Bell-Inspired Bill May Curb Cities' Issuance

ALAMEDA, Calif. — Some California cities may have their bond-issuing abilities limited by a bill introduced last week by lawmakers responding to the crisis in Bell, where freewheeling financial policies have resulted in the resignations of three city officials.

The bill is part of last-minute legislation inspired by business practices in the small, working-class community nine miles south of downtown Los Angeles. Ripples from the revelation that Bell was paying its administrator almost $800,000 a year have spread far beyond the city of 40,000, and state lawmakers are eager to be seen doing something about it.

Both Assembly Speaker John Perez and Senate President pro tempore Darrell Steinberg were on hand Thursday to announce the package of six bills.

"The reform package we are advancing today will prevent future Bells and help ensure the tax dollars paid by the people of California are spent properly," Perez said.

One of the measures — AB 1955 — could impose limits on the ability of many charter cities to issue redevelopment agency bonds.

The bill is directed at charter cities, because Bell adopted a charter in 2005, the same year the state passed a law limiting compensation in general law cities. Bell proceeded to ramp up salaries not only for city administrator Robert Rizzo and his deputies, but also for City Council members, who were being paid almost $100,000 for part-time work when the scandal broke.

The bill is sponsored by Assemblyman Hector De La Torre, D-South Gate, who sponsored the 2005 legislation limiting general law salaries. The 2005 law was inspired by a scandal in De La Torre's South Gate hometown down the street from Bell, which is also in his district.

Another city near Bell, Vernon, paid its former administrator more than $1 million a year, the Los Angeles Times reported Friday. Vernon, primarily an industrial center, has fewer than 100 residents.

De La Torre's bill would require the attorney general's office to determine whether a charter city is an "excess compensation city" that pays elected officers more than general law cities.

If so, such cities would be barred from issuing any new redevelopment debt, or amending redevelopment plans, "until the issue is resolved," according to the news release announcing the package.

General law cities, which are generally smaller, operate under guidelines set down in California law, while cities that adopt a charter gain "home rule" authority to design their own governance structures. Pay for elected officials in general law cities is capped on a scale determined by population, topping out at $12,000 annually for cities over 250,000.

The bill would exempt charter cities with full-time city councils, so the $178,000-per-year members of the Los Angeles City Council, for example, would be excluded.

"Regardless of where people live, our local cities have a responsibility to be transparent about their contracts and expenditures," De La Torre said. "Local taxpayers have a right to know about it before they are forced to pay for it."

The Bell exposes have inspired action by other state elected officials, too. Controller John Chiang said he will use his office's powers to require local governments to disclose salaries. Treasurer Bill Lockyer said he will implement a system that would use the California Public Employees' Retirement System to detect unusual pay arrangements. Attorney General Jerry Brown, who is running for governor, announced an investigation.

De La Torre's bill is a "gut and amend" measure, in which lawmakers take an unrelated bill and change its content completely, leaving nothing but the bill number.

It's a common maneuver as the Legislature's Aug. 31 deadline for bill passage approaches. In other end-of-session maneuvering, a controversial bill that would restrict municipalities' abilities to file for bankruptcy was removed Thursday from the "inactive" file and placed on the calendar for a possible Senate vote.

Local government lobbyists oppose AB 155, which would require a government to apply to the California Debt and Investment Advisory Commission before filing for Chapter 9 bankruptcy.

"Simply put, AB 155 is a recipe for fiscal disaster for the state and local governments," California State Association of Counties lobbyist Jean Hurst wrote on the organization's blog Thursday.

The bill is backed by public employee labor groups alarmed at the city of Vallejo's use of the bankruptcy process to modify union contracts.

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