Signal Hill city manager explains councilmembers’ complicated salaries

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By Steven Piper
Editorial Intern

The end of August concluded the California legislature’s law-making season, and a bill (AB1955) that would have stringently regulated elected officials’ income levels died while in the Senate– only weeks after Los Angeles Times reporters exposed the criminally large salaries that certain employees in the City of Bell had been earning.
As developments in Sacramento continue to reveal how oversight of small charter cities will be handled, the City of Signal Hill has continued to maintain fiscal transparency.
City Manager Ken Farfsing, as previously reported by the Signal Tribune, has released the salaries of Signal Hill’s highest paid employees, in addition to the wages of all the city council members.
How to most accurately communicate the council’s wages, according to Farfsing, is not a simple task. At the request of numerous news outlets and governmental agencies, he has decided to use the medical wage figure to portray the City Council’s annual compensation.
“There is a difference between base salaries and additional compensation the employees may receive,” the city manager said. “We want to get the full description of what employees make.”
By disclosing Medicare wages, additional sources of compensation, such as car allowances and taxable health benefits, are included in the total– factors that are omitted in gross or base wages.
“The Medicare wage includes taxable benefits and could be cash or the value of benefits like a city vehicle,” Farfsing said. Every year, councilmembers automatically receive an annual $2,400 car allowance, which is added into the Medicare wage.
Complications arise, however, when the officials decide how they will use their cafeteria allowance, an amount that ranges between $800 and $900 to pay for vision, dental, and other health insurance needs.
In Councilmember Larry Forester’s case, certain health needs were not met by the offered plan, so the annual cafeteria allowance was split into two even pieces– one half going to the City and the other to a deferred compensation fund. The deferred compensation from the cafeteria, however, is a taxable benefit that adds about $5,000 to the medicare wage.
Councilmember Ellen Ward’s Medicare wage is boosted thousands of dollars because California does not recognize same-sex marriage. By using their own salary to purchase health coverage for their companion, the councilmember must list the partner’s health insurance as a taxable benefit and under the Medicare wage– even though the money used to pay for that insurance is coming from the original gross wage.
“I thought it was important to show that it works different with domestic partners,” Farfsing said. “That’s the difficulty of dealing with these Medicare wages.”
Discussion about total compensation and whether or not it should include CalPERS retirement medical moneys will also be an integral factor in reflecting how much a city official actually makes, according to Farfsing.
In the wake of the City of Bell scandal and their excessive retirement compensation, agencies and cities in the same retirement pool, Compton being one example, are going to have to figure out how to pay for the Bell officials’ high retirement benefits.
However, a piece of legislation that did pass before the legislature’s August 31 deadline was AB1987, which would put an end to the public employee practice of pension spiking– the accumulation of vacation and sick time until the end of their occupation so their retirement benefit is boosted, sometimes by tens of thousands of dollars.
The last day for Governor Schwarzenegger to sign or veto any bills passed by the legislature before the deadline is Sept. 30.

Employment, News

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