LA hides health care costs for individual employees in apparent violation of state law

In 2017, the highest paid employee working for the city of Los Angeles collected a nearly $600,000 salary and $12,693 in health benefits, according to the state controller’s public pay database.

Its lowest paid employee — reportedly earning only $1 that year — had a benefits package that also cost the city $12,693.

In fact, Los Angeles reported to the state that 25,331 employees — covering nearly every department except the behemoth Department of Water and Power and first responders — all received benefits costing the exact same amount. Another 10,546 employees, largely representing the police department, had another duplicated figure of $14,471.

The city’s reporting suggests they pay the same medical premium for Mayor Eric Garcetti as a parking attendant, when in reality, they do not. But the public cannot learn the actual cost because Los Angeles refuses to release its true figures.

L.A.’s duplicated figures appear to violate a state law requiring public agencies to report actual employee compensation, including benefits, to the state controller annually. The state controller started publishing pay data for cities on its website in 2010 in the wake of the Bell corruption scandal.

Despite the requirements, California’s largest city has not reported the actual cost for each employee’s premiums for nearly a decade, instead using an average in every year except 2013.

The health costs listed in the state’s database are not disclosed as averages.

It’s impossible for 25,000 employees to have the same costs. A health-care plan for a single employee would cost less than a plan that covers a full family. And the city offers a choice of five plans from Kaiser Permanente and Anthem, each with varying options, according to the LAwell benefits program’s website.

State controller was unaware

The State Controller’s Office was not aware of the duplicated figures until it was contacted by a reporter for the Southern California News Group. The data provided by cities is not audited for such discrepancies, officials said.

“Using averages contradicts the intent of the database — to enhance government transparency and provide a better understanding of how taxpayer dollars are spent,” said Taryn Kinney, a spokeswoman for the State Controller’s Office. “SCO will review the city’s reports and work with them to bring their data into compliance.”

Bruce Whidden, a spokesman for Los Angeles’ personnel department, initially said the city does not release health benefit costs for individuals because the city attorney believes those records are exempt from disclosure. Whidden acknowledged there are “too many variables in employees benefits” for one figure to be accurate.

Ian Thompson, a spokesperson for City Controller Ron Galperin, said the city is open to working with the state to ensure Los Angeles is submitting the most transparent information possible.” The local controller’s office provides the payroll data to the state each year.

“The City has submitted its payroll data to the state Controller in the same format for at least a decade, and each year, the state has certified the data and posted it online for everyone to see,” Thompson said. “Our goal is to follow all local and state rules, while also being as clear and accurate with City data as possible.”

Mayor Garcetti’s office did not respond to requests for comment.

Other big cities report actual costs

Los Angeles is the only agency among its big city peers that does not submit the correct information. San Diego, San Francisco, San Jose and Long Beach all reported unique figures for employees in 2017, according to an analysis of the state’s pay database. Their benefits weren’t far off from Los Angeles’ average, but, by reporting the actual costs, residents in those cities could find out if any employees received overly generous benefit packages.

Jessica Levinson, a Loyola Law School professor and former president of L.A.’s Ethics Commission, described Los Angeles’ uses of averages as providing “only part of the picture.”

“It doesn’t allow anyone to draw a distinction between the people who are exactly at the average, people who are at the high end, people who are at the low end and why,” Levinson said. “(Proper reporting) serves two purposes. It provides the public with information and it acts as a deterrent to bad behavior. When all you disclose is an average, you really don’t serve either of those purposes.”

Taxpayers have a right to know

Taxpayers have a right to know what the city spends on its employees, as evidenced by state law, she said.

The state law in question requires cities to report the “annual compensation of a local agency’s local officials, officers, and employees in accordance with reporting instructions developed by the Controller …”

Those instructions state cities must “capture pay and benefit information for every compensated employee who received a W-2” and asks for “the dollar amount paid by the employer toward the employee’s Health, Dental and/or Vision care plans.”

For years, Los Angeles gave the same figures to the independent pay database Transparent California, according to its executive director, Robert Fellner.

The city did not disclose that it was providing averages until 2017. In a review of prior years, Fellner said it was clear L.A. had sent the nonprofit misleading data since at least 2014.

In 2013, Los Angeles apparently did provide numbers that were unique to both Fellner and the state controller, according to a review of their databases.

“It is like somebody accidentally did the right thing, but only for 2013,” he said.

‘No excuse … they know the law’

In Fellner’s line of work, he expects to have to fight tiny districts over the release of their pay data, but a city like Los Angeles should know better, he said.

“There is no excuse for an agency like L.A.; they know the law, they’re just choosing to ignore it,” he said.

Part of the problem, Fellner said, is that the Controller’s Office doesn’t police the data it requests. And even when a problem is raised, the agency has few tools for enforcement.

According to the State Controller’s Office, failing to comply with the agency’s reporting standards can carry a fine of up to $5,000.