U.S. News

California city manager's pension could top $30 million

SAN FRANCISCO (Reuters) - A municipal manager in California who makes nearly $800,000 a year working for a small, poor city could draw pension payments exceeding $30 million in retirement, according to an activist who has been calling for an overhaul of the state’s public pension system.

That would put Robert Rizzo, chief administrative officer for the city of Bell in Los Angeles County, far ahead of other retired public workers in the state, said Marcia Fritz, who heads the California Foundation for Fiscal Responsibility.

“This guy will be our first seven-figure retiree,” said Fritz, whose group has played a leading role in publicizing the issue of California’s public pension liabilities.

Governor Arnold Schwarzenegger has seized on the topic and is demanding that lawmakers reform pensions as part of a deal to plug a $19 billion deficit in the state budget.

The state’s public pension assets are managed by the California Public Employees’ Retirement System and California State Teachers’ Retirement System, global fund giants better known as Calpers and Calstrs, respectively.

In California’s current race for governor, Republican nominee and former eBay Inc chief executive Meg Whitman has proposed restructuring state employee pensions to reduce their cost to government.

Democratic rival Jerry Brown has proposed limits on public pension benefits, his campaign says.


Currently, a former employee of the nearby South L.A.-area city of Vernon is California’s top public pensioner, pulling in just under $510,000 a year, according to a top-ten list compiled from public record searches by Fritz’s group.

If Rizzo leaves his job, which irate residents of Bell are demanding, he could draw $884,692 in his first year of retirement, according to her calculations.

At age 62, when Rizzo could also begin receiving Social Security payments, his annual pension would rise to $976,771, topping $1 million two years later. If he lives to age 83, his annual payout would rise to $1.48 million.

Fritz said she calculated Rizzo’s pension according to standard methods used in California, including available optional benefits as well as incentives she said likely will be offered to get him to resign quickly amid public uproar over his annual pay. That totals $787,637, nearly double the $400,000 a year salary of U.S. President Barack Obama.

“I don’t think there is anything illegal ... The system allows this,” Fritz said. “It’s all by the book.”

Fritz noted it is not unusual for retired firefighters in California to get bigger pensions than those paid top U.S. military officers who retire much later after many more years in uniform.

Bell, with a population of under 40,000, is one of the L.A. metropolitan area’s poorest cities. Many of its residents are calling for Rizzo, the city manager and other top officials to resign after the Los Angeles Times reported their salaries.

Rizzo may be the most highly compensated city manager in the United States and the salaries of others in Bell’s government are just as amazing.

Bell’s assistant city manager pulls in $376,288 a year. Its police chief is paid $457,000, or about 50 percent more than what neighboring Los Angeles pays its top cop to oversee law enforcement in the second-largest U.S. city.

Additionally, some of Bell’s city council members earn nearly $100,000 a year. The salaries are so big that the Los Angeles County district attorney’s office is probing them.

Bob Stern, president of the Center for Governmental Studies in Los Angeles, predicted tumult at Bell’s city hall. “There’s probably going to be a recall of city council members and terminations ASAP.”

Editing by Eric Walsh