Los Angeles County officials have adopted changes in the county pension system that could cost taxpayers millions of dollars each year by boosting the retirement pay of hundreds of senior employees by at least 19%, according to records and interviews.
The pension changes were implemented over the past several years with little public discussion and no study of their impact on the financially troubled county.
Unlike the vast majority of other counties, Los Angeles requires that certain fringe benefits--such as car and medical insurance allowances--be counted with salaries when retirement pay is calculated.
Though some changes will benefit most of the county's 85,000 employees, the Board of Supervisors and top county managers will derive the largest gains in retirement income, The Times found.
Chief Administrative Officer Richard B. Dixon, a county employee for 33 years, would receive an annual pension of at least $127,236--about a $25,000 increase because of changes he recommended to the supervisors.
The pensions of most supervisors will increase by at least several thousand dollars a year, and one supervisor will receive retirement pay that is higher than his annual salary of $99,297. Kenneth Hahn, who is leaving office this year after four decades, will receive a pension of $126,442 a year, retirement officials said.
County officials said they do not know the total cost of the pension hike. But experts consulted by The Times said the county could pay up to $50 million a year in increased contributions to the $13-billion pension plan.
Dixon said the estimate "sounds high." And he said the pension increase was "fair and appropriate," although "a lot of people will say this is terrible."
"Your transportation allowance, your salary, and your benefits are altogether part of your total compensation" and should be included in calculating retirement pay, Dixon said.
The supervisors made "an informed decision," said Dixon, and were aware that the changes will benefit them as well as county workers.
Supervisor Gloria Molina, a frequent critic of county spending practices, recently proposed rescinding the pension changes and asked the county's civil grand jury to investigate.
"While taxpayers will be forced to fund these inflated pensions in future years, these changes occurred without the benefit of public debate or adequate public disclosure," said Molina, who joined the board several months after the last changes were approved.
County Counsel DeWitt Clinton, said the action is irreversible because it is illegal to take away pension benefits already granted. The most that the board could do, he said, is to limit the pension rights of future employees.
Some supervisors defended the pension increases, although they had only vague recollections of the decision-making process and were unaware of the financial impact on county employees and themselves. They expressed surprise when informed that Dixon had not conducted studies to project the increase in the county's annual contribution to the pension program, which now amounts to about $370 million.
Supervisor Deane Dana said he believed that "there were studies at the time." When told there were none, he said: "It would have been nice to know the cost."
The pension increases are necessary to attract and retain good managers, said Dana, adding that the rules were "adopted in a different economic climate."
Supervisor Ed Edelman said: "I think there was some discussion." When asked further about the program, Edelman said only, "I would defer on that."
Supervisors Hahn and Mike Antonovich and former Supervisor Pete Schabarum did not return phone calls.
The county's civil grand jury is examining county spending practices, and the supervisors are under fire for granting broad authority to non-elected officials, particularly Dixon, who has the power to award millions of dollars in contracts and maintains an open-ended expense account for himself and the supervisors.
Public employee retirement pay is the focus of statewide controversy.
State officials have begun a crackdown on so-called "pension spiking," or efforts by public officials to inflate their salaries in an attempt to boost their retirement pay.
A recent audit by state Controller Gray Davis revealed widespread pension spiking in many public agencies by officials who pumped up their final year's salaries by including sick leave, vacation days, automobile allowances and other perks in calculations of their compensation.
Assemblyman Dave Elder (D-San Pedro), who has proposed legislation to make intentional pension spiking a felony, said that Los Angeles County's actions do not appear to be illegal but provide benefits that go "well beyond what anyone had in mind."
The supervisors, Elder said, are operating by "the mushroom theory of management: They are being kept in the dark and fed manure."
