Some
thoughts on the impact of increasing Mr. Van Winkle’s compensation
in his new position
of interim town manager.
Since the Town is conducting a
nationwide search for a permanent Town Manager to replace the departed Mr.
Francis what impact does the increase in Mr. Van Winkle’s salary have on his
post-retirement compensation, given the fact that he may not be the ultimate
successor?
As Director of Community
Services, Mr. Van Winkle was making $119,002 plus an undisclosed bonus. He was
entitled to 35 vacation days and could sell back 20 days at the rate of 1/260th
of his annual salary per day. In addition, he is entitled to 15 paid sick days
and 12 paid holidays including his birthday. Assuming he sold back the allotted 20 days vacation, he made $128,156 plus
his undisclosed bonus and would have retained 6 weeks vacation/sick days plus
12 paid holidays.
By increasing his salary by
$26,000 to $145,002, the Council effectively increased Mr. Van Winkle’s income
to $156,156 plus bonus - an increase of at least $28,000. Of course, he still
enjoys the vacation days, sick days and paid holidays described above and
presumably, he will be entitled to a larger, undisclosed bonus. The higher
salary will also be used to compute his future pension. Assuming the Town will
pay a pension to Mr. Van Winkle for 20 years following his retirement, the
increase in his cumulative pension resulting from his elevation to Interim Town
Manager carries a Net Present Value (NPV) of over $320,000 at a discount rate
equal to inflation.
The Town Council had the rare
opportunity to break from the “business as usual” way of running West Hartford
when Mr. Francis “retired” with his $100,000/year pension and lifetime health
care and accepted a new position in