$3.9 Million Pension Demands Sunshine

JUNE 9, 2011

By K. Lloyd Billingsley

Pension payments such as the $3.9 million in supplemental funds to Samuel Downing, retired chief executive of the Salinas Valley Memorial Healthcare System, have touched off outrage among California legislators, editorial writers, and the public. But the amounts were approved long ago, and the decisions were not made behind closed doors.

A spokesperson for the Salinas Valley Memorial Healthcare System told CalWatchDog.com that the decision on the $3.9 million in supplemental funds for Samuel Downing was made in 1988, a full 23 years ago. Everything had been done in “open session,” the spokesperson said, and “the information had always been available.”

The board of the Salinas Valley system paid Downing an annual salary of $668,000, according to news reports, and he draws a pension of $150,000. The $3.9 million comes on top of that, after Downing turned 65. The executive, who started with the Salinas district in 1972 and served as CEO since 1985, told reporters he had earned the money and had given his “heart and soul” to the institution.

Members of the Salinas Valley board also defended the payouts, which the Los Angeles Times charged were “far more generous” than those promised to administrators at larger public hospitals. The Times noted that the $3.9 in supplemental retirement benefits for Downing came at a time of cutbacks and layoffs at the hospital.

Unconscionable Benefits

Assemblyman Luis Alejo, D-Watsonville, called the benefits “unconscionable,” and charged the Salinas Valley health system gave million-dollar benefits “at the expense of patient care.” Alejo is also on record that the Salinas hospital “had a history of not functioning with transparency.”

The problem may stem from the state’s transparency laws, according to Lawrence J. McQuillan, director of business and economic studies at the Pacific Research Institute, the parent think tank of CalWatchDog.com. He’s the author of the recently released study, “Bringing More Sunshine to California: How to Expand Open Government in the Golden State.”

The flywheel for California’s open-government laws came in the early 1950s with a 10-part series by San Francisco Chronicle reporter Mike Harris about local governments making decisions in secret. The series prompted Ralph M. Brown, D-Modesto, to hold hearings that resulted in the Brown Act, which mandates open government. McQuillan believes the measure could use some reforms.

“The Act should be amended to require that notice language be reasonably calculated to give notice to the public of what the governmental body will actually do in a forthcoming meeting,” McQuillan said. “If a hospital district is considering giving a $4 million pension to an executive in the next meeting, the public notice on the Web should say that.  Saying ‘considering adjustment to compensation expenses’ doesn’t cut it.”

Not-So-Open Meetings

According to “Bringing More Sunshine to California,” the Golden State ranks a lowly 45th out of 50 states for its open-meetings laws. The study calls for “affirmative disclosure,” the open release of material by government as a matter of course, before anybody asks for it.

“Public pay is the public’s business,” McQuillan said. “The state legislature should require the posting on a searchable website the salaries, benefits, business expenditures, and gifts for all public employees.  Such affirmative disclosure would relieve the public of requesting this information on a piecemeal basis and having to fight uncooperative governmental agencies in court.”