Cambria manager gets raise despite financial discrepancies
July 18, 2016
Editor’s Note: The CalPERS audit is at the bottom of the article.
By JOSH FRIEDMAN
A series of financial blunders committed by the Cambria Community Services District have surfaced over the past year, including in a recent audit that discovered violations of the California Government Code.
The district responded with the board granting its general manager a raise of almost $10,000. But before he voted to raise General Manager Jerry Gruber’s pay, board member Michael Thompson criticized CalCoastNews for its reporting.
“I just want to comment a bit on CalCoastNews,” said Thompson, a former shop owner. “As a journalism graduate, I doubt that any of my professors would have considered CalCoastNews a legitimate news organization.”
CalCoastNews Editor Bill Loving did not agree with Thompson’s statement.
“As a practicing journalist, a member of the American Society of News Editors and a tenured full professor of journalism at Cal Poly, I consider CalCoastNews a legitimate news organization,” Loving said.
Thompson said before the vote that CalCoastNews had improperly compared the Cambria CSD to the Templeton CSD when reporting on general manager pay. Thompson said the Templeton CSD only has responsibility for water delivery, and it has none of the other responsibilities that the Cambria district has, like parks and recreation, fire and trash services.
The Templeton CSD, in fact, provides fire protection, parks and recreation, sewage treatment and other services. Despite providing similar services to communities of similar sizes, the Cambria CSD pays its employees significantly more than the Templeton CSD. Additionally, Cambria employees only work four days a week while Templeton operates on a full-time schedule.
After Thompson’s comments, the Cambria board voted unanimously to grant Gruber a 6 percent raise, which would increase Gruber’s salary from $160,808 to $170,456. The raise also came with a slight increase in benefits.
Earlier this year, CalCoastNews reported there were significant discrepancies in the CSD’s accounting of General Manager Jerry Gruber’s pay. District staff reported salary figures to the CSD board that differed from what they reported to the California State Controller’s Office.
After CalCoastNews questioned CSD staff about the discrepancies, the district’s finance manager sent revised figures to the state controller’s office. The revised accounting shifted thousands of dollars Gruber received from being classified as salary to being classified as lump sum pay. District officials did not explain the accounting move.
Last November, CalPERS, the state retirement system, released an audit of the Cambria CSD showing the district had engaged in other questionable accounting practices in recent years, including failure to divulge Gruber’s rate of pay.
CalPERS auditors examined the district’s accounting for sampled employees and pay periods between July 2011 and June 2014. The district hired Gruber as its general manager in June 2011.
The audit report states the CSD’s pay schedule did not list the payrate for the general manager position, and auditors had to reference another document to identify the rate of pay. Additionally, the pay schedule did not show the payrate for a fire reservist position.
Those accounting errors and others constituted violations of California Government Code, according to CalPERS.
Other errors CalPERS auditors found included improper reporting of unused sick leave, misclassification of special compensation and failure to account for a raise an employee had received.
Accounting errors alter employees’ retirement benefits because the pay that workers receive factors into the pension they earn when retired.
CalPERS auditors also found the district classified an interim finance manager as a contractor, rather than an employee. By doing so, the CSD avoided submitting pension contributions for the worker, who was already a member of the state retirement system.
The district paid $1,500 a month for the person’s housing and provided the worker with an office, email account and business cards. That shows the worker was a district employee, the audit stated.
CSD officials sent a response to the CalPERS audit stating the interim finance manager was not an employee. The response did not explain why the worker did not classify as an employee.
In the response to the audit, Finance Manager Patrick O’Reilly said the CSD agreed with the majority of the auditors’ findings but disputed some of them.
Despite the ongoing financial irregularities, this year district officials pushed for giving a raise to Gruber. In April, district staff recommended the board approve a series of pay hikes that would have raised Gruber’s base salary to $221,984 by 2020. Gruber was hired at a salary of $150,000.
Members of the public then protested the proposed raise, and the district removed the salary hike from the board agenda.
But last month, the district staff again placed a 6 percent raise on the board agenda and the board approved it.