Home > Uncategorized > The Bell Pay Scandal Rings Worser and Worser

The Bell Pay Scandal Rings Worser and Worser

You need not be a numbers cruncher to chew on this. Robert Rizzo was forced to resign as city manager of Bell, Calif., (pop. 36,900) when his salary was discovered the highest in the nation for that job position at $787,637. His pension is estimated $637,985 for the rest of his life. Rizzo is 55.

The public employee worked for three cities for 30 years, the last for one year at Bell. He earns 2.7% of his final pay for every year worked.

As one of 90% and 1.6 million public employees in California, Rizzo is invested in CalPERS, one of two state pension plans which combined are the largest in the country. Three basic factors go into retirement calculations: age, years of service and ending salary.

Half of Rizzo’s annual retirement pay will come from his two previous cities of Hesperia and Rancho Cucamonga. The other half spread between 140 cities and special district’s in the same pension liability pool as the City of Bell.

CalPERS benefit system is so complex, so convoluted, it stumped Gov. Arnold Schwarzenneger.

“Even the governor’s office couldn’t figure these Bell pensions out,” said Marcia Fritz, a certified public accountant and president of the California Foundation for Fiscal Responsibility.

On this the top state political leaders and gubernatorial candidates Meg Whitman and Jerry Brown agree: Reform CalPERS before it breaks the backs of state taxpayers.

The latest estimate for pensions due Rizzo and other Bell employees forced to resign were calculated by investigations by the Los Angeles Times in concert with pension experts.

The lavish salaries also are being investigated by the Los Angeles District Attorney’s office and the state attorney general. The report did not say what percentage of Rizzo’s salaries paid into the pension plan.

CalPERS announced last week it was putting on hold any payments to Rizzo and his cohorts until the dust settles.

Rizzo is exempt from Internal Revenue Service rules capping pensions at $245,000 annually because he joined CalPERS years before the 1996 IRS edict.

Unless the investigations find criminal intent by the Bell city council which approved the pay scales for favored employees and compensation perks for themselves, Rizzo will join this list of miscreants taxpayers are stuck with:

Michael Carona, former Orange County Sheriff convicted of witness tampering — $215,000.

Robert Citron, the public administrator who led Orange County into bankruptcy in 1994 — $142,000.

Bruce Malkenhorst Sr., former Vernon city manager, indicted for misappropriating public funds — $509,664.

And, here’s the lipstick on this pig:

Bell voters in 2009 approved a ballot measure changing the legal status of the city from general law to charter. Under general law, city councils are governed by established parameters. Charter cities are not, allowing the city council, among other things, to establish those lavish salaries and compensations.

In Bell’s case, the residents saw the errors of their ways and thanks to an enterprising large daily newspaper, have the power to right their ship.

According to the Times, this story will not guarantee a Hollywood ending of redemption and reform.

California courts have consistently ruled in favor of pensioners, said Stephen Silver, a Santa Monica attorney specializing in public pension law..

“It’s pretty hard to do,” Silver said. “You’d have to prove some sort of fraud or undue influence.” The best chance for rescinding at least part of a pension would be for investigators to show that Bell’s high salaries were an unlawful expenditure¬† of public funds.

“That’s what this really smacks of,” he said.

That’s the good news. The bad news is that politicians claiming they want to reform the public pension system are blowing smoke.

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