SLO management to take a pay cut

December 7, 2011

Katie Lichtig

San Luis Obispo City Council voted 3-2 to approve an upper level employee proposed pay cut on  Tuesday night.

The move is slated to save the city $807,000 annually.

Councilwoman Kathy Smith and Councilman Dan Carpenter voted against the proposed cuts because they thought SLO’s top earners should be doing more to save the city money.

Smith criticized City Manager Katie Lichtig for not taking a lead position in setting the proposed cuts. Lichtig had instructed members of her staff to come up with the proposed pay reductions.

Lichtig earns a base salary of $221,500. She agreed to forgo her car allowance and reduce her pay by $39,500.

In addition to the salary cuts, the 73 employees who are not represented by a union are to begin paying the 8 percent employee portion of their retirement contribution to the state retirement program, which was previously paid by the city.

The cuts in management staff pay are also intended to help sway employee unions to make similar cuts in an attempt to balance the city’s budget.

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Good comments here on the funny math used to sway public opinion.

My point is a different one though. Let’s say Katie did take a 40k a year reduction and the rest were cut too, saving the city 800k a year. If they can cut 800k off just top management salaries like “that”, why was there 800k there in the first place? Why weren’t these cuts implemented 3 years ago when the economic crisis hit the private economy?

Yeah, ok, let’s not even go there. Don’t want to open up that can of worms do we.

And for what?


Katie gave up NOTHING. Her salary is EXACTLY THE SAME.


Employees will now pay their own 8% pension contribution. Approx $17,600 for Katie. But this isn’t a reduction in salary! Sure, it costs money, but that money is tax-deferred. But go ahead and count that as a “compensation reduction”. Fair enough. But please notice the difference between “salary” reduction and “compensation” reduction.

Next, they are counting her car allowance ($5,400) which she already gave up for 2011, but now she gave that up permanently. So this is nothing new. Katie is not seeing a drop in pay here.

AND—get this—they are also counting that they took away the ability to cash out up to 80 hours of administrative leave. Now admin leave is “use it or lose it”. Okay, that saves the city money, but only PRESUMING that employees previously cashed out their entire 80 hours each year. So now, employees will just be sure to use their entire 10 days off (which also costs in a more indirect way since we are without their “services” for ten days).

So the $39,500 figure is just put out there to show how magnanimous everyone is, but it’s a complete load. Despite that, the press bought it, and you bought it too, didn’t you?


It’s about time.

I don’t think $39,500 is remotely correct. First, it’s not a salary cut–look at the staff report. Katie’s salary is still $221,000 (page 16, Item C):

The ONLY thing changed in Katie’s contract is benefits. Council was talking about employee’s paying their 8% pension contribution last night. I don’t see how that possibly adds up to $39,500.


This is the first positive news I have seen out of local government in months. Bravo!

If they think unions will voluntarily make any cuts they are living in a dream world. Unions have one purpose, get their members paid as much as possible.

Lichtig seems to get bashed a lot, but that is downright noble of her to give up nearly 20%.

IF Ms. Lichtig is actually giving up 20% of her salary, that is a really great thing for her to do; I am just having a problem working out the math though. Could you “show your work” as to how you came up with that 20% figure?

$221,500 * 20% = $44,300

$39,500 + car allowance = ±$44,300

Or another way:

Total compensation for the City Manger (Trib request for data)

also here in more detail – though a little dated:

$311,252 total

$5400 for car allowance + $39500 base salary reduction = $44900, or a 14.4% total reduction, nothing to sneeze at.

for comparison

SLO City-wide average salary: $34,661

SLO CIty median household income: $31,926

( 2011 figures, )

Sounds good, if it were true… See my post above.

Thank you for delving into it. I took the article at face value without checking the backstory.

Kevin Rice, citizen reporter of the year. srsly

Not SLORider….SlowThinker..

Extreme libertarian solipsist, i e. “Me, Myself, and I” .