Bay Area city managers highly paid regardless of city size, raising questions

Are you paying through the nose for your city manager — or getting a relative bargain?

Is your top local official the $433,000 guy at a medium-sized Bay Area city — that would be Palo Alto — whose compensation dwarfs the cash and benefits of his contemporaries? Or is she the $294,000 top executive in a city more than double the size — think across the bay to Hayward — with many more challenges? Or the $297,000 manager in one of the area’s smallest cities — Clayton — who justifies his compensation, partly, by pointing out that he does his own filing and takes out the recycling?

Did your manager cost every living soul in town the equivalent of $150 last year — of course, in cemetery capital Colma you oversee a lot of dead folk, too — or less than $2 per person in San Jose, the region’s biggest city?

Don’t know? We’re here to help. Today, this newspaper is making the dollar amounts available in a database of hundreds of thousands of public employees’ compensation costs at www.mercurynews.com/salaries. But trying to make sense of the numbers is no easy task.

Our first-of-its-kind examination of managers’ pay and benefits, using data collected from 104 cities and towns in the greater Bay Area, indicates that compensation doesn’t depend on the factors you might imagine — such as the population of a city, the size of its workforce, or, seemingly, the challenges of running it. Instead, a scattershot pattern emerges across the region, with a manager’s pay, benefits and extra sweeteners determined as much from what they can negotiate from elected officials as from hard facts.

Just about every city manager has convinced their city councils that they’re worth more than the governor. Of the 104 cities analyzed, all but five — Rio Vista, Dixon, Gonzales, Escalon and Sebastopol — compensated their manager or administrator more than the $213,000 that Gov. Jerry Brown received in cash and benefits to run the Golden State last year. (Brown’s 2014 compensation data, released by the state Controller’s Office last week, doesn’t include the cost of insurances such as life and disability, which add insignificant amounts to compensation totals).

“Getting paid more than the governor gets paid is ridiculous. And getting perks that the taxpayers can only dream of makes it worse,” said David Kline of the California Taxpayers Association. Taxpayers, he said, should “take a long look at this and remember they vote on the people who set these salaries.”

The random discrepancies between cities also “don’t make sense,” he said.

Consider San Francisco and Vallejo. The world-famous City by the Bay has seven times more residents and 70 times more government employees than the recently bankrupt Solano County city, yet Vallejo City Manager Daniel Keen raked in almost $70,000 more than San Francisco City Administrator Naomi Kelly did last year.

Even the region’s small towns pay healthy sums for comparably tiny jobs. In tony Monte Sereno, Brian Loventhal was compensated $235,000 to supervise the region’s smallest city government — eight people plus himself. If San Francisco’s Kelly got paid at Loventhal’s rate per worker, her 2014 compensation would have totaled $997 million.

Keen said he “took a risk” by leaving a stable job in Concord in 2013 for Vallejo, which had just emerged from bankruptcy and “had something like 10 city managers in 15 years.” He sought — and received — generous compensation in return and has stabilized the city, he said.

In all, 43 percent of the cities examined paid more than $300,000 each to compensate managers last year, and the average for all city managers was just below that ($299,000). Politically turbulent Oakland, which had three people in the top spot, spent $569,000 on their compensation combined over the course of the year. One of them, Deanna Santana, departed for the top job in Sunnyvale last year, racking up a combined $543,000 in compensation from the two cities, including a $222,000 payout of her remaining Oakland contract.

San Jose, the region’s biggest city, paid the most to one person, Edward Shikada, who received $446,000 in cash and benefits before resigning under pressure in December. He now works for last year’s third-highest compensated city manager: Palo Alto’s James Keene, whose $433,000 in salary and benefits included $52,000 in deferred compensation in addition to the city’s $68,000 contribution to his future pension. Data show 53 of the 104 cities paid into such 401(k)-like accounts for their managers, a negotiated, optional sweetener, but Keene received almost twice as much deferred compensation as any other city manager in the survey.

“City managers are a little club. It’s tough to break in, but once you do, you’re golden,” said Stanford public policy professor Joe Nation, who studies municipal government costs.

For some city managers, the newspaper’s survey revealed something else: frustration.

“Do I think I am underpaid? Hell, yes,” said Fran David, the city manager of Hayward in Alameda County, the region’s seventh-largest city. Her 2014 compensation was $294,000 — a relative bargain given Hayward’s size.

Compare David with Gary Napper, manager of Clayton in the Contra Costa County foothills of Mount Diablo, the 80th-most populous city analyzed. His 2014 compensation topped David’s by $3,000.

“Am I going to be your poster boy?” asked Napper.

He insisted his job equals the size of his pay: Since Clayton is small, he has to be more involved than managers in bigger cities. He negotiates employee contracts, while others have human resources managers. He does his own filing and writes his own reports. “I even take the recycling out at City Hall.”

Napper said he was unsure what other cities would be a fair comparison to Clayton. Its mayor, David Shuey, said the council looks at other Contra Costa cities when considering Napper’s compensation and pays what he called premiums to keep him from leaving. “We are constantly at risk of being raided.”

So is Napper overpaid or is David, as she says, underpaid?

David scoffed at the idea that small-city managers should be in her pay range.

Hayward has slashed budgets and employee ranks to deal with budget problems and soaring pension contributions. “We’re trying to be very aggressive with revenues and expenditures,” David said. “It’s really hard for people at the top to say ‘give me a raise’ when others aren’t getting them.”

Back across San Francisco Bay, James Keene’s $433,000 total compensation in Palo Alto is the envy of other managers, David said. Palo Alto’s “comparative size … and apparent lack of operational complexities compared to other jurisdictions might be a basis to question” how much the city spends on Keene, she said.

Keene declined to be interviewed despite several attempts. Mayor Karen Holman didn’t return messages.

Keene’s pay and benefits also exceeded those of other Silicon Valley cities with more residents, such as Mountain View, Milpitas and Sunnyvale.

Compensation “can’t be determined by an algorithm,” said Chris McKenzie, executive director of the League of California Cities. “It’s a local decision. If you have the desire to attract someone with more qualifications, you are going to pay for it. You want people who know a lot more than the minimum.”

But to taxpayers such as Hussein Afifi, 57, a Union City resident, showering city mangers with big compensation packages is money that could be better spent on services or training employees who keep cities running.

“We’re throwing money at them and treating them like gods,” Afifi said. “They’re just managing people.”

Follow Thomas Peele twitter.comthomas_peele. Follow Daniel J. Willis at http://twitter.com/BayAreaData