California city official quits nearly $800,000 post

SAN FRANCISCO (Reuters) - A local official in California earning close to $800,000 a year as the manager of a city with nearly a quarter of its population in poverty has quit following a public uproar, the mayor said on Friday.

Robert Rizzo, chief administrative officer of Bell, California, resigned along with an assistant and Bell's police chief, Mayor Oscar Hernandez said in a statement.

Rizzo's $787,637 salary was nearly twice that of U.S. President Barack Obama, a considerable expense for a city of 37,000 people operating its own food bank for impoverished residents.

Assistant city administrator Angela Spaccia's pay exceeded that of the top administrator in Los Angeles County, and Bell was paying police chief Randy Adams 50 percent more than what his counterpart earns in neighboring Los Angeles, the nation's second largest city.

Bell residents have been clamoring for answers to questions about the city's financial management since The Los Angeles Times reported the compensation of the three city employees -- along with reporting that many members of Bell's city council earn nearly $100,000 a year.

Hernandez criticized the Times' "skewed view of the facts" and praised Rizzo's service.

INVESTIGATION LAUNCHED

The Los Angeles County district attorney's office is probing them and California Attorney General Jerry Brown and the California Public Employees' Retirement System, the pension giant known as Calpers, have opened a joint investigation.

Calpers has an interest in the compensation Bell provided because of the pension payments it must make.

Rizzo could amass pension payments of more than $30 million in retirement if he lives until age 83, according to an analysis by the California Foundation for Fiscal Responsibility, a group calling for an overhaul of the state's public pension system.

Brown's office said it plans to look beyond Bell in its probe, which will coincide with his campaign as the Democratic nominee to succeed Republican Governor Arnold Schwarzenegger.

Schwarzenegger is making pension reform a condition for his signature on a state budget, a challenge purely on fiscal terms because he must negotiate a spending plan that closes a $19 billion shortfall with the Democrat-led legislature.

Former eBay Inc chief executive Meg Whitman is the Republican nominee for governor and is for pension reform. It could include providing new public employees less generous benefits or even putting them into retirement accounts like the 401(k)s in the private sector.

Brown has proposed limits on public pensions and in his office's statement said the salaries at issue in Bell are "shocking and outrageous."

(Editing by Xavier Briand)