City Manager Style Government.
I
have long since concluded the American voter has lost control of the U.S.
government, State government and probably county government. On the other hand, one might expect city
government to reflect a reasonable and calm determination to do what is best
for the local community because it involves local issues.
Most
small communities cannot afford to pay full time politicians to run its city
affairs like Los Angeles or San Francisco; instead, the "City Manager" style of
government is utilized extensively with the idea a small city can hire someone
possessing expertise to handle the many details of city management on a full
time professional basis. It is a cheaper
alternative - so what could possibly go wrong?
Typically,
a City Manager would insure his city's streets, water, sewer, and the general
infra-structure is properly maintained.
Of course, the city requires fire and police protection along with city
offices which include finance, building inspection and planning. But most of all, the City Manager must do all
of this while balancing the City's budget with expenditures not exceeding
income.
Obviously,
there are possible problems related to placing a Chief Executive Officer (CEO) in charge of all city affairs. To begin with, the average citizen has no say
in what a city manager actually does.
The City Manager is accountable only to elected officials such as a
Mayor and City Council. Individual
comments or complaints concerning city affairs can only be directed to these
elected officials much the same as stockholders of a large corporation might
comment to its Board of Directors.
Additionally,
under most local jurisdictions, the Mayor and City Council members are poorly
paid and hold down a job elsewhere to make a living. Many small communities pay city council
members a modest $200. per month and the Mayor a little more. These "part
time" council members are often required to make million dollar decisions
with respect to their city's future.
Accordingly, they must rely upon data and input from other sources
within the city to reach a decision on budgetary and city expenditures; hence,
this leads to a situation where "non-elected" persons have a greater say in the
direction of the city than the citizens themselves.
But
there's more. The City Manager
negotiates city contracts which, by necessity, include employee contracts. Employee contracts are directly related to
wages and benefits which could impact the city manager's financial situation
resulting in a possible conflict of interest - some compare this to placing a
"fox in the hen house."
It
was in July of 2010 that a Bell City news item revealed its City Manager was
pulling down $787,637 per year and additional benefits rounded out his annual
income to nearly $1.5 million. The
assistant City Manager was making $376,288 and the police chief $457,000. And finally, the five City Council members
were paid $94,000 per year. A full scale
investigation followed the publication of these salaries, but the disturbing
fact remains the circumstances surrounding the Bell City scandal was possible
because the average citizen either did not bother to look after city affairs,
or simply did not care.
Even
so, advocates of City Manager style government point out the City Council
meetings, which are open to the public, provide detailed information concerning
city affairs as well as an opportunity for public comment. In reality, the information provided is in
the form of written material which is hundreds of pages in length and requires
considerable study time. The public is
encouraged to read all this "stuff", but it is more likely they will defer to
their elected officials which, as previously mentioned, can result in
situations similar to Bell City.
The
City Manager is in charge of contract negotiations with employee union
representatives. Nearly all California
cities climbed aboard the CalPERS pension program. CalPERS does not calculate its pension based
on actual contributions made, as is the case with social security, but instead
offers the reverse calculation whereby the participant can be awarded
retirement based upon a percentage (2 or 3%) times an average of his highest
income years, times the number of years served.
An actuary is then employed to determine how much must be contributed to
the fund in order to pay for this retirement when it comes due.
There
is no "cap" limiting pension benefits.
Some public jurisdictions have allowed overtime pay, accumulated sick
leave and even vacation time to be added to the final pension calculation. The Sacramento Bee reported in June, 2011,
that nearly 9,000 retirees in the state currently receive $100 thousand or more
in annual benefits.
Many California cities agreed to pay 100% of CalPERS
pension costs, all increases in health benefits, uniform allowances, and other
benefits including continued use of the 3@50 pension formula for public safety
and 2@55 for other staff members.
To
be fair, much of these employee benefits were granted at a time when CalPERS
made claims of 7 to 10 percent returns on member investments so employee
contributions picked up by the city were considered a reasonable alternative to
providing an increase in salaries and wages.
By 2009 CalPERS investment schemes were in the toilet. Those cities agreeing to pay the modest 7% to
9% pension cost of employees were now required to pay a massive 30% pension
cost plus a pension obligation bond which added another 10%. The health benefits paid by many cities
ballooned to as much as $10 thousand per employee per year. Moreover, management contracts for many small
cities compare favorably with what Governor Jerry Brown and his staff receive for
running the entire state.
The
Mayor and City Council members must rely upon data and input from other sources
within the city to reach a decision on budgetary and city expenditures;
accordingly, those staff members benefitting from these pension & salary
benefits would be reluctant to advise city council members that approval of
these contracts could lead to financial disaster - after all, self-interest
trumps financial responsibility.
It
is understandable why public employees have joined this pension program because
it offers a huge return with a small percentage cost. The financial impact on a city's general
fund, and resulting huge deficits, is not limited home town cities but includes
County and State budgets as well.
According
to a Contra Costa Times editorial (April 8, 2013): ". . .CalPERS and CalSTRS
(State Teachers) have a common thread: They each lack sufficient money to pay
for pension benefits workers have already earned." Additional editorial remarks point out that
both of these pension funds have a combined $173 billion unfunded liability.
The
real question is why would the State, County or City get involved? Private enterprise would never consent to a
plan requiring contributions with no designated limits. The city of Pacific Grove has been attempting
to adjust or eliminate the CalPERS pension program for several years, but the
outright termination of CalPERS would cost $30 million and the city could not
afford that expense. Critics of PG's
pension plan argue the expensive police pension benefit package, which provides
for 3 percent of salary for each year of service at age 50, was illegally
approved by the city in 2002 and should have been put up for public vote.
It
should be noted the CalPERS Pension Board is dominated by public employees who
will benefit from the pension system and the other board members include
Democratic appointees who receive significant campaign contributions from
government labor unions.
According
to some financial actuaries, any existing formula to off-set the deficit will
not be enough because California's public employee pension system could have
unfunded debt exceeding the aforementioned $170 billion by 2020.
The
alarming reality is, the California taxpayer gets to pick up the tab for any
losses or shortfalls to the system.
Governor
Brown, in an attempt to limit pension costs, supported measures to limit
pensions to no more than 80% of highest wage.
Additional measures raised the retirement age, and prohibited overtime
pay, vacation pay and sick leave from being counted as part of qualifying income.
This, of course, is like closing the barn door after all
the animals have fled because all those persons under the old pension formula
will continue to impact existing city, county and state budgets. Several California cities have already filed
or been through a bankruptcy proceeding.
When considering whether it is wise to install a "City
Manager Style" government - one can only respond that no matter what type of
government a local community selects, there is no solution that does not
require the public's surveillance of their political body.
"The price of Liberty is eternal vigilance .
. ." - Frank Birch