CITY HALL — Two weeks after city officials approved water rate hikes as part of the new budget, officials are recommending considerable pay raises for the utility’s general manager and senior executives.
The City Council on Tuesday is scheduled to weigh new compensation packages that would raise top-range salaries between 7% and 11%.
Officials are recommending salary increases for Ron Davis, general manager of Burbank Water and Power, that increase incrementally over three years by 7%, 7.5% and 8%. Davis last year was paid a base salary of $217,799. His proposed salary increases pencil out to between $233,045 and $270,566, according to the report.
Officials said the raises provide retention incentive and bring the general manager’s pay range in line with a recent compensation survey by the American Public Power Assn.
“I am fully aware that there just couldn’t be a worse time to do this. It’s just horrid,” Davis said Thursday. “These are good-paying jobs, and we should all be happy to have jobs. But if we cannot get people in these positions, and assemble the type of team I inherited, I am going to spend even more money and have your rates go even higher.”
The proposal comes as public utilities across the country struggle to retain senior-level managers, who are either leaving for higher pay, more affordable areas or to retire.
Pasadena recently pushed through similar packages, and officials in Glendale are working on one of their own. In Burbank, executives recognized the trend nearly seven years ago and began recruiting. But those candidates are still five to 10 years away from upper-level management prospects, Davis said.
The salaries of other top managers are tied to Davis’ salary and would be adjusted accordingly.
However, while the salary ranges are proposed to increase by 11%, incumbents can receive maximum annual increases of only 10%, according to current personnel policy. Davis said he would recommend across-the-board salary increases of 7.5% for incumbents as a way to further reduce the fiscal impact for 2010-11.
The proposal would provide raises of $19,647 for the vacant assistant general manager of power supply; $13,394 for two assistant general managers; $12,724 for the chief financial offer, $11,385 for the assistant general manager of customer service and marketing and $8,036 for the administrative officer.
Davis, a 30-year veteran of the industry, has run the utility for 12 years after moving to Southern California from Washington. He recently withdrew from a chance to take the helm of Austin Energy, the nation’s ninth-largest public electric utility.
Davis approached Burbank City Manager Mike Flad and Austin City Manager Marc Ott for an offer that eventually brought his salary up to market.
The utility over the last 1½ years has been working with specialists on nationwide recruiting. But the results have been less than satisfactory, Davis said. In one effort to fill a recently vacated position of assistant general manager of electrical services, the pool of applicants was 26, with half meeting preferred requirements for managerial experience.
All were professional-engineer-certified, but when they were informed of the salary, all 13 withdrew their names from consideration for the job, Davis said. The city again lost top-tier recruitments for the post on a second round, officials said.
“Make no mistake: The proposed wages are not sufficient to recruit and relocate qualified people,” Davis said. “They are sufficient to keep people we have developed here.”
Councilman David Gordon said in the current economic downturn, already robust job security, health and retirement benefits should be enough to attract and retain quality employees.
“It is hard to believe and accept that a public utility must pay disproportionally high salaries when so many highly skilled and experienced professionals are unemployed and more than eager to accept a six-figure salary and benefit-package job offer,” Gordon said. “Pay raises should not be based on utility revenue, particularly when recommendations for rate hikes directly benefit and skew the scales in favor of the employee being considered for a pay raise.”
Several senior positions have been filled with so-called second-career candidates — qualified professionals who recently retired from careers elsewhere and are interested in working at a new utility for one to five years. Along with difficulties recruiting outside candidates, the utility is also facing significant challenges of retaining workers.
Two assistant general managers, both of whom were instrumental in planning the city’s smart grid, have either retired or taken another job, Councilman Gary Bric said. The cost of the raises for 2010-11 would be covered by carried-over savings from vacant senior positions.
“Mr. Davis has been unsuccessful trying to fill these positions for the past year and a half,” Bric said. “It’s especially unfortunate at having just passed the 2010-11 budget that this is coming before us at this time, but it seems that we really don’t have much of a choice.”