Burying the Lede: Disgraced Former Bell City Attorney Has Always Seen Peter Yao as a Man of Integrity

What a Recommendation!

Peas in a Pod

Several readers have taken us to task, and rightly, for burying the lede or missing the most interesting part of the Peter Yao story:

Peter Yao's recommendation letter to the Applicant Selection Panel for the State of California Citizens Redistricting Commission was written by none other than Edward Lee, the disgraced/resigned/fired former City Attorney of Bell. Yao thus far has made the cut of the 120 names to be winnowed to 60 names by October 1, 2010.

Shortly after the Bell salary and governance scandal was publicized by the Los Angeles Times, Edward Lee was removed as Bell City Attorney, fired as Downey City Attorney, and resigned from Best, Best and Krieger. The city of Covina removed Lee but kept BBK. Best, Best and Krieger, which continues as Claremont City Attorney, has been subpoenaed by Attorney General Brown in the Bell scandal.

See the letter from Lee below:

15322

Imagine having the guy who signed off on the obscene salaries of the Bell City Manager, Assistant City Manager, Police Chief, and four of the five councilmembers, say this about you [emphasis added]:

I firmly believe that Peter possesses the skills to balance the competing interests of the State. His experience in his professional and political arenas make him uniquely qualified to weigh and understand the issues which redistricting the State will present. My knowledge of his integrity and honesty also speak to his valuable qualifications to present the views of all segments of our diverse State.

While the corruption at Bell may or may not directly affect Claremont, certainly a good bit of the stink has rubbed off on Peter Sunway Yao.

You can't pick your relatives, but you can pick your friends.

More Tangled Webs

We got to wondering about that fellow Jared Boigon, who figures so much into the Claremont Unified School District's bond plans. The more we thought about it, the more it seemed that decisions that ought to have been made in public by the CUSD Board of Education have instead been made by the district's Measure CL bond campaign committee and by Boigon.

The bond committee by law is supposed to be distinct and separate from the school district, but as we've pointed out, the three people heading the committee, Bill Fox, Lee Jackman, and Mike Seder, are the same three people CUSD appointed to work with Boigon when the district was deciding whether to pursue a parcel tax or a bond.

Those same four are now working on the Yes on CL campaign, and Boigon is operating as a campaign consultant. We first saw Boigon in June, when he and his company, TBWB Strategies, were under a $25,000 contract to CUSD to conduct polling research to test voter support for both a parcel tax and a bond. Incidentally, the word is that TBWB had a $10,000 cost overrun, so the district really ended up paying them $35,000 - not exactly a good start for a district accused of misspending on its last $48.9 million Measure Y bond.

Boigon appeared again after we and others noticed that the bond resolution lacked a specific project list. When the district voted on that resolution, board member Jeff Stark (photo, left) falsely stated that they could not come up with a list until after the board voted on the bond language. The district approved the bond resolution with no discussion of the projects Measure CL's $95 million would pay for.

As we discovered, rather than trying to figure out what projects needed funding and what the total cost would be, CUSD simply figured that the maximum they could seek was $95 million and went for that. After they were publicly called on that point, they scrambled for a couple weeks and then had Boigon come up with what the Yes on CL campaign calls a project list:

Bond 2010 Site Detail 08-26 FINAL


The document, however, fails to give a school-by-school cost breakdown, and Yes on CL committee member Bill Fox lamely explained in the Claremont Courier that any more details would have to wait until after the bond election. This is the typical CUSD response: We have a secret plan to spend the money, just trust us.

This hearkens back to Jeff Stark's earlier prevarications, and came up again a letter to the Courier by former Claremont Faculty Association president Dave Nemer. Apparently, the district and its surrogate Nemer feel you, Mr. and Ms. Voter, just aren't smart enough to hear the details right now. Let them think for you.

And who created the district's project list? None other than Jared Boigon of TBWB Strategies.

So we have an unelected consultant, working with a campaign committee handpicked by the school district, designing an after-the-fact spending list to justify the district's blank check to itself. This all fails the smell test on so many levels - the lack of public discussion, the district's involvement in the bond campaign, the district's and the campaign's misrepresentations justifying their decisions, and so on.

What's emerged is a mostly notional, consultant-created spending scheme designed to justify obtaining as much money for CUSD as is allowed by law. The money, in turn, will flow out to the same vendors and contractors who will be the campaign's largest donors.

This wastefulness, as well the blatant and false emotional appeals to voters by the Yes campaign - save our kids, save our schools, save our teachers - will inevitably lead to a $95 million debt whose final costs will more than double once the interest and principal are paid off. As with Claremont's 2000 Measure Y, the money will be spent long before Jared Boigon's project list can be completed.

Boigon won't care. He'll collect his paycheck and move on, and the damage he's inflicted will be so far off in the future that, even if someone called him on it, he'll have already banked the tens of thousands he'll have billed the district and the bond campaign for.

Don't believe us? Consider the Contra Costa Times' followup stories to the Mt. Diablo Unified School District's $348 million Measure C bond, which voters approved in June. Like our district, MDUSD hired Jared Boigon to oversee a poll looking at financing options. With interest, the bond will end up costing $1.8 billion.

After the election, the public learned that there was at least one other option that would have shaved $1 billion off that amount, but MDUSD refused to release Boigon's poll, which was evidently the basis of the decision to pursue Measure C. Like the Claremont school district, MDUSD played hide-the-ball, according to a 7/26/10 article by Contra Costa Times reporter Teresa Harrington:

District General Counsel Greg Rolen has repeatedly denied access to the voter poll results, saying they are exempt from state laws requiring release of public documents because they were paid for with private campaign committee funds.

Even though some board members received the results, Rolen said the results are not maintained by the district, "and the interest in withholding these documents clearly outweighs the public interest in disclosing them."

One MDUSD trustee told the Contra Costa Times that if he had known of the second, cheaper financing option, he would have considered it, but he wasn't given a chance to review Boigon's poll:

Trustee Dick Allen, who did not receive the poll results, said he was not aware that the board had two options. In hindsight, he said the board should have discussed the two tax rate choices and allowed the public to weigh in.

"I think we should have made the decision with all the transparency that we can provide," he said Friday. "I think in the long run, it's always better to be honest."

In May, the Times asked the consultant who helped the district with the bond campaign whether the poll specifically asked voters to choose between two tax rates. He didn't give a direct answer.

"I don't think it's a fair question," said Jared Boigon, of TBWB Strategies. "I think you have treated this to unfair scrutiny, more than any other bond in Contra Costa County."

The similarities between Mt. Diablo and CUSD continued with the lack of a bond project list, as Teresa Harrington reported in a separate article:

The district's list of improvements to be completed with the bond was not finalized until April, too late to be included in the voter information pamphlet. Voters approved the bond based on a general list of districtwide improvements that was not school specific.

The district posted its final list of projects online, but did not include detailed descriptions or costs for work to be done. This caused some confusion in schools regarding what the money would ultimately pay for.

Further, as with Claremont Unified's Measure Y, contractors donated generously to MDUSD bond campaign and expected to be rewarded for those donations:

Chevron Corp. donated $10,000 to a $348 million bond measure four days after it was approved by voters in the Mt. Diablo Unified School District last month.

The San Ramon oil giant donated the money to the Measure C campaign as a San Francisco subsidiary, Chevron Energy Solutions, continued to press the district to award it a $68 million, no-bid solar contract that would be paid by the bonds. District leaders told the company this week they planned to seek competitive bids on the project.

The MDUSD bond campaign raised well over $200,000, and the list included several five-figure donors in addition to Chevron, all of whom could have potentially profited from the bond's passage as the CC Times' Harrington reported on June 7:

$25,000: Seward L. Schreder Construction, Redding
$25,000: Northern CA Carpenters, Regional Council Issues PAC
$25,000: IBEW 302: Community Issues PAC
$25,000: Stone and Youngberg, San Francisco, bond underwriters
$15,000: George K. Baum and Co., Denver, bond underwriters
$15,000: Sheet Metal Workers International, Local Union No. 04
$15,000: Brandis Tallman LLC, San Francisco, bond underwriters
$10,000: Diablo Education Association Political Account

Harrington goes on to note that the MDUSD bond campaign's expenditures were equally large, with the bill from Jared Boigon's TBWB Strategies coming to $85,176.

If one examines these school funding elections closely, one sees the same pattern repeated again and again. Schools in need of short-term cash manipulate public perception with Chicken Little claims of impending doom. Using money from the very people will profit from the bonds, school districts like Mt. Diablo and Claremont hire highly paid professional consultants like Boigon to run the campaigns. The goal is not to raise and spend money efficiently and only where it is needed. Rather, it is to get voters to approve as much borrowing as possible, no matter what the long-term costs are to the community, and to funnel that money back to the parties who funded the campaign.

The lie at the heart of all of this is the premise on which these bond campaigns are built: Bond X is the only solution to our schools' problems. As the Contra Costa Times noted, there are much cheaper alternatives, but then those are never really explored.

These sorts of manipulations should be a public scandal, but they never rise to that level because, unlike with the City of Bell, the reporters who cover school districts tend to fall into a kind of journalistic Stockholm Syndrome and end up identifying with the subjects of their uncritical stories. For years, the Claremont Courier's Pat Yarborough epitomized this phenomena, and Courier reporter Landus Rigsby, who currently covers Claremont schools, seems set on continuing in this tradition.

It's no wonder, then, that all the parties supporting the Claremont school bond (Jared Boigon, the school district, the Claremont Faculty Association, the Yes campaign) are confident that voters are stupid enough to pass the bond. With local media unable or unwilling to question anything presented by the district and its surrogates, lies become facts, and the final costs get deferred long enough for the responsible parties to successfully evade any accountability.

City Attorney Firm Subpoenaed in Bell Investigation - UPDATED

The LA Times reports that the two parallel investigations into the Bell scandal, one by Los Angeles County District Attorney Steve Cooley's office and one by state attorney general Jerry Brown, have proceeded with brisk election-year dispatch, an efficiency that will no doubt fade quickly after the first Tuesday in November.

The Times said that an LA grand jury has issued subpoena's in the DA's investigation. The Times also indicated that Brown's office served subpoenas to obtain records and depositions from nine former Bell officials.

The Times article also said that the AG's office served subpoenas on Best, Best & Krieger, the law firm Bell employed for its city attorney services:

The attorney general also said Monday that his probe was expanding to include the city's former law firm, Best, Best and Krieger, which also received subpoenas. The city last week ended its contract with the lawyers. Shortly thereafter, a longtime city attorney, Edward Lee, who worked for Best, Best and Krieger, announced that he was leaving the firm. A spokeswoman for Best, Best and Krieger said the firm had received the subpoena and is "assisting in any way we can."

BB&K contracts with many municipalities to provide city attorneys. Claremont's city attorney, Sonia Carvalho, is a partner at BB&K.


- UPDATED 9:20AM

The city of Maywood, which outsourced nearly all of its services earlier year, was also in the LA Times today. An article in the paper's LA Extra section described how the turmoil in Bell has spilled over into Maywood:

In late June, Maywood fired most of its workers and turned over operations to its neighbor city. But the scandal over eye-popping salaries in Bell has become a "distraction," and Maywood leaders said they would look for someone else to run their affairs.

"We're caught in a situation where we need to move forward," said Maywood Councilman Felipe Aguirre. "We don't want to be distracted by things that are not germane to our city."

Aguirre said doesn't want Maywood to "become a laughing stock of a city," a term used to describe Bell by one of its own embarrassed council members.

When it began to look outside the city for its services, Maywood hired Angela Spaccia, who was at the time the assistant city manager in Bell, as its interim city manager. Spaccia's Maywood contract paid her $10,000 a month. Spaccia was also earning $376,288 at her regular job in Bell and received benefits that drove her total compensation up to $845,960. Bell let Spaccia go when it fired its former city manager Robert Rizzo when Times broke the news of Rizzo's exorbitant compensation package.

Maywood's three-month contract with Spaccia ends on Thursday. During her short time in Maywood, Spaccia oversaw the dismantling and outsourcing of the city's various departments, and under her Maywood signed a $50,833 a month contract with Bell to run Maywood's basic operations.

Maywood also retained BB&K's Edward Lee for its city attorney, and Lee resigned from Maywood on August 2.

The photo that accompanied today's Times' Maywood article showed angry residents at last night's Maywood city council meeting. The protesters were upset over Maywood's alliance with Bell, and the photo showed one person waving a sign that said, "BBK and Spaccia Brought Bell to Maywood."

Pension Tension

To follow on Friday's post about Bell, CalPERS, and Glenn Southard, we came across a New York Times article by Ron Lieber titled "The Coming Class War Over Public Pensions." (The NYT has toned the title down to "Battle Looms Over Huge Costs of Public Pensions.")

Lieber writes that our labor force is evolving into a two-class system. On the one hand are public employees, who continue to receive generous, taxpayer-funded defined benefit pensions with built-in cost of living increases. On the other are private sector employees, most of whom do not have pensions but who may, if they work at the right place and happen to be savers, have 401(k) or IRA accounts in which they, not taxpayers, bear all of the risk.

According to Lieber, taxpayers will likely be asked to rescue underfunded public pension plans for cities and states when those begin to go underwater. As Claremont city council member Peter Yao said a couple weeks ago, our own employee' CalPERS pension account is underfunded to the tune of up to $50 million, something that the majority of the council (Elderkin, Pedroza, and Schroeder) and the Claremont 400, refuse to admit.

Claremont's pension problems are just one small part of a national problem. How much money are we talking about? Lieber tells us:

At stake is at least $1 trillion. That’s trillion, with a “t,” as in titanic and terrifying.

The figure comes from a study by the Pew Center on the States that came out in February. Pew estimated a $1 trillion gap as of fiscal 2008 between what states had promised workers in the way of retiree pension, health care and other benefits and the money they currently had to pay for it all. And some economists say that Pew is too conservative and the problem is two or three times as large.

So a question of extraordinary financial, political, legal and moral complexity emerges, something that every one of us will be taking into town meetings and voting booths for years to come: Given how wrong past pension projections were, who should pay to fill the 13-figure financing gap?

As Yao could tell Lieber, here in Claremont we won't be having those public meetings until the City is at the verge of bankruptcy. The same is true with nearly every other municipality in the state and nation. As a result, the people Lieber calls "have-nots," private sector workers, will also be the ones asked to bear the burden of maintaining the lifestyles of our current public sector retirees, who for the most part refuse to give any concessions on their benefits.

Our public sector pension costs are compounded by the practice of pension spiking, in which public workers in their final year of employment manipulate the rules to drive up the value of their pensions. CalPERS offers a couple different ways of determining pension payments. Under many, such as in the city of Bell, the amount is determined by the employee's final year of compensation. If employees game the system by working a lot of overtime or by cashing out unused vacation time, their pensions can end up significantly higher than their final base salary.

Those spiked pensions cause additional problems for already underfunded CalPERS plans because the employees end up earning much more than can be covered by the money they and their employers actually paid into the system.

To no one's surprise, former Bell city manager Robert Rizzo has become the poster boy for outrageous public pensions. The Daily Bulletin ran an article Saturday by reporter Sandra Emerson, who explained that as a result of how CalPERS formulates pension payments, the city of Rancho Cucamonga, where Rizzo worked for about eight years, will be on the hook for about $125,000 of Rizzo's estimated $650,000 a year pension, assuming Rizzo survives his tarring and feathering long enough to collect.

As we said Friday, when former Claremont city manager Glenn Southard retired from Indio, his base salary was $300,000 a year. However, Southard also could have earned as much a $30,000 performance bonus, and he cashed out $162,000 in unused vacation and sick time. If Southard's pension is based simply on his final year of earnings, and if any bonus and accured vacation/sick time count towards that amount, he could end up with a pension well in excess of his salary.

Whatever pension Southard gets, because of CalPERS' crazy rules, Claremont will be on the hook for a considerable portion of his pension. Because Southard worked here for 17 years, Claremont will have to pay for those 17 years, but the payout will be based on his final year in Indio. For Claremont's share of his retirement, Glenn will qualify for 2.5% of whatever that final Indio figure was times 17 (each year that he worked here).

The California Foundation for Fiscal Responsibility (CFFR) has a website that takes public information from CalPERS and CalSTRS (the California State Teachers' Retirement System) and posts the names and annual pension payments for anyone getting more than $100,000 a year.

Southard isn't on there yet because the figures haven't been updated since his retirement earlier this year, but another familiar Claremont personality did have her information posted. Our own Bridget Healy, Southard's right-hand woman in Claremont and Indio, retired in 2008 .

CFFR puts Healy's CalPERS pension at $166,701.84, of which Claremont will pay around $100,000 for Healy's roughly 18 years in Claremont, based on her $220,000 final year's salary in Indio. Healy, who seems to be maneuvering for another run at a Claremont city council seat, never has explained how she would manage her conflict of interest when it comes to pension matters here. However, we're going to guess that Healy's the pull-the-ladder-up-after-me type and probably won't have any qualms when it comes to cutting future employee benefits.

Here from CFFR are the Indio retirees in the six-figure club, soon to be joined by our friend Glenn:


And, in case you were wondering about our fair city, here is our $100,000+ CalPERS club:


We also present the Claremont Unified School District's CalSTRS pension high rollers:



There will be others joining these lists. Former Claremont Human Services Director Dick Guthrie, for instance, isn't on Claremont's CalPERS list, though his pension has to be well over $100,000. Former Claremont Community Services Director Mark Harmon and former Community Facilities Manager Mark Hodnick, too will join the exorbitant pensions club.

We're also struck by the presence of a number of prominent Claremonters on these lists. Council member Larry Schroeder is represented on the city of Lakewood's CalPERS pension rolls. Also, two influential members of the Claremont League of Women Voters own hefty public pensions: Bridget Healy and Anita Hughes, the wife of the late former Claremont mayor and CUSD assistant superintendent Alexander Hughes.

Yet another person, LWV president and Claremont Police Commissioner Barbara Musselman, is a former San Bernardino County Human Resources Director and receives a large San Bernardino County Employees' Retirement Association pension (SBCERA doesn't make its individual pension payouts readily available for the public).

Claremont's unsustainable pension obligations are the number one long term threat to our city's financial security. Yet, no one in any position of power, with the exceptions of Council members Yao and Corey Calaycay, are willing to deal with that threat. Instead, groups like the local League of Women Voters, who remained preoccupied with rehabilitating former Claremont mayor Ellen Taylor's image and helping Healy get elected to the council, are content to allow the City fly into a fiscal abyss.

One would expect people like Musselman or Healy to express a little more empathy and gratitude toward the people who fund their wealthy lifestyles. Instead, we constantly see them pushing this or that costly toy - a trolley, say - that only adds to the burden borne by the working stiffs who have to pay for for Musselman's and Healy's retirements as well as their own.

Lost in all this is the unfairness of forcing the public, the majority of whom do not have the luxury of unearned, spiked pension benefits with automatic cost-of-living increases, to rescue these underfunded public pension systems when they become insolvent. If our local and state elected officials and their supporters continue on their present course, that class war that Ron Lieber wrote of will move very quickly from metaphor to reality.

Golden Eggs

HEADED FOR A FALL

As we said last week, the scandal in the city of Bell will probably end up being a good thing for California municipal governments. Right now, they have to worry about the unusual attention their residents are devoting to cities' financial affairs.

That is, in fact, what's happened in our own town. At the July 27 meeting of the Claremont City Council, Mayor Linda Elderkin went to great lengths to contrast Bell's $100,000 city council annual salaries with Claremont's $4,800 per year for council members. Claremont city staff also made some salaries available online as a show of fiscal transparency.

But in the long run, cities like Claremont will weather the current scrutiny, public attention will fade, the LA Times and other media won't have anywhere near the staff and resources to cover every area of Southern California, and things will revert to the status quo.

Bell represents the far extreme, and their council and city management were caught because they allowed greed to get the better of them. In a town like Claremont, financial losses result from poor decision-making rather than outright fraud or embezzlement, and simply looking at employee and council salaries doesn't begin to capture the full impact of the money flowing out of city coffers.

That kind of financial leakage flourishes on the local level, mostly because, even when citizens are paying attention, elected officials refuse to deal with problems with long time horizons or because city officials refuse to release all of the information needed for a full public accounting.

Consider that July 27 council meeting.

Item number 7 on the consent calendar was a request by staff for the council to adopt a resolution implementing a Memorandum of Understanding (MOU) between the City and the Claremont Police Management Association. The CPMA agreed to conceding a 1.9% cost of living increase for the current fiscal year and to the implementation of a two-tiered CalPERS pension system. Current safety employees receive a 3% at 50 pension (that is, at the age of 50, 3% of their final year's salary for every year of employment).

In return for those CPMA concessions, the City agreed to continue paying for the employees' 9% CalPERS contribution. You can see the discussion here (at around the 57:40 mark).

Councilmember Peter Yao (photo, right) asked for the MOU to be pulled for discussion. Yao, who has been on top of the City's the unfunded pension liabilities, put that amount in the tens of millions and said that by his personal calculation, it was closer to $50 million. (The Courier and Daily Bulletin later reported the unfunded liabilities as $40 million.)

Yao pointed out that the City doesn't possess $50 million in assets, which Yao said meant that "by definition we're insolvent." Yao's problem with the MOU was that, although it introduces a two-tiered pension system, one for current employees and one for future employees, the MOU defers any actual details of the new pension tier until next year. He added that the new tier wouldn't have any effect on the CalPERS problem for anywhere from 15 to 30 years from now, when new employees would be entering retirement.

We might add, too, that there's a hiring freeze on right now and that could extend for several years if the economy doesn't turn around soon. That means that any savings from the new pension benefits wouldn't apply quite a while.

Yao was also unhappy with council members Elderkin, Sam Pedroza, and Larry Schroeder for their failure to address that 9% employee CalPERS contribution the City continues to cover. Elderkin's and Pedroza's refusal to ask the employees to pick up their own 9% contribution was almost certainly out of self-interest. They, along with Yao, could be campaigning for reelection. Linda and Sam may be figuring there's no sense in angering the employee union gods at this point, even if it imperils the City's solvency.

Schroeder's reluctance to correct the CalPERS problem is more puzzling. Schroeder spent 10 years in banking and 19 years as a finance director for the cities of Lakewood and Glendora. And in the July 27 pension discussion, Schroeder acknowledged that "we do have a pension problem." Should that not be a huge red flag, especially coming from Schroeder?

In the end, Schroeder, perhaps because he himself is a CalPERS pensioner, voted along with Elderkin and Pedroza to implement the MOU. Council member Corey Calaycay voted with Yao against the MOU, citing the City's responsibility to not make promises it cannot keep (an ethical sticking point that has never bothered Elderkin, Pedroza, and the Claremont 400).


THE GOOD LIFE

Today's LA Times had an article in its LA Extra section about concerns that CalPERS authorities failed to notify the California attorney general's office in 2006 when they discovered a 47% increase in Bell City Manager Robert Rizzo's salary while conducting an audit of Bell's .

That increase raised Rizzo's salary to $447,000. According to the Times:

Documents released by CalPERS on Thursday show that the fund was also informed of a 42% raise for the assistant city manager and nearly 38% raise for City Council members. That brought council members' pay to $62,000 by 2005 for part-time jobs that in other small cities pay about $400 per month. The newly released records include Bell's explanation to CalPERS of why its officials were worthy of such salaries.

Assistant City Manager Angela Spaccia told CalPERs in writing in October 2006 that the city manager's salary was hiked "to reflect his contributions to the city," which included helping Bell resolve a multimillion-dollar deficit. She said her own pay hike was "provided to reward her for her efforts and new responsibilities" related to a promotion the city had given her.

"It should also be noted that the City Council, also members of the Executive Management classification, were compensated accordingly for their contributions and efforts toward the City's dramatic financial recovery," Spaccia wrote.

The Times said that CalPERS found Bell's documentation sufficient and never did any subsequent audits. CalPERS has already been criticized for using overly optimistic rates of returns in figuring how much local governments and their employees should contribute to their pension accounts. CalPERS has also suffered from a scandal involving a former CalPERS executive and a former board member.

So if you're a public employee, there's no time like the present to retire, if you are eligible. There will be a day of reckoning for California public employee pensions, and chances are that day will arrive sooner rather than later.

One recent retiree familiar to us is former Claremont City Manager Glenn Southard. You'll recall that Southard went to Indio for five years following 17 years in Claremont. He retired from Indio earlier this year.

We were curious about Glenn's retirement. It couldn't possibly be near Robert Rizzo's $600,000-plus annual retirement pay. Figuring pensions is guess work, though there is a website called CaliforniaPensionReform.com that does post a searchable database with all of CalPERS' six-figure pensions. Glenn isn't on their yet, but he will be the next time CPR updates its records.

Southard's base salary his last year in Indio was $300,000. That's important because CalPERS uses that last year when figuring retirement payouts. That's why you used to see certain CHP employees putting in a lot of overtime during their last year of work.

We were able to find an estimate on the size of GS's retirement after a reader alerted us to a blog called Inflection Point Diary that had a couple recent posts about Glenn's compensation. IPD carried a thorough breakdown of Southard's Indio contract, which IPD posted along with the analysis.

As IPD notes, most people, including our local papers, only focus on base salaries when they examine public employee compensation. But buried in the details of their contracts are things like bonus agreements that can add a good chunk more to a fellow's pension. IPD reveals that in addition to the $300,000, Indio also agreed to give Southard an annual bonus of up to 10%, or $30,000 for Southard's last year.

The analysis goes on to say that Southard was eligible for a deferred compensation account with an apparent maximum contribution of $16,500 a year, paid entirely by the city of Indio. There's also the matter of unused vacation time, for which Southard also received compensation. In fact, IPD posted a follow-up on Southard that said he cashed out around $80,000 worth of unused vacation during his time in Indio.

IPD also cited a Desert Sun article from February 24 that said in 2008 Indio overpaid by $5,949.52 for 40 hours worth of vacation time he didn't have, an error that wasn't caught until Southard was getting ready to retire.

IPD estimated that Southard's final year's salary could have been closer to $400,000 the the $300,000 base. Upon retirement, the Desert Sun said, Southard was also supposed to get $162,000 for 136 hours of accumulated vacation and sick time. All in all, not a bad payday for a man who left Indio sitting on a $13.5 million budget deficit. Good thing he didn't stick around for his 2010 performance bonus.

Getting Schooled

CUSD MAIL

When the Claremont Unified School District first raised the idea of floating a $95 million school bond, a reader wrote in with a few questions about the district:

DATE: Wed, July 21, 2010 7:29:46 AM
SUBJECT: CUSD
TO: Claremont Buzz

Isn’t the enrollment decreasing? I think school districts, including colleges, do whatever they can to keep expanding even when enrollment is falling. How many students attending school in Claremont are from out of the area? How many of Claremont ’s star athletes and scholastic award winners are actually not Claremont residents?

In answer to the reader's first question, enrollment hasn't fallen in recent years, at least the last time we checked. It seems to have stayed mostly flat, but the number of interdistrict transfers, students from outside of the district's enrollment area, has increased greatly.

Back in February, CUSD said that the district's enrollment had increased from 6,625 in the 2000-01 school year to 7,044 in 2009-10. The district also said interdistrict transfers increased from 787 to 1200 in the same period. So almost all of the increase, 413 out of 419, came from kids who don't live in CUSD's area. In other words, in 10 years interdistrict transfers increased by 52.5% while the number of Claremont kids increased by a total of 6 students, or about 1/10 of one-percent.

Now, if you listen to CUSD and the Claremont 400, these interdistrict transfers generate net income. However, they never give any numbers to support those statements, and no study has ever been done comparing the cost of this artificial increase in the student population with the savings that would be generated by having a slimmed-down district.

The other thing CUSD ignores is the fact that those interdistrict transfers get the benefit of any bond measures the district floats without having to pay for them since only properties within the district's boundaries get assessed to pay for the bond. So there is a fairness factor involved, too.

We think this business of interdistrict transfers is just another numbers game CUSD plays without proper consideration of any alternatives or any sense of how their games play out in the real world.


CARTELS

Another reader wrote to say that we should see a documentary film called "The Cartel," which debuted at the end of May. The film examines the workings of the state of public education in New Jersey. It seemed to get good audience reviews, but the mainstream media reviews were mixed at best, as in this NY Times blurb:

A mind-numbing barrage of random television clips and trash-talking heads, “The Cartel” purports to be a documentary about the American public school system. In reality, however, it’s a bludgeoning rant against a single state — New Jersey — which it presents as a closed loop of Mercedes-owning administrators, obstructive teachers’ unions and corrupt school boards.

The NYT reviewer and some of the others were were able to find seemed to agree that the outrages (such as a missing $1 billion in school construction money) mentioned in "The Cartel" by filmmaker and journalist Bob Bowdon were substantive but didn't like the film's tone.

The NYT piece pointed out that any such examination is a complex matter, and perhaps it is asking too much of the documentary format to examine all of the nuances involved. As with the city of Bell, we suspect that what happened to schools in New Jersey is at the far end of the school scandal spectrum, but we also think that even in a district as small as Claremont's such waste occurs, not necessarily out of maliciousness or criminality so much as because of a sort of institutional arrogance and false sense of infallibility.

Here, our ruling cartel just has a larger margin of error than New Jersey, though they seem to be doing their best to run through that.