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California Seeks to Prevent `Future Bells' With Public-Employee Pay Limits

California lawmakers are considering a package of bills designed to limit public-employee compensation in the wake of reports that the former manager of the Los Angeles suburb Bell was paid almost $800,000 a year.

The legislation would ban automatic contract renewals and raises above the cost of living, according to a summary provided by the office of Assemblyman Hector De La Torre, a Democrat who co-sponsored four of the bills. Cities would be required to post salaries, stipends and reimbursements on their websites.

Public salaries in California have come under scrutiny after the Los Angeles Times reported July 15 that Robert Rizzo, the manager of Bell, was paid $787,637 -- with annual 12 percent raises. Rizzo, his assistant manager and the city’s police chief resigned July 22. Bell council members, some of whom earned almost $100,000 a year, agreed to limit their pay.

“The outrageous salaries paid to Bell city officials is insulting to the hard-working people of Bell and all Californians,” Assembly Speaker John Pérez, a Democrat, said in a press release today. “The reform package we are advancing today will prevent future Bells, and help ensure the tax dollars paid by the people of California are spent properly.”

Under the proposals, municipalities that approve employee contracts above statutory limits would be designated as “excess compensation cities” and face some limits in their ability to borrow, according to the summary. Council member compensation above state limits would be taxed at a 50 percent rate.

Charter Exemptions

Current state law caps city-council member pay at $1,000 a month, according to Chris McKenzie, executive director of the California League of Cities. Those limits don’t apply to communities such as Bell that operate under their own charters rather than state jurisdiction.

McKenzie said in a telephone interview that while his group hasn’t made any final decisions regarding the pending legislation, lawmakers may be exceeding their authority by putting pay limits on charter cities, which account for 122 of the state’s 480 municipalities.

“We’ve made it very clear we’re prepared to support greater transparency of compensation,” McKenzie said. “We’re committed to preserving as much local control as possible. Bigger state government is not the answer to the problem.”

Lawmakers are also considering legislation that will return $2.9 million in excess taxes paid by Bell residents to the city’s schools, Dan Reeves, chief of staff to Assemblyman Kevin de Leon, said in a telephone interview. De Leon is a sponsor of that legislation. The current legislative session is scheduled to end in two weeks.

Bell, a city of 38,000 mostly Latino residents located about 10 miles (16 kilometers) south of Los Angeles, ended a loan program to municipal employees on Aug. 17, according to a statement from the city. The Times reported that Bell employees including Rizzo borrowed as much as $1.5 million from the city. Rizzo couldn’t be reached for comment.

Matt Connelly, a spokesman for Governor Arnold Schwarzenegger, said the governor will “take a close look” at the bills.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net.

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