Years Added to City Manager’s Contract

By Cassandra Reinhart, Special to the Independent

An employment contract for Laguna Beach’s top-paid employee, City Manager John Pietig, was extended three years to 2020 with an option for another year’s extension through 2021 in a vote Tuesday by the City Council.

Pietig’s current annual base salary of $251,809 will increase 3%, effective July 1, bringing his compensation to $259,363. In 2018, it will rise another 3% to $267,166. Both raises mirror salary increases negotiated under contracts for the city’s municipal workers.

“As other cities around the state are filing bankruptcy, or their pension plans are going under, we are in the best shape we have ever been in and things look good going forward,” Council member Steve Dicterow said. “And that is thanks to what John has done.”

Pietig was hired in 2001 as an assistant city manager under former and longtime Laguna Beach City Manager Ken Frank. When Frank retired, Pietig was promoted to succeed him in 2010.

Recent forecasts show financial storm clouds looming as employee pension costs remain a driving factor behind a projected $2.5 million budget deficit for Laguna Beach by 2022. The increased costs are related to the California Public Employees Retirement System (CalPERS) lowering its rate of return on investments. Pietig previously said leaving the system isn’t an option; lacking the CalPERS benefit will hinder the city in recruitment and retention of quality employees.

Dicterow pointed out that Pietig spends much time devoted to hiring and has recruited two assistant city managers he described as “superstars.”

Mayor Toni Iseman, although complimentary of Pietig, had a different view on all of the new hires and some requests going forward. “I want to see a filling-in with the managers and the talent underneath that we need to move forward,” said Iseman, who pointed out that a flurry of turnover among staff means departments lack personnel with institutional memory. “Hopefully we can get the new people, train them fast and retain them,” she said.

Pietig is the only city employee elected officials directly hire themselves, and his salary is slightly higher than California city managers in like-sized cities, according to 2015 figures posted on the Transparent California website.

Laguna Beach’s population in 2013 was 23,250, although the city estimates an annual influx of 6 million tourists to its beaches. The site shows that the city manager in Calabasas, population 24,153, earned $239,640; the city manager in Monterey, population 28,294, took in $226,524; and the city manager in Coronado, population 23,511, made $215,862.

Transparent California also ranks salaries of city managers in neighboring cities, all with higher populations: Irvine, $265,707; Newport Beach, $255,461; Dana Point, $233,183; and San Clemente, $231,292.

Dicterow told Pietig the contract extension and compensation are well deserved. “The city manager is the most important person in the city, and we rise and fall based on his skills,” Dicterow said. “When things are good he should get credit and when things are not he should get the comments for not doing it well. “

Pietig is also eligible for performance pay bonuses of up to 5% annually, which in his case could amount to $12,968 and $13,357 respectively for 2017 and 2018, with additional yearly 3% increases and 5% performance pay increases possible through the life of the contract. Full-time city employees are eligible for exceptional performance pay of up to 5% each year.

The council also voted to eliminate the cap on Pietig’s $4,000 professional dues allowance, citing dues for three professional groups, training and conference expenses as needed. He also receives a $500 per month automobile expense stipend.

“Getting John out there more among other city professionals is a good thing; he will use discretion on the budget,“ council member Bob Whalen said.

He was unavailable to respond to a request for comment.