Public Officials' Compensation Report

CITY COUNCIL COMPENSATION:

City Council members are elected to serve four-year terms of office.  They are paid a monthly stipend of $623.66, as authorized under State Law, for the time they contribute to serving their community and fulfilling their constitutional duties.  While it is considered a part-time job, there are periods of time when a great many hours must be committed to attending public meetings within the City and also to representing the City of Laguna Hills at events and meetings held by other governmental agencies.  Most of these meeting are held during the regular work week and require Council members to take leave from their private, full-time employment.  

In an effort to streamline the land-use planning process and save money, the City Council also sits as the Laguna Hills Planning Agency. Council members do not receive any additional compensation for this service. The full City Council also appoints individual Council members to serve on a variety of regional boards. You can find a complete listing of all appointments here. For the most part, Council members serve on these governing boards with no additional compensation; however, there are a few governing boards that pay meeting stipends to appointed members to compensate them for their mileage and the amount of time required to effectively serve. The Council members that are due to receive meeting stipends in 2023 from the Boards on which they serve are as follows:

Orange County Fire Authority – Josh Sweeney:  $100 meeting stipend ($300 maximum per month).

Orange County Mosquito & Vector Control District – Erica Pezold:  $100 per month maximum.

San Joaquin Transportation Corridor Agency – Janine Heft:  $120 meeting stipend (maximum of eighteen meetings per quarter).

As part-time employees, City Council members and their dependent family members are eligible to participate in the City’s group health plans (medical, dental and vision) along with all other City employees.  The following listing is the current breakdown of the monthly insurance premiums in 2023 paid by the City of Laguna Hills for each member of the City Council:

            Donald Caskey:             $ 112.82 mo.

            Janine Heft:                    $ 2,594.18 mo.                         

            Erica Pezold:                  $ 2,594.18 mo. 
 
            David Wheeler:              $  112.82 mo.       

            Josh Sweeney:                $  2,466.47 mo.   

            The City does not provide retired Council members with any retiree health coverage, nor are they permitted to purchase their health benefits through the City’s group health plan after they retire.          

In addition to the monthly stipends, CalPERS contribution, and insurance premiums as stated above, City Council members may be reimbursed for their routine travel and incidental expenses associated with attending training, meetings, or other official business pertaining to the City.  This can vary widely from year-to-year depending on the circumstances and demands of City business.

CITY ORGANIZATION:

            The City of Laguna Hills is a General Law City which means that most of the laws we operate under were first established by the State of California.  When permitted to do so by the State Constitution, the City may adopt new or more restrictive laws than those already established by the State.  Laguna Hills operates under what is known as the Council-Manager form of Government.  This form of government is modeled after the traditional corporate business model of a Board of Directors (the City Council) and a Chief Executive Officer (the City Manager).  So the role of the City Council is primarily to make policy-level decisions, to adopt the annual budget, and to make land-use decisions and other financial and legislative decisions as required by law.  The City Manager’s role is to oversee the day-to-day operations of the City, to implement the City’s budget and to implement the laws and policies established by the City Council. The specific enumerated duties of the City Council and the City Manager are set forth in Sections 2-04 and 2-08 of the City of Laguna Hills Municipal Code and may be viewed by clicking here.  Additionally, you can find a copy of the City’s organization chart depicting the reporting relationships and primary responsibilities of each department here.

            Laguna Hills has always prided itself in being a streamlined and efficient organization, and while there are only 27 full-time employees, the City’s actual total workforce is much higher.  These positions are filled with a variety of full-time employees, part-time employees, and contract employees.  By design, the City Council and City Manager have chosen to use contracted services whenever advantageous to do so in lieu of hiring City employees to perform the work.  This strategy has proven to be a cost-effective approach to providing traditional city services.  It has also been proven to be a very effective way to quickly adjust staffing levels to properly reflect the changing demands that are often driven by the economic conditions of a given time period. 

The City Manager has a management staff of five professionals who report directly to him. Collectively, they serve as department heads over all City operations. All management salaries are set by the City Council pursuant to authorizing Resolutions adopted at public meetings. Salaries are benchmarked against comparable positions in Orange County.  The compensation of all management staff, beginning with the City Manager, is listed below.

MANAGEMENT STAFF COMPENSATION

CITY MANAGER:

           The City Manager, Jarad Hildenbrand, was appointed by the City Council on April 26, 2022, and began serving on May 16, 2022. He serves at the pleasure of the City Council. His specific powers and duties are established by law in the City of Laguna Hills Municipal Code. His compensation and other related terms of employment are embodied in an Employment Agreement which was approved on April 26, 2022, a copy of which may be found here.  The City Manager may be removed from his position upon a majority vote of the City Council at a lawfully noticed public meeting conducted in accordance with the requirements set forth in the Municipal Code and his Employment Agreement.

            The City Manager’s annual base salary is $260,000.   The City Council has established a practice of setting the City Manager’s salary at a level commensurate with his professional competence, knowledge, education, length of service, and performance. The City Manager receives all of the same employee fringe benefits that are afforded to all City employees.  That includes, City-paid medical, dental and vision coverage; group life and disability insurance; a defined benefit pension plan through CalPERS (2 % at 60 formula); and supplemental retirement contributions.   The City Manager pays his full 7% share of the employees’ individual contribution rate. The City also contributes toward additional benefits such as Deferred Compensation, and Excess Life and Disability Insurance.  The position of City Manager requires the use of an automobile seven days a week, 24 hours a day as he is always on-call to respond to emergencies.  The City Manager is the top official in charge of implementing the City’s Emergency Operations Plan.  The City Council has chosen to supply the City Manager with a vehicle in lieu of a monetary car allowance.  The City-owned vehicle is typically replaced on a five to seven-year cycle.  The total annual value of all the aforementioned benefits provided to the City Manager is estimated at $88,999.  As of February 2023, the combined total of all of the above-listed annual compensation items is estimated at $348,999. 

PUBLIC WORKS DIRECTOR:

            The Public Works Director, Joseph Ames, is appointed by the City Manager and serves at his pleasure.  He is an “At-Will” employee under State law.  In addition to the traditional duties of Public Works Director, he also serves the City as the City Engineer, the City Traffic Engineer, the Parks Director and the Street Superintendent.  Mr. Ames directs the functions of the Engineering Department, Public Works Department, Parks Department and Capital Improvement Administration, and is the principal staff for the City’s Traffic Commission.

The Public Works Director annual budgeted base salary is $204,350.  Mr. Ames also receives additional benefits (retirement, health, disability and life insurances, auto allowance) that has a total annual value of $65,455.  As of February 2023, the combined total of all of the above-listed annual compensation items is estimated at $269,805.

FINANCE DIRECTOR:

            The Finance Director, Eric Hendrickson, is appointed by the City Manager and serves at his pleasure.  He is an “At-Will” employee under State law.  In addition to the traditional duties of Finance Director, he also functions as the department head for Budget, Benefits Administration and Risk Management.  

            The Finance Director annual budgeted base salary is $198,313.  Mr. Hendrickson also receives additional benefits (retirement, health, disability and life insurances, auto allowance) that has a total annual value of $71,310.  As of February 2023, the combined total of all of the above-listed annual compensation items is estimated at $269,623.

COMMUNITY DEVELOPMENT DIRECTOR:

            The Community Development Director, Larry Longenecker, is appointed by the City Manager and serves at his pleasure.  He is an “At-Will” employee under State law. As the Community Development Director, he oversees the Planning, Building, Code Enforcement, and Receptionist functions for the City of Laguna Hills.  He is the principal staff for the City’s Planning Agency.  

            The Community Development Director annual budgeted base salary is $204,350.  Mr. Longenecker also receives additional benefits (retirement, health, disability and life insurances, auto allowance) that has a total annual value of $72,414.  As of February 2023, the combined total of all of the above-listed annual compensation items is estimated at $276,764.

CHIEF OF POLICE SERVICES:

            The Chief of Police Services, Captain Rene DeLaRosa, is selected by the City Manager.  He is an employee of the Orange County Sheriff’s Department.  In addition to the traditional duties of a Police Chief, he also oversees Emergency Management.  As an employee of the Sheriff’s Department, Capt. DeLaRosa does not receive any compensation directly from the City.  The cost of his position is paid for under the City’s contract with the Sheriff.  For the current fiscal year, that annual cost to the City is $435,561.

DEPUTY CITY MANAGER/DIRECTOR OF COMMUNITY SERVICES:

            The Deputy City Manager/Director of Community Services, David Reynolds, is appointed by the City Manager and serves at his pleasure.  He is an “At-Will” employee under State law.  The Deputy City Manager/Director of Community Services is the department head of the Community Services Department and is responsible for the management of the 18-acre Laguna Hills Community Center and Sports Complex.  In addition, the Deputy City Manager/Director of Community Services is responsible for the administration of the City’s waste and recycling franchise agreement with CR&R, the administration of the animal services agreement with the City of Mission Viejo, and also oversees the City’s Information Technology Department.  Mr. Reynolds is also the principal staff support assigned to the City’s Parks and Recreation Commission.

            The Deputy City Manager/Director of Community Services’ annual budgeted base salary is $208,229.  Mr. Reynolds also receives additional benefits (retirement, health, disability and life insurances, auto allowance) that has a total annual value of $82,119.  As of February 2023, the combined total of all of the above-listed annual compensation items is estimated at $290,348.

CITY CLERK:

            The City Clerk, Jennifer Lee, is appointed by the City Manager and serves at his pleasure.  She is an “At-Will” employee under State Law.  Ms. Lee oversees the City Clerk Services for the City, and is responsible for administering the City's legislative process including the publication of notices and ordinances, agenda preparation, recording and communicating all City Council actions taken and proceedings conducted, the City’s Records Management Program, Municipal Elections, and preparation of the City's Municipal Code.  

            The City Clerk’s annual budgeted base salary is $127,992.  Ms. Lee also receives additional benefits (retirement, health, disability and life insurances, auto allowance) that has a total annual value of $63,537.  As of February 2023, the combined total of all of the above-listed annual compensation items is estimated at $191,529.

California Public Employees Retirement System (CalPERS)

After incorporation in 1991, the City joined CalPERS in 1992.  Today, of the 480 cities in California, 449 are members of CalPERS.  CalPERS offers a wide array of defined benefit pension plans, generally described by one of the following formulas:

-          2.0% at the age of 60

-          2.0% at the age of 55

-          2.5% at the age of 55

-          2.7% at the age of 55

-          3.0% at the age of 60

        Laguna Hills retained the more conservative and sustainable 2.0% at 60 formula.  In Orange County, many cities still provide the 2% at 55 pension plan or the more lucrative 2.5% or 2.7% at 55 formulas.  These more lucrative 2.5% or 2.7% formulas serve to enhance pension benefits by 20% to 26% over and above the City of Laguna Hills’ pension plan.  Since January 1, 2013, pursuant to State law, all new employees who have not been a part of a public employee pension plan in the previous six months are under a 2% at 62 formula. It should also be noted that in Laguna Hills the only compensation that can be legally used to calculate an employee’s retirement pension is base salary, plus performance-based incentive pay.  No other benefits, including vacation buy-outs, can be used to enhance an employee’s pension.

        There are two components of the City’s contributions to CalPERS. The following table describes CalPERS contributions for Fiscal Year 2023/24.

The City’s employer contributions are considered an asset of the City and not of its employees.  For this reason, it is not considered employee compensation.

Retiree Health Savings Plan

        It is a common practice for governmental agencies to provide retiree health insurance coverage to their employees.  Over fifteen years ago, the City evaluated the provision of this benefit to its employees.  The analysis showed that it was just too expensive.  As a cost-effective alternative, the City evaluated a Retiree Health Savings (RHS) plan for long-time employees.  This type of plan functions like a defined contribution 401k plan.  After ten years of full-time employment, employees are enrolled in the City’s RHS plan and the City starts contributing $5,000 annually while the employee is employed by the City.   In addition, any unused sick leave over 160 hours is bought out by the City and deposited in the employee’s RHS account.  The employee may use these contributions to help defray medical expenses in retirement.  When the employee retires, or exits employment with the City, the City has no post-employment benefit obligation.  The City Council does not participate in this plan.

Vacation Buy-out

        City employees accrue vacation leave at various levels depending on years of service.  State law requires that employees be compensated for unused vacation leave when they exit employment with the City.  It is a recommended best management practice to limit the amount of vacation leave that an employee may accumulate.  In Laguna Hills, the maximum number of hours that an employee may carry-over from one year to the next is 320 hours.  If at the end of a given fiscal year, an employee has an excess of 320 hours of vacation, the City buys out all vacation leave in excess of the 320 hours.  The City encourages all employees to reduce their unused leave balances each year to 160 hours or less.  This practice allows the City to avoid the accumulation of large unfunded liabilities.  Employees are thereby allowed to cash out vacation leave in excess of 80 hours.  To the extent that an employee has his or her vacation bought out by the City, or if it is cashed out by the employee, it is taxable compensation.  And, as stated above, it is illegal to include vacation buy-outs when an employee’s pension is calculated. City Council members do not receive vacation, or any other types of leave.