Laguna Hills Watch Dog, Special Report - What "City Views" Says and Doesn't Say - Who Can You Trust?

In response to the information about the Laguna Hills City Manager's Total Compensation in the recent "City Views" publication from the City of Laguna Hills, you may not be sure who to trust for the correct information. We suggest you trust no one and encourage you to do the math yourself with the online raw data from the City of Laguna Hills. Go to: http://taxdollars.ocregister.com/2010/05/17/controversial-city-comp-report-now-online/57357/ Controversial city manager compensation report now online
Click on -"(Here are the numbers, directly from the city: Laguna Hills response.)" to see the City's FY 2004/2009 raw data for total compensation of the City Manager, Assistant City Manager and the medical benefit costs for all the city council members and their families. The $60,000 4 wheel drive Toyota Sequoia purchased for the exclusive use of the Laguna Hills City Manager in July 2009 is not included in this raw data.

The most important question is what to count and what not to count as "Total Compensation" from the city's raw data. We asked Barbara Kogerman what she counted in all cases for all City Managers in Orange County as "Total Compensation" from the information received from all the cities in her study and she told us her "intent was not to determine compensation as determined by the IRS but to determine what taxpayers paid for within each employment contract". She said she required a specific dollar amount for each category of compensation for each employee. So, regardless of what appears on W2 forms we want to know exactly what each city manager costs the taxpayers of his/her city. Because the cities mix personal use with business reimbursement we counted everything to be fair to all.

Because the $60,000 car for the City Manager of Laguna Hills was purchased in July of 2009 it was NOT included in the raw data from the city. The city of Laguna Hills' fiscal year ends on June 30, so the car purchased in July narrowly escaped being counted by the city in their FY 2008/09 data and of course the city's data for FY 2009/10 was not completed when the study was done. So, opinions about adding the cost of the car differ, but if you look at the City of Laguna Hills' report of $31,744.30 under FY 2004/05 in the raw data for Don White, Assist. City Manager, the city appears to have reported the entire cost the 2005 Ford Explorer for Don in one year so set a precedent for reporting it that way. If you don't want to add the entire cost in 2009 you could add $10,000 for the July 2009 down payment of the city owned trade in car and you could add another $5000.00 to cover 6 months of car payments for 2009. The terms of the purchase contract for the city manager's car are $10,000 a year for 5 years plus the $10,000 trade in. Or, you can just leave out the car because anyway you do it, the Laguna Hills' City Manager's cost to taxpayers is higher than that of any other city manager in Orange County.

In the most recent issue of "City Views" - 2010 Fall, Laguna Hills

"City Views" says the city manager's annual salary is $233,592 and salaries for City Managers in Orange County range from $166,104 to $324,000.

"City Views" does not say there is no salary of $324,000 for any "City Manager" job in Orange County. The only $324,000 salary reported in Orange County was for Joe Tait who is reported to have 2 jobs in the City of San Juan Capistrano and he is paid $169.629 for the City Manager job. He is reportedly paid $153,324 for the Utilities Director job - See that story in the OC Register - Two jobs, two salaries, for San Juan city manager at: http://taxdollars.ocregister.com/2010/07/21/two-jobs-two-salaries-for-san-juan-city-manager/61063/

"City Views" says the city manager is eligible to earn up to 10% in additional pay at the discretion of the city council.

"City Views" does not say the city manager receives the whole 10% bonus every year and we can see in the raw data that he has also received pay for unused vacation days every year since 2004/05 ranging from a low of $7,914.66 to a high of $41,819.21, and he is entitled to receive the annual cost of living increases that he gives to the other employees. Also there is no mention of any standards or goals to meet in his contract.

"City Views" says the City Manger receives retirement, health and other benefits in addition to his salary and the combined value of this additional compensation is about $108,000.00.

"City Views" does not say city/taxpayers pay - the contributions to the City Manager's 457 deferred compensation program of $10,000 a year that increase annually by up to $1000 + both the employee and employer contributions to his PERS Retirement plan + he gets the PARS and ICMA-RHS benefits that the other management employees receive + the entire cost of the Cadillac medical, dental and vision plan for Channing and his family and his taxes on his medical coverage with no maximum amount in his contract + an annual physical exam for Channing at a cost of more than $700 + his employee contribution to Medicare + the premiums for Channing's personal $350,000 life Insurance Policy + his choice of a new $60,000 4 wheel drive Toyota Sequoia for his unrestricted personal as well as business use + all operating costs of the car including insurance, maintenance, repair and gasoline (There is no mention of how frequently he gets a new car and no maximum cost for a car in his contract) The city/Taxpayers also pay for unrestricted personal and business use of his toll road and cell phone expenses with no maximum + his in home computer equipment that is also for his personal use. The City offers to mutually determine with Channing the city's payment for his moving expenses if he relocates from Yorba Linda to Laguna Hills including realtor and loan fees, closing costs, and moving costs. The city/Taxpayers pay for professional dues and subscriptions up to $2000/year + travel and subsistence expenses to continue his professional development with no maximum + long term disability, + an income protection policy + additional disability and life insurance policies. If Channing elects to pay the premiums for these policies himself the city/Taxpayers will pay salary increases to cover his payments with no maximum amounts noted. The City Manager also receives 30 vacation days a year, and is often awarded much more, that he may use or sell back to the city for cash + 12 sick days a year. ** You can now see all the City Manager's benefits, for the first time in almost 20 years - just published 8/18/10, on the city web site at www.ci.laguna-hills.ca.us Go to the city web site - Click on - Forms, Documents and Maps - City Manager - City Manager Employment Agreement & Corresponding Resolutions to check our information.

When we added all of these benefits we got not the "City Views" amount of $108,000.00 but $171,341.32 without the $60,000 car.

When we ran all the numbers what we got for the Laguna Hills City Manager's Total Cost to Taxpayers = $464,771.21 including the new $60,000 car. The total was $414,711.21 if you add only $10,000 for the 2009 car down payment + none of the new car payments in 2009 which are $833.33 per month/$10,000 a year for 5 years. Or, even without the new car theTotal was still $404,711.21. Any way you do it the total is well above the second highest total compensation for any city manager in Orange County which was $355,692 for the Irvine City Manager. Valerie Bromberg noted that even if taxpayers just give him the car as a gift he is still costing us almost $2000 a day when you consider his benefits - with 365 days in a year, 104 days off for weekends, 30 vacation days (and often more) plus 12 holidays and 12 sick days. That leaves about 207 days of paid work, so at $400,000.00 a year that = about $1,932.00 per day.

Laguna Hills Assistant City Manager Don White's total compensation of $320,682.52 (reported as $282,045 on the city web site) is higher than the total compensation of all but 4 CITY MANAGERS in Orange County, those 4 being the City Managers of Laguna Hills, Santa Ana, Newport Beach and Irvine according to the study done by Barbara Kogerman with help from the Brandman and Pepperdine graduate students. Laguna Hills is the 7th smallest city in Orange County with only 26 full time employees including the City Manager and Assistant City Manager and a city population of only about 34,000.

Valerie Bromberg noted that Laguna Hills is attempting to distance itself from the City of Bell in "City Views" but Laguna Hills, and the City of Bell have many similarities:

- Both City Councils paid excessively high salaries to their City Managers for the size of their cities and never made this information easily available to the citizens.

- In both cities Additional Benefits to the City Managers were not previously acknowledged.

- Both City Managers received payments by the city to their 457 account (Robert Rizzo of Bell received $20,496 & Bruce Channing of Laguna Hills received $16,000)

- Both City Managers received annual payouts for unused vacation leave or unused sick days

- Both City Manager's received 15% per year increases in compensation and both justified their compensation as "deserved".

In 2005 the total compensation of the Laguna Hills' City Manager was $224,817, the
7th highest paid in the county according to the Orange County Register Newspaper report of April 24,2005 - Perks fill out city managers' compensation - Running a town earns officials home loans, SUVs and free gas

In 2010 the total compensation of the Laguna Hills City Manager is $460,809 making him the highest paid city manager in county. He has been the city manager in Laguna Hills since 1991. http://taxdollars.freedomblogging.com/2010/05/17/top-city-manager-compensation-460809-report-says/57287/ This is a 15% increase per year in total compensation from 2005 to 2010.

In 1993 the City Manager/CAO of Bell made $72,000
In 2010 the City Manager/CAO of Bell made $787,637 which is a 15% increase per year - http://www.ktla.com/news/landing/ktla-bell-hefty-salaries,0,3545022.story

City Manager Bruce Channing of Laguna Hills said his compensation was justified. In the 2005 OC Register News story above Channing said "Performance is the key factor," he said. "If the City Council didn't think I was providing a valuable service, they would have decided long ago I wasn't worth the compensation I receive." (from the 2005 OC Register News story noted above)

City manager Robert Rizzo of Bell said his salary was justified. Rizzo was unapologetic about his salary and was quoted as saying, "If that's a number people choke on, maybe I'm in the wrong business... I could go into private business and make that kind of money. This council has compensated me for the job I've done." http://www.huffingtonpost.com/2010/07/15/robert-rizzo-bell-city-ma_n_647826.html

The City of Laguna Hills continues to disconnect calls for Transparency and Accountability in "City Views," which is paid for by the taxpayers, is very expensive. From the 6/9/09 City Council Meeting Warrant Register an agreement was made with Faubel Public Affairs, a consulting company, for an annual budget of $105,000 for 2 years to produce "CITY VIEWS" and the cost of the Summer issue of City Views was $19,519.10 plus $2,500 to mail as reported in City Warrant Registers.

There is supposed to be a fine line about "content" regarding the City Council in
"City Views" Publications. At the 12/9/08 Laguna Hills City Council Meeting, Council Member Melody Carruth, in response to a citizen questioning some content in "City Views", cautioned that the city needs to safeguard against any intentional or unintentional abuse of the City Views publication in ensuring that elected officials photographs are not in there especially during years in which they are running for office, and perhaps not at all. City Views is a tax payer funded publication, so the council must be very careful especially in election years and some issues of this publication were, surely innocently, distributed in some areas prior to election day. The FPPC (Fair Political Practices Commission www.fppc.ca.gov/ monitors these publications and responds to complaints about taxpayer funded publications that feature elected officials. She said we need to feature the citizens of our community and leave photos of elected officials to the newspapers.


Concerns from Only 2 City Council Members have been expressed about the City Managers' total compensation.

NO CONCERN was expressed from Council Member Craig Scott who consistently supports the city manager's compensation and has been the long time negotiator of the City Manager's compensation. See Craig Scott's business web site for Attorney Specialists targeting Senior Executives at www.execlaw.com - stating they supply "proven strategies to use in approaching management to achieve changes and possibly augment the benefits in your package. One of the greatest advantages we give to our executive clients is our extensive experience representing employers. Until Executive Law Group was formed, our attorneys were all on the other side! We know what employers are thinking as they deal with you." Question - So whose side are you on here? Does Council Member Craig Scott know or care what taxpayers who elected him are thinking when he negotiates these great deals for the city manager every year with our money?

From 12/9/08 Laguna Hills City Council Meeting - City Council Member Melody Carruth expressed opposition to the $32,000 bonus for the City Manager as inappropriate due to the terrible state of the economy at this time, and an uncertain economic future. She noted that the 10% promised bonus was $23,000 and there are restrictions in the contract for awards over that 10% amount, but the city council added $9000, and they can call that vacation pay or whatever they like, but they still added $9000 to the $23,000 which = $32,000. * Resolution # 2008-12-09-7 The City of Laguna Hills awarded the City Manager 10 additional vacation days. * Resolution 2006-12-12-5 the City awarded the city manager his maximum bonus plus 30 additional vacation days.

From the 6/9/09 Laguna Hills City Council Meeting Consent Calendar - Item 4.4 - In anticipation of revenue reductions, for FY 2009-2010, the city council has eliminated 2 deputies from the Laguna Hills Police Services for a savings of $142,206.00, a 2.18 % savings. Only City Council Member Bressette voted against this and the City Manager still received his $60,000 4 wheel drive Toyota and his "maximum bonus" (actual amount not disclosed) in 2009 with only Council Member Carruth voting NO on the bonus and questioning the car.

From the 12/8/09 LH Watch Dog - Laguna Hills City Council Member Melody Carruth called for Amendments to the City Manager's contract to plug gaping loopholes. Council Member Carruth stated, This is the third year I have asked for amendments to the city manager's contract. Listed are a few of the contract provisions which should be changed:

1. Limit city manager travel paid for by city to the US.

2. Cap the bonus amount awarded by the city council to the city manager (currently the city manager contract calls for 10% of base salary which means the bonus amount increases every year as his salary increases). He has been awarded a bonus every year.

3. Eliminate "open-ended" contract provision for city manager's car. Limit car purchase to set amount determined by city council and require city council approval before purchase. Under the current contract, Mr. Channing may purchase any car without council approval. (The $60,000 controversial car purchase was revealed to the council during a routine Warrant Register item on the consent calendar. I was not told of the purchase-not consulted, nor asked. It was not in the budget-it was not a budget discussion. Because it is a provision in the contract, the city manager is not required to get a vote from the council before purchasing a car...any car.

From the 1/26/10 Laguna Hills City Council Meeting - Regarding Item 4.4, the Resolution for the City Manager's Bonus for 2009 passed in closed session 4 -1 (No vote being Council Member Carruth. Mayor Bressette stated, "As I indicated at our last meeting, the December meeting during closed session, which as you well know I cannot discuss, left me making a decision that on further review and further investigation we couldn't enact, and therefore, if the opportunity presented itself, I would vote NO today, and this is the only opportunity that I have to say that."

Editor's Note - We agree with Council Member Melody Carruth who on 12-8-09 asked for the plugging of gaping loopholes in the City Manager's Contract. We also have to seriously question why these loopholes ever existed and continue to exist after almost 20 years when Council Member Craig Scott, an Attorney Specialist targeting Senior Executives, and Council Member Allan Songstad, who has repeatedly said he is a Contract's Attorney, have both been on the City Council for almost 20 years. Were they not paying attention all that time or did they not understand that they are pledged to serve the citizens? We can see they have protected the City Manager very well, but who has protected the taxpayers of Laguna Hills? Why are we were paying for the highest compensated City Manager in Orange County and an Assistant City Manager who makes more than all but 4 of the highest paid City Managers in Orange County?

We thank all of the Laguna Hills citizens who have contributed to this response to the latest "City Views" Publication and a huge thank you to Barbara Kogerman, Candidate for Laguna Hills City Council and to Teri Sforza, Watch Dog Reporter for the Orange County Register Newspaper. Without Teri, all Ms. Kogerman's work could have gone unnoticed and citizens would remain uninformed. Teri's contributions to citizens in this county and now throughout the State are phenomenal thanks to her dogged pursuit of investigational reporting and Barbara Kogerman appears to have done more for citizens as a candidate than many city council members have done in 20 years related to her Term Limits for the City Council Initiative that is now on the ballot and her study of City Manager Compensations that ushered Statewide transparency reforms, the results of which we can now see, for the first time in 20 years, on the City of Laguna Hills web site
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Don't forget to attend Comedy Night on August 27 at The Hills Hotel at 25205 La Paz Rd., Laguna Hills starts at 7 pm, $20 per person includes a pasta meal. This will be a "Totally Laughable" Fund Raiser for the Term Limits for Laguna Hills City Council Members Initiative expenses. The meal will be in the upstairs Crystal Ballroom from 7 to 8 pm, From 8 to 9:30 pm the comedians will keep you laughing and from 9:30 to midnight there will be music with a DJ and dancing. There will also be some auction items. Please Contact Barbara Kogerman with any donations for Auction Items at 949-586-5552.