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Reader RD has the first batch of questions on our SEDC investigations:

Smith makes $206K a year. If she counts as a city official, might she be one of the highest paid? How does her salary compare with what top city officials (mayor, city manager, etc.) make?

The comparison isn’t perfect because the compensation numbers we have from SEDC are for the fiscal year 2005-2006, which runs from July 1, 2005 to June 30, 2006, and the city’s salary rankings run for the calendar year.

That said, going by this list of the top 1,000 paid city employees provided by the city, Smith would be the highest paid at the city. Smith reports, like you mentioned, $206,328 for her pay in fiscal year 2005-2006. In calendar year 2006, the highest paid city employee was an unnamed fire battalion chief at $199,510.37.

City Attorney Mike Aguirre was ranked second on the list with an income of $193,648, third was former COO Ronne Froman at $193,500 and fourth was police Chief William Lansdowne at $190,480.

Smith isn’t technically paid by the city, she’s paid by SEDC. But SEDC is a government entity of the City of San Diego, it’s just structured as a nonprofit.

We’ll get more into this later, but that nonprofit structure used by SEDC and its downtown counterpart Centre City Development Corp. is unusual. A government official in Sacramento told me about 90 percent of redevelopment agencies are tucked directly into the municipal bureaucracy and overseen by the city council or board of supervisors.

Who pays for these salaries? City taxpayers? City property owners through the redevelopment scheme?

Taxpayers pay for these salaries, plain and simple. When a government creates a redevelopment zone, it is allowed to capture a greater share of the taxes in that area as long as they use them specifically for revitalizing that specific zone, known as a project area.

So, if you live in the SEDC area or buy stuff there, this is your tax money. The redevelopment groups use that money for public improvements, beautification projects and to subsidize commercial and residential development. The idea is that development would otherwise not happen in these blighted neighborhoods, so public money must be used to entice developers. This happens in the form of direct subsidies, loans and discount land purchases.

Smith says she “declined to provide a breakdown of the sources of each individual’s extra compensation, citing privacy concerns.”… Privacy concerns? Why is privacy involved? Is she referring to the percentage of salaries that are made up of merit pay?

We are challenging SEDC’s interpretation of this.

It took a months-long struggle and legal threat to get them to give us the precise salaries of President Carolyn Y. Smith and Finance Director Dante Dayacap. Before that, all it would provide was a vague “salary range.” (For example: $130,000 to $160,000 instead of precisely stating that Smith made $158,000.)

The California Supreme Court recently made an important ruling in this arena.

On Aug. 28, 2007, the state Supreme Court, in Contra Costa Times v. The City of Oakland, ruled that detailing the compensation (including overtime and additional payments) of public employees is mandatory under the California Public Records Act. The court found that public employees should not have an expectation of privacy in relation to their salaries, even if that causes discomfort or embarrassment.

The court ruled that the disclosure of such information is “in many cases necessary to disclose inefficiency, favoritism, nepotism, and fraud with respect to the government’s use of public funds for employee salaries.”

In that ruling, Chief Justice Ronald George wrote that “Openness in government is essential to the functioning of a democracy.”

We’re hoping to have more precise information on some of these salary issues following our next public records act request.

On Aug. 28, 2007, the state Supreme Court, in Contra Costa Times v.The City of Oakland, ruled that the salaries of public employees is mandatory under the CPRA. The court found that public employees should not have an expectation of privacy in relation to their salaries, even if that causes discomfort or embarrassment.

In that ruling, Chief Justice Ronald George wrote that “Openness in government is essential to the functioning of a democracy.”

Have any human resources, compensation or non-profit experts ever heard of an “acknowledgement payment”? I can’t find a reference to the term in this context on Google.

I’m checking on it. If there are any of you out there that are experts in this arena, or if you have questions about our reporting and the stories, e-mail me at andrew.donohue@voiceofsandiego.org.

We’ll be back with more soon.

ANDREW DONOHUE

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