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PA City Mgr $100k/yr +/- housing subsidy from City?

Original post made by Diogenes on Oct 7, 2011

Followers of this forum will perhaps recall that I have posted here twice recently regarding information I came across in the Palo Alto Free Press about previously unknown compensation provided by the City of Palo Alto to our City Manager James Keene. While I thought those two prior issues to be rather disingenuous and flagrant violations of the public trust and full disclosure, it seems that this latest disclosure makes them pale by comparison.

According to the information posted - and confirmed by independent research of City records and the Manager's employment contract - the City went into a partnership with Keene to buy a house for him. The City paid 75% and gave Keene a below market loan for his 25%.

The issue of a subsidy arises because the City charges Keene no interest or rent on the City share, and the City pays the property tax on the City share. Records show the house was purchased for $1.875 million, so the City (we taxpayers, that is)share is $1,410,000. That is the capital cost of the housing subsidy Keene receives.

The annual value of this subsidy can be determined by calculating the amount that a real estate loan for the City share would cost and the amount that the property taxes on the City Share would be.

Today's rates for jumbo loans (> $729,000) are in the 4.5% range, contrary to the Free Press postings use of 5.5%. At the 4.5% rate the cost is $5.05 per $1000 of loan, or 1410 x $5.07 = $86,000 per year.

Property taxes run about 1.2% per year on the purchase price, or .012 x $1,410,000 = $17,000 per year.

Thus, the total annual value of the housing subsidy Keene receives can be reasonably estimated to be $86k + $17k = $103,000 per year!

I have noticed that this forum has restricted comments on my prior posts to Registered users only. I did not do that, and do not know why they felt the need to so do. I equally do not understand why the local media other than the Free Press has not covered these issues of Keene's undisclosed compensation above his base salary.

Perhaps they were protecting him during his negotiations with the Fire Fighters Union?

It will be interesting to see if comments on this thread are likewise restricted.

Comments (10)

Posted by Just wondering, a resident of Fairmeadow
on Oct 7, 2011 at 12:23 pm

Does he receive any automobile subsidy?


Posted by Diogenes, a resident of Crescent Park
on Oct 7, 2011 at 12:38 pm

According to his employment contract, his "transportation" subsidy is $650.00 per month, which equals $7800.00 per year.


Posted by Joanna, a resident of Menlo Park
on Oct 7, 2011 at 1:14 pm

This is disgusting! Only in government will you find such waste and abuse of our money.


Posted by Only in government, a resident of Barron Park
on Oct 7, 2011 at 1:35 pm

"This is disgusting! Only in government will you find such waste and abuse of our money."

Uh-huh. How about the bank we bailed out that's going to charge you a fee to use their debit card? Web Link

"It was a tough year for Bank of America, what with the foreclosure mess and a sagging stock price. Its chief executive, Brian T. Moynihan, nonetheless received $10 million in his first year on the job."

Are you in the 1% with Moynihan and trying to disambiguate, or are you in the 99%

Occupy.


Posted by Not happy, a resident of Barron Park
on Oct 8, 2011 at 6:58 am

This is typical. What we, tax payers need to do is stop approving all these bonds! Any other ideas?


Posted by anonymous, a resident of Duveneck/St. Francis
on Oct 8, 2011 at 11:28 am

Thank you to the OP. We need to know what is happening in local government, there is a chance of changing it to fit the reality most of us in private world face (as opposed to local public govt operations)
I feel less likely to change operation of BofA, a huge national company, except I am not their customer....
I strongly wish to thank local news reporters and other people interested in the truth and tracking what is done with our tax dollars. We ARE entitled to have them tracked and the light of day shone on what is happening..AREN'T we?


Posted by VoxPop, a resident of Old Palo Alto
on Oct 8, 2011 at 1:18 pm

This information is on the public record -- the City of Palo Alto website: Web Link

It has been on the public record and didn't require any special investigative reporting skill to find it. The poster seems to think the data were held back from the public under some kind of nefarious scheme. Not so. That website also includes a survey of comparable compensation.

Before you try to trash people, do some research.


Posted by Walter_E_Wallis, a resident of Midtown
on Oct 8, 2011 at 3:33 pm

Walter_E_Wallis is a registered user.

It is time for Palo Alto to purchase a Manager's residence and make it available to any manager during his/her term of office. Mansion to belong to the city.


Posted by Diogenes, a resident of Crescent Park
on Oct 10, 2011 at 8:31 am

To VoxPop -

Thank your for posting the link, as it actually proves my point! The link to the League of Cities City Manager salary survey clearly shows that, on page 17 of 26 on the line for the City of Palo Alto, Kenne did NOT report any of his "special compensation" items above his base salary. The is a specific column for those items, which was used and reported by other City Managers. If you actually READ the link you provided you will find that many other City Managers disclosed their car allownaces, deferred compensation, and housing subsidies.

Keene chose to report only his base salary of $260,000, and did not include items such as his $7800/year transportation allowance, his then 2010 $24,500 now 2011 $36,750 401a non payroll deferred comp, or the value of the +/- $100,000 housing subsidy.

One does wonder why other Managers in other Cities chose to provide full disclosure, and Keene did not, in spite of his own self declared policy of openness and transparency?

Perhaps, before you VoxPop decide to schill for and defend someone while criticising the efforts of others, you should complete your own research!


Posted by David L, a resident of College Terrace
on Oct 11, 2011 at 1:30 am

This is outrageous, now the question is how can we stop those waste?


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