Saturday, July 31, 2010

City of Bell Not Transparent Either

How the city politicians of Bell conned the low income taxpayers to unwittingly pay for their huge salaries

The outrageous story of the hapless city of Bell, California is now widely known across the nation. A group of city politicians led by City Manager Rizzo allegedly colluded to pay themselves obscene salaries in a poor city of under 40,000 residents.

The disgraced city manager has resigned, losing his $790,000 salary. But not to worry -- he'll get by okay.

It turns out that his pension likely will as much as $710,000. When you factor in the employee deductions from a $790,000 salary, odds are that the pension roughly equates to the take home pay the city manager was previously receiving.

Assuming this new retiree now leaves the state (I can all but guarantee his stealthy departure from his Huntington Beach abode), he'll head to a lower state income tax state.

Indeed, Rizzo has been planning for this contingency -- he owns a horse ranch in Washington state -- which has no state income tax. Hence this reprobate will net significantly more in retirement than he made doing next to nothing for his previous paycheck.

The economy of Rizzo's new adopted state will be stimulated at California's expense. And, BTW, since Bell's pension is with CalPERS, the cost of his grossly underfunded pension will be shared by almost ALL the cities in California.

If formal quid pro quo collusion can be proved, he might end up in the hoosegow, along with the other alleged city co-conspirators. But that's very hard to prove, so I'd say the odds are that all the Bell officials avoid being convicted of a crime.

One puzzling aspect was how could such a poor city afford to come up with the cash for the officials' bloated salaries and pensions. Seems the answer is now at hand.

It wasn't just the usual slashing of city services -- it also included amazingly high (and completely unnoticed) property taxes. Here's the salient excerpt from a blog item on the PublicCEO website:

The citizens of Bell were first upset because their city's administrators were making some of the largest salaries in the nation. Now, it's being shown exactly what the price of those salaries was.

On Thursday, the Los Angeles Times reported that the working-class town is paying the highest property taxes of all but one of Los Angeles County's 88 cities (the other being the city of Industry with just 21 residential parcels affected)

From the Times:
All county property owners pay 1% general property tax, along with special or direct assessments levied by their municipalities. The countywide average of all tax rates is 1.16, or $11.60 for every $1,000 of assessed value.

Bell's rate is 1.55% -- nearly half again as much as those in such affluent enclaves as Beverly Hills and Palos Verdes Estates and Manhattan Beach, and significantly higher than just about everywhere else in Los Angeles County, according to records provided by the county Auditor-Controller's Office at The Times request.

That means that the owner of a home in Bell with an assessed value of $400,000 would pay about $6,200 in annual property taxes.The owner of the same home in Malibu, whose rate is 1.10%, would pay just $4,400.

So now taxpayers are finding out that they are being - for lack of a better term - screwed.
It's amazing how, as a society, we just assume taxes are correct and rarely question the percentages. . . . Now, taxpayers are awake. It's another reminder of how local government officials need to act with the greatest of transparency.


  1. maybe they took out some lease revenue bonds to finance some projects and dumped the money into the general fund to pay salaries...hmmmmm, sounds familiar

  2. this is just like Dalager voting for his own 40% increase in pension along with every other city employee in 2005. Can you say corrupt. One thing that blows me away is how stupid the public is to put up with this robbery. Man are Encinitas residents stupid!

  3. K.C.,

    Excellent post. I am heartened that so many Leucadia bloggers and commenters are so attuned to this issue.

    I've talked to other Encinitas acquaintances recently who are far removed from politics, and everybody seems to be smelling a giant rat in public pensions.

    I hope this translates to throwing the bums out at the polls this November. I'd point out that Dalager, Stocks, and Houlihan voted for the massive pension increases. Unfortunately, only one of them is up for re-election this year.

  4. WC- that is fortunate. We get a chance to throw out one of the major bums. If you really want change, put money toward Krantz's campaign. Otherwise your just bitching in the wind. Dalager is Bad for Ecinintas.

  5. WC,

    No credit for me. That is Rider's commentary.

  6. "One of the penalties for not taking an interest in politics is that you end up being governed by your inferiors."

    Plato, 400 BC


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