Former Carson mayor could add millions to his pension if water district hires him to 6-month job
- ‘It’s not a red flag, it’s a garbage truck full of red flags,’ said the chief of a public watchdog nonprofit
If former Carson Mayor Albert Robles lands a $275,000 temporary position at the Water Replenishment District of Southern California, it could spike his pension over his lifetime by more than $2.7 million for just six months of work, according to an analysis by the Southern California News Group.
His pension would jump by $5.4 million if the board later extended his contract to a full year.
“It’s not a red flag, it’s a garbage truck full of red flags,” said Robert Fellner, executive director of Transparent California, a public pay database. “It’s just so obviously corrupt from every angle you look at it.”
Fellner reviewed Robles’ proposed employment agreement and assisted in calculating a hypothetical value for his pension based on a scenario in which the former mayor begins collecting his pension at 60, lives until 82 and receives a 2 percent cost-of-living increase each year.
Hiring on Thursday agenda
WRD’s Board of Directors is set to vote at its 11 a.m. meeting Thursday, Dec. 17, on a recommendation to hire Robles as its “special interim general manager,” a six-month position that would in part help the board conduct a search for a permanent replacement for Robb Whitaker, the district’s outgoing general manager. Robles would receive $137,500, half of the proposed salary, for the six months outlined in the contract, according to board President Vera Robles DeWitt.
“It is proposed that Albert comes in as the person in charge,” Robles DeWitt said of the $275,000 annual salary in an email. “He should make more than his subordinates.”
Robles, who was defeated last month in his bid for a second full term as Carson mayor, did not return requests for comment.
Whitaker’s contract does not expire until December 2021, though the general manager had previously announced he would retire in March before retracting that plan earlier this month. A majority of board members have refused to accept Whitaker’s offer to stay on and instead are pushing to hire Robles in January, with the two positions overlapping for the first three months. If that occurs, the water district’s attorney warned, Whitaker may be eligible for a year’s pay as severance because the new hire could be seen as termination without cause.
Robles DeWitt disagreed with the attorney and said Whitaker’s retirement letter shows his decision to leave is voluntary.
The board faced significant backlash for a Dec. 3 vote to hire Robles as general manager, including from nine members of Congress, seven state legislators and several of the cities served by the water district. Earlier this week, lobbyists for the board said the damaged relationships could impact funding and may lead to a unified push for reforms to water governance in the region.
The board’s recommended vote on Thursday appears to scale back the Dec. 3 vote by pledging to limit Robles’ contract to six months and to conduct a formal recruitment process in the near future.
In a response letter to legislators, Robles DeWitt, who also served on the Carson City Council but is not related to Robles, said the former mayor would not be a candidate for the permanent general manager’s position. Hiring Robles will save money, she argued, because he is willing to work for half of Whitaker’s $550,000 total compensation and has agreed to waive most benefits, including a car allowance and 200 hours of paid leave. WRD had the most generous benefits package in the state for a special district in 2018, according to Transparent California.
However, the savings is not quite as deep as it seems. The salary outlined in Robles’ contract does not include the district’s contributions to CalPERS on his behalf. If Whitaker pushes for severance and is successful, the cost of that payout would outweigh any savings completely.
Robles’ offer to waive benefits also neglects to mention that he already receives lifetime health benefits from WRD for his 25 years as a board member of the district, which serves a massive 420 square miles and 43 cities from Montebello to San Pedro and Manhattan Beach to Whittier.
Pension costs outweigh savings
But the biggest cost to the district won’t come until Robles retires. According to estimates, the value of Robles’ current pension from serving as a board member and mayor of Carson is likely about $2.3 million under the hypothetical scenario of retiring at 60 and living until 82.
If Robles works for six months at $137,500, the total value of his pension under the same scenario jumps to $5 million. If he stays on for the full year? It’s worth about $7.8 million.
Robles’ situation isn’t ordinary. Of the 7,482 board members of special districts in California, only 46 received pensions in 2019, according to Fellner.
What this means is that unlike typical government employees — whose pay increases slowly over time — a low-paid elected board member with a pension can spend decades in the system and then cap it off with one high-paying job to dramatically increase the overall payout, Fellner said. Robles received about $32,000 annually from WRD before his removal from the board in 2018.
“In other words, no public employee with 25 years of service has a salary that can be increased nearly 10 times in year 26, which is what is happening here,” Fellner said.
In an email, Robles DeWitt said she did not ask staff to calculate pension-related costs for hiring Robles, nor did she have any discussions with him about a need for a CalPERS-eligible position.
She accused a reporter of being in “cahoots with those folks who hate Albert” when presented with rough calculations of the potential pension costs.
Pension would drop if hiring is delayed
Robles is what is referred to as a “legacy” member of CalPERS, meaning his pension is calculated based on the single highest paid year, rather than an average of the three highest as required by the Public Employees’ Pension Reform Act for new hires after 2013.
If Robles is out of the pension system for six months, he would be forced to use the PEPRA equations for any future public jobs, according to Fellner. If WRD waited to hire Robles as special interim general manager until after Whitaker’s contract ended, Robles’ pension would lose about $1.8 million to $4.5 million in potential value, depending on whether he served six months or a full year.
Regardless, the possible spike in Robles’ pension may not be accepted by CalPERS.
A large increase near retirement would trigger a review from CalPERS and the salary could be excluded from the calculation of retirement benefits, according to Amy Morgan, a spokeswoman for the agency. Other scenarios, such as short-term employment, could similarly spark an investigation.
“If a position is temporary or there is an anticipation of separation from employment, we will conduct a review to determine compliance with CalPERS rules and regulations, which could result in the position being excluded from the calculation of retirement benefits,” Morgan said. “Pension spiking hurts the fund and CalPERS does not tolerate any form of pension fraud, waste or abuse.”
Board members rush to find Robles a job
Within two weeks of Robles’ defeat at the polls in November, discussions began about finding him a job at WRD. The original proposal contemplated promoting the current assistant general manager, Rob Beste, on the condition that Robles be hired as one of Beste’s assistant general managers.
During separate interviews, board members John Allen and Rob Katherman, who publicly oppose Robles’ hiring, say they had conversations with Robles in November and, in both talks, the former mayor was adamant he was only interested in a CalPERS-eligible position, according to the board members.
Both suggested to Robles that he may be better suited for a consulting job as he did not have the experience for a senior leadership position. He wasn’t interested in a position that wouldn’t include a pension, according to Allen.
“I certainly characterized it as him trying to spike his PERS,” Allen said in an interview.
Katherman recalled Robles bringing up plans to retire within a year and noting his length of employment under CalPERS during a phone conversation. Robles’ contract sets his term at six months, but it requires the board to vote to terminate him within 30 days after the contract ends, making it likely it will extend past six months, Katherman said.
According to a staff report, WRD’s unfunded liability for pensions is $6.2 million. Robles’ hiring would increase that figure by more than $1 million.
“This is not a good deal for WRD or for our pumpers,” Katherman said. “These costs all get passed on to our pumpers and the pumpers in turn pass them on to their customers — the residents — many of whom are in disadvantaged communities.”
Source: Jason Henry, Daily Breeze