Council Votes to Increase Compensation Plan For New City Manager

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The Davis City Council in a special meeting on Thursday evening, acting on advice from Melissa Chaney, Director of Human Resources, and consultants from the executive search firm Ralph Andersen & Associates, unanimously voted to increase the salary range for the city manager position and to re-open recruitment at the new salary range level.

Their vote sought to modify “the Compensation Plan of the City Manager position to be competitive with market comparisons,” “Establish a salary range of the City Manager position up to a range of $217,200 to $241,300, with appointment to be made within the range based upon the qualifications and employment history of the individual appointed to the position,” and “establish a limit of up to 10% for additional monetary benefits (in addition to health/dental and PERS retirement benefits), to be negotiable.”

Melissa Chaney explained to the council that they wanted to make sure this conversation happened prior to the break to go over compensation and salary for the position, and they also wanted to make sure that the new council was seated so that the new council made this decision.

“We haven’t looked at the compensation for the position within the last three years,” she stated. She explained that the current language limits the ability for the recruiter to have conversations with some of the applicants “because of the salary limitations. The language basically stated it was tied to what the previous compensation was going to be. That was compensation that was three years old.”

Councilmember Rochelle Swanson explained the timing of the discussion. She said, “Had we had the discussion about the City Manager in our closed session at our first July meeting, then we would have had this conversation ideally tacked on this Tuesday night. I just don’t want the community to wonder why there was this rush – there’s not so much a rush as we’re going into break and you need to have this feedback and ideally this would have been on Tuesday night’s open and normal calendar.”

“We recognize that that would have been ideal ,” she added.

CM-Compensation

The city and consultants did a rate comparison that showed Davis’ City Manager compensation of $188,000 was at the bottom of the market.

As the staff report noted, “Working with the guidance of the Recruiter, staff conducted a labor market analysis of certain cities within an approximate 60 mile radius of Davis to determine the city’s competitiveness in the marketplace. Based on the survey information it is evident that the city’s medical/dental and retirement benefits are comparable to other cities in the region. The area where Davis is clearly not competitive is salary and additional cash-related benefits (i.e. deferred compensation, PERS pickup and auto allowance).”

The consultant suggested that the city should aim for between the 50th and 75th percentile in terms of compensation which would bump up the pay range from the current level to $217,000 to $247,000.

As staff wrote, “Given the desire of the Council to attract and select a highly qualified City Manager, the recruiter recommends using the 75th percentile of the market to establish the high end of the range, which would be $241,300. The additional benefits provided are widely varied.”

Councilmember Lucas Frerichs moved staff recommendation. Seconded by Rochelle Swanson.   Councilmember Frerichs argued that we currently offer the lowest pay in the region and we need to be able to be competitive with other markets particularly given our higher cost of living.

“Any city manager worth their salt is really 24/7 City Manager,” he said. “In Davis that is absolutely not the exception, it’s the absolute rule. Whoever has been and whoever will be the city manager is going to be someone who is facing such a wide range of really important tasks working on not only budgets and such but revenue issues and also economic development, innovation parks and stuff like that.”

Councilmember Swanson talked in terms of being these regional leaders. “The 24/7 is certainly an expectation on the city manager,” she stated. She added that “this is the right thing to do to ensure that we really get the best candidate pool including those that we have already seen and making sure that we give the community the very best that we can.”

Mayor Pro Tem Robb Davis said that, while he did not disagree with expanding the pay scale, he wondered if it would be worthwhile to maintain the lower limit. He said, “Does it keep it just a little bit more open so that maybe a candidate whose salary experience suggests we set the bounds lower, do we keep it open just in case?”

However, the consultant talked him out of such a notion, stating, “I think it would be very unlikely that you get a candidate, recognizing your cost of living, that would come here for that money.” He stated, “It’s not a real number. It’s not a number that practically that any candidate takes, unless you were literally hiring somebody that this was their first experience in terms of that role.”

He added, “That wouldn’t be a good fit for the city of Davis.”

Mayor Pro Tem Davis quickly agreed with the consultant.

Mayor Dan Wolk would add, “I think what Robb (Davis) is bringing up is an important point.” He noted that “during a time of budget crunch and we are getting concessions from our existing employees” he believes that this an important point.

However, in the end, he agreed with the consultant. “I will support this,” he stated. “Having a really good city manager can make a huge difference.   It is clear from the data that we are significantly below… other cities.”

“To get good people, salary is a critical part of that,” he continued. “Even though we’re in a period of tighter budget, even though we’re in a period where we’re making concessions… I think that it’s important that we have a good city manager at the helm.”

He said he hoped that the city employees would understand that a greater salary would give the city someone who can be a good city manager and be very good on employee morale issues.

The motion passed unanimously 4-0 with Brett Lee absent on a pre-planned trip. The city will now re-open the process over the break. Interim City Manager Gene Rogers took over in late April and he has until late October before his time as allotted by CalPERS under the retired annuitant policies would expire.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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39 Comments

    1. South of Davis

      D.D. wrote:

      > Wow. You can’t find anyone willing and able to run the
      > City for $188,000 per year.

      We would get more than a dozen qualified people interested at $175K.

      Whenever the firefighters get raises we always see a chart like the one David posted showing that we need to need to increase pay to “keep and attract good people” but they never mention that less than 1% leave at the lower pay and that they have 1000+ (unless they cut off the number of people they allow to apply) at the old lower pay.

      Does anyone know what Davis will be paying Pinkerton as he is “retired” making good money in Nevada?

      P.S. I noticed (on Zillow) that Pinkerton dropped the asking price of his Davis home by $40K this week (still asking $139K more than he paid for it) so he must be getting ready to move…

      P.P.S. Many on the “conservative” side have been trying to stop “government insiders” from paying their friends way more than they need to, but it has only been in the past few years when people on the “liberal/progressive” side seem to be learning that when you pay people WAY more than you need to there is less and less money to help the people that really need help (and you also screw the poor working class who keep paying more and more in taxes, fees and fines).

      P.P.P.S. I just went to http://transparentcalifornia.com and see that four guys I know in their 50’s (a little older than me and a little younger than Frankly) that worked for the same fire department are making more than a MILLION combined (average of a 1/4 MILLION each that goes up EVERY year) in pension payments. Anyone (on the right or left) that thinks this is sustainable needs to take a math class (and focus on exponential growthl)…

  1. Sam

    What is the actual cost to the city now for a City Manager at these higher wages? My guess is above $400,000. How do we expect someone to live on that? It really looks like they are getting their financial house in order before asking for more money to fix the roads.

    1. David Greenwald

      Why do you figure $400,000? The figures cited are total comp, not just salary. My opinion is a good city manager saves you at least $1 million. If the city was at the bottom of the rung, then that made it less likely they could get the candidate of their choice.

      1. Sam

        If they are only given salary, medical & PERS I com up with $334,000. Although most of the time these positions get other benefits like relocation packages, cars and other things. I don’t doubt a good City Manager can save the city money. I am just wondering if we only spent $150,000 could we get someone good enough to save the city $900K and come out ahead a little?

        Salary $240,000
        Underfunded PERS Contribution (24.4%) 58,000
        Medical & Dental Benefits 24,000
        Payroll Taxes 12,000
        Unfunded Medical During Retirement 0?
        Total $334,000

      2. South of Davis

        David wrote:

        > The figures cited are total comp, not just salary

        After he wrote above:

        “Establish a salary range of the City Manager position up to a range of $217,200 to $241,300″

        I’m pretty the city manager will be getting a “salary” (as David stated in his article) of $217-$241K with “total comp” (as summarized by Sam) well over $300K.

        P.S. Has anyone seen the actual job posting or know what “extras” they are offering like car allowance, housing allowance, moving costs or low interest loans. It is amazing how good “public servants” are at hiding what they actually get.

        When Janet Napolitano took over the UC system she got $140K “moving expenses” plus and “extra” $120K a year for housing (a lot but less than UC paid for Yudoff’s house):

        http://www.nytimes.com/2010/08/22/education/22bcyudof.html?pagewanted=all&_r=0

  2. Tia Will

    South of Davis

    “We would get more than a dozen qualified people interested at $175K.”

    On what are you basing this assertion ? What are you using to define the term “qualified” ?
    Are you including entry level managers as qualified ? How many years of experience and which specific responsibilities for a population of what size would you consider “qualified” ?

    We can certainly get more applicants for a surgeon’s position as we lower the salary. That doesn’t mean that you would want those willing to accept the lowest pay to operate on you !

    1. David Greenwald

      “We would get more than a dozen qualified people interested at $175K.”

      Obviously that wasn’t the case or staff and council wouldn’t have raised this issue after the initial application phase.

    2. Barack Palin

      And just like any doctor that would accept lower pay we also wouldn’t want a doctor who had a 2.0 grade average who got into medical school because of race quotas operating on you.

          1. Davis Progressive

            that’s not really how affirmative action works. i’m also not sure anyone looks at people’s grades. when i applied to law firms, no one asked to see my grades.

          2. Frankly

            Question: What do they call a doctor that graduates at the bottom of his class?

            Answer: A doctor.

      1. Tia Will

        BP

        Good heavens ! What in the world does race or affirmative action have to do with this article ?
        And to read some of the posts on the Vanguard one would swear that only minorities and liberals play “the race card” !

    3. South of Davis

      Tia wrote:

      > On what are you basing this assertion ?

      I have been involved (never paid) with politics, government and elections (working for Republicans, Democrats and even a Libertarian) for almost 40 years and I know quite a few people that have spent 20-40 years working full time in the public sector. I personally know a dozen people that would take the job as the Davis city manager for less than $200K (if you sell a crappy home in the Bay Area you can move to a mansion on Davis).

      > What are you using to define the term “qualified” ?

      Someone with 10+ years city government experience who would do as good or better a job than the last city manager….

      1. Davis Progressive

        “I personally know a dozen people that would take the job as the Davis city manager for less than $200K ”

        right. so why didn’t they apply when they had the chance?

        1. Frankly

          Experience and credential requirements manipulated in such a way to rule out many qualified candidates that would otherwise do the job for less.

          The fox is guarding the hen house.

  3. D.D.

    David, I really do understand your point of view but I probably would have chosen a different word than “good”. Sometimes very good people just can afford to take a lesser salary, for whatever their reason. Maybe some good people just don’t want to move into a smaller square foot home, if they decide to move to Davis & make $180,000 a year. It is their prerogative.

    1. Davis Progressive

      they’re not making $180,000 a year – that figure includes health care, pensions, etc. if you watched the council meeting last night, they basically said that they couldn’t get people at that rate after posting for the position.

      1. hpierce

        No… go to the city’s website… CM SALARY is $15,667/mo. (=$188,000/yr). That DOES NOT include employer share of PERS, medical, retiree medical, etc.

        MINIMUM proposed SALARY will be $217k AND potentially another $22k in ‘negotiated enhancements’. To that, you have to add the employer’s PERS contributions, medical ins. contributions, etc. “They are not making $180k (sic, 188K) a year” is an ‘un-truth’.

        1. South of Davis

          hpierce wrote:

          >They are not making $180k (sic, 188K) a year” is an ‘un-truth’.

          If people hear the “un-truth” enough they tend to believe it (why should anyone count a $1K/month car allowance or $10K/month housing allowance as pay anyway, they are just small “benefits” like a $20K/month pension at 50)…

  4. Davis Progressive

    i like the comments on the enterprise…

    jim leonard: “Hire a City Manager who already lives in Davis. I don’t want any more mercenaries like Pinkerton who are hired to do a particular job and then leave. The whole of Davis, not just the City Council, should impact him. NO MORE ANONYMOUS CITY MANAGERS!”

    pinkerton was a great city manager, unfortunately the firefighters tried to get him fired, he did the math and fled. but who does jim leonard think lives in davis that could be a city manager?

    wally: “This amid the financial woes this city has found itself in? It comes as no surprise bankruptcy is imminent! Where is the fiscal responsibility?”

    hey wally, where’s the beaver? you really think we’re going to go bankrupt with $30K additional spending? a good cm can save the city ten fold of that in a year, if not more. look how much money pinkerton saved the city.

  5. D.D.

    In one of my gov’t jobs years ago there was an undercurrent of resentment because a very few seasoned folks who held masters’ degrees were ahead of the pay scale from their newly hired managers. (the masters’ degree folks did not want to move into management, so they hired from the “outside”)
    I don’t know all the salary ranges for the City. Is it remotely possible that a city attorney could make more than the manager who is his or her boss? Is that even a remote possibiity of why a manger doesn’t like the compensation package offered?

    1. Frankly

      I am a professional manager… been one since I was 22 years old. At many times in my career I have managed people that were paid more than me. I do today. I have sales people that make more than me.

      Do you think coaches and managers of professional sports teams always have to make more than their players?

      Public sector and union labor is obsessed with pay grade sans any consideration of market value. This is why we see comp constantly jacked up.

      “it’s not fair!” That is the rallying cry.

      In the private sector we say “Who told you life was fair?” Then we say “We would like you to stay, but if you don’t come to work with a positive attitude relative to your pay and pay grade, you can quit or we will help you leave.” And we explain the market value of labor skills and talk about career planning and how a person can earn higher comp by advancing a career.

      But here is my thinking on the city manager comp.

      $250k per year is not out of market for a CEO with 375 employees and all the responsibility, and job risk, that comes with the job. In fact, I would be fine with a bit more.

      What is obscene is the value of all the perks and the benefits… especially the pension benefits and healthcare benefits. But also the car allowance and the housing allowance… and whatever else we can uncover and value.

      And that is the problem… the press and people focus on the base comp/salary and don’t get to see the total value of all the perks and benies.

      But here is what I would support.

      First, get rid of the extraneous perks and level the benefits to something much more inline with the market. The value of the defined benefit pension alone would knock out most of the other perks. And healthcare benefits are also beyond the Cadillac plan. And then the other post retirement benefits need to be included.

      Second, pay the city manager $300k in base, but hold $100k of that as an end of year performance bonus that is linked to the expected accomplishments for the year.

      You see, this is what is missing from the private sector CEO compensation comparison. The private sector CEO running a $100 million company with 375 employees would have close to 50% of her comp at risk at tied to specific performance metrics. The press never posts the report of a CEO getting a small bonus. In fact, the reason we don’t often hear about it is because that report if usually the CEO getting fired for lack of performance.

      But if the city manager is getting the job done as expected, he/she should earn the bonus.

      1. Don Shor

        For $188K, you can get someone that you promote into the city manager’s job, as Woodland did when they hired Paul Navazio from Davis (and I’m guessing he’ll be angling for a raise when his contract comes up, given those stats). If you want to hire in someone with current experience as a CM, you’ll obviously have to pay higher — that’s what the consultant’s report show. So the council is opting for experience.

        1. Frankly

          I forgot to add that we should also include a retention bonus.

          But if the profession of government did not allow people to retire in their 50s with six figure pensions, we might have some enterprising people develop a CM boot camp where a city could hire an outside management talent at a discount and then train them on the specifics.

          There are a lot of very smart and talented business managers that could come in and do wonders for this city, but they would lack the institutional knowledge for managing all of the functions of a city. But that can be taught.

          My thinking is that we would be better served with someone having out-of-the-box experience but that would be a quick study and would get up to speed quickly on the business of government.

          As an example Lou Gerstner was a former CEO of RJR Nabisco, and also held senior positions at American Express and McKinsey & Company… before he was hired to fix IBM. He did fix IBM. And part of the reason he did is that he wasn’t myopic about the business model because he didn’t grow up within the design of the legacy business model.

          This same approach can work in many businesses and organizations… getting in fresh talent to take a fresh approach.

          But then sometimes this does not work out so well as in J.C.Pennys and their Ron Johnson experiment. But then you fire that person and try again. J.C. Pennys did not want to try again, and brought back CEO Mike Ullman. That is the common pendulum swing back and forth that US business is known for.

    2. hpierce

      City Attorney’s “boss” is the CC, NOT the CM. Yes, City Attorney makes more than CC. In Davis, the law firm BB&K is the one the City has a contract with. Current City Attorney works for BB&K, and CC has recognized her as the City Attorney [perhaps a bit over-simplified].

      1. South of Davis

        David wrote:

        > That’s not accurate.

        Are you sure the city (that owns the DACHA Homes) could not let the new city manager live in one of them?

        P.S. When most of my union friends talk about “total comp” it almost never includes things like car allowances and/or free cars (like the nice fire department Explorer a friend gets), housing allowances, low interest loans (that are often “forgiven”) or per diems ($140 per DAY for the “public servants” in Sacramento)…

        1. David Greenwald

          I’d have to look at how they have the homes set up, but if they are low income homes, then a CM wouldn’t qualify. Also the DACHA homes are around 1000 square feet, don’t think you’re going to induce a Cm to live in that small a home.

  6. Tia Will

    David

    “Also the DACHA homes are around 1000 square feet, don’t think you’re going to induce a Cm to live in that small a home.”

    I wouldn’t be too sure. Jerry Brown lived in an apartment during his first term as Governor.

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