Advertisements for Southern Shores’ vacant town manager position were to be placed in strategic venues yesterday and today—officially launching a hiring search that has been delayed for months—according to consultant Ellis Hankins of The Mercer Group, who presented his search process and timeline to the Town Council at its Tuesday morning workshop.
The Town Council unanimously approved both Mr. Hankins’s ad copy, which Town Finance Officer/Human Resources Director Bonnie Swain had previously critiqued, and his search timeline, which, if adhered to, would have the Council interviewing candidate “semifinalists” in early May and a new manager on the job in mid- to late-June.
Former Town Manager Peter Rascoe gave notice in the middle of last July of his Sept. 1 retirement. (He is pictured above in his Town office.) Deputy Town Manager/Planning Director Wes Haskett has been serving in the position since Mr. Rascoe went on leave last August.
Mr. Hankins also met Monday with Mayor Tom Bennett and each member of the Town Council, except Matt Neal, who was unavailable. The consultant, a senior vice president with The Mercer Group, encouraged members of the community as well as others who have an interest in or opinions about the town manager search to contact him at firstname.lastname@example.org.
Tuesday’s workshop also featured the presentation of a pay study report prepared by management analysts for the Piedmont Triad Regional Council (PTRC). David Hill, who conducted the study with colleague Bob Carter, told the Council that his report was based on workforce data that he received July 2, 2019, two weeks before Mr. Rascoe gave notice.
He came “on site” last summer, Mr. Hill said, meeting with Town employees and their supervisors in order to develop classifications for their jobs. He failed to mention if Mr. Rascoe was involved in this process.
Mr. Hill’s agreement with the Town is not included among the service contracts posted on the Town’s website, and neither Mr. Rascoe nor Mr. Haskett ever mentioned his pay study in a town manager’s report at a Council meeting. Former Councilmen Fred Newberry and Gary McDonald, who served until early December, told The Beacon they were unaware of it.
The Town contracted with The Mercer Group, after considering proposals from three North Carolina search firms that were submitted last fall. According to the proposal that Mr. Hankins submitted to the Town, his firm’s fee for its services is $17,500 plus incidental expenses of up to $3,500.
Although Southern Shores has had outside help before in identifying town-manager candidates, it has never hired a professional search firm.
THE BEACON’S QUICK TAKE
The Beacon gives high marks to Mr. Hankins and The Mercer Group, which does business nationally and has offices in 12 states, including one in Raleigh. The Mercer Group has performed dozens of executive searches for public entities, including recently assisting Manteo with finding a highly qualified successor to its longtime town manager, who retired. Emerald Isle is another of the firm’s clients.
Mr. Hankins’s presentation was very polished and professional.
We find little value, however, in the flawed pay study conducted by Mr. Hill and Mr. Carter. Mr. Hill presented results to the Council that The Beacon would characterize as both meaningless and irrelevant. Council members appeared to us during his talk to be either indifferent or confused or both. We could readily empathize.
The PTRC study concludes, without citing any comparable job-market hard data—such as the position-grade salaries paid by Duck and Kitty Hawk to their employees—that the Town needs to invest $70,444.79 into adjusting its salaries and benefits upwards in order to be competitive in the marketplace. The methodology that enables PTRC to get to this recommendation–which is based on apposite comparisons to other towns and inherently unreliable self-reporting (you tell what you do, thus defining your own job description)–simply does not hold up.
This conclusion is reached even though the study shows that Southern Shores has the highest average salary among all Dare County towns (Manteo, Nags Head, Kill Devil Hills, Kitty Hawk, and Duck), as well as in comparison with 13 other local governments, including those of Dare and Currituck counties and in coastal towns such as New Bern, Beaufort, and Wilmington.
Southern Shores’ average salary—a figure that The Beacon views as insignificant, because it is derived from taking into account disparate jobs (different departments, different skills) performed by people with disparate levels of experience—is purportedly $62,622. The $70,000-plus increase in salary funding recommended by PTRC would bring the average salary in Town to $63,314, another meaningless value.
While it would make sense to derive an average salary from among police officers with less than five years of experience, for example–or from another group with comparable job qualifications and traits–it makes no sense, mathematical or otherwise, to compute an average salary for an entire town staff.
According to public records obtained by The Beacon last year, Southern Shores has about 25 full-time employees working across four departments: administration, police, public works, and code enforcement.
Ms. Swain told the Town Council that municipal pay studies, which form the basis for staff position pay grades and salary ranges, typically are performed every three to five years, but Southern Shores has not done one since 2013. Mr. Rascoe, who was hired in June 2010, would be the person primarily responsible for the time gap.
Tuesday’s workshop meeting was videotaped in two segments, the first of which addresses the pay study report, and the second of which consists of Mr. Hankins’s presentation and a public hearing on the town manager search process/timeline.
You may access the first segment here: https://www.youtube.com/watch?v=-KX4_ECIZKs&feature=youtu.be
Segment two is accessible here: https://www.youtube.com/watch?v=QBMDzF1Pq7Q&feature=youtu.be
The Beacon will discuss the segments further in reverse order.
THE TOWN MANAGER’S ROLE & JOB DESCRIPTION & THE SEARCH TIMELINE: WE ENCOURAGE YOU TO MAKE YOUR VIEWS KNOWN; EMAIL ELLIS.HANKINS@GMAIL.COM
Mr. Hankins described the search for the Town’s next town manager as a “great challenge” and a “great opportunity” and expressed his commitment to assisting the Town Council with finding a “competent professional” who is a “good fit.”
He also referred to the town manager as the Town’s “chief executive officer . . . on a daily basis.”
The town manager, he said, is “the person in charge of town government”—subject to the Town Council’s “supervision.” Not control or command, but supervision.
The Beacon believes this is an important point to understand. The town manager does not work for the Town Council. He or she works for the Town.
Only two people spoke during the public hearing Tuesday for the town manager search, and I was one of them. I started by emphasizing that Southern Shores has a council-manager form of government and noted that the manager’s powers and duties are set out in state law, specifically in N.C. General Statutes section 160A-148. A council may not modify these powers, except perhaps to add to them.
Under state law, a North Carolina municipality may choose to have a mayor-council form of government or a council-manager form of government. In a mayor-council government, the power and authority to govern and make decisions are vested in these individuals, who may hire an “administrator”—not a manager—if they choose and delegate to that person specific duties and powers, which they may modify or even completely eliminate.
The administrator in a mayor-council government serves at the discretion and pleasure of the ruling board, which can delegate to him or her any of its own power or duty, as long as it is not a power or duty that state law requires the board to exercise.
Unlike “administrators,” town managers have a lot of independence and autonomy and should not be viewed, nor should they act, simply as instruments for carrying out the Mayor’s or the Town Council’s orders. They are high-level professional managers, CEOs.
The council in a council-manager form of government is required by state law (NCGS sec. 160A-147(a)) to appoint a manager “solely on the basis of the manager’s executive and administrative qualifications.” The statute also states that the manager need not be a resident of the municipality or of North Carolina at the time of his or her appointment.
I gave a fairly exhaustive description of the experience, qualifications, style of management, and personal characteristics that I consider prerequisites for an excellent town manager/CEO. In addition to what may be rather obvious attributes, I asked for a manager who follows up on Town business (the CodeWright project and the land-use plan revision, for example) and fosters a give-and-take with the public, informing “stakeholders,” and observing an “open-door policy.”
Please share your thoughts with Mr. Hankins about the town manager you would like to see in Southern Shores. Email him at email@example.com. “Half of the folks in Manteo” have his email address, he said, and they used it during that town’s search.
FROM PLACING JOB AD TO HIRING NEW TOWN MANAGER
Among the job-ad placement venues mentioned by Mr. Hankins Tuesday were the N.C. Association of County Commissioners, the N.C. League of Municipalities (NCLM), and the International City/County Management Assn. (ICMA), a Washington D.C.-based association that represents professionals in local government management.
Mr. Hankins, who is an attorney with a master’s degree in regional planning, served as executive director of the NCLM from 1997-2014. He currently is Town Attorney for Spring Lake, N.C. and an adjunct faculty member at the UNC-Chapel Hill School of Government, N.C. State University, and Duke University. He teaches public law and ethics, state and local government, and intergovernmental relations.
Mr. Hankins’s CV is extensive. You may view it, as well as the rest of The Mercer Group’s proposal, on pp. 34-74 of the packet at https://www.southernshores-nc.gov/wp-content/uploads/2020/01/Manager-Search-Firm-Packet.pdf.
During the recruitment period, Mr. Hankins told the Council, he will be reaching out to “folks in coastal communities, in particular,” for town manager candidates—in Virginia, South Carolina, and Georgia, as well as in North Carolina.
He also outlined the following upcoming events in the search process:
From now until March 2: preparation of a color recruitment brochure/position profile, dissemination of which will start about March 2
March 3-April 8: phone conversations with strong job applicants and preliminary reference and background checks
April 6: beginning of the first review of applications (the so-called “soft application deadline”)
April 16: a closed meeting with the Town Council to discuss the “strongest candidates,” about whom Council will have received written information; and selection of five to seven semifinalists to interview
April 30: completion of reference and background checks on selected semifinalists
May 1: interviews by Council with semifinalists (Mr. Hankins will help with standardized interview questions)
May 8: second interviews by Council with select semifinalists, if desired (possibly in a more social setting, with spouses present, Mr. Hankins suggested)
Early- to mid-May: vote by Council in open meeting to appoint new town manager
Mid- to late-June: arrival of new town manager; transition
Mr. Hankins said he would help the Town Council to negotiate the new town manager’s employment contract, including suggesting a salary range. (The Beacon would like to see Mr. Hankins’s pay study of the position!)
The Mercer Group consultant also advised that he would “recruit, recruit, recruit,” and keep the Council informed of the search progress.
“We may get as many as 40 to 50 applicants,” he said, adding that the “best-qualified” applicants often apply toward the end of the application process, after they have done their “due diligence” about the job and Southern Shores.
CRITIQUING THE PAY STUDY AND THE TOWN’S PAY HISTORY, ESPECIALLY WITH TOWN MANAGER RASCOE, IN MORE DETAIL
In critical public comments that I made before Mr. Hill’s presentation, I observed that the PTRC study, as included in the workshop meeting packet, lacks a listing of the positions currently held by Town staff and the pay grades and salaries for each. This constitutes an omission of key data.
Upon an inquiry about the same from Councilman Neal, Mr. Hill explained that such a list does exist, and that Interim Town Manager Wes Haskett possesses it.
Councilman Leo Holland also expressed an interest in seeing this list, so that he can compare and contrast it with Mr. Hill’s recommended changes in pay grade and salary range—which are included in the study. Mr. Haskett said he would get this information to the Council.
It came out during the Town Council’s discussion that the Town’s current pay-scale plan is available on the Town website. But this is true only if the position-based pay scale in FY 2019-20 is the same as the pay scale that was in effect in FY 2018-19. A pay scale for the current fiscal year has not been posted.
The Beacon only discovered links to FY 2018-19, FY 2017-18, and FY 2016-17 pay scales on the Town website under the category of “Financial Documents.” The two pay scales for fiscal years 2018-19 and 2017-18 are dated 7/1/2018 and are identical. They show pay grades numbering from 10 through 26 and figures next to each job classification denoted as “hiring rate,” “minimum,” and “maximum.”
The FY 2016-17 pay scale is different, however. It is dated 7/1/2016 and has similar pay grades and job classifications, but the salary numbers (hiring, minimum, maximum) vary from those in the next two fiscal years.
The FY 2016-17 pay scale also includes this noteworthy addition to the positions in grades 10 through 26: a “contract position” in grade “C,” classified as “Town Manager,” with a contract rate of $141,934.
Mr. Rascoe’s salary history with the Town was unusual and controversial. Within three years of his appointment, he had received a 20-percent pay increase.
Under his initial 2010 contract, which was for three years, Mr. Rascoe earned a base salary of $109,500. A year later, in open session, Mayor Hal Denny and the Town Council increased his base salary to $120,000 (roughly a 10 percent raise). A year after that in an open session on Aug. 21, 2012—before the initial contract had expired—Mayor Denny and the Council increased Mr. Rascoe’s base salary to $128,000 (about 7 percent).
Shortly before Mr. Rascoe’s contract was to expire in 2013—and less than six months before Mayor Denny left office—the Mayor and Town Council extended Mr. Rascoe’s term of employment five years, through June 30, 2018, and increased his salary to $131,800 (about 3 percent). These actions were taken in closed session.
A year later, in a closed session presided over by Mayor Pro Tem Jodi Hess, because Mayor Tom Bennett was absent, the Town Council extended the term of Mr. Rascoe’s contract nine years, through June 30, 2023.
In FY 2019-20, according to public records, Town Manager Peter Rascoe earned a total salary of $163,940. When benefits were added to his salary, Mr. Rascoe’s compensation was $214,902—the highest salary-benefit package for any town manager in Dare County.
See Mr. Rascoe’s contract and addenda at: https://www.southernshores-nc.gov/wp-content/uploads/2018/04/Binder1-Town-Manager.pdf
According to Mr. Hill, Mr. Rascoe’s salary was included in his pay study, even though its history clearly shows preferential treatment, and Mr. Rascoe’s position is outside of the established Town pay scale.
The pay study also does not consider the variable of benefits, which should be evaluated when base salaries are assigned. Southern Shores gives its employees very generous benefits.
The Beacon obtained FY 2019-20 salary-benefit totals from other nearby beach towns and learned that the town manager of Kill Devil Hills receives a salary-benefit package of $199,017; Duck’s town manager earns a package of $191,347; and Nags Head’s town manager receives $179,451.
Kitty Hawk’s town manager has a FY 2019-20 base salary of $108,201.60, to which health insurance, 401(k) and retirement benefits, and FICA would be added. We did not obtain a package figure for this position, but would estimate that the amount is between $130,000 and $150,000.
Comparisons of other position-based salary-benefits packages, as well as base salaries, also can be readily made.
COMPARING SOUTHERN SHORES WITH OTHER NEARBY BEACH TOWNS
Among the five beach towns, Southern Shores has the lowest annual revenue, a factor that The Beacon believes should be weighed in the establishment of salary ranges for position-pay grades.
In FY 2018-19, when The Beacon last compiled annual revenues for all of the towns, the totals were:
Southern Shores: $6,200,846
Kitty Hawk: $9,703,157
Nags Head: $19,715,579
Kill Devil Hills: $19,877,121
Southern Shores FY 2019-20 revenue was budgeted at $6,220,846. Town records reveal that total salaries consume roughly 29 percent of this amount; and salaries with benefits consume 39 percent. That’s a hefty amount going into just paying people to run the government.
When the Town Council decides the pay grades and minimum, midpoint, and maximum salaries for staff positions, The Beacon hopes it will consider how much of the Town’s annual revenue is being spent on salaries and benefits, and compare those percentages with other towns, especially Kitty Hawk and Duck, which have annual revenues most comparable to our own.
Mr. Hill was correct about one thing: There is no “coastal market” for jobs. The best comparison towns for Southern Shores are those “from Duck to Manteo.” These towns constitute what Mr. Hill called the “actual competitive market” for Southern Shores.
The Town of Duck discloses, and makes readily accessible, on its website the salaries and benefits it pays every staff position, and the salary grades and ranges for each position title. Duck’s website is the gold standard for Dare County town websites.
The Beacon could not readily access the same information for Kitty Hawk online, but Town Clerk Lynn Morris will provide whatever the Town Council needs to know.
Other criticisms of the PTRC study can be made, but we will stop here and refer you to the videotape.
PLANNING BOARD ELECTIONS: The Planning Board elected current vice-chairperson Andy Ward to serve as chairperson for the remainder of the current fiscal year, and new member Don Sowder to serve as vice-chairperson, at its Tuesday evening meeting.
THE TOWN’S BRANCH LIBRARY EXPLORATORY COMMITTEE will meet Feb. 27, at 1 p.m., in an upstairs room in the PittsCenter. The meeting is open to the public.
Ann G. Sjoerdsma, 2/20/20