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City Managers Pensions Not Included In City Managers Compensation Survey

City Managers Pensions Not Included In City Managers Compensation Survey

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Published by wmartin46
As events in Bell, CA continue to reveal the depths of corrupt, heretofore unaccountable, local government in California, the League of Cities (a service organization for California City Governments) has released an informal compensation survey for around 90% of the towns and cities in the state. This survey is not "official", reporting to the public the amount of compensation that appeared in “Box 5” of the Federal W-2 form for Calendar Year 2009.

Other sources of compensation exist which are not found in this report.

This short paper (actually a letter to local San Francisco Bay Area Governments) suggests that a "total compensation model" needs to be created, which would identify future pension payouts as a component in yearly compensation determinations.
As events in Bell, CA continue to reveal the depths of corrupt, heretofore unaccountable, local government in California, the League of Cities (a service organization for California City Governments) has released an informal compensation survey for around 90% of the towns and cities in the state. This survey is not "official", reporting to the public the amount of compensation that appeared in “Box 5” of the Federal W-2 form for Calendar Year 2009.

Other sources of compensation exist which are not found in this report.

This short paper (actually a letter to local San Francisco Bay Area Governments) suggests that a "total compensation model" needs to be created, which would identify future pension payouts as a component in yearly compensation determinations.

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Categories:Types, Research, History
Published by: wmartin46 on Sep 23, 2010
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09/23/2010

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To
:Elected Bay Area Government OfficialsSan Francisco Bay Area, CA
Subj
: Pensions Not Considered In City Manager Compensation Survey
Date:
09.23.10Elected Officials:As events in Bell, CA continue to reveal the depths of corrupt, heretofore unaccountable,local government in California, the League of Cities (a service organization for CaliforniaCity Governments) has released an informal compensation survey for around 90% of thetowns and cities in the state:http://www.cacities.org/resource_files/29185.CompensationSurveyReleaseSept10FINAL. pdf 
League of California Cities Releases Manager Compensation Survey
Survey Demonstrates Compensation in Bell is Extreme Outlier 
Today the League of California Cities announced the release of a recentlycompleted voluntary International City/County Management Association(ICMA) survey of the compensation of city and town managers acrossCalifornia. The survey results are available on the League’s website atwww.cacities.org/opengovernment. Below is a brief summary of thesurvey’s key elements:
Of the 468 cities and towns with managers, 90 percent responded tothe survey, with more In order to secure a quick but complete response,city managers were asked to report the amount of compensation thatappeared in “Box 5” of the Federal W-2 form for Calendar Year 2009.Although not perfect, this is a uniformly available compensation figure thatincludes salary and a variety of fringe benefits (e.g., car allowance,deferred compensation, payouts of unused leave, life insurance greater than $50,000, etc.). It does not include health insurance or employer payments to defined benefit retirement programs, however. This latter information will be collected in the upcoming report from the StateController’s Office, which the League and CalICMA (the California Affiliateof ICMA) have both offered comments on to the State Controller’s Office.
Survey Results:
 
Pension Payouts Not Considered Compensation
The league of California Cities is not a public agency, and can not be expected to providea complete, full, accounting of the costs of City government. Nonetheless, these outlaysof public funds exist, and need to be identified for the public to fully understand the costof local government. While there are no doubt many “benefits” that City Managers enjoy, such as housingallowances, car allowances, and travel budgets, post-retirement “benefits” are notconsidered in these sorts of surveys. The most significant dollar amount that needs to beconsidered is the pension payout that Cities guarantee their employees. Rather than beingconsidered as “deferred compensation”, the current pension system sees these payouts as“defined benefits” (without any consideration for the magnitude of the “benefit”).Given that the Compensation Survey provided by the League of Cities identifies anumber of Bay Area City Managers/Executives as having salaries over $300,000, whatkind of post-retirement “benefit” (ie-pension) has been offered to these already highly- paid government employees?The following table provides estimates of the payouts for City Managers/Executivesmaking at least $300,000 a year at the time of retirement:
ExitSalaryMultiplie
$300,0002.50% 
 Years of Pension Payouts Years of Employ-mentBasePensionPayout10-Years20-Years30-Years
10$75,000$837,654$1,858,749$3,103,45820$150,000$1,675,307$3,717,498$6,206,91630$225,000$2,512,961$5,576,246$9,310,374
In this example, the table estimates the payouts for an employee retiring from agovernment agency that offers a 2.5% per-year pension. The table points out that pension payouts are dependent on the number of years worked, and the lifetime of the employeeduring retirement. The “multiplier” could be larger, or small, than the 2.5% used in thisexample, based on the pension program selected by the government agency andCalPERS. Finally, COLAs have been included in the payout calculations.The yellow zone in the table highlights pension payouts that most CityManagers/Executives might expect to receive, based on their possible years of employment and their possible lifetime after leaving active employment. As can be seen,retired City Managers/Executives can easily expect to see between $3.7M and $9.3M inretirement. Yet, “compensation surveys” do not include these dollars, even though it is possible that these pension payouts are larger than the retiree received from hisgovernment job when he/she was actively working.

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