Negotiating City/County Manager Employment Contracts, Part Two
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By James Bourey
May 16, 2022
This is the second part of a two part column on city/county manager employment agreements. In case you missed it, the first column was in the April 11th edition of the PA Times. The current edition deals with many of the substantive terms included in a contract. The material in this column is covered in more depth in a chapter on job searches in my book entitled, A Journey of Challenge, Commitment and Reward; Tales of a City/County Manager.
Topping the list of contractual terms the council, quite naturally, will be concerned with is the base salary. While the prospective managers will also be most interested in salary, they should not lose sight of other critical terms. Since the public is generally focused on the base salary, it is often easier to get a larger compensation package by adding or increasing items such as deferred compensation or automobile allowance. Although it is natural for people to push for the highest starting salary possible, I have always been willing to leave a few dollars on the table if it meant maintaining the good will achieved with the council during the interview process. Additionally, allowing the council to feel good about the base salary and pushing for higher deferred compensation and other provisions, gives the council some cover with their constituents.
Managers and councils have their own individual preferences on whether they prefer the city to provide an automobile or car allowance. I have always followed the council’s preferences, agreeing to use a car provided by the city or receiving an allowance. If the contract includes a car allowance and/or deferred compensation, it is important to include a provision that says any percentage of increase in the base salary will also be applied to these items as well. In addition, having the deferred compensation amount be included in calculations for any retirement program is very beneficial.
Many contracts include a provision that says the manager will receive any overall cost of living adjustment (COLA) that the general employees get. If the council offers it, I certainly would not say no but I have never pressed for it. Working with a contract, managers are simply different from regular employees and council should be free to pay the manager what they believe is justified. However, including a stipulation that restricts the council from unilaterally reducing the manager’s compensation should certainly be included.
Since managers will have an employment agreement, there is a measure of independence from the particular benefits that employees receive. The council may be willing to pay for all the costs of employer provided health insurance. Although the health care premiums can be significant, I have gone along with the council’s preference. My practice has been to be more bullish about annual leave. I have always pressed council for the maximum amount of the rate of accrual that is provided to the longest tenured employees. In addition, I have asked for unlimited accrual. Most often, I have had to settle for less than that, but this is money in the bank at a time of departure and taking some vacation can be critical considering the stress of a manager’s position.
Further, one can request an upfront allocation of vacation time. In fact, I once used the upfront allocation of vacation time and unlimited accrual to overcome a very restrictive state law that limited severance. Since this was such an unusual situation, the council was generous and gave me six months of vacation time when I started the position. Thus, whether leaving on my own or being showed the door, I would receive the vacation pay out. Ironically, this was even better than a severance provision that I would have only received if forced out.
Most all contracts allow for relocation expenses, including moving and temporary housing. It is good to only include actual cost, so it does not appear to be overly generous. Providing for payment to rent a temporary dwelling is most reasonable. Beware that this and other relocation payments are taxable. It is nice if you can get the city/county to pay for the taxes due on these payments. This is referred to as “grossing up.” While I have had this a couple of times, councils are generally wary of how this may be perceived by the public.
Contracts usually provide for an evaluation of the manager at some interval, generally on an annual basis. Annual evaluations have always been included in my contracts. The more definitive the method of conducting them, the better. Some contracts call for the process to be led by an independent party. Everyone needs to recognize councils are rarely very skilled at doing evaluations. Evaluations can be a time for an individual council member to complain about anything the manager did that they did not agree with. It is likely that the terms of an initial employment agreement will follow you for your entire tenure. So make sure you are willing to live with the terms, but also don’t sour the relationship with the council in the process.
Author: James Bourey served local government for 37 years, including as a city and county manager and regional council executive director. He also worked as a consultant to local government for another six years. He is the author of numerous professional articles as well as the books, A Journey of Challenge, Commitment and Reward; Tales of a City/County Manager and A Guidebook for City and County Managers: Meeting Today’s Challenges.
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Negotiating City/County Manager Employment Contracts, Part Two
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By James Bourey
May 16, 2022
This is the second part of a two part column on city/county manager employment agreements. In case you missed it, the first column was in the April 11th edition of the PA Times. The current edition deals with many of the substantive terms included in a contract. The material in this column is covered in more depth in a chapter on job searches in my book entitled, A Journey of Challenge, Commitment and Reward; Tales of a City/County Manager.
Topping the list of contractual terms the council, quite naturally, will be concerned with is the base salary. While the prospective managers will also be most interested in salary, they should not lose sight of other critical terms. Since the public is generally focused on the base salary, it is often easier to get a larger compensation package by adding or increasing items such as deferred compensation or automobile allowance. Although it is natural for people to push for the highest starting salary possible, I have always been willing to leave a few dollars on the table if it meant maintaining the good will achieved with the council during the interview process. Additionally, allowing the council to feel good about the base salary and pushing for higher deferred compensation and other provisions, gives the council some cover with their constituents.
Managers and councils have their own individual preferences on whether they prefer the city to provide an automobile or car allowance. I have always followed the council’s preferences, agreeing to use a car provided by the city or receiving an allowance. If the contract includes a car allowance and/or deferred compensation, it is important to include a provision that says any percentage of increase in the base salary will also be applied to these items as well. In addition, having the deferred compensation amount be included in calculations for any retirement program is very beneficial.
Many contracts include a provision that says the manager will receive any overall cost of living adjustment (COLA) that the general employees get. If the council offers it, I certainly would not say no but I have never pressed for it. Working with a contract, managers are simply different from regular employees and council should be free to pay the manager what they believe is justified. However, including a stipulation that restricts the council from unilaterally reducing the manager’s compensation should certainly be included.
Since managers will have an employment agreement, there is a measure of independence from the particular benefits that employees receive. The council may be willing to pay for all the costs of employer provided health insurance. Although the health care premiums can be significant, I have gone along with the council’s preference. My practice has been to be more bullish about annual leave. I have always pressed council for the maximum amount of the rate of accrual that is provided to the longest tenured employees. In addition, I have asked for unlimited accrual. Most often, I have had to settle for less than that, but this is money in the bank at a time of departure and taking some vacation can be critical considering the stress of a manager’s position.
Further, one can request an upfront allocation of vacation time. In fact, I once used the upfront allocation of vacation time and unlimited accrual to overcome a very restrictive state law that limited severance. Since this was such an unusual situation, the council was generous and gave me six months of vacation time when I started the position. Thus, whether leaving on my own or being showed the door, I would receive the vacation pay out. Ironically, this was even better than a severance provision that I would have only received if forced out.
Most all contracts allow for relocation expenses, including moving and temporary housing. It is good to only include actual cost, so it does not appear to be overly generous. Providing for payment to rent a temporary dwelling is most reasonable. Beware that this and other relocation payments are taxable. It is nice if you can get the city/county to pay for the taxes due on these payments. This is referred to as “grossing up.” While I have had this a couple of times, councils are generally wary of how this may be perceived by the public.
Contracts usually provide for an evaluation of the manager at some interval, generally on an annual basis. Annual evaluations have always been included in my contracts. The more definitive the method of conducting them, the better. Some contracts call for the process to be led by an independent party. Everyone needs to recognize councils are rarely very skilled at doing evaluations. Evaluations can be a time for an individual council member to complain about anything the manager did that they did not agree with. It is likely that the terms of an initial employment agreement will follow you for your entire tenure. So make sure you are willing to live with the terms, but also don’t sour the relationship with the council in the process.
Author: James Bourey served local government for 37 years, including as a city and county manager and regional council executive director. He also worked as a consultant to local government for another six years. He is the author of numerous professional articles as well as the books, A Journey of Challenge, Commitment and Reward; Tales of a City/County Manager and A Guidebook for City and County Managers: Meeting Today’s Challenges.
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