Barbara Kogerman is running for city council in Laguna Hills
In the wave of outrage over the excesses in City Council and City Manager compensation packages, a rush to create corrective legislation is well underway.
While corrective action is desperately needed, the objective of any effective corrective legislation must be the edification of voters. Without a mandated fiscal disclosure of public compensation packages, voters are deprived of essential decision-making criteria.
Voters must have at their ready disposal sufficient information to make educated decisions regarding the financial priorities established by their cities’ city councils and administrators. Only readily available and easily understandable information will serve that voter requirement.
In determining what compensation data is pertinent, new legislation must err on the side of “more data is better than less.” My Orange County City Managers Compensation Report, May 10, 2010, (which has become the standard reference of Orange County City Managers’ 2009 compensation history and which was a precursor to the City of Bell investigation) has been subjected to complaints by the League of Cities, certain city council members and administrators that extraneous data were collected and reported.
For example, some administrators complain that even municipality-paid CalPers contributions should not be considered when evaluating the cost of benefits. Besides lacking any intelligent basis, such a conclusion completely misses the point of providing transparency in these matters.
How do we make transparent the financial priorities established by city councils, if the voters are only given minimal information? The answer is simply, we can’t! Only by viewing, in a standardized format, expenditures attributable to the offices of city council members and city managers, will voters be able to make decisions as to the appropriateness of their city’s administrative expenses and fiscal priorities. Only by weighing the extent of a city council’s approval of administrators’ expenses for benefits such as salary, travel, telephone, auto, dues and subscriptions, insurance, vacation and sick leave payouts, relocation, and private pension contributions, performance incentive programs, etc., can a voter draw informed conclusions.
And these become “fully-informed conclusions” only when comparable city expenditures, available in the same format, are available for voters to weigh the fiscal priorities of one community against the fiscal priorities of a similar community.
After the release of the Orange County City Managers Compensation Report, one Orange County city voluntarily posted its city manager’s salary on-line. As commendable as this decision was, it completely missed the mark in that only salary information was published. According to my report, in the last recordable year of 2009, that very same city awarded its city manager, in addition to his salary, more than $39,500 in compensation authorized by his more obscure benefits package. These additional benefit costs were not publicly reported.
In the current political environment, in which benefit expenses negotiated as part of city manager contracts can approach the total amount of their salaries, un-reported, obscure benefit costs can have considerable impact on the future financial stability of the city. For example, the Laguna Hills City Manager, whose 2009 salary was $233,430, was additionally awarded benefits totaling $227,379, for an annual total of $460,809. By failing to report all benefit costs, voters were denied knowledge of certain questionable appropriations of taxpayer funds-including the a new Toyota Sequoia four-wheel drive SUV purchased, as was stated on the sales contract, “. . .for his personal use.”
My research for the Orange County report also revealed an unhealthy trend of city councils burying compensation expenses in the more-obscure benefits packages. Certain elected officials showed a preference to increase their city manager’s obscure benefits portions of the overall compensation package, while stabilizing the more visible salaries. Without a forensic search of the city manager’s total compensation package that includes all benefits, increases in total compensation would not be apparent. In such practices voters are kept unaware of the true nature of the council’s financial priorities and the pending pension liability that they will face in the future.
Any legislative mandate for the disclosure of compensation and benefits should not be for the convenience of IRS reporting but should instead permit concerned voters to make comparative analyses. Voters are fully capable of weighing the necessity and the extent of fiscally-impacting perks awarded to council members and city administrators. In order to make fully informed decisions, voters need to be able to weigh the entire benefit packages awarded their local public officials against similar data from comparable cities. Voters should not be forced to access multiple city websites to make appropriate comparisons for their own city.
Comparable municipalities’ data must easily readable, centrally accessible and independently managed. All local public employee compensation benefits should be coupled with estimates of their impact on the retirement pensions of the public employee and future liability to the cities involved. And irrespective of any option for council members to legally meet in “closed” session to discuss “personnel matters,” future legislation must address the public’s right to review such fiscally-impacting matters and the rationale for granting performance bonuses and employee incentives.
Only when the voters have full access to complete compensation data can the full impact of each city’s fiscal priorities be measured. Voters can then take informed, corrective actions at the polls.