The former executive director of the California School Boards Association who retired amid a financial scandal involving his pay and bonuses will have his pension reduced by 65 percent, the state pension fund said.
A California Public Employees' Retirement System audit to be released today concluded that Scott Plotkin's pension was improperly inflated over a period of years by excessive raises that were granted out of public purview. Based on that finding, the auditors said, the raises cannot be counted toward retirement calculations.
Plotkin said Thursday he would appeal the decision.
CSBA is a statewide nonprofit organization that receives much of its funding from membership dues and other fees paid by public school districts and county offices of education throughout California, which are funded with taxpayer money.
In return, CSBA lobbies on behalf of school boards, provides school board members with professional development and is a resource on policy and legal issues.
CSBA brought in $14.6 million in revenue last year, including $5.7 million in membership dues, according to figures on its website.
"We won't tolerate pension abuse and if we believe the pensions were improperly awarded or policies were not followed we will take steps necessary to recover funds," said CalPERS spokesman Brad Pacheco.
Plotkin was notified by CalPERS that his current pension of $17,089 a month will be reduced to $6,024 monthly. That's a 65 percent decrease from the $205,000 he has been receiving annually since retiring in September 2010. CalPERS officials said they will seek reimbursement for any overpayments.
"CSBA has been in compliance with the rules in place over the past decade and will follow the normal procedures to make that case," Plotkin said when reached by phone Thursday.
But CSBA General Counsel Keith Bray said the organization has not decided whether to appeal Plotkin's pension reduction.
The CalPERS audit reveals that the pension fund investigated CSBA a decade ago for inappropriate pay raises given to another former executive director.
The 2001 audit found CSBA did not make salary information of top executives available to the public. Because the group contracts with CalPERS, the audit said, salary decisions needed to be open to public scrutiny. Both findings were restated in the most recent audit.
Plotkin was hired a month before the 2001 report was released. CSBA responded to that audit by saying it had taken corrective action.
Tax filings showed Plotkin was paid $562,333 from July 1, 2008, to June 30, 2009. The following fiscal year, he earned $452,339.
Those figures include large one-time bonuses. Plotkin received a $175,000 bonus in 2008, and in 2009, he received nearly $75,000 in bonuses and other compensation.
Monthly base pay is reported to CalPERS, which doesn't include bonuses. Plotkin's monthly base pay went from $18,026 in 2006 to $27,414 in 2008.
Plotkin's compensation became in issue in 2010 after media reports revealed he had charged thousands of dollars at area casinos to his CSBA credit card.
CSBA is governed by a board of directors made up of school board members representing different areas of the state. The board's meetings are not open to the public, a practice the CalPERS audit cited in taking issue with the raises Plotkin was awarded.
The auditors concluded that, in violation of government code, Plotkin's pay increases were not voted on in public meetings and that the association failed to provide any public record of its votes on salary increases. CSBA's contract with Plotkin was marked "confidential," the audit said.
Bray said he disagreed with many of the audit's findings, but said his organization is working with CalPERS to resolve outstanding issues. He said CSBA continues to argue that the nonprofit is not bound by open meetings laws.
Bray said CalPERS did not adopt a regulation requiring agencies that contract with the pension fund to adhere to public meetings laws when determining employee pay until August 2011. That is more than a year after the period of time covered in the audit, Bray noted.
CalPERS officials said they stand by their findings.
Several school districts, including Sacramento City Unified, dropped their memberships for a year in response to the scandal.
"It sounds like the CalPERS auditors had the same issues and concerns that caused us to leave," said Patrick Kennedy, a board member of Sacramento City Unified. "I think there is a transparency there now that wasn't there before."
CSBA now posts the employment contract of its new executive director, Vernon Billy, who receives an annual salary of $232,000. The organization said it has eliminated numerous fringe benefits previously provided to Plotkin.
"We are committed to working with CalPERS," Bray said. "We have already done a number of things to respond to the report."