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Paychecks and Balances? At the end of 2002, a combination of raises and bonuses resulted in the following annual salaries for these city officials: (left to right, top) Gerald Silva, City Auditor, $176,006; Teresa Guerrero-Daley, Independent Police Auditor, $143,872; William M. Lansdowne, Chief of Police, $188,037; Manuel P. Alarcon, Fire Chief (retiring), $177,894; (left to right, bottom) Jane E. Light, City Librarian, $164,674; Frances Winslow, Emergency Preparedness Director, $101,797; Susan Shick, Redevelopment Director, $210,991; Del Borgsdorf, City Manager,$221,732.

Public Consumption

As private industry cuts salaries and slashes budgets, the city of San Jose handed out more than a million dollars in pay increases to its managers at the end of 2002

By Najeeb Hasan

WHILE warnings of budget deficits have San Jose scrambling to salvage city programs and services (some forecasters say that nearly all the city's departments could face cuts of more than 15 percent), the city's top employees, so far, haven't felt the economic pinch.

If anything, the city's top dogs are seeing their paychecks getting fatter than ever.

Out of 39 high-level city employees who were eligible for performance-based salary increases last year (a list that includes heads of city departments and the city manager's senior staff), only two did not merit raises.

As for the other 37 employees, the city doled out $328,213 worth of salary increases among them, with the individual raises ranging from between 5 and 7 percent of base salaries. Most of the raises were approved by City Manager Del Borgsdorf, while some went through the San Jose City Council.

Borgsdorf's own $12,551 bump was council approved, though Borgsdorf's case (along with five other council appointees) was unusual in that his performance reward will not be added on permanently to his original base salary of $209,186.

In all, 95 percent of eligible employees in the top tier qualified for what the city describes as a "discretionary pay increase based on performance."

"I'm not going to be too critical of it, because I helped put that system in place," says former City Manager Les White. "But in my time, there were some who got it; some who didn't get it; some whose salaries were decreased. I don't think the rate of those who got it was that high. They shouldn't automatically get it. [Ninety-five percent] sounds like a pretty dramatic curve--if you look at a bell-shaped curve that's skewed to one side. But that's just me speaking without facts."

Moreover, the city had enough in its coffers to dole out discretionary performance increases to its two lower tiers of senior staff as well. Eligible employees in the city's executive staffs (another 65 employees) and in the city's management staffs (at least another 629 employees; totals for five departments were not available) received a total of $208,823 and $406,729, respectively, in performance-based salary increases.

The performance-based pay increases were developed by the city to increase the salaries of the city's senior staff, who, unlike the city's labor force, do not receive step or cost-of-living pay increases. Typically, labor contracts are negotiated by bargaining groups that determine the amount of the step and cost-of-living increases. However, those employed at the management levels may or may not get cost-of-living increases and step increases.

"As an alternative," explains public outreach manager Tom Manheim (whose salary was boosted from $115,555 to $123,644), "each manager is evaluated for quality of work performance."

So does that mean San Jose has a staff that has done a bang-up job, across the board?

In addition to the $214,000 in pay increases for department heads, raises for the senior staff of the city manager's office alone totaled $101,734.

Including Borgsdorf, the San Jose's city manager's office top level of senior staff consists of at least 13 employees. Their total combined compensation at the end of 2002 was $1,955,687. This, does not include the salaries of the city manager's executive and management staff, two lower tiers of management which earned totals of $135,395 and $1,503,846, respectively. The average salary among the lowest tier of management in the city manager's office, which has 17 employees who were eligible for "performance pay" increases, is now $88,426.

By comparison, in San Diego, a city whose government and population are similar to San Jose's and which manages a $1.2 billion budget (San Jose's budget is $3.3 billion), the city manager's office's executive team, not including the police chief and fire chief, has only seven members. Meanwhile former City Manager White says he remembers employing only seven or eight senior staff members.

Neither Borgsdorf nor any of his 12 senior assistants were available for comment or explanation on Friday.

The city's trend of rewarding its executives contrasts with the trends in the private sector.

"There's obviously a lot of belt-tightening," says Anthony Marek, director of communications for the Silicon Valley Marketing Group. "It's been a tale of two valleys: best of times, worst of times. During the boom, we were popping the champagne; now we're feeling the pain."

As Silicon Valley's economy has slumped, companies are rewarding their executives less.

"In terms of cash compensation, there are definitely changes," says Gautam Srivastava, a pay consultant for Mercer Human Resource Consulting. "You're seeing fewer salary increases. Salaries are cut to reflect the downturn. In other cases, they're just being kept constant. It's not atypical for executives to earn less than their target performance bonuses."

Srivastava, whose consulting firm operates in a 140 cities internationally, went on to say that if a company is doing well, which some are, it would be expected that executives receive bonuses.

"But failing companies, for instance, a banking company--they're not doing it," he says.

And as for a city giving performance raises to 95 percent of eligible employees? "That is strange," he says. "In comparable situations in the private sector, it is very rare for 95 percent of your executives to get performance raises. Ninety-five percent is very rare."

City of San Jose Senior Management Raises and Salaries 2002
Name Title Original Salary 2002 Raise New Salary
Susan Shick Redev. Agency Director 202,875 8,116 210,991*
Richard Doyle City Attorney 195,533 11,732 207,265*
William Lansdowne Chief of Police 175,736 12,302 188,037
Ralph Tonseth Aviation Director 173,130 12,119 185,249
Manuel P. Alarcon Fire Chief 166,256 11,638 177,894
Gerald Silva City Auditor 166,043 9,963 176,006*
Scott P. Johnson Finance Director 164,302 11,501 175,803
Wandzia Grycz Chief Information Officer 164,302 9,858 174,160
Stephen Haase Planning, Bldg. Code Enfcmt. Director 161,005 9,660 170,665
Jane E. Light City Librarian 153,901 10,773 164,674
Katrina Allen Public Works Director 164,000 ----- 164,000
Larry D. Lisenbee Budget Director 151,632 10,614 162,246
Leslye Corsiglia Housing Director 150,001 10,500 160,501
Carl W. Mosher Environmental Services Director 149,565 10,470 160,035
Sara Hensley Parks, Rec. & Neigh. Svcs. Director 158,517 ----- 158,517
Alejandro Gurza Employee Relations Director 140,047 9,803 149,850
Nancy M. Johnson Conventions, Arts & Ent. Director 140,578 8,435 149,013
Paul Krutko Economic Development Director 140,010 8,401 148,411
Jose Obregon General Services Director 135,918 8,155 144,073
Teresa Guerrero-Daley Independent Police Auditor 135,728 8,144 143,872*
Edward F. Overton Retirement Services Director 130,083 7,805 137,888
Tom Manheim Public Outreach Director 115,555 8,089 123,644
Nina S. Grayson Equality Assurance Director 113,963 6,838 120,801
Patricia O'Hearn City Clerk 117,615 2,352 119,967*
Frances Winslow Emer. Preparedness Director 95,137 6,660 101,797

Business As Usual: Despite a budget shortfall of at least 15 percent, senior management for the city of San Jose received raises and salary increases totaling $214,000 at the end of 2002.

*Total salary for 2002 reflects one-time increases for this fiscal year, not a raise.

San Jose City Manager's Staff Raises and Salaries 2002
Name Title Original Salary 2002 Raise New Salary
Del Borgsdorf City Manager 209,186 12,551 221,732*
Darrell Dearborn Deputy City Manager 177,619 12,433 190,052
Mark R. Linder Assistant City Manager 178,503 10,710 189,213
Peter L. Jensen Asst. to City Manager 96,123 4,806 100,929
Katherine V. Winer Deputy City Manager 160,718 11,250 171,969
Terry E. Roberts Deputy City Manager 159,164 11,142 170,306
James N. Holgersson Deputy City Manager 153,454 9,207 162,661
Jesus Nava Jr. Deputy City Manager 132,508 6,625 139,134
David Sykes Asst. to City Manager 110,614 7,743 118,357
Dorothy W. Disher Asst. to City Manager 102,594 6,156 108,750
Cynthia E. Bojorquez Asst. to City Manager 99,812 5,989 105,801
Deanna J. Santana Asst. to City Manager 95,728 6,701 102,429
Lisabeth Shotwell Asst. to City Manager 95,093 4,755 99,848
Rita S. Megrath Sec. to City Manager 70,289 4,217 74,506

Managing to Get Raises: At the end of 2002, more than $114,000 in raises was awarded to the top tier of management in the San Jose city manager's office alone, bringing the cost of top management salaries in that office close to $2 million. In addition, two lower tiers of management in the city manager's office awarded raises at the end of 2002 will earn a total of $1.8 million this fiscal year.

*Total salary for 2002 reflects one-time increases for this fiscal year, not a raise.

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From the January 30-February 5, 2003 issue of Metro, Silicon Valley's Weekly Newspaper.

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