In a report by the Orange County Grand Jury examining public-employee compensation by the county’s 34 cities, Laguna Beach and Newport Beach were singled out for an outsized number of employees reaping $100,000 plus salaries compared to its population.
In addition, Laguna, along with most cities in the county, received poor marks from the jury for the clarity of its disclosure of compensation information to the public.
Laguna Hill’s city manager also was spotlighted for salary and benefits exceeding $378,427, the highest paid city employee in the county.
As required by law, Laguna, Newport, and Laguna Hills must report their actions in response to the jury’s recommendations to the presiding Orange County Superior Court judge within 90 days. The report was released June 10. The jury recommended that Laguna reconcile maintaining its relatively large number of upper level positions in relation to its population.
In a statement, Laguna’s City Manager John Pietig called invalid the jury’s points of comparison using salaries and population.
A more effective comparison would analyze services against personnel costs, he said. While other cities contract out for services, Laguna provides its own police, fire and marine safety services. In addition, other cities don’t provide summer shuttles, beach maintenance, street sweeping, an animal shelter, water quality enforcement and a community center, which all require underlying support services such as finance and technology, he said.
The grand jury’s examination was spawned by last year’s revelations in the city of Bell about city officials paying themselves lavish salaries and benefits at taxpayer expense, says the report, which concludes that there are no similar instances of egregious abuses in Orange County.
Nevertheless, the report pointed out inconsistencies in pay that lack correlation with population but that no individual compensation was considered abusive.
The jury’s compensation analysis focused solely on 11 management positions, 1,847 employees with base salaries in 2009 exceeding $100,000, but excluded police, fire, utility and Great Park personnel.
Laguna’s municipal payroll includes 22 people earning in excess of $100,000, or 8.73 six-figure workers for every 10,000 residents, the highest in the county. If Laguna maintained the countywide average of positions paying over $100,000, just eight people would receive such wages and benefits, the report said.
The report’s findings undercut an initiative by elected city Treasurer Laura Parisi. During Tuesday’s City Council meeting, she again unsuccessfully argued to become a fulltime employee, which would have boosted her salary to six figures. In a report to council members, Parisi identified reduced banking fees that would have outweighed salary costs by her being on the premises. “I don’t know if it affected the outcome,” she said of the jury’s report.
At the meeting, though, resident Nancy Miller argued that the treasurer works as a watchdog to ensure fiscal responsibility. “Since the current occupant of the job is also a CPA, unlike any of our hired accounts and bookkeepers in the city, she has a fiduciary responsibility to do what’s in the best interests of the taxpayers’ money with the threat of losing her license if she does not. I think the city of Laguna Beach cannot afford to not have a full-time treasurer.”
Mayor Toni Iseman and Verna Rollinger, voting in the minority, supported the proposal.
In a later interview, Iseman defended the city’s personnel costs, agreeing that Laguna has little in common with typical cities with a population of 24,000. “We have big city problems when our population balloons,” she said, increasing to 100,000 on a sunny weekend.
Even though the jury’s report excluded accounting for emergency workers, Iseman pointed out that Laguna’s high cost real estate and its lack of physical uniformity required hiring personnel capable of decision making and dealing with the public.
“We like very much for staff to live here,” she added, a value reflected in the council’s willingness to raise salaries and subsidize housing, as it does for five employees with key roles in emergencies.
Only in the public works position did Laguna’s annual pay and benefits of $284,720 hit the top mark countywide. Recipient Steve May, who has served as the city’s public works director since 1995, said the report’s findings failed to account for an unusual one-time infusion to his pay that year. Unused sick leave amounting to 1,000 hours was added to his pay due to a policy change, he said.
Without the windfall, his base salary and benefits would fall in the middle range, May said. The average pay and benefits for public works directors was $207,322, the report found.
Laguna ranked 27th among cities for its compensation of $7,918 a year in pay and benefits for city council members, expected to attend scores of fee-based events annually.
California League of Cities city manager compensation survey
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