ALAMEDA, Calif. — The city of Bell, Calif., received a singular piece of good news Monday as one of its bond ratings rose amid the tempest over the huge salaries paid to some of its public servants.
The working-class city southeast of Los Angeles has been in turmoil since July 15, when the Los Angeles Times revealed just how much its 39,000 residents were paying city officials: nearly $800,000 in the case of former chief administrative officer Robert Rizzo. He and two other exceedingly well-paid administrators resigned last week, but the turmoil continues in the 2.5 square mile city.
Some residents want to recall four of the City Council’s part-time members, who receive almost $100,000 a year.
Fitch Ratings revised the rating on Series 2005 Bell Public Financing Authority taxable pension revenue bonds Monday up one notch, to A-plus from A.
“That is completely an administrative correction on our part,” said Amy Doppelt, Fitch managing director in San Francisco. The rating should have been adjusted to A-plus as part of Fitch’s public finance sector recalibration in April, she said.
The Fitch revision brings Bell’s pension bond rating to parity with the city’s general obligation rating: A-plus. That’s because the pension bonds are secured with a voter-approved property tax, like GO bonds, Doppelt said.
Bell residents have shown up in droves at City Council meetings to protest the salaries their public servants chose to pay themselves. In addition to Rizzo’s $787,637 salary, police chief Randy Adams was paid $457,000 a year, and assistant city manager Angela Spaccia was paid $376,288. They all resigned Friday.
Per capita income in Bell averaged $13,652 from 2006-2008, according to the U.S. Census Bureau — about half the national average of $27,466.
California Attorney General Jerry Brown said Monday that he had subpoenaed the city’s employment, salary, and contract records as part of an investigation to determine whether civil or criminal action should be taken.
“I’m determined to get to the bottom of these exorbitant payouts and protect the state’s pension system against such abuses,” Brown said. “Today’s subpoenas are an important step in that process.”
Based on his salary, Rizzo reportedly will be entitled to an annual pension in excess of $600,000.
In late June, the Los Angeles County district attorney’s office announced an inquiry into Bell City Council pay; four council members are paid almost $97,000 annually.
After a state law enacted in 2005, according to the Times, the city held a special election to convert to a charter city, exempting it from state limits on elected officials’ pay. Only 390 people voted in the election.
The city and its authorities had about $139 million in outstanding debt as of June 30, 2009, according to its most recent comprehensive annual financial report.
That includes $50 million in general obligation bond debt, out of a $70 million authorization approved in 2003. Only 933 people voted in that election.
Standard & Poor’s upgraded Bell’s underlying GO bond rating to A-minus in May 2009. “They had pretty good fund balances and their financial position was very strong,” said analyst Gabriel Petek. “They had, by some of the metrics they go by, pretty good figures, and relatively moderate debt.”
According to the 2009 CAFR, the recession forced the city to have “reluctantly modified” its youth recreation programs. The document made no mention of the pay granted top city officials, or the automatic 12% annual raises given to Rizzo and Spaccia, according to the Times.
14-Day Free Trial
Corrected July 27, 2010 at 9:42AM: Corrected S&P rating to A-minus.