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Why give ANY bonuses to city employees?

Original post made by Diana Diamond, Palo Alto Online blogger, on Aug 14, 2006

The more I thought about the $17,000 in bonuses that the four Palo Alto City Council-appointed administrators received last week, the angrier I became.

Here we are at a point where the council is telling residents that the city will probably face a $7 million deficit next year. One thing that will go, saving the city $10,000, is the Brown Bag concerts which have been around for 25 years. Yet the council majority — Mayor Judy Kleinberg and Council members LaDoris Cordell, Jack Morton and Bern Beecham — voted to give out $17,000 in bonuses to four people. (Council members John Barton and Peter Drekmeier were absent.)

City Auditor Sharon Erickson received a $6,000 bonus, City Manager Frank Benest got $4,000, City Attorney Gary Baum received $4,000, and City Clerk Donna Rogers got $3,000.

Why? It’s not that the four individuals aren’t making a fair money. Benest’s salary is now a little over $208,284 a year – plus the council is paying for half of his property taxes. Rogers and Erickson make over $100,000, Baum more than $184,000. All four, in addition to their bonuses, will get the same raises as the management group at City Hall, an estimated 3 percent increase, and their customary fully paid health, dental and vision plans for themselves and their spouses.

I think the four got these bonuses simply because they did their jobs, and not because of outstanding performances. (The one exception is Erickson, who probably is the only one who deserves a bonus.)

In Benest’s case, there was a lot of council dissatisfaction with his day-to-day performance. Not only was there the Utilities Department scandal that cost the city $300,000 to investigate and that resulted in the firing or resignation of some 15 Utilities Department employees, but there also was the feeling among some council members that Benest was not always on top of things at City Hall.

So why did Benest get his bonus? I have no idea. Council members who voted for it said publicly they had problems with Benest’s performance this past year, and hoped he would improve. To their credit, three council members voted against his bonus – Vice Mayor Yoriko Kishimoto, Larry Klein and Dena Mossar.

As for Gary Baum getting his bonus, I find that equally surprising. This was the attorney that has consistently claimed attorney-client privilege in dealing with the Utilities Department scandal, even though the client was, in fact, the City Council. All the council received was a two-page report on the findings of the investigation – and council members were not told who had been disciplined.

Baum was also ultimately responsible for the city having to pay $21.5 million for the Enron settlement. The council followed the recommendations of Baum's office in settling with Enron.

In private industry, “bonus” isn’t a word heard very much. You get your salary, and perhaps a percentage increase based on performance, and that is it. Even if you are in upper management, then a salary raise, and perhaps a bonus, only come after you have met a set of goals that go way beyond what your day-to-day responsibilities entail. It’s called a “management by objectives” approach, and the rewards come only after you’ve met your extra objectives.

Bonuses should not be automatic at City Hall. Showing up to work and doing an okay job is no reason to pay out a couple of thousand dollars as a reward. In fact, let’s just get rid of bonuses, it’s an outdated concept.

Comments (16)

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Posted by Angy Citizen
a resident of Another Palo Alto neighborhood
on Aug 14, 2006 at 4:09 pm

A revolution is needed in Palo Alto to get the right people in place who will not rob its citizens blind as the present bunch of free loafers are doing.

There's absolutely no excuse to cry budget shortfall on the one hand, forcing service cutbacks and what not, and to handout extra money on the other hand to people for just doing their job, some not even satisfactorily.

Let us remember the following names:
Judy Kleinberg
LaDoris Cordell
Jack Morton
Bern Beecham

I call upon the good citizens of Palo Alto to vote these incompetents out of their comfortable positions!

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Posted by Incredulous
a resident of Another Palo Alto neighborhood
on Aug 14, 2006 at 9:12 pm


I can't understand why this sticks in your craw to such an extent that you write multiple editorials about it. Do you really fail to understand that the Council-appointed officers would be paid MUCH MORE if they chose to work in the private sector? You act like $200,000 is an outrageous salary for a CEO, when in fact it's at the low end of the scale these days.

I'm sure any one of our city executives would give back the nominal bonus they received to stop the unwarranted public criticism they ensure on a daily basis.

Time to get over it and find a REAL issue to gripe about. This one is so over.

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Posted by Angry Citizen
a resident of Another Palo Alto neighborhood
on Aug 14, 2006 at 9:43 pm

Two problems with your comments.

First, you are trying to silence a messenger who happens to be doing our community a great service by speaking up. You, Incredulous, on the other hand, are only aiding and abetting a bunch of misfits running Palo Alto into the ground.

Second, those people chose to work for the city. Why should they have the cake and eat it too? If all they cared about is money, they should never have left the corporate world. Besides, they'd have to work A LOT HARDER in the corporate world and hence the higher reward. In comparison, they have it so easy working for the city. In my honest opinion, they are paid way over what they deserve for the cushy positions they hold.

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Posted by ssquared
a resident of Greenmeadow
on Aug 16, 2006 at 9:25 am

I agree with Diana. A governmental agency is not the place for bonuses. If the employees want bonuses, they should join a for-profit company. How can the city cut services and Brown Bag Concerts, then give bonuses. Aren't taxes supposed to benefit all of us, not just four individuals. It is time to stop this self-serving practice?

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Posted by Resident
a resident of University South
on Aug 16, 2006 at 8:21 pm


Enough with the bonuses!! Do you ever have anything good to say about the city employees or the services they provide? I feed very lucky to have lived in this city for over 25 years.

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Posted by Resident
a resident of Crescent Park
on Aug 16, 2006 at 8:28 pm

Same old Diana Diamond.

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Posted by A sane resident
a resident of Midtown
on Aug 17, 2006 at 1:48 am

While bonuses are not necessarily a bad thing, I do agree that they should be given for overachievment. What outstanding services were these bonuses given for?

As for the post by "Incredulous", I find it worse than ridiculous to insinuate that we should be thankful that these guys are willing to work for the city. They're not doing anyone any favors - the door is open and they can leave any time. If they are to work for the city, their work is definitely appreciated but they should be closely monitored the same way that any other public position is monitored, nothing more, nothing less.

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Posted by Incredulous
a resident of Another Palo Alto neighborhood
on Aug 17, 2006 at 6:28 am

Of course they should be monitored and held to standards. I'm just saying that $200,000+ is the going rate for a municipal CEO. Diamond seems to think that's outrageous--that's just naive or she hasn't done her homework.

We are fortunate to have two CAOs with national reputations for excellence - Erickson and Benest. And yes, we SHOULD be thankful that they have dedicated their lives to public service.

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Posted by Angry Citizen
a resident of Another Palo Alto neighborhood
on Aug 17, 2006 at 9:36 am

Why, Incredulous, are you one of the Gang of Four? You seem to keep pounding on the notion that we ought to thank them for willing to work for pittance. Let's be real. They took the job because they're getting excellent money and benefits for less work and less pressure. Palo Alto is hurting for money and can ill afford to dish out extra to people who did what they were paid to do. Let's face it. People are attracted to places like Palo Alto because they know they can count on people like you to pay them more than they deserve. If you are so happy with them, why don't you pay the bonus money yourself?

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Posted by Logical
a resident of Crescent Park
on Aug 17, 2006 at 8:39 pm

Lets be fair:


Enumerate Benest's outstanding work.


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Posted by PK
a resident of Barron Park
on Aug 18, 2006 at 3:45 pm

My guess is that "Incredulous" and "Resident" are probably the same person. And anybody who uses the unnatural, stilted term "resident" is probably on the city staff. Who knows, "Incredulous" and "Resident" might be Frank Benest.

Any way, I agree with Diana -- the city manager and his staff have been doing a lousy job for years. They should have been fired long ago, but council doesn't have the guts.

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Posted by Richard Placone
a resident of Barron Park
on Aug 19, 2006 at 10:14 am

Frankly, I think the idea of giving bonuses to senior managers for just doing their job and not spreading the bonuses around to the people who may really be working hard is grossly unfair,is unbusiness like and typical of the Council's elitist attitudes. In fact, there should be performance criteria that is incentive based that awards managers and regular staff alike for jobs that exceed their job description. Showing up on time and putting in a full day does not count. Exceeding expectations in measurable ways should head the list. For example, a department manager who manages to provide all the services of the department, and come in well under budget should be rewarded. For a manager who manages to have staff trained such that when someone leaves, another can take over, and perhaps have a position eliminated, and still provide services, should be rewarded. And I would make the reward significant. In the case of a department manager who comes in under budget without sacrificing services ( it can be done, you know) and saves lets say $20,000, then the bonus should be 50%. Imagine if staff were put on notice that savings in budget without sacrifice in service is worth 50% of the savings, or maybe an extra weeks paid vacation for that year - I'll bet you would soon find that the alleged deficits the city faces would be greatly reduced and morale rise.

In regards to anonymous posts here, I find them worthless. As someone pointed out, the author could be anyone. If one is afraid to speak out about important city issues without identifying themselves, then their opinions do not count for much. Afterall, I doubt that the police chief is monitoring these posts and anyone who expresses an opinion against city policy or practice will find an increase in their utility bill! If more people would identify themselves and speak out, as I have been doing for years, we might be able to bring about some needed changes in which "the best managed city in the country" (to quote one Council Member)is in fact managed.

Richard C. Placone
Barron Park

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Posted by paly resident
a resident of Old Palo Alto
on Aug 20, 2006 at 9:12 pm

the $17k isn't worth the ink it is getting in this blog. this area has hugely inflated salaries. no one moves into a home in places like palo alto without selling a few million in stock ahead of time. no one does anything here (that lives here) that doesn't make six figures.

you can't get people to do the jobs on the council for less. they would not be worth it.

the big issue is the $7 million deficit. THAT IS THE ISSUE. lets see some constructive advice on where to take out the $7 million. how are we going to do that? not obvious is it. a whole lot of stuff isn't going to get done.

in the meantime lets keep the staffers motivated and working on the problem of the 7 million deficit. quit nickel diming them on little chicken**** issues like the 17k bonus.

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Posted by Angry Citizen
a resident of Another Palo Alto neighborhood
on Aug 20, 2006 at 10:49 pm

Make that $7.017 million deficit, and growing everyday thanks to cavalier attitude displayed by the likes of "paly resident." Oh, yeah, let's not worry about peanuts. Few more follies and we shall reach $8 million in no time. But of course, "paly resident" will come in and asks out loud: "What's all the fuss over a few little chicken**** extravaganza? the big issue is the $8 million deficit. THAT IS THE ISSUE." Yeah, we know, but instead of spreading your wings, how about offering something to tackle this big issue.

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Posted by Mark Nelson
a resident of another community
on Nov 6, 2006 at 8:50 pm

I can't believe what I am reading. Although I do not live in your city or state, I felt the need to comment. Everyone seems to be a critic and have drawn ridiculous conclusions about all of your city employees and city government. Maybe the problem with the city is not your government but the citizens within your community who are afraid of change. I will make my argument and then leave in peace.

How many times have you driven down the road and seen city or state workers all standing by a truck drinking coffee and watching one person do all of the work, which is usually the lowest man on the totem pole. We all comment about what we just seen but never do anything constructive about it. Our social system within federal and city government that guides the employment of these individuals has created an employment nightmare.

Many people have developed their own answers to problems like these, "Just fire them!", most of you would say. If one person out of seven is doing the job, then get rid of the other six! That is a great idea, with the exception to the one person that is still employeed. Where's the pat on the back and the recognition for a job well done. It is only a matter of time before the one efficient employee becomes just like the rest before him, a mindless drone who just shows up to work and does what he is told to do and puts very little effort into their work because noone took the time to recognize them.

People will go out of their way to complain but will take little effort to send a letter or say thank you for certain accomplishments like plowing the snow off the streets throughout the day and into the night.

But just like good has bad and up has down, you can not have incentives without penalties. As it stands now, our why of thinking keeps us from giving incentives, but it also prevents us from penalizing those city employees who are not doing their job. WHY?!!! Because everyone is afraid of law suits that may cost the taxpayers more money. So, in eccessence we as a whole have created the very system that we don't like and want to critize anyone in any postion of being in charge of it.

There is no incentive to do a better job, there is no incentive to go the extra mile, there is no incentive to burn the midnight oil. If you are at the DMV, standing in line for god knows how long, only to get to the window and find out that it is 3:30 pm and they put up a sign saying closed. What harm would it have been to stay open and finish up those still standing in line. I will tell you, no incentives.

Having served in the military for 20 years, the army used to use the same concept. But then, in the mid 80's, a new inovative concept was create, instead of an army of mindless drones, let's push for a more educated soldier. A soldier more suited to defend our nation and way of life with not just brawn but also brain. This concept proved well for the Federal Government and allowed Congress to reduce forces over a period of several years since one soldier could now perform the tasks of 10 which saved the taxpayers alot of money until the war came into play.

The past is the past, and what worked back then is not neccessarily the best option for what will work in the future. If you people don't get your act together, you are going to kill your city's prosperity because your driving a wedge between everyone within your community. Most people don't see the behind scenes, or refuse to see what happen within city government, it isn't because they were not made aware of it, it is only because that particular subject did not draw their interest. If you have ideas and interest which would help your city make better decisions, then be an effective citizen and present those ideas to the council before it becomes an issue.

It is easy to sit back after the play happens and tell everyone what they did wrong, but maybe if you had a broader scope of what they were attempting to accomplish then maybe you would better understand some of their decisions and possibly add to their decision making process with thoughts of your own.

I for one think if the people are demanding that the government do more with less then I think that those same voting people should be open to new concepts, because obviously, the old method wasn't really working was it. Your city deficit was not a product of the bonuses awarded, but more of an on going compilation of financial issues that have carried over from year to year, possibly by prior officials. Maybe an incentive to those who can truly make a difference and hopefully change a system which is full of faults and which caused your deficit to expand over a period of time is the answer. You won't know unless you explore that concept.

If we do not keep our options open and explore new ideas or concepts then issues like slavery would never have gotten addressed and abolished, and women would never have gotten the right to vote. New concepts and inovative ideas are what drive the American Dream, which country do you want to live in?

Mark Nelson

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Posted by Former City Employee
a resident of another community
on Nov 16, 2006 at 10:44 am

I have no problem with public sector employees getting bonuses, however a bonus should be based on measurable delivered product. The measurement and the goal as well as the potential amount of reward should be established at the start of the period the bonus is for, not after. If there is no goal and no measurement then isn't the reward a "gift" and if so that is "gifting of public funds" and illegal.

Sorry, but further commenting on this topic has been closed.

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