The crown of “Prince of Public Pension-Spiking” would surely land on the head of Bruce Malkenhorst.
Despite pleading guilty to embezzlement of public funds, the Huntington Beach resident received $551,688 a year from California’s public employee retirement system in 2015. How? By awarding himself separate salaries for serving as Vernon City Administrator, Director of Finance, Director of Redevelopment, Clerk, Treasurer, and Chief of City Lighting and Electrical Operations—all at the same time! Once shaken by the proverbial necklace, however, CalPERS cut his pension to $120,530. Malkenhorst sued to arrest him. He lost.
An extreme example, perhaps, but soaring pensions is an age-old tradition that civil servants have tried to fight to submit to and the courts have ruled verboten. Yet doping – like beauty – can be in the eye of the beholder.
Gerry Serrano is a Santa Ana police sergeant, on paid leave from police duties to serve as president of the Santa Ana Police Officers Association. Serrano wants to retire. The burning question is: how much of his salary should count towards his final pension?
Following CalPERS pressing this issue and the city defending him, Serrano filed a lawsuit accusing Santa Ana city officials of a host of sins, from sexual harassment to retaliation to freedom violations. expression and labor laws. It’s a brazen attempt to silence them, say the city’s lawyers – all based on rage over the final calculation of the pension.
Serrano’s attorney says the lawsuit has absolutely nothing to do with the pension dispute, and it’s unfortunate the city is tying the two. “They’re ignoring the serious issues — raised by the Association of Police Officers and other officers — about what’s going on at the department, which they really need to address,” Corey W. Glave said.
In a letter to police union members in March, Serrano sought to explain the dispute. “I risk losing almost half of my pension,” he wrote. “Who would ever work in this mission knowing that you and your family would lose about 50% of your pension? This work assignment endures unimaginable stressors for the employee and their family, so who would ever accept this work assignment under these conditions? The fact is that the city wants to break and weaken the SAPOA.
Understand that the police only get a salary (Serrano’s base salary was $133,032 in 2020).
They also receive additional compensation for many other things, such as being bilingual and being a detective, and being “regularly and systematically assigned to sensitive positions requiring confidence and discretion” (confidential premium salary), and taking courses that “enhance their ability to do their job” (“education-incentive” compensation), as well as for many other things.
Serrano’s “special compensation,” on top of that base, was an additional $123,925. That bumped his total salary to $256,957 in 2020 (not including benefits), according to CalPERS.
It is therefore clear that a pension calculated on the base salary alone would be significantly lower than a pension calculated on the base salary plus these extras (in the case of Serrano, 48% less, says CalPERS). For years, the city had reported these extras as pensionable pay — but ultimately, CalPERS disagreed.
First of all, most of the special salaries are for police officers who, you know, police the city. Serrano hasn’t done that since 2016, instead working as the head of the officers’ union, negotiating contracts and pay raises, managing health insurance and more. (for much more than he earned in his role as a policeman). Since he was not working as a detective, the additional detective pay made no sense, CalPERS concluded. Ditto for the “confidential bonus”. “He was not assigned to any position within the city … much less a position requiring trust and discretion,” the CalPERS decision read.
And then there is the issue of overtime. Overtime is do not included in pension calculations – imagine civil servants working overtime in their last working years, doubling take-home pay, and therefore doubling the pension forever – precisely to avoid spikes. Unfortunately for Serrano, the agreement between the union and the city specified that the union president’s “confidential bonus” was intended to make up for the overtime he would not earn because he wasn’t really a police officer, according to the documents.
He enlisted the help of state treasurer Fiona Ma, who backed two (unsuccessful) proposals that would exempt Serrano from pesky rules that prohibit CalPERS from including “special compensation” in his final pension calculations, discovered the brave Anaheim investigator.
In the end, Serrano’s education incentive bonus (he has a bachelor’s degree) may count towards his final pension, but not the confidential, detective and bilingualism bonuses, nor vacation pay (he wasn’t required to work during vacations), nor uniform pay (he was not required to wear a uniform), CalPERS decided. The final decision was passed, over Serrano’s objections, by the CalPERS board of directors on April 25.
And now ? Serrano can appeal the finding in court, as Malkenhorst did, but no decision on that has yet been made, Glave said.
City officials declined to comment, but the police department, which has retained a separate attorney for the chief (indicating, perhaps, that not everything is Technicolor on the rainbow -sky), sent us there for perspective.
“CalPERS’ final ruling strongly prohibits pension hikes and clearly supports the position that Gerry Serrano’s lawsuit against Santa Ana, City Manager Kristine Ridge, City Attorney Sonia Carvalho, Human Resources Director Jason Motsick and the Chief of Police David Valentin is false and intentional. to distract law enforcement officers and the general public from the truth,” Seymour B. Everett, III, partner at Everett Dorey LLP, said via email.
“Unfortunately, Serrano’s baseless and irresponsible lawsuit continues to drain precious city resources that could possibly be directed to further support the brave men and women who protect and serve the city.”
There’s a lot of troubling stuff in the lawsuit and countersuit, from allegations of bullying and sexual harassment to dire warnings of workplace violence. City prosecutors and the police chief asked the judge to throw out much of it; hearings are scheduled for June.
As all of this unfolded, Serrano sought another job in the city so that his pension could return to the intended range of $200,000 per year.
It’s messy. In a letter to city council last year, City Manager Ridge accused Serrano of making false accusations to get what he wanted. “Clearly he intends to ‘burn this town down’ if he doesn’t get what he wants,” she wrote.
Serrano, for his part, said city officials were “spreading misinformation” and outright lying to weaken the union. “I am portrayed as greedy and guilty of pension hogging,” he wrote in his letter to union members, saying it is an issue affecting other public union leaders across the state. “You can see why this is a significant issue. Could your family resist a decision that blows up your retirement and your family’s future so much? »
It must certainly be shocking. But many people would swoon over a meager lifetime pension of $120,000 a year.