The events that recently took place in Bell, California, tarnished public perceptions of the value and relative worth of public employees in general and ICMA members specifically. To repair the damage, we must proactively educate our constituents about how compensation for public employees and managers is established. We need an affirmative approach to telling our story so that there can be no question or conflict about how compensation for our members is determined.

A new set of guidelines adopted by the ICMA Executive Board in October advocates ethical standards for establishing compensation, places greater emphasis on transparency, and provides a roadmap for managers and their elected officials in establishing and negotiating compensation contracts. These guidelines are a proactive statement of our professional responsibilities of fairness and transparency.

The ICMA Guidelines for Compensation reaffirm the fundamental public service values—honesty, trust, transparency, integrity, and accountability—embodied in the ICMA Code of Ethics and provide sound guidance to ICMA members who want to

• Identify a best practice for establishing and negotiating compensation for local government managers and staff
• Ensure transparency around issues related to compensation of public employees
• Clarify the roles and responsibilities of the governing body and local government manager, and
• Maintain public trust and integrity in local government and position professional local government managers as primary stewards of that trust.

Why Compensation Guidelines Are Important to ICMA Members

The ICMA Guidelines for Compensation ensure that the practice for establishing the compensation of local government managers is fair, reasonable, transparent, and based on comparable national and regional public salaries. The guidelines emphasize how the starting point in any salary negotiation should be to establish what comparable public sector executives earn and how competitive the local government wants to be within the marketplace. Other variables such as the size, complexity, and financial resources of the organization and the individual’s credentials and experience should also factor into compensation.

The ICMA Guidelines for Compensation also highlight the importance of maintaining transparency when establishing and negotiating salaries for city, town, and county managers. Elected officials and managers must understand the impact of embedding “add-ins” (such as leave buyouts and other elements that pump up base salaries) into senior manager compensation packages. Elected officials also have an obligation to seek advice, either from internal resources or a third party, as they consider compensation requests and to understand the financial impact of those requests on the organization. In the interest of transparency all compensation should be approved during a public meeting.

City, county and town managers are stewards of the public trust. As such, negotiation of excessive compensation packages during a time in which local governments are struggling to provide essential services to communities is damaging to the reputation of the local government and to the management profession. ICMA members should be prepared to facilitate discussions around this issue with local opinion leaders, the media, and elected officials. We encourage members to review and adopt the ICMA Guidelines for Compensation in their entirety whenever considering compensation for a public sector position.

Next Steps

The situation in Bell, California, was an anomaly. The majority of public employees are hardworking, honest individuals who are committed to enhancing the quality of life in their communities.

Conveying the true story of our members, however, requires accurate compensation information. Accordingly, ICMA is developing a national survey instrument that will focus on the collection and analysis of accurate salary and benefits data for local government chief appointed officers. The summary results of the survey will be disseminated to local elected officials, opinion leaders, and the media. Individual responses will not be released; however, the guidelines recommend that managers take the initiative to release their salary information or otherwise make it readily available in their own communities.

The release of the summary data will be used to demonstrate that the Bell salaries were an anomaly, and that most CAOs are fairly, and not excessively, compensated. ICMA will administer the salary survey in early 2011. Its success, however, is dependent upon the participation of a statistically representative number of ICMA in-service CAOs. Your participation is critical to telling the full and accurate story of manager compensation.

What to share your thoughts about this issue? Review the ICMA Guidelines for Compensation and then post your comments on the blog of Martha Perego, ICMA Director of Ethics.