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Pensions: State to audit Salinas hospital that gave CEO nearly $4 million in retirement benefits

May 11, 2011 |  2:19 pm

Samuel Downing, who retired last month, will be paid $3.9 million in extra benefits in addition to his $150,000 annual pension. A state Assembly panel voted Wednesday to conduct an audit of a Salinas public hospital that awarded its chief executive close to $4 million in supplemental pension benefits.

The investigation of the Salinas Valley Memorial Healthcare District comes after The Times reported on the lucrative retirement package received by Samuel Downing, its former president and CEO.

Downing, who retired last month, will be paid $3.9 million in extra benefits in addition to his $150,000 annual pension.

The audit was requested by Assemblyman Luis Alejo (D-Watsonville), whose district includes the city of Salinas. Alejo said the hospital “had a history of not functioning with transparency.”

“When you get that type of resistance, it raises a lot of red flags,” Alejo said in an interview. “Our state auditor will get us answers and tell us exactly what’s going on.”

Downing earned close to $800,000 in total wages in 2009, according to a database released by the state controller’s office, making him one of the best-paid public employees in California.

He also received a series of increases to his pension package during his final years as CEO. In 2009 the hospital designed a “Post-65” retirement plan exclusively for Downing.

Over the same period, the hospital faced declining revenues and patient admissions. About 600 staff positions have been eliminated through layoffs and attrition since January 2010, and the hospital has been locked in contentious negotiations with the unions that represent its workers. Union leaders have been especially critical of Downing’s pay.

Hospital representatives defended their compensation policies at Wednesday’s Joint Legislative Audit Committee hearing but said they welcomed the scrutiny.

“These are challenging times for all of us, and we understand the need for public debate,” board president Jim Gattis said.

State Auditor Elaine Howle said the investigation would cover a number of areas, including executive compensation. A report is expected to be completed by the end of the year.


Hospital chief leads list of California's top-paid public workers

Parks official earned $300,000 a year, according to salary database

California State Controller's Office: Local government compensation reports (external link)

-- Sam Allen

Photo: Samuel Downing