That increase will take place this coming September on the 5th anniversary of his employment with the City, and is in addition to his PERS retirement and 457 eligible deferred compensation as provided to other employees. This increase will bring the total amount of the annual contribution by the City to this special fund up to $51,000 per year, in addition to his published salary of $247,187.20, or a total monetary compensation, not including benefits, of $298,187.20 per year!
The details are as follows. When Keene was hired by the City in 2008 an "Employment Agreement" was negotiated and executed. That agreement provides, in section 5.2, for establishment of a "Government Money Purchase Retirement Plan" under the provisions of IRS code section 401(a). This allows the creation of a separate deferred compensation account whereby the employer (City) pays the allowable funds DIRECTLY into an account without it having to pass through the employee's base salary, paycheck, or deductions - as would a regular 457 plan or IRA.
The agreement was signed by then Mayor Larry Klein on August 26th, 2008.
The Employment agreement provides that Keene will be paid 50% of the allowable 401(a) annual maximum in years 1 - 3 of his employment, 75% in years 3 - 5, and 100% after 5 years, which will occur this September. The maximum contribution for 2013 is $51,000, and the 25% increase from the 2012 maximum is the aforementioned $ 13,500 per year raise.
Interestingly, no mention of this supplemental retirement account or funding can be found in the City's web site published list of "Salary Rate Sheets" for "Council-Appointed and Elected Officers" dated 10/6/12, nor in the City Budget as a distinct line item. The rate sheet is where the $247,187.20 salary is found.
Why would a City and a City Manager who claim to pride themselves on openness and transparency choose to provide such an significant amount of compensation in such an obscure, undisclosed, and seemingly intentionally hidden fashion? It would seem to be a classic case of "do as I say, not as I do".
One significant clue as to the motivation involved may be to look at Keene's employment history over the past 17 years or so:
* 1996 - 2000 City Manager of Berkeley CA
* 2000 - 2005 City Manger of Tuscon AZ
* 2005 - 2007 California Association of Counties
* 2007 - 2010 International City Managers Association
* 2010 - 2013 City Manager of Palo Alto
When one looks at these and other prior employment stops in Arizona and on the east coast one finds that Keene has no vested interest in the California PERS system (which requires a 5 year minimum tenure), and will not do so until his vesting upon his 5th anniversary with Palo Alto this September.
No wonder he said when he first started that he wanted to stay with Palo Alto for 10 years - even that would only give him a 27% retirement at an age in his late 60s!
It would appear that Palo Alto negotiated a deal with him creating the 401(a) supplemental retirement fund in order yo make up for his prior failures to vest in a system, possibly so as to attract him to employment there at all. If he stays the full 10 years that fund will total over $500,000.00, not including interest and appreciation! High risk and high stress are sometimes commensurate with high rewards - just not usually at taxpayer expense in the public sector!
This story contains 613 words.
If you are a paid subscriber, check to make sure you have logged in. Otherwise our system cannot recognize you as having full free access to our site.
If you are a paid print subscriber and haven't yet set up an online account, click here to get your online account activated.