Sacramento City Manager Contract Shows Us Business As Usual Continues –
The numbers were stunning. And they come as a stark reminder that business as usual is not over, that the arms race top to bottom has not been thwarted by the economic downturn nearly as much as we would like to believe. That even as Wall Street and, indeed, Washington sway under the pressure of a potential new downturn, the message has not been reached on Main Street any more than it has on Wall Street.
But the numbers coming out of Sacramento on Tuesday should sound alarm bells up and down the coast. Sacramento, whose city has laid off public safety workers galore, will be giving their new city manager, John Shirey, tens of thousands of dollars more than the two previous full-time city managers.
According to the Sacramento Bee his base salary is $258,000, which is higher than any other current city manager in the region, and he will receive a total of $305,940 in salary, benefits and allowances.
Worse yet, “The City Council’s offer to Shirey comes just weeks after it filled a $39 million budget deficit by making cutbacks that included laying off 42 police officers.”
Councilmembers can justify it any way they want.
“It’s a fair package for a professional city manager, for the capital of California and the largest city in the region,” Councilwoman Sandy Sheedy said. “We need someone who needs no training, who can just come in and start putting the city in the right direction.”
Mr. Shirey himself said that “people should know that I’m going to earn every dollar and more.”
“I’m always expecting something to be said any time a public official’s salary and compensation is there in the public venue for review,” he said. “My salary is very fair compared to my peers up and down the state. If anything, it’s under market.”
On the one hand, Sacramento is among the largest cities in the state, and two dozen city managers earned more in 2009 than what Mr. Shirey will make. However, he is getting about a $35,000 more than his predecessor, the interim city manager, made and $49,000 more than what the previous city manager made.
Even Mayor Kevin Johnson questioned whether this was the appropriate time to boost the city manager’s pay.
“John deserves our full support as he prepares to become city manager, but today’s news is a tough pill to swallow for our community,” Mayor Johnson said. “It’s hard to justify salary raises and contract guarantees when we’re cutting cops, closing fire stations, and watching our economy enter a free fall. I’ll respect the will of the Council, but understand why this hiring process continues to frustrate the public.”
Now the reality.
As much as the contract in Sacramento is stunning in that it gives the city manager in Sacramento a huge raise at a time when the city is cutting back vital services, there are a few things that should sound alarm bells in Davis.
First, as stunning as the salary is, it is really not that much higher than ours, especially when you consider the population difference and the revenue difference in the communities.
Moreover, if the $281,000 total compensation figure for Steve Pinkerton is remotely correct, Mr. Shirey will only make about $24,000 more in total compensation than Mr. Pinkerton.
The alarm bells will sound from Sacramento because it is a big city that everyone is watching, but what this really shows us is that even now, when revenues have not rebounded, when the economy is teetering back on the brink of another recession, cities have not been able to find ways to stop the arms race.
The problem, of course, is twofold. First, a city like Sacramento or even Davis will justify the higher rate, arguing that they need to hire a quality individual to lead the city, and they can rationalize that the general fund hit caused by $35,000 is minimal compared to the size of the budget.
Neither Davis nor Sacramento will break their budget based on the salary of one city manager. However, it is an illusory justification. The salaries at the top inevitably will pull the rest of the salaries with them. Moreover, they send the message to employees not to cooperate.
This is the real danger. We are telling employees that we face economic crisis if we do not make cutbacks and then we go out and raise the manager’s salary by $34,000. How much sense does that make?
The problem is that we are in real danger. We face economic collapse in this city if we cannot reform our system, but the nuclear arms raise to economic destruction is continuing unabated. Across the state apparently, city councils have proved that they cannot resist raising city manager and other management contracts.
And, while it is true that Davis and other cities have seen unsustainable rates of increase across the board to employees, led by firefighters and public safety, it is difficult to look at the size of these raises and the timing and not think, placing yourself in the shoes of a Bobby Weist, why should I cooperate when they are going to be lining the pockets of the top executives?
Why should rank and file employees even consider taking less money when the leaders in a city – the city manager and the city council, cannot control the top of the line?
I naively thought that the current downturn would bring back sanity and end this ridiculous race to the bottom. Sadly, that will not happen. And it is quite simply stunning.
I am beginning to believe that cities deserve what they get. It is frustrating, because neither the communities that they represent, nor the workers that rely on them for their pay checks, deserve it.
—David M. Greenwald reporting
David…. did your proof-reader quit on you?
She doesn’t start at 6:45 in the morning. Patience please
hpierce, have I missed something? Please refresh page – I actually started at 6:35 today. I have just been checking the salary figures.
highbeam… good work, you caught most, if not all of the ones I saw.
[quote]We can perhaps excuse or even forgive the Davis City Council giving Steve Pinkerton $188,000 in salary. After all, the City of Davis was near the near bottom in city manager compensation.[/quote]
You may excuse or even forgive it, but I personally don’t.
[quote]Neither Davis nor Sacramento will break their budget based on the salary of one city manager. However, it is an illusory justification. The salaries at the top inevitably will pull the rest of the salaries with them. Moreover, they send the message to employees not to cooperate… Why should rank and file employees even consider taking less money when the leaders in a city – the city manager and the city council, cannot control the top of the line?[/quote]
This is it in a nutshell.
[i]”Moreover, if the $281,000 total compensation figure for Steve Pinkerton is remotely correct, Mr. Shirey will only make about $24,000 more in total compensation than Mr. Pinkerton.”[/i]
David, if the Sac CM is making $70k more in salary, then his total comp is going to be at least $70k more. I think your including this $24,000 figure is the exact same mistake that the city council press release made last week when they announced the hiring of Steve Pinkerton.
For Pinkerton (using the $281k figure, which I believe is high by $11k, as I have done the math and came up with $270k), you are reporting a total comp figure which includes every expense to Davis to employ him. But for John Shirley, you are using (not exactly reporting) a figure, $305,940 in salary, benefits and allowances, which leaves out tens of thousands of dollars in costs to the people of Sacramento for employing Mr. Shirley.
I will back off in calling that a lie. But it is really bad and mistaken accounting.
[i][b]Even Mayor Kevin Johnson[/b] questioned whether this was the appropriate time to boost the city manager’s pay. … “I’ll respect the will of the Council, but understand why this hiring process continues to frustrate the public.”[/i]
It is misleading to say “even” Kevin Johnson questioned this hiring. The truth is that Johnson was the only member of the Sacramento City Council who voted against hiring Shirley. Moreover, it seems like the subtext of the hiring process and the vote was a reflection of the power struggle on the Sacramento City Council, where Johnson has lost his campaign to make his role as mayor much more powerful–the strong-mayor system–and the others on the council are flexing their power to buck him.
To be fair to Mr. Shirey, he has to make a little more than his predecessors, since Thomas and Kerridge didn’t leave much to steal !
Rifkin:
I believe David took the figures for Mr. Shirey that were published in the Bee – $258,000 salary and $305,940 total compensation. Then he was comparing to what the last estimated figures were for Mr. Pinkerton – $188,000 salary and $281,877 total compensation.
But you are right that there is a discrepancy, in that Mayor Krovoza reported to the Vanguard that Mr. Pinkerton’s salary would be $29,300 over Mr. Emlen’s $148,700 salary(and $44,000 more than Mr. Emlen’s total package). That salary would indeed come to $178,000, not $188,000.
I may be confused on this; if so, I apologize for making things muddier.
HIGHBEAM: [i]”I believe David took the figures for Mr. Shirey that were published in the Bee – $258,000 salary and $305,940 total compensation.”[/i]
The figure for Shirly is NOT total comp. The figure for Pinkerton that David quoted is total comp (according to Sue Greenwald). I noted that I think Sue’s figure is high by $11,000 for Pinkerton’s total comp.
HB: [i]” Mayor Krovoza reported to the Vanguard that Mr. Pinkerton’s salary would be $29,300 over Mr. Emlen’s $148,700 salary …”[/i]
For the record, the annual base salary for Mr. Pinkerton in 2011-12 will be $188,000. That is $29,300 higher than Mr. Emlen’s 2009 base salary of $158,700.
HB: [i] … and $44,000 more than Mr. Emlen’s total package.”[/i]
The $44,000 differential is how much more it will cost the City of Davis to pay for one year of Mr. Pinkerton’s salary + cafeteria + pension compared with those same categories for Mr. Emlen. The $44,000 is probably very close to the difference in total comp for Pinkerton.
HB: [i]”That salary would indeed come to $178,000, not $188,000.”[/i]
Pinkerton’s base salary is going to be $188,000. If he has any cashouts to which he is entitled, his taxable income could be a bit higher. The confusion which arose in the announcement of the hiring of Pinkerton was due to the fact that the council members mistakenly added Emlen’s cashouts to his salary, but did not do the same math with Pinkerton. They also appeared to have pretended that it makes a difference to the City if the income is taxable (as a cashout is) or not taxable (as a medical benefit is not).
I simply reported the figures given to me, in writing, by our human resources director. I respect her figures.
R – I should not have termed the $305,940 figure for Shirey as “total compensation” in my comment – I should have called it “salary, benefits and allowances,” as we called it in the article, and as the Bee called it.
We can only make an apples to apples comparison regarding base salary, since we don’t have the information that we would need to calculate the Sacramento total compensation in an apples to apples fashion.
It is not really important anyway. The issue that concerns me is a larger one. Before our city manager search began, I tried to make the point that cities and other local government agencies pay far more than state and federal government for comparable management positions, and that small cities pay much more than large cities relative to revenues. That is certainly the case if we look at the new Sacramento CM salary as percent of revenue, which is probably the best indicator of what you can afford. The Sac City manager would be making over $1.4 million to maintain the same revenue to CM salary ratio that the position pays in Davis.
As we consider the bleak fiscal outlook for cities, I think we have to keep these things in mind. Should we try to move towards bench marking our management positions to what other cities pay, or should we start trying to approximate the compensation of comparable state and federal public sector management? I agree with David that, as a general principle, we are moving in a direction of less, not greater, sustainability.
[quote]I am beginning to believe that cities deserve what they get. It is frustrating, because neither the communities that they represent, nor the workers that rely on them for their pay checks, deserve it.[/quote]
I wholeheartedly agree. I belive that in the end it will ultimately be the low-level staff who foot the bill for Pinkerton’s raise. And what kind of example is this man setting coming out of the gates, essentially taking a pay raise only to immediately turn around and expect everyone else to take a cut. Then again,I can’t say as I’m surprised – if there’s any truth to the comments on the Manteca Bulletin that he agreed to a pay cut while he was one of of the finalists for this position.
Sequoia,
The general council philosophy towards city manager salary was determined in open session of the city council before Mr. Pinkerton was involved. I had a different philosophy, but I lost fair and square. It would be wrong to blame the new city manager. If council wants to change the philosophy towards management compensation and try to bring it back in line with comparable state and federal positions, it will have to involve a change in recruitment and negotiation approach at earlier stages in the process.
In the meantime, I have confidence that Mr. Pinkerton personally will be the exception that proves the rule, and that he will prove himself to be worth a large merit bonus. (I am not opposed to merit pay in cases of truly exceptional and irreplaceable performance proven over time).
[quote]In the meantime, I have confidence that Mr. Pinkerton personally will be the exception that proves the rule, and that he will prove himself to be worth a large merit bonus. (I am not opposed to merit pay in cases of truly exceptional and irreplaceable performance proven over time).[/quote]
I would argue he has already received his “merit pay” in advance, w/o having done anything to merit it (pun intended)! And it will make it much more difficult for the city to ask the bargaining groups to take pay cuts…
[i]”And it will make it much more difficult for the city [b]to ask[/b] the bargaining groups to take pay cuts …”[/i]
It won’t make it any harder [b]to ask[/b] for anything. It will, however, provide an argument to the labor groups to respond, when asked, that they want more, not less.
In the big picture, our most salient problem in the labor contracts is NOT the levels of worker salaries. So asking them for cuts in salaries out of all context is not something the City Council needs to be doing with the labor groups.
Our biggest problem–of which salaries are a part–is with the inflation of total compensation, especially the unaffordable inflation of the cafeteria benefits, the retiree medical benefits and the funding for the pension benefits.
So what the City Council will be asking the labor groups next year is to restrain the growth of their total compensation to the level of growth of the City’s revenues.
One more very important point on this: the City Council holds almost all the cards. If the labor groups will not agree to the reforms requested in bargaining, then the City Council has the power to impose its terms, including terms which restrain the growth of total compensation and any other terms the Council desires.
The non-public safety groups still could strike if the Council imposed terms they did not like. I would not be surprised to see a strike. Yet in these tough economic times, a strike is unlikely to arouse any public sympathy and is unlikely to make a real difference in contract terms.
Elaine, I don’t disagree with you. But I am very optimistic that the new CM will prove to have been an excellent choice.
Sue Greenwald ,
“””””But I am very optimistic that the new CM will prove to have been an excellent choice.”””””
AS excellant as Bill Emlen , Jim Antonin , Jim Hyde , were as choices ?
All picked and voted on by you . Thanks Sue !
Hi Avatar,
Great to see you back on line! For the record, council doesn’t pick the police chief.
[quote]Elaine, I don’t disagree with you. But I am very optimistic that the new CM will prove to have been an excellent choice.[/quote]
I, too, wish Pinkerton much success… the city needs all the help it can get!