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California’s $100,000 Club

Posted by Larry Doyle on May 2, 2009 9:10 AM |

Hat tip to MC for sharing with us an initiative of the California Foundation for Fiscal Responsibility. The CFFR was founded two years ago to develop transparency in the California pension system. Make no mistake, current and future pension obligations at the state and local level will impact almost every aspect of our lives. The current deficits in these pensions funds and the increasing obligations as our population ages will serve as a chokehold on future generations. This same dynamic is playing out at the federal level as well. However, let’s focus on California.

I am all for longstanding civil servants receiving pension benefits. However, the largesse that has been contracted in certain circumstances is anything but fiscally responsible. I commend the CFFR for working to provide transparency on this topic. Let’s dig deeper. As the Sacramento Bee highlights, Pension Watchdog Puts Database of 5,000 Calpers (California Public Employees Retirement System) Online.

Information is critically important for fiscal discipline. Transparency in the pursuit, collection, and dissemination of that information is a cornerstone of good government. Regrettably, too often our public servants conflict themselves in currying personal favors while obligated to perform their public service. To that end, I commend CFFR for shedding light on this critically important topic:

“We feel it’s time for transparency on this issue,” said CFFR vice-president Marcia Fritz. “In the current economic climate, it’s important that taxpayers know what kind of pensions our public employees are receiving and what the budget implications will be.”

CFFR was founded in 2007 by Keith Richman, a former LA County Republican assemblyman. 

Richman says the foundation’s sole purpose is to highlight  the skyrocketing costs of public employee retirements.

I am not looking to promote personal witch hunts. I am looking to promote fiscal responsibility.  I would hope that every state and local municipality develops an initiative like the CFFR. To that end, please question your local representatives as to how many individuals are collecting six figure pensions. Share with them the fact that in California over 4,800 individuals have six figure pensions. In fact, Bruce Malkenhorst, a municipal government retiree from Vernon, CA is “collecting” a cool half million bucks a year in retirement. An article from Forbes Magazine back in 2007 sheds further light on the municipality of Vernon, California:

Welcome to Paradise
by Evan Hessel 02.26.07

The city fathers of Vernon, Calif. run their tiny town like a family business, with unchecked power, pay and perks.

Four miles south of downtown Los Angeles sits the city of Vernon, a five-square-mile industrial enclave of meatpacking plants, warehouses and paint-mixing factories. There’s not much to see, but smells are plentiful, courtesy of a rendering factory that boils the dead pets of southern California into grease and high-protein animal feed.

Only 92 people live in Vernon. There are no parks, schools, libraries, health clinics or grocery stores. The only four restaurants close by 4 p.m. By sundown the 44,000 workers who commute here have all fled the stench.

Vernon’s leaders like it that way. California’s tiniest city, if you want to call it a city, is one of the nation’s most lasting and efficient political machines, run almost entirely for the benefit of a handful of rarely opposed, extremely well-paid politicians. Vernon should have been subsumed long ago into the surrounding city of L.A, but its independence is a strange and stark example of how a democracy can become a dynasty.

Vernon is run by two families: the Malburgs and the Malkenhorsts, neither of which agreed to be interviewed. The bespectacled Leonis C. Malburg, 77, whose grandfather founded Vernon in 1905, has been mayor for 33 years. Bruce Malkenhorst, 71, was for 32 years the city administrator as well as clerk, finance director, treasurer, redevelopment agency secretary and chief executive of the utility Vernon Light & Power. The city was reportedly paying him $600,000 a year, more than twice what L.A.’s mayor earns, until he resigned all posts unexpectedly and without public announcement in 2005. By most accounts Malkenhorst still pulls the strings. His appointed successor is his 42-year-old son, Bruce Jr.

Theirs is a benign dictatorship. Who would run against them? Outsiders hoping to move into town are denied housing permits and Vernon’s 32 houses and apartments are owned by the city and leased to its employees for as little as $150 per month. In 1980 Malkenhorst Sr. evicted a former cop from his Vernonowned house after he ran against Malkenhorst’s favored candidates. Last year the state Superior Court forced Malkenhorst Jr. to move ahead with an election he had derailed on the grounds that the three challengers had moved in illegally. Once the votes were counted, the incumbents won anyway—in a landslide.

While many state unions do not appreciate the release of information by the CFFR, I believe every state should publicly release it. Watchdog groups should not be forced to request it. To that end, I encourage everybody who reads this post to share the link to CFFR with your local reps and specifically highlight California’s $100,000 Club.

LD

  • lizzy

    Very timely article LD. As tax revenues contract in response to the economic decline pensions are becoming a larger focus.

  • silver

    Another great article LD! Kepp up the good work! 🙂

  • TeakWoodKite

    I belong to this LD, thanks for the tip. Great read.

    Reminds me of the movie “Changling”.

  • Paul C

    The intersting fact about these high end pensions is that most of them are from management and not part of the any employee union. They worked with their city councils (local rep) and boards to get their sweetheart pay packages.

  • Larry Doyle

    Puttin in the fix!!

    If it happened on the street it would be called ‘grand larceny.’

  • TeXan

    Please keep up the news. Shining sunlight on these villians will help dry up the slime. This is described as robbery when done under other situations. What kind of life insurance policy does the city of Vernon offer ?? I would like to know..

  • TeXan

    hey lookee at this link.. the city even gives them houses to live in! WOW is all i can say. http://en.wikipedia.org/wiki/Vernon,_California






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