CITY HALL — Lawyers and other employees in the Santa Monica City Attorney’s Office received $182,000 in bonuses during this fiscal year, even though other employee groups agreed to forego merit-based bonuses to help close City Hall’s budget gap and prevent layoffs.

Twenty-six employees in the City Attorney’s office received bonuses during 2009-10, according to a record provided by City Hall’s Human Resources Department.

The biggest bonus, paid to a deputy city attorney, was $19,520. The average payout was $7,000.

Bonuses received by legal support employees, who have a separate bargaining unit from attorneys, included an $8,113.20 payment to a legal assistant and a $12,274 payment to an office administrator.

The bonuses were a standard part of employees’ compensation but were unusual because the vast majority of bonus-eligible employees this fiscal year agreed to go without cash bonuses after the recession caused a decline in revenue.

At the request of former City Manager Lamont Ewell, who retired in January, three bargaining units representing about 300 employees — the Management Team Associates, the Executive Pay Plan Members and the Administrative Team Associates — each agreed their members would accept up to five paid days off, based on performance reviews, in exchange for giving up their right to be considered for bonuses.

All bargaining units whose members are eligible for performance-based bonuses have agreements that stipulate consideration for possible annual bonuses of 1 percent to 10 percent of salary, according to Donna Peter, City Hall’s director of human resources.

But facing an $8 million budget gap last year, Ewell asked many employees to make an exception.

“This one-time revenue will help balance the first year of what could be multiple year deficits resulting from the unprecedented economic downturn,” he said when he explained his decision to ask employees to go without bonuses to the Daily Press last April.

Employees who agreed to the plan said they saw it as part of their duty in an uncertain economy.

“We were facing a very difficult economic climate with the real possibility that there might be layoffs and we just felt it wasn’t appropriate to take a bonus that would possibly increase the number of people that might be laid off,” said Greg Mullen, city librarian and a representative of the bargaining unit that represents department heads, the Executive Pay Plan Members.

But lawyers and legal support employees were never asked to give up their bonuses.

The payouts to legal employees were based on performance reviews conducted by City Attorney Marsha Moutrie, who recently defended the bonuses as an important part of retaining talented employees.

“The performance bonuses, and the acknowledgment they provide, help keep the best workers here, working for the public, despite the fact that their salary and their bonuses would be much higher in the private sector,” she said.

Asking her employees to trade the bonuses for paid time off, she said, would have hurt the city, which “needs the attorneys and the support staff here and working, not home on paid leave.”

The total amount of $182,000 spent on bonuses in 2009-10 was sharply down compared with prior years. City Hall spent an average of about $2 million per year the prior three years on bonuses, according to a record provided by the Human Resources Department.

Now, as the City Council prepares to adopt a budget for the upcoming fiscal year, which begins July 1, City Manager Rod Gould said he plans to give all eligible employees their bonus reviews, but plans to reduce the bonus pool by $500,000 as the city attempts to grapple with a $13.2 million deficit.

The reduced bonus pool, though, will be based on the $2.6 million budgeted for bonuses in 2009-10 — only a small fraction of which was paid out.

Finance Director Carol Swindel on Monday said City Hall’s proposed budget for the upcoming fiscal year sets aside $2.1 million for bonuses.

“We expect to offer bonuses to our employees that exhibit exceptional performance this coming year, but the bonus pool will be smaller than in year’s past,” Gould said.

He added that only awarding bonuses to employees of the City Attorney’s Office caused “some dissension in the ranks” among City Hall employees and said he favors a bonus policy that applies equally to all eligible employees.

Mullen said he only recently learned that employees in the City Attorney’s Office had received cash bonuses, but stopped short of saying it caused resentment among employees who gave up their bonuses.

“I was surprised and curious how that happened and why we didn’t know about it,” he said of the bonus arrangement.

Reached on Monday, City Councilman Richard Bloom, an attorney, defended the bonuses paid to legal staff members this year.

“The legal business is highly competitive with top attorneys with experience comparable to many on our legal staff earning many hundreds of thousands of dollars per year,” he said. “The pull of the private sector is always there and, in my view, it is completely appropriate to do what we can to reward excellence and retain our staff.”

While most bonuses are approved by the city manager, legal staff bonuses are approved by the city attorney. The City Council has the authority to award bonuses to the city manager, the city clerk and the city attorney.

Moutrie has never asked for a bonus, she said. Assistant City Attorney Joe Lawrence also did not ask for a bonus this fiscal year.

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