Is $464,000 per yr Salary Too Much for a Village Employee? How about $75,000/mo?
Posted: November 20, 2010 http://www.championnews.net/article.php?sid=2696
Bell, California has nothing on the Village of Mundelein, Illinois
By Bill Zettler
You have probably heard about Bell CA and the millions of dollars
it's employees and managers received unbeknownst to the taxpayers.
Robert Rizzo, former city manager of Bell, California, population about
30,0000, was making $787,638 per year in that position.
Here
in Illinois we have a village employee, village administrator Ken
Marabella, who made $464,005.67 in the last 12 months of his employment
for Mundelein, population about 30,000, in 2005. Now admittedly,
$464,000 is a lot less than $787,638 but it still smacks of uncontrolled
spending of taxpayer dollars in a manner that taxpayers would never
approve of if they had been asked. An insider's game made possible by
little known rules and lots of taxpayer dollars sloshing around village
coffers. Too many taxpayer dollars and too little oversight in my
estimation.
Mr. Marabella retired at age 55 and currently pulls down a pension of
$151,000/yr. He is also eligible for Social Security. Since he was able
to retire at age 55, unlike private sector employees, he was able to
get another very good job. According to his linkedin personal site he is
now a consultant after being Vice President of Entitlements, whatever
that is, for Cambridge homes a developer with projects in Mundelein and
other suburban locations.
I think Mr. Marabella would agree that if he had had to work until
Social Security's full retirement age of 66 he would not have been a
candidate for the VP's job at Cambridge Homes. Therefore one of the many
benefits of his public sector job was to be able to retire at age 55
with a pension that will payout in excess of $6 million over his
expected lifetime and, at the same time be eligible for another job in
the private sector. And, of course, he will be eligible for Social
Security beginning at age 62.
As village manager he was directly responsible for something less
than 100 employees since the police, fire and parks all have their own
management and budgets. That level of responsibility in the private
sector might be worth something like $150,000/yr salary not counting the
enormous pension cost and a health-care cost which currently runs the
village about $21,000 for the family plan. According to IMRF his
contribution was 4.5% of salary for the $6 million potential pension
payout.
I am not questioning Mr. Marabella's ability or work ethic. I assume
he is smart and hardworking but then again so are millions of other
mid-level managers in the private sector. Nor am I saying he should not
have taken the compensation he was offered. Of course he should of. What
I am saying is that job, as described, is nowhere near worth the
compensation that was provided to him. He was vastly over compensated
compared to his peers, taxpaying peers, in the private sector.
His final 5 year salaries and age is outlined below:
|
Year
|
Age
|
Salary
|
Increase
|
|
2001
|
51
|
$131,076.00
|
|
|
2002
|
52
|
$137,803.22
|
5%
|
|
2003
|
53
|
$178,196.48
|
29%
|
|
2004
|
54
|
$254,101.67
|
43%
|
|
2005 (4 months)
|
55
|
$270,000.00
|
319%
|
The first two entries show a reasonable 5% increase from 2001 to
2002. If that had continued for the next three years his final salary,
at age 55, would have been $159,000 a little high in my estimation but
within the range of reasonableness.
But Mr. Reasonableness left town in 2003 as his salary jumped 29%
then 43% and finally in 2005 an astounding 319% but that was for only
four months work. According to IMRF and the Village of Mundelein his
salaries Jan-April 2005 were $60,000, $60,000, $75,000 and $75,000.
Therefore his monthly average salary in 2005 jumped more than 300% from
2004.
It actually is worse that that. By increasing his salary by those
very large amounts they increased his pension from about $93,000/yr to
about $133,000/yr which adds up to $1.7 million more in pension payments
over his expected lifetime. And virtually all of that is taxpayer
funded because Mr. Marabella's additional IMRF pension contributions to
go from a $93,000 to a $133,000 pension only add up to $11,076. His
first month's pension was $11,074, only 2 bucks less than he put in for a
$40,000/yr increased pension. A one-month pay back on an investment is
pretty good, wouldn't you say?
So if you are a public employee $11,000 gets you $3,300/mo. If you
are a private sector employee and put $11,000 into your 401K at age 55
you could buy an annuity that would pay you about $40/mo for the rest of
your life. You pay 100% of the cost of your $40/mo annuity and then you
and other taxpayers pay 99% of Mr. Marabella's $3,300/mo annuity.
And you wonder why your taxes are so high?
Recap of Mr. Marabella's advantage over his middle-manager peers in the private sector.
1. Ability to retire at age 55 allowing for lucrative 2nd career.
2. Pension at age 55 of $130,000/yr so stupendously generous as to be
unavailable to any middle manger in America outside of the public
sector.
3. Salary doubled in the last three years of employment increasing pension by almost $40,000/yr.
4. Pays only $11,000 in contributions for extra $40,000/yr pension.
5. Pays less into his pension plan for $130,000 pension at age 55
than peers do into Social Security for maximum $28,000 at age 66.
6. Eligible for Social Security too anytime after age 62.
What exactly is the justification for compensating public employees
so much more than their taxpaying peers in the private sector?
We make millionaires out of teachers, why not municipal employees?
As you might have guessed Mr. Marabella is not alone nor is he some
sort of outlier in terms of late-career salaries and pension bump ups.
The following list is of the Top 100 IMRF retirees ending last
12-month wages. They average $269,000. Notice that two of the three
$200,000 plus pensions and two of the $400,000 plus salaries are park
district employees. Hope your toboggan hills are worth it.
What is the thought process that goes into these public employee salary decisions?
If you had a private sector contractor that was providing a service
to the village, under what circumstances would you double their contract
for no increase in service? The answer, of course, is never because if
you did you would be accused of favoritism or corruption. Yet when you
do the same thing with public employees, not a complaint is heard mainly
because no one knows about it. Salary and other compensation decisions
need to be dealt with in open meetings not behind closed doors like they
typically are now.
If the purpose of taxation is to serve the "common good", what
"common good" is served by making public employees multi-millionaires in
their fifties?
And finally, at what level does excessive public compensation become a corrupt practice?
