In a nod to the country’s economic turmoil, President Barack Obama's first public act in office Wednesday was to freeze the salaries of high-paid White House aides who make over $100,000 a year.
—Associated Press, Jan. 21
“Proceed with caution” was the advice that City of Berkeley Budget Manager Tracy Vesely offered the council during its Dec. 8 budget work session. Citing “the failure” of the nation’s banking sector, California’s “almost $28 billion deficit”—it’s now ballooned to over $40 billion—and a $2 million decline in Berkeley’s General Fund monies for the first quarter of Fiscal Year 2008–09,Vesely said that “the city will again be confronted with some difficult choices, as budget cuts are unavoidable.”
Mayor Bates’ response? He’s asking the council to increase City Manager Phil Kamlarz’ monthly salary from $17,903 to $19,335—an 8 percent raise—effective Feb. 8. That’s a jump from $214,836 to $232,020 a year. The money is to come from the General Fund.
The rationale for the proposed raise, as stated in Item 4b.11 on the Agenda Committee’s Jan. 20 agenda, cryptically entitled “Salary Adjustment for the City Manager,” is “to bring [Kamlarz’] salary to the median of City Managers in comparable cities in the Bay Area.”
In fact, the mayor is seeking far more than an 8 percent monthly raise for the C.M. He’s asking the council to okay a whole new and higher range of salary steps—a.k.a. a reclassification. That’s because at $17,903 a month, Kamlarz is pulling the maximum “actual monthly salary” for a Berkeley city manager. Supposedly, the only way he can get more is if the city manager slot is reclassified.
But Kamlarz may already be getting more than $232,020 a year from the city. Exhibit A, attached to Item 4b.11, indicates that his “adjusted annual maximum”—his “actual monthly” salary plus some benefits—currently comes to $241,156. So the city manager’s current $17,903 “actual monthly salary” isn’t really actual.
In any case, Kamlarz may be getting more yet. The rule of thumb is that city of Berkeley employees’ benefits equal at least 50 percent of their salaries, so the C.M.’s current total compensation may well be over $300,000 a year. His full benefit package isn’t laid out in the mayor’s report.
Bates’ report also fails to mention the annual 2 to 2.5 percent cost of living increases that are charted on another (unnumbered) attachment. Kamlarz would receive the first of these so-called COLAs on June 28, a mere four months after his initial raise. By Dec. 25, 2011, his “adjusted annual maximum” salary would rise to $282,920 (not counting additional benefits).
Last May, Daily Planet reporter Judith Scherr wrote that Kamlarz was earning “about $208,000 … plus about $100,000 in benefits” and was “asking for a wage hike from a City Council subcommittee evaluating him.” (The mayor’s report mentions no such quest or council subcommittee charged with evaluating it.) The C.M. is now earning at least $232,020 a year, so in the past eight months, his compensation has gone up at least 11.5 percent.
The 11.5 percent increase apparently comes from the 3.5 percent “cost of living adjustments and benefit improvements” plus a “Longevity Pay Differential” (percent unspecified) that the council, acting on the C.M’s recommendations at its Oct. 7 meeting, gave to Kamlarz and other “Confidential and Executive Management” employees who belong to “Representation Unit Z-1.” The Longevity Pay Differential is available to employees who have more than 25 years of benefited service.
The council approved these raises on consent, which is to say, without discussion. If on Jan. 27 the council approves Bates’ current request (which is also designated for a “consent” approval), then since last May Berkeley’s city manager will have received a salary increase of 19.5 percent.
In defense of the latest proposed raise, the mayor argues that Kamlarz’ current salary is 8 percent below the median of salaries paid to city managers in fifteen other Bay Area jurisdictions. Bates asserts that “the Berkeley city manager position is equally, if not more challenging, than most of the city manager positions surveyed,” given “the size of city of the Berkeley budget and staff, the range of services provided, and the degree of community involvement.”
The mayor also cites precedent: “In setting employees’ salaries, it has been the council’s policy to compensate employees at the median of comparable jurisdictions.” This is true. The same rationale was used to justify raises the council granted most City of Berkeley employees in fiscal year 2007–8.
Why, given the dire state of the economy, is the mayor proposing a raise for anyone in City Hall, least of all, for an employee who’s already making nearly a quarter of a million dollars a year (and possibly more)? Is Berkeley in a municipal arms race, with employee pay replacing weapons? What happened to notions of fiscal austerity, belt-tightening, living within our means?
Before answering these questions, I’d like to take a closer look at the data that the mayor had city staff assemble to support his proposed “salary adjustment for the City Manager,” and specifically at Exhibit A, a chart entitled “City Manager—Compensation Survey/October 2008.” (We can understand why the mayor waited until after the November election to go public with his request to increase the C.M.’s pay.) The survey lists 16 cities, each city’s budget, its number of full-time employees (FTEs), and the actual monthly salary, adjusted monthly salary, and adjusted annual maximum salary currently received by each jurisdiction’s city manager.
I have reconfigured the chart, listing the cities in ascending order of their city managers’ adjusted annual maximum salaries. Drawing on the latest figures from the U.S. Census Bureau, I have also added each city’s population and median household income.
Far from supporting the mayor’s proposal, the survey’s findings raise big questions. Why on earth, for example, is San Jose on the list? With a population of 929,936, an annual budget of $3.7 billion and 6,992 city employees, how can San Jose possibly be compared to Berkeley? Ditto for bankrupt Vallejo, whose city manager gets $320,436 a year (second highest among the 16 cities surveyed). At $342,903, San Jose’s city manager is the top earner here. Were San Jose and Vallejo included to jack up the median salaries?
Indeed, what were the criteria of “comparability,” to use the mayor’s term, that determined which cities were surveyed? How can Palo Alto, a rich city where the median household income is $90,377, be compared to Berkeley, where the corresponding figure is $44,485?
Bates cites the number of employees that Kamlarz has to manage as a rationale for increasing his pay. Berkeley taxpayers might wonder: Why does our city, with a population of 101,555, have 1,660 city employees, while Daly City, pop. 101,005, has 525; Hayward, pop.140,607, has 900; and Fremont, pop. 140,606, has 912? Does Berkeley’s conspicuously large city workforce—by far the third largest on the list (San Jose and Oakland are respectively #1 and #2) and much bigger than workforces of cities with comparable populations, signify better management or worse?
In short, the numbers suggest that cities vary so greatly that there is no firm ground on which to base any city manager’s compensation, except what the market, i.e., taxpayers, will bear.
To understand the push to raise Kamlarz’ pay, we have to look elsewhere. The Berkeley C.M. is nearing retirement. If the council approves the requested reclassification, the city will be able to attract a successor who demands big bucks.
Here’s another explanation. In school we learned that in the early 20th century, the city manager system was instituted as an alternative to corrupt political machines. From now on, Americans were told, their cities would be run like big businesses, not personal fiefdoms based on patronage and personal allegiances. City managers and their staffs were disinterested civil servants, who above all prized competence and efficiency.
The Berkeley situation belies this roseate image. In recent years City Manager Kamlarz has repeatedly identified the control of labor costs as a, if not the, crucial factor in ensuring the city’s fiscal stability. Yet he has just as regularly sought and received council approval for substantial raises for city employees. Now, at a time of extreme financial instability, he has apparently embarked on a campaign to raise his own compensation by tens of thousands of dollars. (According to City of Berkeley Human Resources Director David Hodgkins, the Longevity Pay Differential was first instituted for Unit Z-1employees in June 2008.)
Though character is always a factor, the root of the problem isn’t Kamlarz; it’s the city manager system itself. The C.M. is in an inherently contradictory position; he’s at once the top administrator and the top employee. He needs to seek the good of the city as a whole, but he also needs to command the loyalty of his subordinates; one of the surest ways of doing so is helping them maximize their earnings, even when such assistance conflicts with his own budgetary recommendations (which it regularly does). The more he makes, the more they can justifiably claim for themselves.
In principle, the city manager follows the council’s direction. But when it comes to budget and finance, practically speaking, he leads the council by the nose. Mind you, they are willingly led.
I predict that on Jan. 27, the council will unanimously approve an 8 percent raise for Kamlarz—on consent.