Tolls
Board up the whole state, start over.
Jul '10
Re: The Bell Tolls
Where were the crusading local media while all this was going on? (Oh yeah, up in Wasilla covering something really important of course.)
You know, the people of California have no one to blame but themselves.
What really worries me is the Californians who figured it out and moved to a more conservative part of the country; and then they turn around and start voting in the same kinds of politicians that ruined California in the first place...
Jun '10
Re: The Bell Tolls
This demonstrates a fundamental economic problem: when you separate responsibility between the buy decision and the the economic responsibility to pay, the buyer has no constraints.
Sort of like Daddy and Mommy giving little Billy or Susie their credit card and telling them to go have some fun. You can bet they will, and Mommy and Daddy will have a whopping bill.
That's why it's so critical in the health care world, that there be some clear connection between the decision to seek health care and the payment for health care (this is not an argument against health insurance, but there must be some connection between use of health care and the cost of health care). As long as it looks like it's free (which, of course, it isn't) then we'll use lots of it.
As long as California allows a city to make crazy buy decisions, then spreads the cost over all taxpayers, one thing is sure: they'll get lots of crazy decisions.
Jul '10
Re: The Bell Tolls
I once heard the problem with Congressional Spending described in a similar fashion.
Imagine you are issued a credit card, we'll call it an Exclusive Gold Card. The reason it is Exclusive is because only 435 other people will get this card, and you too are a member.
Now then, the billing will not be monthly for this Exclusive Gold Card, it will be yearly.
And, Oh, By the Way, you are not going to get a bill for what you bought. What you are going to get at the end of the year is a bill for 1/435th of what everyone bought with the card.
Does it Behoove you to be frugal with that card?
Jun '10
Re: The Bell Tolls
Jaydee_007
Good analogy. I agree.
Re: The Bell Tolls
Not so fast. It isn't just Krazy Kalifornia, I promise. It's all over:
Even in the heartland.
I'll make a prediction: anyone who looks will find a story like this in all 50 states. Maybe even all 57 states.
May '10
Re: The Bell Tolls
I found something similar (though much smaller scale) here in Ohio - a county official entered office in January '09, hired a new chief administrator in April, and had increased that administrator's pay from $85,000 to $105,000 by this June. And now she's running for Secretary of State!
Columbus: it ain't Chicago, but give the Democrats a couple more decades!