Spokane Valley City Council approves contract for city manager

Four thousand dollars and a retirement package stood between three Spokane Valley council members and their approval of City Manager Mike Jackson’s new contract.

Council members Bob McCaslin, Brenda Grassel and Dean Grafos voted against the package, calling it too generous, while the other four council members voted to approve the contract. The contract will take effect immediately.

Some changes were made to the contract after previous comments from the council. The base pay went up slightly from $151,200 to $154,000, but the six-month job review and automatic raise to $158,400 was removed. Language was also added to allow the council to reduce Jackson’s pay if all other city employees are also getting pay cuts. The retirement account percentages were not changed. “I think we’ve got a good contract,” said Mayor Tom Towey.

Grassel said she believed the contract negotiations “were flawed to start with” since the old city manager contract was used as a template. “We’re using that contract as a basis for a new one,” she said. She also noted that the council hadn’t received any information on median income or the cost of living to help them determine the annual salary. “The reason I was elected was to be a good steward of taxpayer money.”

Councilman Bill Gothmann said he had done his own research of city manager salaries across the state and that the pay proposed for Jackson was right in the middle. The salary is “perfectly reasonable” when you consider that the top salary for the city’s deputy manager position is $148,000, he said.

Grafos, who voted to hire Jackson, said Jackson is “very qualified,” but would feel more comfortable with a salary of $150,000. “I think that’s a fair starting salary,” he said. Grafos also said he thought the proposed retirement benefits were excessive and should be reduced to somewhere between 4 percent and 6 percent of Jackson’s annual salary.

After listening to their concerns, Councilwoman Rose Dempsey asked Towey what information he used when negotiating the salary. “I didn’t use the old contract,” Towey said. “I did study, at great length, the different levels of pay of not only all the executives but the cities and towns in Washington.” He also got information from the Association of Washington Cities and the Washington State Employment Security Department, he said.

Towey pointed out that the cost of living raise had been removed from the contract. “There is no cost of living raise, so it’s 154 (thousand) for life unless the City Council votes to raise it a year from now,” he said.

The city will be saving more than $150,000 in the city manager department this year and next even with the new salary, Towey said. “I’ve worked with Mike and I know he cares for this city,” he said. “I put value to that.”

Grassel said the city would save money only if no deputy city manager is hired. “That’s a good point,” Towey said. “We have the option to take that out of the budget. We are in control.”

Acting city attorney Cary Driskell said his reading of the contract is that Jackson would be eligible to receive the same cost of living increases other employees do in the future. Jackson said it was his understanding that he would not be eligible for such an increase until 2012.

During the public comment period, John Miller said that it didn’t matter what other city managers in the state are paid. “We don’t necessarily have to do it like Bellingham or Yakima,” he said. He suggested cutting Jackson’s vacation time and not letting it accrue, making Jackson pay half of his insurance costs and reducing the retirement package.

Dempsey responded that Jackson should be allowed to accrue vacation time. “There is nobody to take his place,” she said. “He can’t go on vacation.”

Councilman Gary Schimmels said the city published a salary range in the advertisements for a new city manager. “We’re right within that range,” he said. He was in favor of the contract. “There’s been some concessions here.”

Grassel pointed out that Jackson’s total retirement would equal 24 percent of his pay base and that she thought it was too high. “I don’t feel comfortable with that either,” said Grafos. “We’re digging into reserves this year to run this city. Next year we’re probably going to have a $2.5 million deficit to run this city.”

According to budget documents presented to the council, current budget projections call for the city to spend about $500,000 of its reserves in 2011, but the city is still expected to have a $24 million carryover balance at the end of 2011.