Duane Olson (July 20, 2011)

Thanks to the payouts for sick pay and vacation time he received upon retirement, Huntington Beach's former fire chief earned the highest paycheck among municipal fire chiefs statewide in 2009 — the most recent year for which there is data — state controller's office records show.

Duane Olson's compensation that year, $363,608, eclipsed the total compensation for fire chiefs in Los Angeles, San Jose and San Diego — the three largest cities in California.

However, because Olson received his large payment in the year of his retirement, it is difficult to make apples-to-apples comparisons with California's still-working fire chiefs.

Olson's base salary during his last year of work, $191,349, is largely in line with his peers in California's larger cities. That number was nearly doubled by more than $70,000 in accrued sick time and more than $56,000 in accrued general leave, among other payouts.

At least in 2009, Olson did take in more than all others in the same line of work. Riverside's fire chief, for example, earned $360,411, the second-highest rate in California. Anaheim's fire chief made $230,410, while Santa Ana's chief made $270,428. Each city is larger than Huntington Beach.

Olson's pay in 2009 did not increase his pension, but he already receives the maximum benefits based on his years of service.

Olson, 62, receives a monthly pension of $16,001, an amount that will increase for the rest of his life based on the cost of living, according to information obtained from the California Public Employees' Retirement System (CalPERS).

Reached by phone, Olson defended his benefits package, saying it was something he negotiated over more than 35 years of work for the city of Huntington Beach.

When asked if taxpayers should pay public employees' accumulated hours like sick pay, he said this is the case even in some private companies.

"CEOs get stock options, access to private cars, incentive pay," he said. "They get their base salaries plus bonuses, which you never see, add up to a substantial amount of money. There's no way you can check into it."

Though such examples are true in the higher echelons of corporate America, many private-sector employers have adopted use-it-or-lose policies in relation to sick and vacation pay.

However, Olson said his job required him to work long hours and forego vacations.

Olson acknowledged that times have changed since his era and believes that public employees should take on more of the costs of their retirements.

"The system needs to be reformed based on what's happening in our economy," he said. "Cities need to do something in order to compensate for these additional costs."

The system has evolved over time, and cities must adjust to it by prolonging the time their employees can retire with benefits and by getting them to pay more into their retirement accounts, Olson said.

Olson's accumulated sick pay, general leave and monthly pension check for the remainder of his life is a clear example of how the current system is unsustainable and how taxpayers cannot afford to continue paying employees' high retirement costs, said Huntington Beach Councilman Don Hansen.

Olson was not the highest paid firefighter in California. There were two other city fire employees in the state, and one county employee, who made more in 2009. Their job titles did not come with the responsibilities of the chief.

A Ventura city fire battalion chief earned $486,205, a division chief in the San Bernardino County Fire Department made $461,342, and a Milpitas fire-prevention inspector took in $416,628.

The controller's database lists the total pay of each employee, which includes sick, vacation and special pay. The database does not take into account whether the employee retired that year or continues to work.

Huntington Beach city officials are considering reforms to the compensation costs in the future to reduce pressure on the general budget. But, given the politically charged nature of pension and compensation reforms, it's a difficult task.

The city is talking with all of its labor groups; many have agreed to open discussions with the city, although their contracts are not yet up for negotiations.

The city manager and department executives recently agreed to contribute 2.5% more of their share to the state pension system. The contribution is set to save the city $74,500 in the next two years.

Det. Kreg Muller, president of the Huntington Beach Police Officers Assn., said his group agreed to continue to contribute 4.25% of the employees' share to the state pension for the next two years, in addition to taking on the anticipated increase in medical costs next year.

"We are happy that we're able to work with the city and get through these difficult economic times," Muller said. "Are we excited about the difficult economic times? No. But we're all getting through this."

The goal is gradually to get all the employees to contribute the maximum shares allowed by law, said Councilman Joe Shaw. This would mean that the public-safety employees would end up paying 9% and non-public safety employees 8% toward the pension program.

Talks with the Huntington Beach Firefighters Assn. came to a standstill in May after the majority of the council did not tentatively agree to the group's offer, said association President Darrin Witt.

"Unfortunately, at this time, at least some on the council, I believe, are trying to think politically instead of fiscally," he said. "There are some people on the council that want to make a political statement. They want to take a political stand. Unfortunately for us, and I think for the city, is we're trying to come up with real solutions to real fiscal problems."

But Hansen, an outspoken critic of the level of benefits received by public employees, said the Firefighters Assn. is not offering long-term solutions.

"That's kicking the can down the road," he said.