October 11, 2010

Rizzo may seek more money

The city of Bell reneged on a severance agreement, his lawyer says. The details of the resignation are murky.

Robert Rizzo might be due back pay from the city of Bell after officials reneged on an agreement to provide the longtime city administrator with severance payments and other benefits when he resigned earlier this summer, his attorney claimed Thursday.

Attorney James Spertus said the city is violating state labor laws by not paying Rizzo's salary and should begin new negotiations over his departure.

The accusation threatens to create another potentially costly battle for the struggling city, which is operating with the majority of council members facing criminal charges and trying to deal with millions of dollars in revenue losses from taxes the state has determined were illegally levied.

The Bell City Council accepted the resignations of Rizzo as well as Assistant City Administrator Angela Spaccia and Police Chief Randy Adams after a lengthy closed-door meeting July 23. Ever since, considerable mystery has surrounded the terms under which the three officials agreed to leave.

The resignations came after The Times revealed the huge salaries that Rizzo and other top city officials were receiving. Rizzo was set to earn more than $1.5 million in compensation this year, making him one of the highest paid officials in the nation. He and seven other city leaders were charged last month with public corruption.

Since he resigned, Rizzo has also requested that the city pay his legal bills.

Jamie Casso, Bell's interim city attorney, declined to comment on Spertus' claims, saying the dispute was confidential because it was a personnel matter.

A source familiar with the negotiations said the City Council initially agreed on a severance package for Rizzo but later voted to accept his resignation without any benefits attached. The source spoke on condition of anonymity because a personnel issue was involved.

Some community activists said it was outrageous for Rizzo to demand more money from the city and urged city officials to take a hard line.

"This is Rizzo's way of spiting us," said Nestor Valencia, a community activist. "The city will now have to get a lawyer and fight him on this. He's literally just abusing us more."

In an interview Thursday, Spertus said the current city manager has rebuffed his efforts to negotiate the terms of Rizzo's departure from the city.

Spertus initially said he believed Rizzo was owed back pay and other benefits from the city. In a later interview, however, the attorney said he was not at this time requesting a specific sum of money but wanted to get the city back to the negotiating table.

Spertus provided an Aug. 30 letter he sent to Mayor Oscar Hernandez saying two attorneys for the city told Rizzo that the council had voted 5 to 0 in closed session to give Rizzo severance and/or support a workers' compensation claim. The amount of severance is not specified in the letter.

In the letter, Spertus says the city had agreed not to sue Rizzo or publicly disparage him.

The letter says that then-City Atty. Ed Lee and Tom Brown, then-special counsel for Bell, briefed Rizzo on the deal. Brown said he could not discuss the issue because of lawyer-client privilege. Lee could not be reached for comment.

But Spertus said Brown confirmed the deal to him.

Spertus said that in August he received an undated one-paragraph letter from Mayor Hernandez saying, "This letter shall confirm your voluntary resignation of employment from the City of Bell on July 22, 2010...." But the note did not mention the conditions Spertus said the city had earlier agreed on.

"The city can't just declare an employee resigned and stop paying him," Spertus said.

Councilman Lorenzo Velez, the only sitting Bell council member not charged with a crime, denies he ever backed any special benefits for Rizzo.

"He resigned without severance pay," Velez said, adding, "I will not even give [him] a penny cut in half."

After the resignations were announced, Hernandez released a statement praising Rizzo's performance as city administrator.

"Unlike the skewed view of the facts the Los Angeles Times presented to advance the paper's own agenda, a look at the big picture of city compensation shows that salaries of the city manager and other top city staff have been in line with similar positions over the period of their tenure," the statement said.

But in the following weeks, some city leaders took a more critical tone about Rizzo in their public comments.

"This man's intentions were to milk and exploit this community to take advantage of the innocence of this community," former Councilman Luis Artiga told The Times last month, after a state audit found that Bell had used city funds to repay a $95,000 personal loan Rizzo had taken out.

Rizzo, Hernandez, three other council members, two former council members and Spaccia, Rizzo's longtime deputy, were charged with misappropriating more than $5.5 million from the small, working-class community.

Rizzo posted $2-million bail and was released from Los Angeles County Jail late Wednesday after two weeks behind bars.

Rizzo had a three-year contract with the city that was automatically renewed every year. After stepping down, he would be eligible for a pension of more than $1 million, according to a Times estimate.

Bell officials maintain that the contracts were never approved by the City Council and are void. The Los Angeles County district attorney's office maintains that Rizzo illegally wrote his own employment contracts.

Under his most recent contract, the city may terminate Rizzo's employment only by mutual agreement, death or retirement, or as a result of a felony conviction or for a crime involving moral turpitude.

If the city was not renewing Rizzo's employment, the contract required officials to give him 90 days' notice before Aug. 1 of any year. Because of the automatic renewals, Rizzo — at any time — would be owed at least two years' pay. He would also be entitled to receive all accrued and unused sick and vacation leave. If Rizzo decided to leave, he would be required to give the city 180 days' notice, the contract said.

The contract also includes an indemnification clause, which notes that the city "shall defend, hold harmless and indemnify employee" against any claims.

"It's beyond my wildest imagination that Rizzo could even think he should be paid one more penny of the residents' hard-earned money when he has bankrupted the city, families and the democratic process," said Christina Garcia, a leader of the community activist group BASTA.

By Jeff Gottlieb and Ruben Vives, Los Angeles Times - October 8, 2010

http://www.latimes.com/

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