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Thursday, May 24, 2012
City Council approves salary contract for new city manager
by Melissa Corker, published on August 10, 2011 at 1:25 AM
Storyline: Politics
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Sacramento’s new city manager will get a 16 percent increase in salary over the previous city manager, making him the highest-paid in city history and the first to receive a labor contract.
John Shirey’s three-year contract, which includes a $258,000 base salary was approved by the City Council with a 7-2 vote Tuesday.
According to the staff report on the contract, Shirey’s annual salary is within the city’s current salary pay range of $187,357-$281,035 for the position.
The staff report also notes that Shirey’s benefit package is essentially the same as for city charter officers such as city attorney and city clerk, with two exceptions: Shirey will pay his own 7 percent contribution to PERS and, instead of the typical 4 percent contribution to a 401(a) plan, the city will contribute $15,000 to a deferred compensation plan.
These changes give the city a net savings of nearly $13,000 – approximately $10,000 for the PERS contribution and approximately $18,000 for the 4 percent contribution to a 401(a) plan.
The new contract includes a severance clause that provides for payment of six months’ salary and medical benefits if Shirey or the council terminates his employment before the contract expires.
A recent press release from Eye on Sacramento, a local political watchdog group, criticized the contract as “fundamentally wrong” for the 16 percent pay hike the contract includes.
“The (pay increase) for its city manager is immensely insensitive to city taxpayers and city employees who have seen their pay cut or jobs eliminated in the current recession,” the release states. “The council's extravagance with its top manager's pay cannot help but make future relations and negotiations with (the) city's unions more difficult and probably more costly to city taxpayers.”
Earlier this week, Local 522, the union representing 550 city firefighters, voted to defer a five percent payraise until 2013 and give six percent to their pensions, according to a labor leaders.
Jaymes Butler, municipal vice president for Local 522 and a captain in the department, told council members Tuesday that, when asked to “do their part” despite being the lowest paid in the region, “our (union members) stepped up to do it.”
Had they known what the city manager’s salary package would look like, Butler said, his union membership would likely not have voted for labor concessions as they did.
“The last time I checked,” Butler said, “none of these (city managers) save lives.”
Councilwoman Angelique Ashby said she’s looking forward to working with Shirey, though she is disappointed with the compensation package.
“It’s unfathomable to grant the largest compensation package in the history of Sacramento during one of the worst economic times in the history of Sacramento,” Ashby said. “It’s counterintuitive.”
Ashby said she could not support the contract “in the same week that firefighters step forward and help us initiate true pension reform for the first time” in the city of Sacramento.
“I just feel like there is no reason to make an exception to the standard of everyone working for the city to pull their weight and do more with less,” Ashby said.
Councilman Rob Fong supported the contract and welcomed Shirey to the position.
“The salary is within the range for the position,” Fong said, “so, yeah, he’s going to get more than we gave (the previous city manager). (Shirey) has an impressive wealth of experience. We are fortunate to have him.”
Mayor Kevin Johnson said he assumed the contract was supported by the majority of the council, but he reiterated concerns about the recruitment process that he expressed in a recent press conference.
Johnson said that the process could have been “more comprehensive,” and he was disappointed that there wasn’t any public input.
The recruitment process wasn't as transparent as it should have been, Johnson said, and he objected to granting a contract that makes Shirey the highest-paid city manager in the city’s history.
“This defies logic, in my opinion.” Johnson said.
With the new contract in place, Shirey will begin work as city manager Sept. 1.
Melissa Corker is a Staff Reporter for The Sacramento Press. Follow her on Twitter @MelisaCorker.
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Councilwoman Ashby and Mayor Johnson were the two 'no' votes. They based their vote on a contradiction between increasing the salary of an executive at a time when other valuable city employees are seeing their salary decreased.
[The City would normally have paid about 18k to PERS (instead, he will pay his own contribution) and would normally have paid about10k to a 401a (instead they will pay 15k in deferred compensation). So the "net savings" are 18k+10k-15k=13k (approx figures).]
And the potential benefits of an experienced, competent city manager are much larger than that amount. Will he be worth the extra $15K a year? We'll see--and if the Council decides he is not, they do have the option to fire him with a two-thirds vote. That's the nice thing about a council/manager system: the city manager is an employee, not an elected official, whose performance is based on their professional competence and ability to turn the will of the Mayor and Council into action, not their skill as a politician.
And the down side of a city manager is that he's not accountable to us -- you know, the voters. A Mayor with the power to run a city is. That's why most major cities in America dumped the bureaucratic and expensive city manager concept and have elected officials that are accountable to voters.
Figuring the cost of his contract over its term vs. one year's salary is an apples-and-oranges comparison. Meanwhile, having the city run by someone who actually has experience running cities could produce far more fiscal benefit and savings than having it run by, say, a former building inspector with no experience in city management, or an elected official with no required experience in running anything. Which is why Sacramento did away with its "strong mayor" charter a century ago.
Meanwhile. when you take into account the difference in the pension contributions, the increase in salary costs over the old position is more like 10.5% rather than 16%.