He got paid $412,000 for quitting a government job? Welcome to Sacramento | Opinion
Shouldn’t the highest paid manager in Sacramento be someone who is actually working?
Not here in River City, where former city manager Howard Chan managed to turn roughly eight years of managerial service into 10 years’ worth of pay.
According to pay stubs obtained by The Bee via the California Public Records Act, Chan made $412,041.35 in gross wages in 2025. Leyne Milstein, the interim city manager in 2025, made $392,736.06.
Chan stayed on the payroll for a full year after stepping down as city manager because he had a contract that gave him an extra year’s pay simply for leaving. It was an extraordinary perk. If the current city manager decides to leave the job, based on her very different contract, Mareskeshia Smith leaves the payroll when she leaves Sacramento.
Chan’s ability to break through the $400,000 salary barrier in a year without working marks the final indignity of his eight years as manager. He amassed too much power and wealth thanks to a compliant mayor and city council.
It took a new mayor, Kevin McCarty, and a new council to finally reject Chan’s bid for an extended contract in December 2024. The day after the council decision, Chan announced his departure. He may have left City Hall, but he most certainly didn’t leave the city payroll.
It is common for city managers to get severance pay for a period of time if a council seeks new leadership and the manager has not committed a fireable offense. Smith, for example, would get nine months’ pay were a council supermajority to show her the door.
Yet in his very first contract, Chan got a guaranteed year’s extra pay regardless of the eventual reason for leaving the top job. The salary was set at the highest level of an assistant city manager, which in 2025 was $163.85 an hour. The contract guaranteed this year’s pay, even if fired during the year, regardless of any hours actually worked.
Chan received his second extra year of pay in January 2022, when the council unanimously voted to give Chan 2,320 hours of extra leave time (that is one year and two weeks) that he could take as cash rather than actual vacation. As he began taking the money, this is what skyrocketed Chan to the top of city manager pay in California.
Chan outpaced Milstein in pay in 2025 thanks to one final round of cashing out various leave balances. He got paid $15,409.71, for example, in an “additional time off payoff.” He got a car allowance of $6,000, and a “tech” allowance of $1,200. There was another “vacation payoff” of $26,067.45. And he converted some unused sick leave into cash as well, earning another $16,950.68.
Even the holidays were lucrative. Chan received a “holiday credit accrued payoff” of $2,182.40 on top of his holiday earnings of $16,075.07.
Milstein, who has returned to her previous role as assistant city manager now that Smith has assumed the top managerial duties this year. She didn’t make as much money as Chan in 2025 even though she was running the city.
But Millstein was worth every penny as she began an important course correction at City Hall.
Whereas Chan’s last year in 2024 was consumed by his pursuit of greater pay and a longer contract, Milstein kept her head down and never upstaged her council. In a difficult budget year, she helped to craft a spending plan that moved the city closer to confronting its structural deficit.
And with the help of the Department of Community Response, the staff and McCarty championed a new era of homeless management, advancing tiny home “micro-communities” that are less expensive than large shelters and more financially sustainable thanks to lower operating costs.
Smith’s contract calls for $399,000 a year in base pay and some typical allowances and benefits. The council, for now, is managing the city manager position in a sane and standard fashion. Let’s keep it that way. Pay should be for service, not for quitting.