The report singled out the city manager pay in the cities of Laguna Hills, Buena Park and Lake Forest.
The city manager in Laguna Hills gets a salary and benefit package of close to $380,000. In Buena Park and Lake Forest, the city managers get pay packages of more than $340,000.
The report also questioned the number of city employees making over $100,000. Newport Beach has 60 workers in that category, while Laguna Beach has 22.
Officials in Laguna Beach and Newport Beach argue that they use city employees for services that other cities contract out and must provide services for tourists.
The Associated Press contributed to this report.