Was Payout to Santa Ana City Attorney an Illegal Gift of Public Funds?

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One of the questions swirling around former Santa Ana City Attorney Joe Fletcher’s nearly $200,000 sick and vacation leave payout is whether it should be considered an illegal gift of public funds.

Orange County Supervisor John Moorlach thinks so. And an argument in favor of Moorlach’s position can be found in the county’s lawsuit against the Association of Orange County Deputy Sheriffs over retroactive pension benefits.

Fletcher, upon leaving the city’s employ at the end of last year, cashed out $191,699 in unused vacation and sick-leave pay. Fletcher was able to do this because of a contract amendment that backdated the accrual of his vacation pay and the carryover of his sick leave as though he’d been hired in 1983 — 13 years before his actual hire date in 1996, according to Santa Ana Councilman Sal Tinajero.

Fletcher’s situation has some similarities to the basis of the county’s 2008 pension benefit suit, which contends that a 2001 board decision to retroactively grant a 3 percent at age 50 benefit to sheriff’s deputies violated the California Constitution.

Specifically, it violates a provision stating that a “local government body may not grant extra compensation or extra allowance to a public officer, public employee, or contractor after service has been rendered or a contract has been entered and performed in whole or in part,” the suit claims.

The idea is that “you can’t be paid twice for doing the job once,” Moorlach said. He called Fletcher’s payout “way beyond the pale.”

Fletcher’s contract amendment that gave him retroactive status was made in 2002, six years into his tenure as city attorney.

“How do you negotiate something to a date where you weren’t even working?” Moorlach asked. “I don’t even know how you do that.”

In the county’s legal battle, a trial court has already ruled in favor of the union. However, an appellate court is scheduled to hear oral arguments on Jan. 19, Moorlach said.

Moorlach might be in the minority opinion regarding Fletcher’s payout.

Huntington Beach City Attorney Jennifer McGrath said that as long as the compensation has a valid public purpose, then even retroactive vacation and sick-leave benefits wouldn’t constitute a gift of public funds, which occurs when a governmental body gives away money without anything in return.

“It’s a case-by-case analysis — what becomes a gift of public funds or not,” McGrath said.

Dave Mora, West Coast director for the International City/County Management Association, agreed with McGrath and said compensation for services can take a multitude of forms.

“It would be very difficult to try to describe that as a gift of public funds,” Mora said. “In my mind you’re also saying that a person’s salary is a gift of public funds.”



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