City, County of Santa Barbara Likely to Feel Effects of Scandal-Related Legislation

Statewide bills passed this week aim to rein in salaries and pension benefits for public employees

By Giana Magnoli, Noozhawk Staff Writer | Published on 09.02.2010

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The California Legislature passed three bills this week related to the City of Bell’s salary and benefits scandal.

Seemingly exorbitant base salaries and pension packages for the city’s officials have caused a ripple effect throughout California and led to the resignation of several top city staffers, including the city administrator who was making nearly $800,000 a year, and numerous legislative proposals.

Assembly Bill 194, authored chiefly by Assemblyman Alberto Torrico, D-Fremont, would cap the salaries of public employees used to calculate retirement benefits. The maximum would be 125 percent of the governor’s salary as of Dec. 7, 2009. The California Citizens Compensation Commission determines all salary amounts for elected state officials.

Therefore, the top salary that could be used to determine retirement benefits would be $217,483, as the governor’s salary is $173,987. That amount could be adjusted based on changes to the Consumer Price Index. Though the law, if signed, would take effect Jan. 1, it would influence only employees hired on or after that date.

Its quick implementation would be necessary “in order to preserve the fiscal integrity and increase the stability of public retirement systems at the earliest possible time,” according to the bill’s text.

Gov. Arnold Schwarzenegger has until Sept. 30 to decide whether to sign the bills into law.

Several employees of Santa Barbara County and the City of Santa Barbara would come in over that mark with their base salaries. For the county, that includes the positions of county executive officer, public health director and Alcohol, Drug and Mental Health Services executives. Santa Barbara City Administrator Jim Armstrong and City Attorney Steve Wiley are the only two above that threshold, at $231,276 and $219,312 base salaries, not including any benefits.

Pensions are a statewide concern, and even municipalities are feeling the heat. Santa Barbara uses the California Public Employees’ Retirement System, and rates are expected to jump $4 million by 2015 because of investment losses in 2009. For the past two years, CalPERS payments in the general fund have been $15.12 million and $14.42 million, with an expected $15 million price tag for the current fiscal year.

A bill authored by Assemblyman Hector De La Torre, D-South Gate, would do away with automatic pay increases and calls for mandatory performance reviews for any increases above a cost-of-living adjustment. Assembly Bill 827 also would require open session votes for increases above a cost-of-living adjustment, according to the legislation’s text.

It would apply only to “excluded employees,” meaning nonunionized and at-will public workers. For the City of Santa Barbara, all employees are at-will for one year, and no managers or employees involved in labor negotiations are allowed to be unionized, according to employee relations staffer Kristy Schmidt.

The City Council must approve all changes to salaries and benefits, and the staff reviews rates annually for adjustment. Both across-the-board increases and merit-based raises are used for city employees.

Compensation principles used by Santa Barbara are designed to attract and retain employees, yet not spend more taxpayer money than necessary, Schmidt said. The online compensation matrix includes details about each union’s negotiated salary increases and benefit packages under the current contract.

Another Bell-related bill is Assembly Bill 900, which would allow some property taxes from the City of Bell to flow back to residents, as some overcharging is thought to have occurred.

— Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address).

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