words that don’t work: how to figure out how much money a local government manager makes
Posted on | August 4, 2010 | 3 Comments
In the wake of the scandal over Bell City Manager Robert Rizzo’s $800,000 in annual pay, journalists are reporting that, hey, don’t worry, other city managers make more reasonable salaries. And it’s a fair bet that people are calling their own local governments to ask about their city manager’s salary, while some cities work to get ahead of those requests.
But these new efforts are mostly useless. City manager “salaries” don’t tell you what you want to know. If you want to know what your city pays its city manager, you have to see his or her contract. And you have to know what to look for.
Below, as an example, is the contract between the City of Indio and its recently retired city manager, the inimitable Glenn Southard. Scroll past the CalPERS letter at the top to reach Southard’s 2005 contract and the 2007 amendment to that contract. If you don’t laugh out loud at what follows, I’ll eat a bug.(*)
Look at the second page of the Scribd file — the start of Southard’s 2007 contract amendment. It establishes a base salary for the city manager of $300,000 a year. If you called Indio City Hall in 2008 and said, “What’s your city manager’s salary?”, they would have given you this dollar figure.
But.
First, for signing the contract amendment, Southard got a ten percent bonus (same page). Add $30,000 for that year.
Now: Southard’s original contract, which specifies most of the terms of his employment, begins on page fourth page of the Scribd document. On the fifth page — page 2 of the 2005 contract — we get to “Compensation.” So:
Second, look at Item 4B of the 2005 contract: it establishes an annual performance bonus of up to ten percent, or $30,000 on top of Southard’s base salary, which reached $300,000 in 2007. Add a total of up to $30,000 a year, which gets us to a figure potentially as high as $330,000.
Third, look at Item 5, “Benefits,” starting on the next page. We’ve moved past the “Compensation” category, but look more closely — this is still compensation. Item 5B provides for both city contributions to Southard’s CalPERS retirement and for annual city contributions to Southard’s IRS 457 deferred compensation account, which he can choose to take “as taxable salary” any year he chooses to do so. The contract doesn’t specify the dollar figure of this annual city payment to an account that Southard can defer or draw upon at his discretion, saying only that the city will deposit “the maximum sum allowed by law.” That sum appears to be $16,500 a year.
So you can either add this sum to Southard’s annual pay, or to the public costs of Southard’s retirement. In either case, it’s another $16,500 a year that the City of Indio took out of the pocket of taxpayers and transferred to Glenn Southard. We’re up to a potential $346,500 a year in total compensation.
Fourth, look at Items 5A-3 and 5A-4, vacation time and sick leave. Upon commencement of employment, Southard was credited with 120 days of paid sick leave and vacation time — four months of paid time off, from the very first moment he ever worked as city manager. That’s 1/3 of a year in paid vacation and sick leave time: 1/3 of $300,000 = $100,000. Free, upon arrival.
And Southard continued to accrue vacation time at a rate of thirty days a year, while continuing to accrue sick leave time at an unspecified rate according to general city practices.
Now look again at each of these two items. Southard could cash out up to 120 hours of unused vacation time in any year of his employment, and could cash out his unused vacation time upon retirement at a rate of 50%.
Figure the value of this cash-out option in the most limited and conservative way. Say Southard always used all of the sick time he accrued over the course of his employment, and so upon retirement just cashed out the 90 days he was credited with upon arrival. Ninety days of pay times fifty percent: $300,000 / 4 * .50= $37,500. Free! Credited to his account from day one!
Then let’s say he got tired in his second year and started taking all his vacation time, and so only cashed out his first year’s vacation days — thirty days credited upon arrival plus thirty days accrued in his first year. $300,000 / 6 = $50,000.
Put those together, and add $87,500 in cashed out vacation and sick time to the $346,500 we got from salary plus bonus plus deferred compensation: $346,500 + $87,500= $434,000.
Fifth — well, let’s let Glenn Southard have some freebies. His contract gave him a free cell phone and computer, city-paid life insurance, health insurance, and dental insurance, and a car allowance of $600 a month. We’ll call those a gimme, ordinary conditions of executive employment.
But that stills means that Southard’s $300,000 “salary” added up to something much closer to $400,000+ in real annual compensation, at least 33 percent higher than the “salary” the city would have told you about if you called to ask this question.
Something to remember if you want to go looking for government pay in your own city.
As a final note, keep reading Southard’s contract to see his two weeks of unpaid annual “administrative leave,” his thirteen annual city holidays, and his two annual “personal hoildays.” Vacation time plus sick time plus administrative leave plus city holidays plus personal holidays, with four months of free vacation and sick time from day one, means that Southard could have hypothetically worked six months at close to full pay in any year he felt like it. Of course, it’s more fun to cash most of that out, especially with fifteen days off as a freebie before you have to turn to your vacation time and sick time.
This is a good life.
(*Hypothetical fantasy bug. This offer not valid in states where eating a bug would make me hurl, which is all of them. Anyway, man, I’m a vegetarian.)
Tags: absence of skepticism > bureaucratic values > city manager pay > gubmint
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August 5th, 2010 @ 7:09 pm
[...] up on yesterday’s post regarding city manager pay, let’s keep looking at retired Indio City Manager Glenn [...]
August 9th, 2010 @ 8:24 pm
[...] Below, the contract between the City of Newport Beach and City Manager David Kiff. Compare this one to the amazing contract between the City of Indio and its recently retired City Manager Glenn Southard. [...]
August 17th, 2010 @ 3:56 am
[...] may not be comparable to the runaway public salaries in Bell, or the runaway public gift baskets in Indio or Rosemead, they can be…well, interesting. [...]