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News was a lie, but contract is better

RichRifkinW

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August 2, 2011 | 19 Comments

“A lie gets halfway around the world before the truth has a chance to put its pants on.”
—Winston Churchill

No one is going to remember that it was a lie. It wasn’t even an approximation of the truth. It was a real whopper, this one. Yet The Enterprise and other publications reprinted it, taking the quote at face value.

Here is what the city of Davis news release said about how much more we will be paying Steve Pinkerton, our new city manager, than we paid our old head honcho:

“The contract is similar in structure to Bill Emlen’s, and its total compensation will, at most, represent a $3,500 increase over Emlen’s last full year of 2009,” the city news release said.

It’s already traveled halfway around the world. Churchill was right. The people in Durbin, Delhi and Davis were duped.

The city’s human resources director, Melissa Chaney, told me outside City Hall early Monday, “That (news release) was put out by the City Council. Staff had nothing to do with it. The number,” she paused, “it’s not true. They mixed up gross salary with total compensation. They did not compare total comp with total comp.”

The fact is that Pinkerton will cost the taxpayers of Davis $44,300 more in total compensation than we paid for Bill Emlen.

Pinkerton’s salary is $188,000, a $29,300 increase from Emlen’s $158,700.

It will additionally cost the city $12,550 extra to fund Pinkerton’s pension with CalPERS. And the new city manager’s medical and dental plan in the next 12 months will cost the taxpayers of Davis at least $2,500 more per year than we paid for those benefits for Emlen.

Not counting the cost of funding his retiree medical, his life insurance plan, convalescent coverage, survivor benefits, Medicare and worker’s comp insurance, Pinkerton will cost us $252,900 for his first 12 months on the job. In 2009, Bill Emlen cost us $208,600 for the same categories of compensation. The increase is 21 percent.

What the council did to make it look as if Emlen earned nearly as much was to add to his $158,700 salary in 2009 the money he received for cashing out his unused vacation and management leave time. Pinkerton will have the same cash-out options. So it is apples and oranges to attribute that income to Emlen but not to Pinkerton.

To my mind, it is a big deal that the City Council lied when announcing the hiring of Pinkerton. On the other hand, I don’t think the fact Pinkerton will be paid $44,300 more than Emlen made two years ago is necessarily bad.

If he figures good ways to save the taxpayers of Davis millions of dollars per year and proves himself to be an excellent personnel manager, the additional money he will cost will be worth it.

Yet it is not hard to notice how much higher Pinkerton’s compensation will be than the state pays its top managers:

Councilwoman Sue Greenwald pointed out that the executive director of the state water resources control board has a salary under $127,000 and earns less in benefits and pension. Yet his agency’s budget is 6.75 times as large as that of the city of Davis.

When Pinkerton’s prospective proposal was published last Friday, there was a serious problem in it. It capped the amount the new city manager would pay for the employee share of his pension funding at 2 percent of his salary.

In fact, the actual employee share for his pension is 8 percent of salary. The contract said that even if others in the management group had to pay 3 percent, his max would still be 2 percent. What that meant was that the taxpayers, in addition to funding the employer share, would pay another 6 percent to cover the difference.

The gain in dollar terms was just $11,280 for Pinkerton. But if 2 percent had become the precedent for all non-public safety employees, that would cost $6 million a year to the city on $100 million in salaries.

As readers of this column know, I have stressed for years that we need to have all the miscellaneous employees pay their full 8 percent share.

On Friday, I sent an email to all five members of the City Council, pointing out this mistake. I explained to them why it was a big deal and how they could fix it. To my surprise, my email changed their minds.

On Monday morning, when the council went into closed session, they altered the language in the published contract, rewrote it as I suggested and got Pinkerton to accept the new wording.

Under the Rifkin terms of his contract, Pinkerton will pay 2 percent of his salary for the employee share of his pension funding until June 30 of next year. That is the day all labor contracts in Davis expire. Then starting July 1, Pinkerton will contribute the maximum 8 percent until his contract expires.

It’s a shame that the news release announcing the hiring of our new city manager started out with a lie. However, the fact that the council is listening to reason is a good sign.

Everything I have heard and read about Pinkerton suggests he is a great choice for city manager. I wish him the best in leading Davis in the direction it needs to go.

— Rich Rifkin is a Davis resident; his column is published every other week. Reach him at Lxartist@yahoo.com

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Discussion | 19 comments

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  • Sue GreenwaldAugust 02, 2011 - 12:30 pm

    According to city staff, the total compensation for the city manager position is $281,877. That doesn't count the ability to "cash-out" $7,500 in "management leave". Management leave is 11 days in addition to the 20 days of vacation. State management positions do not receive "management leave". The executive directors of state agencies who manage around $750 million to $1 billion dollar budgets made about $126,000 in 2010. The acting director of CalTrans with their budget of over $15 billion made around $135,000 in 2010. Our parks and rec department head makes more than directors of major state agencies.

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  • Sue GreenwaldAugust 02, 2011 - 12:34 pm

    I forgot to add that in contrast to the above budgets of around $750 million to around $15 billion, our city budget is about $116 million. Yet our management pay as far higher. Local government budgets will never be sustainable unless our management compensation is brought in line with the management compensation at the state and federal level, which is far, far lower for positions with far more scope of responsibility.

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  • Rich RifkinAugust 02, 2011 - 1:04 pm

    "Management leave is 11 days in addition to the 20 days of vacation." For the record, it is 10 days, not 11. Here is a quote from the management group's Memorandum of Understanding: "Executive Management EMPLOYEES shall be credited with ten (10) working days (i.e., eighty (80) hours) of management leave each calendar year, which shall be prorated and accrued on a bi-weekly basis." People in 'general management' positions, likewise, get 10 extra days off paid per calendar year for management leave. As management leave has been explained to me, the idea behind it is to compensate personnel for the hours they work above and beyond 40 hours per week for which they get no overtime pay. In other words, when you see the city manager and his top lieutenants at City Council meetings and other after-hours activities, they are not being paid overtime, but are (in effect) accruing 'management leave' time. As Sue points out, they get this in addition to their vacation time, which is quite ample. Every employee (in management or lower level) gets 28 days of paid vacation per year, once they have 16 years of service time accumulated. That adds up to 5.6 weeks of paid vacation and 2.0 more paid weeks of management leave for a total of 7.6 weeks on the clock but off the job. On top of that, all city employees get another 12 days (or 2.4 weeks) of paid holidays off; and most city employees get another 2.5 paid 'floating' holidays, for a total of nearly 3 weeks of paid holidays. Adding up management leave plus vacations plus holidays, you get a total of more than 11 weeks of paid time off. That is clearly excessive and expensive. Management personnel can cash out up to 1 week of vacation time each year and they can cash out all of their management leave time. As far as I know, almost all of them do this every year; and it suggests that we are giving too much paid time off. That is, they don't need so much extra rest. They would rather make more money. My suggestion is this: we need to cap the total of vacation time plus holiday time plus management leave time to 5.0 weeks per year; and we should no longer allow any cash-outs for any unused time off. If an employee is cashing out his vacation time, he is getting too much vacation.

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  • Rich RifkinAugust 02, 2011 - 1:07 pm

    Correction: "Adding up management leave plus vacations plus holidays, you get a total of more than 11 weeks of paid time off." That should be over 10 weeks, not 11.

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  • Good explanationAugust 02, 2011 - 8:45 pm

    Of the excessive compensation enjoyed by city, county, and public agency employees, as compared to state employees. The demonizing of state workers in California and nationwide is unjust and not deserved when you look at what their counterparts in city and county government get. Then when you look at the "safety" workers you realize how bloated the government compensation is.

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  • Rich RifkinAugust 02, 2011 - 9:54 pm

    "The demonizing of state workers in California and nationwide is unjust and not deserved when you look at what their counterparts in city and county government get." Generally, this is true at the lower levels. But there are many serious exceptions to the rule at the state level, especially in a few areas of management and with some types of doctors. Here is one example: in 2010, the Dept of Corrections had two doctors who were paid more than $730,000 for their services, not counting their benefits and pension packages. Dr. Jeffrey W Rohlfing made $784,596.00; Dr. Fong T Lai made $737,057.00. If you think these men earned that money, think again. Here is what the LA Times said about Rohlfing: "Jeffrey Rohlfing, a prison doctor who was paid more than $777,000 in 2010 despite not having treated a patient for six years because of alleged incompetence, was cleared to start examining inmates again Monday. ... "Rohlfing has not treated an inmate since fellow prison doctors revoked his clinical privileges in 2005 after finding his care for two patients who showed signs of heart trouble to be 'significantly substandard.'" Rohlfing and Lai were not the only doctors cashing in. Five other prison doctors made between $500,000 and $599,999 in 2010 working for the Dept. of Corrections. And a prison dentist, Dr. Robert L Stogsdill, had a salary in 2010 of $599,783.00. It is not just the prison guards in California who are robbing us blind. Half the reason it costs so much to keep prisoners locked up is the price we are paying overpaid doctors, many of whom are not good enough to keep a job in private practice. Sue Greenwald is entirely correct to point out that some of the executive managers in California are underpaid when compared with local government and county government managers. But there are important exceptions to this, as well. For example, the Chief Investment Officer of CalSTRS makes $433,692.00. You should know that CalSTRS is badly mismanaged and without taxpayer bailouts will go bankrupt. The STRS CEO was paid $421,488.00 last year plus benefits, pension and so on. CalPERS pays its CEO $434,965.00. When the stock market was stronger, these "investors" were all making even more. Never mind their returns on investment were LOWER than the S&P 500. The top managers in the Dept of Forestry and Fire are all very highly paid. Four of them make more than $377k in salary: Kenneth J Mclean ($412,608.00); Jay D Wickizer ($390,953.00); William A Hodson ($378,041.00); and Del Monte M Walters ($377,200.00). Most of the presidents/chancellors of the UC and CSU campuses are paid from $370,00 to $400,000 a year plus many perks and benefits. For example, the CSU chancellor is paid $399,788.00; the chancellor at CSU LA makes $372,484.00 in salary. I bet if CSU paid its top execs $100,000 a year less, no one would notice any difference in the quality of a CSU education. In 2009 (the most recent year the numbers are available), UC Davis had 544 employees who were paid more than $200,000; and of those 148 made more than $300,000. The very highest paid employees in state jobs are a few coaches at UC Berkeley and UCLA. But at least in those cases the money is coming from TV networks, not from poor students or from taxpayers.

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  • Magilla GorillaAugust 02, 2011 - 11:23 pm

    "......My suggestion is this: we need to cap the total of vacation time plus holiday time plus management leave time to 5.0 weeks per year; and we should no longer allow any cash-outs for any unused time off. If an employee is cashing out his vacation time, he is getting too much vacation." http://truthindavis.blogspot.com/2011/08/and-winner-isrich-rifkin.html

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  • King AlAugust 03, 2011 - 1:50 pm

    If you keep repeating that statement without giving evidence, I'm going to conclude that YOU are the perpetual liar.

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  • Greg KuperbergAugust 05, 2011 - 3:10 pm

    The problem with this article is the attitude of evaluating the city manager based first and foremost on how little he is willing to be paid. It's a recipe for mediocrity. It would be one thing if Pinkerton's compensation were far out of line for someone with his responsibilities, but it just isn't. Davis should not be last in line to hire a city manager, just to dispel local jealousy of city managers. And as for those UC coaches, there is no very strong evidence that their salaries are "coming out of" TV money. Associated with TV money yes, truly coming from that money is a different matter. The question is whether if we paid the UC coaches less, who would enjoy the savings. For various reasons, it's very plausible that if UC pays one of these top coaches a dollar less, then UC itself can keep most of that dollar. One reason is that most athletic departments lose money. Another reason is that compensation for college coaches is suspiciously top-heavy, as if the one top coach on top has magic hands and all of the assistant coaches and trainers hardly matter. No, what's really going on is that the top coaches are very powerful and not very accountable, and their athletic departments would rather not be profitable. It's a completely different picture from city managers. These coaches are paid 10 times as much as the Davis city manager will be paid, and it isn't because they do 10 times more work.

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  • Rich RifkinAugust 06, 2011 - 4:31 pm

    GREG: "The problem with this article is the attitude of evaluating the city manager based first and foremost on how little he is willing to be paid." I never did that. "It would be one thing if Pinkerton’s compensation were far out of line for someone with his responsibilities, but it just isn’t." I never said or implied that it was. "Davis should not be last in line to hire a city manager, just to dispel local jealousy of city managers." Agreed. "And as for those UC coaches, there is no very strong evidence that their salaries are “coming out of” TV money." If you track coaches' salaries at top TV schools over the last 30 years, you will see the correlation with the TV contracts which have been funneled to those schools. "Associated with TV money yes, truly coming from that money is a different matter." That is a distinction without a difference.

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  • Greg KuperbergAugust 07, 2011 - 12:34 am

    If you don't want to evaluate the city manager or other public employees based on how little they are willing to be paid, that's great. Unfortunately that is the implied message of your column and following comments whether you intend it or not. You haven't had anything to say about Pinkerton other than what he will be paid. The truth is that his decisions as city manager will be 100 times more important for city finances than any plausible variation in his salary; yet his salary has been the only subject of discussion.

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  • Rich RifkinAugust 07, 2011 - 9:42 am

    "that is the implied message of your column" A more obvious conclusion is you inferred something which is not there. You have not pointed anything I wrote which implies that I "want to evaluate the city manager based on how little he is willing to be paid." I don't believe in the least what you seem to think I believe and have never said I believe. "You haven’t had anything to say about Pinkerton other than what he will be paid." I have only said one thing about Pinkerton: "Everything I have heard and read about Pinkerton suggests he is a great choice for city manager." My discussion of his compensation was a refutation of the statement put out by the City Council that Bill Emlen was paid only $3,500 less in total compensation. The authors of that statement have since conceded I was right, though deny that their accounting was intended to deceive. (I have a finance/accounting background and still think it was intentional. But I hold no grudges over it and neither does the mayor.) "The truth is that his decisions as city manager will be 100 times more important for city finances than any plausible variation in his salary; yet his salary has been the only subject of discussion." I have to wonder, Greg, if you actually read my column. Your conclusion is almost copied verbatim from what I wrote. ("I don’t think the fact Pinkerton will be paid $44,300 more than Emlen made two years ago is necessarily bad. If he figures good ways to save the taxpayers of Davis millions of dollars per year and proves himself to be an excellent personnel manager, the additional money he will cost will be worth it.") Yet you put forward your conclusion as if it counters what I actually wrote.

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  • Sue GreenwaldAugust 07, 2011 - 2:16 pm

    Greg, I am the one that is expressing concerned about the amount of the total compensation, not Rich. Rich was concerned chiefly with the accuracy of the calculations. Underlying your assumptions that we are paying top dollar for excellence is that the council knows who would make truly outstanding city manager before they have been on the job for many years, or that the council or the public would even agree on who had been a great city manager after they had served for years. And in fact there has not been agreement on who has been an excellent city manager even after they have been on the job. The discussions during open session were not about whether Mr. Pinkerton would deserve this compensation, but whether we should pay a salary at this level to any manager that we picked. I expressed concern about a general philosophy that city managers as a class “deserve” salaries in this range, even though they are higher than comparable state and federal management salaries and disproportionately large compared to big city salaries. The search for outside candidates is by nature superficial. The process is secret, so we are not allowed to call around and inquire about the candidates. We have a few hours of interviews, and a resume and the headhunters “background check”. People are good at writing resumes. How can we determine who will be a great city manager based these searches? I fancy myself a good judge of character and ability, and I was impressed with Mr. Pinkerton. But in all honesty, I suspect that I overestimate my abilities to divine excellence with accuracy after three hours of interviews, and I suspect my colleagues abilities in this regard are about the same as mine.

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  • Joeseph PiehoffAugust 06, 2011 - 2:49 pm

    The reasoning behind this article is seriously in question. "Started out as a lie." This accusation is not supported. They indicated it was a mixup, how does Rich jump to the conclusion that an accounting mistake become something intentional? Because, it's Rich. Rich states that many Doctors in the DOC are "not good enough" to practice privately. Once again, Rich is the standard by which we must judge everyone who is paid more than he is. It seems quite easy to jump on the "they make too much money" bandwagon of reasoning, because the idea of cost being a good thing is nicely tucked in a few sentences in the middle of the article. Nice. The fact is the piece is an attack, a cheap and easy one. Public employee compensation seems to be the fad these days. Funny, the very people I would have liked to have this kind of indignation over public employee compensation was noticeably on Assembly Bill 46 this year, disincorporating the city of Vernon (try those numbers Rich). Davis has an independent public body capable of making well-informed decisions based in part on past performance, noticeably absent from this article is Pinkerton's past performance in Manteca. Besides being the standard job performance for prison doctors, Rich is the gold standard for any public official. Beware Davis citizens, if you earn more money that what Rich considers your 'fair share' than be prepared to be criticized. Spread the wealth around, don't be selfish, to each according to his ability to each according to his need, obviously Rich needs more targets for his ability to state the obvious: people are paid money unequally based on performance.

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  • scottAugust 06, 2011 - 3:59 pm

    So well said! Rifkin's rants are starting to get old as well as his " holier than thou" arrogant attitude. I don't know why the Davis Enterprise feels the need to publish his articles he submits but they might want to reconsider if they don't want to be soon regarded as a rag sheet. It's almost like Rich's life just didn't work out as planned, he's mad at the world and he's going to drag down as many people with him as he can. P.S. Councilwoman Greenwald may want to distance herself from Rich as much as she can for her own safety!

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  • Rich RifkinAugust 06, 2011 - 4:23 pm

    Joeseph: "how does Rich jump to the conclusion that an accounting mistake become something intentional?" I based my conclusion on exactly how the accounting was done. It ignored the compensation paid to one and counted it for the other. Joeseph: "Rich states that many Doctors in the DOC are “not good enough” to practice privately." I based that in part on the current news about Dr. Rohlfing, but also on the hearings which were conducted a few years back by state Senator Jackie Speier (D-Hillsborough). Her hearings, which were widely reported, made it very clear that many doctors serving in the California Corrections system were not good enough to make it in private practice. This is what Mrs. Speier concluded: "To put it very bluntly, the healthcare system at CDC is sick, Twenty percent of the physicians that work at CDC have either a bad mark on their record or a series of malpractice lawsuits — a figure that is four to five times higher than the general population of physicians in California." Joeseph: "Davis has an independent public body capable of making well-informed decisions based in part on past performance, noticeably absent from this article is Pinkerton’s past performance in Manteca." I noted at the end, "Everything I have heard and read about Pinkerton suggests he is a great choice for city manager." I base that on his strong record in Stockton and in Manteca. I fully believe Mr. Pinkerton will prove himself worth what we will pay him.

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  • Sue GreenwaldAugust 06, 2011 - 5:29 pm

    I have been getting little e-mail notices on these comments, so I guess I will jump back in. I know that the calculations in the press release were a nothing more than an error. Rich is passionate on the topic of correct information, and has attributed intent to an error. I have made the same mistake myself. I believe that it is, however, a real problem that local government management is, on the average, paid more highly than comparable state and federal management positions by any reasonable measure – size of budget, scope of authority, amount and quality of education, etc. Cities have boot-strapped each others’ management salaries up. If the pool of people who could make good city managers were limited to those who have been already held that title, then this self-inflicted definition of “market” might make sense. But I don’t think that it is. Just like city management, some state and federal managers are strong, some weak, some stay for the long haul, some leave for greener pastures. This is true of many are high-paid and well many who are paid less. Additionally, small town management compensation is disproportionate to big city management. Cities collect revenue roughly proportionate to our size, and our revenues determine how much we can afford to pay. If Davis can afford to pay a city manager a total compensation of $281,877 a year, then Sacramento should be able to afford a city manager a total compensation of over $2 million a year, and clearly they don’t pay anywhere near that much. Management and public salary comprise our highest paid positions on a total compensation basis. Together, their compensation constitutes over 50% of employee compensation on an all-funds basis, so we have to look at what we can afford. The city manager position is only one management position; we have many, many others. I favor broadening our recruitment, looking for talented people who are moving up or who come from different institutions, and finally moving towards a system where we define market in the traditional fashion, i.e, not what other cities pay but we need to offer to get a good employee. Meanwhile, I think we are lucky to have Steve Pinkerton on board.

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  • Sue GreenwaldAugust 06, 2011 - 7:54 pm

    Correction to 2:59 post above: Management and public safety comprise our highest paid positions on a total compensation basis. Together, their compensation constitutes over 50% of employee compensation on an all-funds basis, and much more on a general fund basis, so we have to start looking at what we can afford. Otherwise, we would have to obtain more of our concessions on the part of our lower paid workers, which I do not believe is right.

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  • James MadsonAugust 07, 2011 - 12:15 am

    I agree that small town management is disproportionate to larger cities; for one, larger city tends to have less money to meet state-mandated limits while providing needed social services that are also disproportionate to small towns. I don’t see the compensation of city officials as a problem. Cities share unequal burdens to state and federal governments. For starters, there are state-mandated limits cities must meet, federally, cities must abide by guaranteed protections, by regulations, and have far less power than either state or federal governments. Cities cannot raise general revenue without voter approval, they simply have less power to tax, cities have no power over people and thus labor (as people can move freely), what cities do have is land. How that land is used lies mostly with the city manager. The city manager has the power to hire and fire, to supervise day-to-day operations, prepare, monitor and execute a budget. With such responsibilities and with so many dynamic interests in Davis (developers, home owners, and students pumping the economic engine) pulling names from the bottom of the compensation bucket is not a justified risk Davis should entertain. The risk is that people tend to vote with their feet. People tend to live near people of the same socioeconomic condition as they are. Looking at the Census data we find Davis has a higher median income than cities of the same size, a higher amount of owner-occupied houses, from 1990 - 2000 the city only added 8,000 people to its population a trend we see continuing. This we all know, the point is that citizens in Davis aren't looking to experiment with a city government that could negatively affect their property values. The idea of cutting cost so close to home, is not a comfortable one. I agree that seeking to lower unnecessary expenses, in principal, is a great platform. I agree that considering costs in terms of what is “affordable” (as that term is loosely defined), should be a consideration when deliberating proposals. However, as any good business knows, as any good researcher knows, if something is working, if someone has a longer record of being on time and on budget, you improve on that (you offer incentives). What you don’t do is drop the hat on the ground and consider all possibilities for the off-chance you may get a statistical anomaly. People with proven track records command higher salaries, like CEOs who, like city managers, are hired to grow the business. Make no mistake; city government is a business, one that offers a service, a lifestyle, a great community to raise children. Like a business, the shareholders hire on merit, compensation is simply the cost of doing business. Look, you guys are smart people, with great backgrounds, with wonderful ideas that have proven beneficial to the lives of Davis residents. This in-house bickering serves no useful function. I may not have the same benefit package as most city workers, but I don’t waste my precious time looking for nefarious shadows that prove illusionary under public scrutiny. Give the Davis residents some credit, they voted you for guys knowing your pay package, unless and until you prove otherwise, you have been a worthwhile investment. Last of all, don't make this into a class issue, opportunity exists even for the lower paid workers to earn merit based promotions.

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