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July 23, 2014

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local government:

Unique perks help keep public sector’s top jobs competitive, expert says

Image

Steve Marcus

Randall Walker, recently retired Clark County aviation director, is shown in the baggage claim area of McCarran International Airport. The top-salaried public employee in 2012, Walker served for 16 years as director of McCarran.

After showering city manager Betsy Fretwell with praise during its most recent meeting, the Las Vegas City Council voiced unanimous support for giving Fretwell a raise, her first since 2009.

The 3 percent increase translated to about $5,400, bringing Fretwell’s annual salary to just over $183,000, placing her as the 15th-highest-paid public employee among local municipal governments.

Although Fretwell’s pay is below the national average of $190,000 for chief executives in similar-size cities, it still puts her in the upper echelon of public salaries in the valley, a group comprising managers, chief financial officers, department directors, attorneys, judges and fire and police chiefs, among others.

Collectively, the 100 highest-paid municipal employees in the valley draw salaries ranging from $150,000 to $229,000, with an average salary of $164,000, not including benefits, according to local compensation data obtained by the Sun.

These high salaries are a result of a variety of factors, including job responsibilities, longevity and local cost of living.

As city manager, Fretwell oversees an organization of about 3,000 employees and billions of dollars in assets. The top-salaried public employee in 2012, the recently retired Randy Walker, served for 16 years as director of McCarran International Airport, a key link in the region’s tourism infrastructure that serves millions of customers per year.

Similar job responsibilities in the private sector would likely net these top employees higher salaries, but public-sector jobs offer a number of unique perks that help them stay competitive, said Thom Reilly, a former Clark County manager.

“A private-sector job can disappear the next day. That’s less likely to occur in public sector,” said Reilly, now a professor at San Diego State University who studies issues of public compensation.

“For individuals who’ve lived through recession and lived through having their 401(k) decimated, having a pension that’s a fixed formula that’s indexed for inflation for life is attractive.”

Benefits such as pensions and longevity pay that accrue increasing value over time serve as incentives for employees to continue working in the public sector, meaning many of the highest salaries reached that level after decades of incremental growth.

Henderson city manager Jacob Snow received a salary of $225,000 when he was hired last year, the highest of any local city or county manager, but that came after 13 years leading the Regional Transportation Commission and time spent working at McCarran before that. In Nevada, retirement benefits are transferable to any public entity that participates in the state’s fund.

“What we tell public employees what the reward is if you stay with the employer a longer period of time, you have a larger pension,” Reilly said. “If you leave, you’re financially penalized in some respects because it’s not transferable from one employer to the other.”

Reilly said public compensation for employees on all levels has become increasingly skewed toward long-term, deferred benefits, which could cause major budget problems for municipalities down the road.

“It’s less visible to the public, and those costs are put out to a future point in time, usually after elected officials leave office,” he said.

In Clark County, commissioners have been working to decrease long-term obligations to all of their employees, often with the trade-off of increased upfront salaries.

“I feel that longevity pay as one of the public-sector employee benefits needs to be eliminated. It’s an enormous cost over time; it builds up and up,” said Clark County Commission chairman Steve Sisolak, who earned $72,488 in salary as an elected official last year. “The county made this an issue with the firefighter and Metro Police contracts years ago. It’s the biggest thing we got out of negotiations.”

Another factor driving salaries up for all public employees is competition between cities and bargaining groups, which use deals offered in other municipalities as negotiating tool.

“Once you start giving back or giving raises, then everybody wants them and it becomes a ratcheting effect,” Sisolak said. “They’re always going to compare themselves to the group that got the best deal.”

Ultimately, much of the local variation in salaries among municipalities is based on the discretion of the city council, which typically authorizes pay for the top positions, including city manager, city attorney, and fire and police chiefs.

Highest salaried municipal employees in 2012*

  • 1. Randall Walker, Clark County director of aviation, $229,091.20
  • 2. Jacob Snow, Henderson city manager, $215,000**
  • 3. Bristol Ellington, Henderson assistant city manager, $201,921.37
  • 4. Donald Burnette, Clark County manager, $199,284.82
  • 5. Josh Reid, Henderson city attorney, $193,822.37
  • 6. George Stevens, Clark County chief financial officer, $187,886.40
  • 7. Christine Guerci-Nyhus, Henderson senior assistant city attorney, $185,326.16
  • 8. Rodney Burr, Justice of the Peace, Henderson Justice Court, $184,142.40
  • 8. Stephen George, Justice of the Peace, Henderson Justice Court, $184,142.40
  • 8. Natalie Tyrrell, Justice of the Peace, North Las Vegas Justice Court, $184,142.40
  • 8. Ann Zimmerman, Justice of the Peace, Las Vegas Justice Court, $184,142.40
  • 8. William Jansen, Justice of the Peace, Las Vegas Justice Court, $184,142.40
  • 8. Deborah Lippis, Justice of the Peace, Las Vegas Justice Court, $184,142.40
  • 8. Karen Bennett, Justice of the Peace, Las Vegas Justice Court, $184,142.40
  • 15. Betsy Fretwell, Las Vegas city manager, $177,975.22
  • * The top two highest-salaried municipal employees in 2012 were Police Officer Eric Spannbauer and benefits analyst Darlene Rosenberg, North Las Vegas employees who received $270,448 and $264,168 in pay, respectively. These salaries were fueled by one-time retro payments.
  • **Snow was hired in March and received $164,423.10 in base pay, a prorated portion of his annual $215,000 salary.
  • Source: Sun analysis of public records of Clark County and cities of Henderson, Las Vegas and North Las Vegas

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  1. BS. Several public jobs now pay better than these people could do in the private sector. Do you think private sectors managers get overtime? Yet we pay it to chiefs of police and fire departments. And the public is funding pensions for rank and file workers they would never be offered for themselves. I think our local governments should cut all management salaries by 25% and only offer defined contribution retirement. I am sure every job will still be filled by a qualified applicant. The money saved could either be used to lower taxes or to hire more rank and file workers that actually do the work (such as teachers in the classroom).