On Raising Mark Vanderpool’s Salary
In a copywritten news article from the Thursday, December 5th edition of The Macomb Daily, I learned today that Mark Vanderpool has recently withdrawn his name from consideration for the city manager position in his previous hometown of Skokie, IL, deciding instead to remain in Sterling Heights.
Mayor Notte is quoted as saying “We will begin (contract) negotiations with Mr. Vanderpool to keep him here. He pulled us through some real tough times especially when the morale of employees was beat up.”
In the same article, unattributed sources were cited as follows: “Those close to Vanderpool said he previously stated he would consider the Skokie job if he could get the same wages, $240,000, as the retiring village manager in the Illinois city has been paid.”
According to the article, Mr. Vanderpool’s current base salary is $137,217.
Mr. Vanderpool has told me personally a year or so ago that he is planning on staying in Sterling Heights, so the story that he might change jobs came as somewhat of a surprise to me. On the other hand, if I was presented with the possibility of making $100,000+ more per year than I am in my current job, I’d very likely pursue the opportunity and at least see if an offer would be made. Who wouldn’t? $100,000 is a lot of money, and it would make a very significant change in my personal financial situation. I am certain Mr. Vanderpool is no different in this respect.
However, this does raise an important question: is Mark Vanderpool underpaid by a hundred grand? Does Sterling Heights really need to step up the base salary by that much in order to retain him and pay him fairly?
In searching for the answer to this question, I encountered the 2012 edition of the ICMA’s Municipal Year Book 2012, Chapter 6, entitled CAO Salary and Compensation: The Big Picture. The International City/County Management Association (ICMA) conducts annual salary surveys of city managers and publishes those results for communities to use as a guideline in determining how to pay unelected public officials.
There are several ways to view the data presented in this publication, and it goes on at some length explaining why it is presented the way it is, so I won’t repeat that discussion here. Essentially, the response to the salary survey by state is somewhat limited, but there is enough data on a national basis to make reasonable comparisons. State-by-state or regional comparisons, according to the article, are probably meaningless, but a useful comparison can be made by looking across the nation and grouping by municipality size.
The relevant information in the article can be found in Table 6-3, Salaries by Population Size, which I’ve reproduced below:
|Population||No. reporting||Mean ($)||Minimum ($)||Median ($)||Maximum ($)||Maximum minus minimum ($)|
The City of Sterling Heights, with a population of 130,000 residents is considered comparable with other cities with populations ranging from 100,000 to 249,999 residents.
Out of 102 data points nationwide concerning cities with populations of roughly the same size as Sterling Heights, the median salary for the City Manager or his local equivalent is $164,586 per year. Recall that the median point in a set of data is not affected as the mean is by high or low values at the extremes: it simply means that 50% of the population is larger than that figure, and 50% is lower than that figure.
According to this data, Mr. Vanderpool’s salary is smaller than 50+% of the salaries of his fellow city managers who run cities of roughly comparable populations.
How Compensation Should Be Set
The article goes on to outline the ICMA’s guidelines on setting salaries, which I will quote here:
Conclusions regarding Base Salaries
Because base pay is a factor of multiple variables, the ICMA survey can never be definitive in determining what a professional manager should make in a specific local government. Nonetheless, the survey collected data on several variables in addition to population size, including form of government and scope of services provided, and the results provide a range that can serve as a starting point. Given the number of variables involved, ICMA’s guidelines recommend that the governing body engage experts as necessary, whether contracted or in-house, “to provide the information required to establish fair and reasonable compensation levels.”
Such information should be obtained by applying the following steps:
1. Determine the requirements of the job and the experience needed to successfully perform the job duties.
2. Examine market conditions to learn what comparable public sector executives earn. A best practice would be to gather information using predetermined comparable benchmark local governments or public sector agencies.
3. Understand the services provided by the local government along with the nature of the current issues in the organization and in the community, and then compare these with the individual’s expertise and proven ability to resolve those issues.
4. Identify the local government’s current financial position, its ability to pay, and the existing policies toward compensation relative to market conditions.
I won’t pretend to be one of the experts on the salaries of public officials that the ICMA recommends that Sterling Heights engages, but I do have some thoughts regarding this.
First, Mr. Vanderpool was motivated to explore an out-of-state opportunity that might have rewarded him with a very significant salary increase. I find it difficult to find fault with him for that, as I have done the same thing myself many, many times. However, this should be used as an indication of his level of satisfaction with his current salary, which I will assume he doesn’t find completely sufficient.
I recall that Mr. Vanderpool has voluntarily taken cuts in his own pay and benefits during the recent downturn. I also recall that he does get paid more than his base salary would suggest, or at least has in the past.
When I look at the range of the salaries of public officials in comparable cities nationally, I find the fact that our city manager’s pay is significantly below the median — by $27,000 — is interesting and significant. If I were in his shoes, I would find this at least mildly distressing, especially considering the fact that he is currently navigating our city through some very troubling times, and by most accounts is working day and night to do so.
However, I also bear in mind that the ICMA recommends that we examine the city’s ability to pay and existing policy towards compensation relative to market conditions. I recall that Sterling Height’s longstanding policy is to pay more than the average city does, in the hopes of attracting and retaining the best available talent.
We have to balance the fact that Mr. Vanderpool is significantly below median pay for his position with the fact that the city is not out of the woods yet with regard to its financial health. We have just enacted a tax increase to alleviate the pressure on the city’s finances, and it was done with the promise that the police and firefighters would not see large increases as a result. However, the police and firefighters were already considerably above median pay levels before that promise was made, and that is something to bear in mind as well.
I will not earn any “thank you” cards from area Republicans by suggesting that we increase Mr. Vanderpool’s pay, but at the same time I’m not sure the Democrats would be terribly happy about it either, given that anecdotally they see him as “top management” and therefore not worth half his pay just by definition.
As a conservative — defined in this case as being someone who takes careful measure of the circumstances and attempts to match outcomes with principles and goals without incurring large amounts of risk — I have to say that retaining Mark Vanderpool at this point in our city’s history is probably the wise thing to do. I do not believe that he should be compensated in the top 10% of respondents to the salary survey, but I sure don’t believe he should be in the bottom 50% either.
If it was up to me — which it clearly is not — I would suggest that the city adjust his benefits and compensation to a more competitive level, such as $175,000 per year. This would put him firmly in the top 50% without giving away the farm, hopefully provide him with a significant enough salary increase to retain him, and at the same time reward him for the successes he has had over the past several years in navigating the city through some very difficult times.