Gatto introduces bill to ease pension burden following Bell scandal

August 19, 2010|By Bill Kisliuk,

Glendale and other cities bearing some of the pension burden for the city of Bell's excessive salaries could get relief from legislation introduced in Sacramento late Tuesday.

The bill, introduced by Assemblyman Mike Gatto (D-Silver Lake), would force cities to cover the cost of an employee's pension if it's tied to a pay raise of more than 15%.

Gatto said the legislation was inspired by the case of former Glendale Police Chief Randy Adams, whose salary more than doubled to $471,000 when he left Glendale last year for the same job in Bell. In doing so, the pension obligations for Glendale and Adams' other former employers — Ventura and Simi Valley — increased by tens of thousands of dollars each year.


That, in turn, prompted city officials to cry foul, arguing they shouldn't be on the hook for the bloated salaries at another city.

"I was extremely angry when I learned that the outrageous pensions that the Bell City Council approved would be borne in part by the city of Glendale," Gatto said.

Under the current California Public Employees' Retirement System, Adams' estimated annual pension of $400,000 would be shared among the four cities where he worked – Ventura, Simi Valley, Glendale and Bell. But because of his longer stays at the first three stops, Bell is only responsible for 3% of his pension benefits, despite the fact that his pension more than doubled because of the single year he worked there.

Under Gatto's bill, cities like Bell would have to cover the additional retirement benefits spurred by the increase in wages that are 15% higher than the last position. The bill would take effect July 1, 2011.

Glendale City Manager Jim Starbird said the proposed legislation was a fair fix to a problem that now remains out of the hands of former employers.

"How can we be held responsible for the actions of agencies over which we have absolutely no control?" Starbird said. "The hiring city ought to have to consider the pension cost at the same time they consider hiring the person. If you want the person bad enough, you say 'OK' knowing full well you are carrying the other burdens."

A spokesman for CalPERS said it was premature to comment on the legislation. In addition to Gatto's bill, several other reform measures are being proposed in Sacramento, ranging from salary caps on charter city employees to income tax increases for those who receive municipal salaries that are deemed to be excessive.

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