Former Lincoln city manager had region’s highest 2014 local government pay: $470,000

The highest-paid local government official in the capital region last year worked just eight months as city manager in Lincoln, a suburb of 40,000.

A separation agreement with the city allowed James Estep to collect severance worth six months of pay and benefits, as well as money for unused leave time, putting his total pay for the year at $470,000, more than three times his base pay for the time he worked.

While Estep represents the extreme, his story shows a key aspect of how local government employees are compensated. Base salary makes up just a portion of each employee’s take-home pay, which can also include credit for unused vacation, allowances for uniforms and other job costs, and overtime pay. Collectively the extra pay can add up quickly, especially when an employee retires and cashes out his or her unused benefits.

Many government workers receive a boost from benefits, but those at the top of the salary scale see a particularly large increase, The Sacramento Bee found in an analysis of salary data. The data was collected by Transparent California, an offshoot of the Nevada Policy Research Council. The council, a “champion of limited government,” makes annual salary reports at the request of another conservative group, the California Policy Center in Tustin. The reports are available on Transparent California’s website.

The 50 highest-paid local government officials in Sacramento, Yolo, El Dorado and Placer counties made an average of $265,000 last year, and one-third of the income was from special pay, The Bee analysis found. The income does not include employer payments for health care or pensions.

Interest in local government pay was piqued by the scandal over compensation in the small southern California town of Bell, where then-City Manager Robert Rizzo made nearly $800,000 in 2010. Former state Controller John Chiang started collecting salary data for all state and local government employees in California and posting the data on the controller’s website, a practice that continues under Chiang’s successor, Betty Yee.

The only difference between the information published by Transparent California and the Controller’s Office is that the Nevada organization includes the names of the employees, while the controller only includes job titles. Including the names allows taxpayers to have a more personal connection to the information, said Robert Fellner, research director at Transparent California.

“Government salaries are often misreported in the news,” he said. “Base pay is often reported, when that is often only half of actual pay.”

Government employees often see their biggest salary boost upon leaving, as in the case of Estep.

On July 8, 2014, Estep and the Lincoln City Council signed a separation agreement that ended his employment a month later. The agreement paid him $178,000 for six months of salary and benefits as severance. He received $135,000 for unused vacation, sick time and administrative leave accumulated since he started at the city in 2008.

The city also paid his interim replacement $75,000 for the four months Estep did not work last year.

The agreement limits what the City Council or Estep can say about his departure. Estep did not return a message left Friday at his job as CEO of a local employment agency.

When government employees retire, they also can get similar big payouts. Sacramento County had 16 of the region’s 50 highest-paid local government officials, more than any other local government, and one reason is that several of the employees retired that year. Sacramento County is also by far the biggest local government in the region.

Most of the top-paid county employees worked in law enforcement, which makes them eligible for more special pay categories than other county employees, county spokeswoman Chris Andis said. For instance, they get allowances for uniforms and other job costs.

Milo Fitch, who retired as a chief deputy from the Sheriff’s Department last year, brought home just under $300,000 last year, only one-third of which was base pay. In the year he left the Sheriff’s Department for the Legislature, Assemblyman Jim Cooper, D-Elk Grove, made $315,000 as a sheriff’s captain, a third of which was base pay.

The county was not able to provide specifics about the special pay of its top-paid employees on Friday. However, the most common types of special pay are for managers having to assume duties beyond their job description, work expenses and unused vacation, Andis said.

Public safety employees are also more likely to receive overtime than other government employees. Overtime pay is what put five Davis firefighters in the list of top 50 salaries last year. Luis Parrilla, a firefighter, made $83,000 in overtime last year, helping to bring his total pay to just under $300,000.

About one-third of the overtime was reimbursed by other government agencies for wildfire work, said Jackie Jaskowiak, a human resources analyst for the city of Davis. The fire department also had an increase in overtime because of the loss of five employees at the end of 2013, she said.

This story was originally published December 12, 2015 at 4:47 PM with the headline "Former Lincoln city manager had region’s highest 2014 local government pay: $470,000."