Who Will Replace the Gray-Haired Guy in the Corner Office?

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Friday, June 25, 2010 | There was a time when the manager of your city was likely a young idealist caught up in the public service mantra of the 1960s. He probably took seriously John F. Kennedy’s words: Ask not what your country can do for you; ask what you can do for your country.

Fast forward more than four decades and that idealist has aged and become tired of negative public attitudes toward government, hard labor negotiations and painful budget cuts. And he is just about ready to punch his ticket and take advantage of a fat pension, if he hasn’t done so already.

Baby boomer city managers are leaving in droves. Just this year, the city managers in Tustin, Laguna Beach and Fullerton announced their retirement plans. City managers in Santa Ana, Costa Mesa and Lake Forrest are at or near retirement.

And there is ample concern about a dearth of qualified replacements in these cities and many others.

The problem, to a large degree, boils down to simple math: There are 80 million baby boomers in the U.S., and only 40 million Gen Xers. This demographic means that the corner offices of city halls are occupied by an inordinate number of people in their late 50s and early 60s.

It is an issue in the business world as well. But the combination of crippling municipal budget deficits, generous pensions and changing attitudes about government service make the problem a particularly difficult one in city governments.

“This (economic) cycle’s been the worst for me,” said Bill Huston, Tustin’s city manager. “We went through Prop. 13, the city adjusted, but the last one we’ve been through is the worst.”

In the 1960s, government service was cool, and it is where many smart and ambitious people ended up. But by the 1980s, Wall Street was the destination for the so-called best and brightest. As a result, there are not enough talented and experienced government hands who are in their 40s and early 50s and willing and able to manage the many-headed beast that is a city government.

And increasingly, the older generation is not willing to continue serving, regardless of what Kennedy said.

“A lot more people are down on government — saying government is the enemy,” said Bob Stern, president of the Center for Governmental Studies. “It’s a feeling that I can retire, and now’s a good time to retire.”

There’s another problem at work said Frank Benest, a retired baby boomer city manager who works on solutions to the problem with the International City/County Management Association. While the business world has done a decent job of capturing knowledge and transferring it to the next generation of leaders, most local governments will be hit hard by the oncoming brain drain.

If city governments don’t come up with a system to retain what he calls “tacit knowledge,” then new city managers won’t grasp what can’t be written on paper — like dealing with the key players who make the town work, Benest said.

Laguna Niguel City Manager Tim Casey, who is nearing retirement age, said cities should create an entry level management position that could attract new talent and allow older city managers to nurture a successor.

The newer talent, having to relearn the art of managing cities, could bring a fresh set of ideas with them, Benest said. But innovation can be fraught with errors — and the public, politicians and the media are unlikely to tolerate mistakes.

“If our political and elective leaders are intolerant of mistakes — nobody’s going to take any risks, nobody’s going to be innovative. They’ll be afraid they might fail,” Benest said. “I would suggest local governments are not open to that.”

The experience of a young city manager in a young city, however, suggests that innovation is possible.

Aliso Viejo incorporated in 2001, and its city manager, Mark Pulone, is in his mid 40s — young compared with many of his equals in Orange County.

With only 14 full-time employees, Pulone runs a lean operation. The city takes an unorthodox approach, much like other younger cities: It relies mostly on contract planners for its construction and partners with homeowners associations to keep the city’s parks and recreation areas maintained.

Now that Aliso Viejo is nearly built out, most of those contractors will disappear.

“As a new city, you have a blank canvas, so you can evaluate the best ways of providing services,” Pulone said.

Aliso Viejo was set up that way from the day it incorporated, and Pulone says his management style probably wouldn’t work in older cities with entrenched labor contracts and heavy organizational structure. Most of the older cities don’t have homeowners associations to partner with and don’t have the leeway to fire legions of staffers and replace them with temporary contractors.

But there are downsides to relying so heavily on contract workers. Many HOAs are poorly managed and close to bankruptcy. And there is generally less transparency and accountability with contractors.

Regardless, most cities are not in the position of Aliso Viejo. And city councils in need of a new manager have found it hard to find strong applicants.

The Tustin City Council sought the help of the consulting firm Teri Black and Company to find its new city manager. And while Councilman Doug Davert said the council is looking for an experienced, well qualified city manager, he admits it has been tough to find one so far.

“The process is moving deliberately — but not quickly,” Davert said.

The problem Tustin is facing is one reason why city managers remain so highly paid even during extraordinarily tight budget times. Last month, the Orange County Register released a report on city manager salaries that showed some eye-popping paychecks being taken home by managers of big and small cities.

Topping the list was City Manager Bruce Channing of Laguna Hills, who earned $460,809 in total compensation in 2009 — the highest of any city manager in the county.

Stern acknowledged that many city manager salaries are high but said the fat paychecks make sense when you look at the people earning them as they should be looked at — as all-stars.

“Why do we pay A-Rod so much money? Why do we pay corporate leaders so much money?” Stern said. “Ninety-eight percent of humanity doesn’t run cities.”

Benest says because of the small talent pool, the best way to continue the talent flow is to grow city managers in house.

To help cities with that effort, Benest has been working with the California branch of the International City/County Management Association on programs to cultivate top-tier leaders from within local governments.

The programs include management exchanges, like having a city planner work in the finance department of another city for three months. That kind of exchange allows future city managers to develop the variety of skills they need to operate a city.

“At this point in time because of the talent crisis — you have to grow your own leaders,” Benest said.

Clarification: A previous version of this story described Laguna Hills City Manager Bruce Channings’ $460,809 compensation package as his salary. The $460,809 includes his salary and other perks like his car allowance.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org, and follow him on Twitter: twitter.com/adamelmahrek. And add your voice with a letter to the editor.


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