HomeMy WebLinkAbout12-06-2011 C2 RiceFrom: Kevin P. Rice fmai Ito: kriceslo @gmail.coml
Sent: Monday, December 12, 20111:29 PM
Subject: RED FILE: SLO CITY SALARY CUTS: $0.00
SLO CITY SALARY CUTS: $0.00
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A recent P.R. blitz from the City of San Luis Obispo lauded $807,000 in compensation reductions
voluntarily taken by top management. Our local spoon -fed media then dutifully regurgitated the
numbers put forth by the city. Citing City Manager Katie Lichtig's flagship salary of $221,500 as the
standard of measurement, reports stated the City will realize an annual savings of $39,500 due to
reductions taken by Ms. Lichtig alone.
"This is absolutely leadership, and it's absolutely a step in the right direction," beamed City Manager
Katie Lichtig during a KSBY interview two weeks ago.
But if you think Lichtig is taking a $39,500 cut in salary, you're dead wrong; and you failed to discern the
purposeful weasel wording used by the city to mislead. The city is keenly aware that subtle word choices
such as "savings" and "compensation reduction" are easily be misconstrued as a cut in salary.
The salary cut actually taken by our city manager? $0. That's right. Zilch.
So let's examine how an $807,000 savings is possible without salary cuts:
First, management employees will begin paying their own 8% member contribution toward their
pensions. Presently the city pays both the 8% member contribution AND the 20% city contribution. For
Lichtig, this amounts to around $18,000 a year. This is a very real savings to the city and a very real cost
to Ms. Lichtig, but it is most definitely not a cut in her $221,500 salary which remains in black and white
in her latest contract.
Second, a $5,400 savings is attributed to our city manager giving up her $450 monthly car allowance.
Except she already gave it up for 2011. The new two year contract simply extends this "give up" for 2012
and 2013.
Finally, management employees theoretically gave up the ability to cash in unused administrative leave
hours at the end of the year.
Except, once again, this was a benefit that was already given up. I find it misleading when extensions of
prior cuts are posed as if they are new cuts. In 2013 will there be another re -run implied to be another
$20,000 cut?
Katie Lichtig earns 80 hours of administrative leave annually. At a pay rate of over $100 per hour,
cashing in her unused leave hours could amount to thousands of dollars. But management didn't lose
any administrative leave hours. Employees can still take days off work which costs us an equal amount in
lost time on the job. It is a mere accounting trick to call this a reduction.
TRANSPARENCY
The agreement between managers and the city truly will save a good deal of money and it's a small step
in the right direction. I don't oppose it, yet I feel it didn't go far enough. Council members Kathy Smith
and Dan Carpenter also didn't think the reductions are adequate.
If we only count the truly new change to pensions, the real reduction is likely around $300,000, not
$800,000.
What I find outright offensive is the clever choice of words used by the city. The public fell into believing
a $39,500 savings came from a 20% cut to our city manager's pay.
One public commenter wrote, "It's about time."
Citizens have even been upset with council members Smith and Carpenter, believing they voted to
protect Ms. Lichtig's compensation.
Quite the opposite is true.
Still further, the city should have cited Lichtig's overall compensation of $311,252 instead of citing her
lower $220,500 salary which wasn't even reduced.
WHERE DO THE LABOR UNIONS STAND?
Missing from the discussion were the city labor unions and represented employees. We've frequently
heard bargaining groups denigrate high management salaries in the past. It would stand to reason, then,
that labor representatives might have joined with council members Smith and Carpenter in asking for
more from management.
But there's an interesting paradox at play here. Labor representatives know the city will be turning to
them next. It is in their interest that managers do not take any pay reductions. And it is arguably in their
interest for management employees to be paid as highly as possible, lest labor groups lose valuable
leverage. Not that I believe labor wants overpaid management, but a rising tide does raise all ships
(while those without a boat drown).
CONCLUSION
Almost overlooked in this story is the question of propriety in regards to City Manager Lichtig appearing
on KSBY prior to the council vote to laud her own contract. Isn't this politicking in her own interest while
on duty? Am I the only one who found that to be somewhat egregious?
I also don't buy Lichtig's claim of "absolute leadership" since she didn't set the bar herself -- instead she
turned to management employees to make an offer which she then went along with. Leadership would
have been offering an aggressive reduction for herself, then challenging other management employees
to follow suit.
While I can agree that these cost reductions are beneficial, I also agree with council members Smith and
Carpenter that it isn't enough.
Worst, however, is the intentional misleading of the public, the failure to clarify new cuts versus old, and
the failure of local media to ask questions.